Exhibit 10.1
TierOne bank
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made and
entered into as of July 27, 2006, by and between TierOne Bank, a federally
chartered savings bank with its principal office in Lincoln, Nebraska (the
“Association”), and Gilbert G. Lundstrom (the “Executive”).
RECITALS
     WHEREAS, the Executive is currently employed as the Chairman of the Board
and Chief Executive Officer of the Association pursuant to an amended and
restated employment agreement between the Association and the Executive entered
into as of February 23, 1995, as subsequently amended effective December 18,
1996 and November 17, 2004 or by subsequent resolutions of the Board of
Directors (the “Association Employment Agreement”);
     WHEREAS, the Executive is currently employed as the Chairman of the Board
and Chief Executive Officer of TierOne Corporation, the parent company of the
Association (the “Company”) pursuant to an employment agreement between the
Company and the Executive entered into as of October 1, 2002, which is being
amended and restated as of the date hereof (the “Company Employment Agreement”);
     WHEREAS, the Association desires to amend and restate the Association
Employment Agreement in order to make changes to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), as well as certain other
changes;
     WHEREAS, the Association desires to assure itself of the continued
availability of the Executive’s services as provided in this Agreement; and
     WHEREAS, the Executive is willing to serve the Association on the terms and
conditions hereinafter set forth;
     NOW, THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the parties agree as follows:
          1. Employment. The Executive is hereby employed as the Chairman of the
Board and Chief Executive Officer of the Association, and shall be accountable
to the Board of Directors of the Association, and, subject to the authority and
direction of the Board of Directors, shall have the duties and responsibilities
customary to the office, including those specifically set out below. As Chairman
of the Board and Chief Executive Officer, the Executive shall render management
services to the Association and its subsidiaries of the type customarily
performed by persons situated in a similar management position. These services
shall include, but not be limited to:

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               (a) conducting day-to-day management of the Association;
               (b) hiring, making job assignments, compensating and discharging
of the Association’s employees;
               (c) recommending to the Association’s Board of Directors policies
for pricing deposits of the Association and then implementing such pricing
policies as the Association’s Board of Directors approves;
               (d) recommending loan policies to the Association’s Board of
Directors concerning compliance with all of the normal and necessary operating
needs of an insured savings and loan association;
               (e) providing advice to the Association’s Board of Directors
concerning compliance with all of the normal and necessary operating needs of an
insured savings and loan association;
               (f) performing such other duties and making such other
recommendations to the Association’s Board of Directors as the Association’s
Board of Directors may request; provided, that such duties are consistent with
his present duties and with the Executive’s position as a senior executive
officer in charge of the general management of the Association.
          The Executive will be elected as a member of the Board of Directors.
If at any time during the term of employment the Executive shall fail to be
reelected to the Board or the Board shall fail to reelect the Executive to the
office of Chief Executive Officer or shall remove him from such office, the
Executive shall have “Good Reason” (as further defined in Section 6(d) hereof)
to terminate his services hereunder and the Executive shall have no further
obligation under this Agreement. The Executive hereby accepts the employment
described herein and agrees to perform such duties as are commensurate with the
position and to abide by the terms and conditions of this Agreement.
          2. Compensation.
               (a) Base Salary. The Executive shall receive an annual base
salary (“Base Salary”) at the rate of $550,000 per annum as of the Commencement
Date (as defined in Section 4 hereof), which Base Salary shall be reviewed and
adjusted by the Board of Directors at least annually. The Board of Directors
shall consider the recommendations of Mercer or some other mutually acceptable
consulting firm concerning changes in the salary grade structure, which
recommendations will be based on compensation data developed from its financial
industry peer group data base (“Data Base”) then in effect and other relevant
sources of statistical information pertaining to compensation practices for
positions comparable to the Executive’s. The Association agrees to continue to
employ Mercer or some other mutually acceptable consulting firm which can
provide comparable compensation data for the entire term of this Agreement,
including any extension thereof.

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          Any increase in Base Salary or other compensation shall in no way
limit or reduce any other obligation of the Association hereunder and, once
established at an increased specified rate, the Executive’s Base Salary
hereunder shall not thereafter be reduced. The Executive’s salary shall be
payable not less frequently than monthly and not later than the tenth day
following the expiration of the month in question.
               (b) Discretionary Bonuses. The Executive shall be entitled to
participate in an equitable manner with all other executive officers of the
Association in discretionary bonuses as authorized and declared by the Board of
Directors of the Association to its executive employees. No other compensation
provided for in this Agreement shall be deemed a substitute for the Executive’s
right to participate in such bonuses when and as declared by the Board of
Directors.
               (c) Expenses. During the term of employment hereunder, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred (in accordance with policies and procedures at least as
favorable to the Executive as those presently applicable to the senior executive
officers of the Association) in performing services hereunder, provided that the
Executive properly accounts therefor in accordance with Association policy.
               (d) Supplemental Benefit. In addition, the Executive shall
receive certain deferred compensation and insurance benefits pursuant to the
terms of a Supplemental Retirement Plan and Split Dollar Agreement, as such plan
or agreement are amended from time to time.
          3. Benefits.
               (a) Participation in Retirement and Executive Benefit Plans. The
Executive shall be entitled while employed hereunder to participate in, and
receive benefits under, all plans relating to stock options, stock purchases,
pension, thrift, profit-sharing, group life insurance, medical coverage,
education, cash or stock bonuses, and other retirement or employee benefits or
combinations thereof, that are now or hereafter maintained for the benefit of
the Association’s executive employees or for its employees generally.
               (b) Fringe Benefits. The Executive shall be eligible while
employed hereunder to participate in, and receive benefits under, any other
fringe benefits which are or may become applicable to the Association’s
executive employees or to its employees generally. Nothing paid to the Executive
under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the Base Salary or other compensation to
the Executive hereunder.
               4. Term. The term of employment under this Agreement shall be for
an initial period of three years commencing on January 1, 2006 (the
“Commencement Date”). Beginning on the first anniversary of the Commencement
Date, and on each anniversary thereafter, the term of employment under this
Agreement shall be extended for a period of

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one year in addition to the then-remaining term of employment under this
Agreement, it being the intent of the parties hereto that the Executive be
assured of a continuous three (3) year term of employment, unless either the
Board of Directors or the Executive gives contrary written notice to the other
not less than 90 days in advance of the date on which the term of employment
under this Agreement would otherwise be extended. The Board of Directors of the
Association shall, at the regularly scheduled Board of Directors meeting
immediately prior to the beginning of the 90-day notice period referred to
above, explicitly review this Agreement and the Executive’s performance
hereunder and take specific action with respect to the extension of this
Agreement pursuant to the terms hereof. Reference herein to the term of
employment under this Agreement shall refer to both such initial term and such
extended terms.
          5. Vacations. The Executive shall be entitled, without loss of pay, to
absent himself voluntarily from the performance of his employment under this
Agreement, all such voluntary absences to count as vacation time, as follows:
               (a) The Executive shall be entitled to an annual vacation in
accordance with the most favorable plans, policies, programs or practices of the
Association and its affiliated companies as in effect generally at any time with
respect to other senior executives of the Association but in no event less than
three weeks per year, one week of which may be carried over one (1) year.
               (b) The timing of vacations shall be scheduled in a reasonable
manner by the Executive. The Executive shall not be entitled to receive any
additional compensation on account of any failure to take a vacation; nor shall
more than one (1) week of unused vacation time be allowed to accumulate for more
than one calendar year.
          6. Termination.
               (a) Death. The Executive’s employment hereunder shall terminate
upon his death.
               (b) Action by Board of Directors. The Association’s Board of
Directors may terminate the Executive’s employment at any time, but any
termination by the Board of Directors, other than termination for Cause, shall
not prejudice the Executive’s right to compensation or other benefits under this
Agreement. The Executive shall have no right to receive compensation or other
benefits, excepting only Vested Benefits described in Section 9(a) hereof, for
any period after termination for Cause. For the purposes of this Agreement,
“Cause” shall mean (i) the willful failure by the Executive to perform his
duties hereunder, other than any such failure resulting from the Executive’s
incapacity due to physical or mental impairment; (ii) the commission by the
Executive of an act involving moral turpitude in the course of his employment
with the Association; (iii) any act of personal dishonesty by the Executive;
(iv) incompetence; (v) willful misconduct; (vi) breach of fiduciary duty
involving personal profit; (vii) willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, or (viii) any material breach of the provisions of this
contract. For purposes of this paragraph, no act, or failure to

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act, on the Executive’s part shall be considered “willful” unless the
Association’s Board of Directors shall determine in good faith, based upon all
available facts, that such was done, or omitted to be done, by the Executive not
in good faith and without reasonable belief that his action or omission was in
the best interest of the Association.
               (c) Termination by Regulatory Action.
                    (i) If the Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of the Association’s
affairs by a notice served under Section 8(e)(3) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. §1818(e)(3) and (g)(1)) (the “FDIA”), the
Association’s obligations under this Agreement shall be suspended as of the date
of service, unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Association may in its discretion (A) pay the
Executive all or part of the compensation withheld while its obligations under
this Agreement were suspended and (B) reinstate in whole or in part any of its
obligations which were suspended.
                    (ii) If the Executive is removed from office and/or
permanently prohibited from participating in the conduct of the Association’s
affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA (12
U.S.C. §1818(e)(4) or (g)(1)), all obligations of the Association under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the parties hereto shall not be affected.
                    (iii) If the Association becomes in default (as defined in
Section 3(x)(1) of the FDIA, 12 U.S.C. §1813(x)(i)), all obligations under this
Agreement shall terminate as of the date of default, but this provision shall
not affect any vested rights of the parties hereto.
                    (iv) All obligations under this Agreement shall be
terminated, except to the extent determined that continuation of this Agreement
is necessary for the continued operation of the Association: (i) by the Director
of the Office of Thrift Supervision (the “Director”) or his or her designee, at
the time the Federal Deposit Insurance Corporation or Resolution Trust
Corporation enters into an agreement to provide assistance to or on behalf of
the Association under the authority contained in 13(c) of the Federal Deposit
Insurance Act; or (ii) by the Director or his or her designee, at the time the
Director or his or her designee approves a supervisory merger to resolve
problems related to operation of the Association or when the Association is
determined by the Director to be in an unsafe or unsound condition. Any rights
of the parties that have already vested, however, shall not be affected by any
such action.
               (d) Termination by the Executive. The Executive may terminate his
employment hereunder (i) for Good Reason, or (ii) if his health should become
impaired to an extent that makes the continued performance of his duties
hereunder hazardous to his physical or mental health or his life, but any vested
rights of the parties hereto shall not be affected by such action. For purposes
of this Agreement, “Good Reason” shall mean (A) a change in control of the
Association (as defined below) having occurred not more than 12 months prior to
delivery of notice of termination, (B) any assignment to the Executive of any

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duties significantly different than those contemplated by Section 1 hereof,
(C) any limitation of the powers of the Executive in any respect not
contemplated by Section 1 hereof, (D) any removal of the Executive from or any
failure to reelect the Executive to any of the positions indicated in Section 1
hereof, except in connection with termination of the Executive’s employment for
Cause, (E) a reduction in the Executive’s Base Salary, or a material reduction
in the Executive’s fringe benefits (including termination by the Association of
the Split Dollar Agreement) or any other material failure by the Association to
comply with Section 2 hereof.
               (e) Notice. Any termination by the Association pursuant to
Subsections (b) or (c) above or by the Executive pursuant to Subsection
(d) above shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a “Notice of Termination” shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated.
               (f) Date of Termination. “Date of Termination” shall mean (i) if
the Executive’s employment is terminated by his death, the date of his death, or
(ii) if the Executive’s employment is terminated for any other reason, the date
specified in the Notice of Termination.
          7. Disability.
               (a) If, as a result of the Executive’s Disability as defined
below, the Executive shall have been absent from his duties hereunder on a
full-time basis for six consecutive months, and within 30 days after the
Association notifies the Executive in writing that it intends to replace him,
the Executive shall not have returned to the performance of his duties hereunder
on a full-time basis, the Association may replace the Executive without
breaching this Agreement. Such disability will not act to terminate the
Executive’s employment under this Agreement. For purposes of this Agreement,
“Disability” shall be deemed to have occurred if the Executive: (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 Company and its subsidiaries.
Any Disability of the Executive shall be certified to the Association and the
Executive by a physician selected by the Chief Medical Officer at the University
of Nebraska Medical Center at Omaha, Nebraska. For purposes of this Agreement,
the Executive shall be deemed to have been absent from his duties hereunder on a
full-time basis for six consecutive months if he has not, within any six-month
period, attended to his duties on a full-time basis for 15 consecutive business
days within such six-month period. Prior to replacement of the Executive
pursuant to this section, and during any period of physical disability or mental
impairment, the Association may, without breaching

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this Agreement, appoint another person or persons to act as interim Chairman of
the Board and interim Chief Executive Officer pending the Executive’s return to
his duties on a full-time basis hereunder or his termination as a result of such
disability.
               (b) If disabled within the meaning of this Section 7, the
Association shall maintain in full force and effect, for the continued benefit
of the Executive for the full term of this Agreement, including any extension
thereof, all employee benefit plans and programs in which the Executive was
entitled to participate immediately prior to the replacement date, provided that
the Executive’s continued participation is possible under the general terms and
provisions of such plans and programs. In the event the Executive’s
participation in any such plan or program is barred as a result of such
disability, the Executive shall be entitled to receive an amount equal to the
annual contributions, payments, credits or allocations which would have been
made by the Association to his account or on his behalf under such plans and
programs from which his continued participation is barred.
               (c) During any period that the Executive fails to perform his
duties hereunder as a result of incapacity due to Disability, the Executive
shall continue to receive his full Base Salary and Bonuses until the Executive
is replaced in accordance with Section 7(a) hereof, or until the Executive
terminates his employment pursuant to Section 6(d)(ii) hereof, whichever first
occurs. After the Executive is replaced, he shall be paid such Disability
payments as are provided in the Supplemental Retirement Plan Agreement.
          8. Beneficiary. If the Executive dies before receiving all the
payments to which he is entitled, the remainder thereof shall be paid to such
person (“Beneficiary”) as may be designated by an instrument in writing, and in
a form acceptable to the Board, executed by the Executive and delivered to the
Board in care of the Secretary of the Association during the Executive’s
lifetime, which designation may be changed from time to time by similar action.
If no such designation is delivered to the Board, or if no such designated
Beneficiary is then living, then the remaining distributions shall be paid to
the surviving spouse of the Executive, or in the event there is no such
surviving spouse, to the estate of the Executive.
          9. Termination Benefits.
               (a) General. If the Executive’s employment is terminated by the
Association or by the Executive for any reason, the Executive shall be entitled
to all Vested Benefits. For purposes of this Agreement, the Executive’s “Vested
Benefits” shall include the following amounts, payable as described herein:
(i) all Base Salary for the time period ending on the Termination Date; (ii)
reimbursement for any and all monies advanced in connection with the Executive’s
employment for reasonable and necessary expenses incurred by the Executive on
behalf of the Association for the time period ending on the Termination Date;
(iii) any and all other cash earned through the Termination Date and deferred at
the election of the Executive or pursuant to any deferred compensation plan then
in effect; (iv) a lump sum payment of the ratable bonus or ratable incentive
compensation otherwise payable to the Executive with respect to the year in
which termination occurs to the extent provided by all bonus or incentive
compensation plans in which the Executive is a participant; and (v) all

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other payments and benefits to which the Executive (or in the event of the
Executive’s death, the Executive’s surviving spouse or other beneficiary) may be
entitled as compensatory fringe benefits or under the terms of any benefit plan
of the Association, including but not limited to his Supplemental Retirement
Plan Agreement with the Bank dated October 27, 1993, as amended (“SERP”) and his
Split Dollar Plan Agreement with the Bank dated January 2, 1994, as amended
(“Split Dollar Agreement”), which was in effect on the Termination Date (in the
event that any compensatory fringe benefits or other benefits were reduced or
eliminated by the Association during the 180-day period prior to the Termination
Date, the Executive will also be entitled to payment of benefits under such
plans as they existed prior to termination or reduction to the extent such plans
are reinstated in whole or in part during the period ending 180 days after the
Termination Date). Payment of Accrued Benefits shall be made promptly in
accordance with the Association’s prevailing practice with respect to
Subsections (i) and (ii) or, with respect to Subsections (iii), (iv) and (v),
pursuant to the terms of the benefit plan or practice establishing such
benefits.
               (b) Termination by the Association. If the Executive’s employment
is terminated by the Association (other than for Cause pursuant to Section 6(b)
or by regulatory action pursuant to Section 6(c)), the Executive shall be
entitled to the benefits provided below:
                    (i) The Association shall pay to the Executive in a lump sum
in cash within 25 business days after the Date of Termination (as hereinbefore
defined) of employment an amount equal to the Executive’s “base amount” of
compensation, as defined in Section 280G(b)(3) of the Code, times the number of
years or fractional portion thereof remaining in the term of this Agreement as
of the Termination Date; plus
                    (ii) The Association shall cause any split dollar life
insurance policy on the life of the Executive to be funded to point of “N pay”
(as defined in the Supplemental Retirement Plan Agreement) and cause the
ownership of the policy to be transferred if the policy is purchased in
accordance with the terms of Mr. Lundstrom’s Split Dollar Agreement, as amended.
               (c) Termination by the Executive. If the Executive shall
terminate his employment for Good Reason or otherwise pursuant to Section 6(d)
hereof, the Executive shall be entitled to receive the compensation described in
Section 9(b) on the same basis as is set forth in Section 9(b).
               (d) Definitions. For purposes of Sections 9 and 14 of this
Agreement, “Date of Termination” means the earlier of (i) the date upon which
the Association gives notice to the Executive of the termination of his
employment with the Association or (ii) the date upon which the Executive ceases
to serve as an Executive of the Association, and “Change in Control of the
Association” is defined as a change in the ownership of the Association or the
Company, a change in the effective control of the Association or the Company or
a change in the ownership of a substantial portion of the assets of the
Association or the Company as provided under Section 409A of the Code and the
regulations thereunder.

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               (e) Limitation.
               (i) Any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with 12 U.S.C. §1828(k) and the regulations promulgated thereunder in 12 C.F.R.
Part 359.
               (ii) Notwithstanding any other provision of this Agreement, if
any portion of the termination benefits or any other payment under this
Agreement, or under any other agreement with or plan of the Association (in the
aggregate “Total Payments”), would constitute an “excess parachute payment,”
then the Total Payments to be made to the Executive shall be reduced such that
the value of the aggregate Total Payments that the Executive is entitled to
receive shall be One Dollar ($1) less than the maximum amount which the
Executive may receive without becoming subject to the tax imposed by
Section 4999 of the Code (or any successor provision) or which the Association
may pay without loss of deduction under Section 280G(a) of the Code (or any
successor provision). For purposes of this Agreement, the terms “excess
parachute payment” and “parachute payments” shall have the meanings assigned to
them in Section 280G of the Code (or any successor provision), and such
“parachute payments” shall be valued as provided therein. Present value for
purposes of this Agreement shall be calculated in accordance with Sections 280G
and 1274(d) of the Code (or any successor provision). Within sixty days
following delivery of the Notice of Termination or notice by the Association to
the Executive of its belief that there is a payment or benefit due the Executive
which will result in an excess parachute payment as defined in Section 280G of
the Code (or any successor provision), the Executive and the Association, at the
Association’s expense, shall obtain the opinion (which need not be unqualified)
of nationally recognized tax counsel selected by the Association and acceptable
to the Executive in his sole discretion, which sets forth (A) the amount of the
Base Period Income, (B) the amount and present value of Total Payments and
(C) the amount and present value of any excess parachute payments without regard
to the limitations of this Subsection 9(e). As used in this Subsection 9(e), the
term “Base Period Income” means an amount equal to the Executive’s “annualized
includible compensation for the base period” as defined in Section 280G(d)(1) of
the Code (or any successor provision). For purposes of such opinion, the value
of any noncash benefits or any deferred payment or benefit shall be determined
in accordance with the principles of Sections 280G(d)(3) and (4) of the Code (or
any successor provisions), which determination shall be provided to the
Association and the Executive. Such opinion shall be dated as of the Termination
Date and addressed to the Association and the Executive and shall be binding
upon the Association and the Executive. If such opinion determines that there
would be an excess parachute payment, then the lump sum cash payment pursuant to
Section 9(b)(i) hereof shall be first reduced or eliminated, with any additional
required reductions in the Total Payments to be determined by the Association,
so that under the bases of calculations set forth in such opinion there will be
no excess parachute payment. The provisions of this Subsection 9(e), including
the calculations, notices and opinions provided for herein, shall be based upon
the conclusive presumption that the following are reasonable: (1) the
compensation and benefits provided for in Sections 2 and 3 hereof and (2) any
other compensation, including but not limited to the Accrued Benefits, earned
prior to the Termination Date by the Executive pursuant to the Association’s

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compensation programs if such payments would have been made in the future in any
event, even though the timing of such payment is triggered by the Change in
Control of the Association or the Termination Date.
          10. No Duplication of Payments. Notwithstanding any provision herein
to the contrary, to the extent that payments and benefits, as provided by this
Agreement, are paid to or received by the Executive under the Company Employment
Agreement, such compensation payments and benefits paid by the Company will be
subtracted from any amount due simultaneously to the Executive under similar
provisions of this Agreement. Payments pursuant to this Agreement and the
Company Employment Agreement (other than severance and change in control
payments and benefits pursuant to Section 9 hereof) shall be allocated in
proportion to the level of activity and the time expended on such activities by
the Executive as determined by the Company and the Bank on a quarterly basis.
          11. Other Activities. The Executive shall be entitled, with or without
remuneration: (i) to serve on the Board of Directors of other profit and
non-profit corporations; and (ii) to continue to perform duties as a Trustee or
Personal Representative, or any other fiduciary capacity, so long as all of such
duties do not unreasonably detract from the performance of duties under this
Agreement.
          12. Indemnification. In accordance with the provisions of 12 C.F.R.
545.121, the Association shall save harmless and indemnify the Executive,
against any financial losses, claims, damages or liabilities arising out of any
alleged negligence or other act of the Executive during the term of this
Agreement, provided that at the time of such loss, claim, damage or liability
was sustained, the Executive was acting in the discharge of duties hereunder and
within the scope of his employment and such loss, claim, damage or liability did
not result from the willful and wrongful act or gross negligence of the
Executive.
          13. Mitigation. The Executive shall not be required to mitigate the
amount of any severance benefits provided for in Sections 9(a), or described in
Sections 9(b)(i) or 9(b)(ii), of this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in
Section 9(a) of this Agreement be reduced by any compensation earned by the
Executive as a result of employment by another employer or by retirement
benefits after the date of termination or otherwise.
          14. No Assignments.
               (a) This Agreement is personal to each of the parties hereto, and
neither party may assign or delegate any of its rights or obligations hereunder
without first obtaining the written consent of the other party; provided,
however, that the Association will require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Association, by an
assumption agreement in form and substance satisfactory to the Executive, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Association would be required to perform it if no such
succession or assignment had taken place. Failure of the Association to obtain
such an assumption

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agreement prior to the effectiveness of any such succession or assignment shall
be a breach of this Agreement and shall entitle the Executive to compensation
from the Association in the same amount and on the same terms as the
compensation pursuant to Section 9(a) hereof. For purposes of implementing the
provisions of this Section 14(a), the date on which any such succession becomes
effective shall be deemed the Date of Termination.
               (b) This Agreement and all rights of the Executive hereunder
shall inure to the benefit of and be enforceable by the Executive’s personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while any
amounts would still be payable to the Executive hereunder if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive’s
Beneficiary.
          15. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the address of the
Association’s executive offices or to the Executive’s last address appearing on
the Association’s personnel records, as the case may be (provided that all
notices to the Association shall be directed to the attention of the Board of
Directors of the Association with a copy to the Secretary of the Association),
or to such other address as either party may have furnished to the other in
writing in accordance herewith.
          16. Amendments, No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties hereto; provided, however,
that if the Association determines, after a review of the final regulations
issued under Section 409A of the Code and all applicable IRS guidance, that this
Agreement should be further amended to avoid triggering the tax and interest
penalties imposed by Section 409A of the Code, the Association may amend this
Agreement to the extent necessary to avoid triggering the tax and interest
penalties imposed by Section 409A of the Code.
          17. Section Headings. The section headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.
          18. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
          19. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State of
Nebraska.

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          20. Dispute Resolution.
               (a) In the event of any dispute, claim, question or disagreement
arising out of or relating to this Agreement or the breach hereof, the parties
hereto shall use their best efforts to settle such dispute, claim, question or
disagreement. To this effect, they shall consult and negotiate with each other,
in good faith, and, recognizing their mutual interests, attempt to reach a just
and equitable solution satisfactory to both parties.
               (b) If they do not reach such a solution within a period of
thirty (30) days, then the parties agree first to endeavor in good faith to
amicably settle their dispute by mediation under the Commercial Mediation Rules
of the American Arbitration Association (the “AAA”), before resorting to
arbitration.
               (c) Thereafter, any unresolved controversy or claim arising out
of or relating to this Agreement or the breach thereof, upon notice by any party
to the other, shall be submitted to and finally settled by arbitration in
accordance with the Commercial Arbitration Rules (the “Rules”) of the AAA in
effect at the time demand for arbitration is made by any such party. The parties
shall mutually agree upon a single arbitrator within thirty (30) days of such
demand. In the event that the parties are unable to so agree within such thirty
(30) day period, then within the following thirty (30) day period, one
arbitrator shall be named by each party. A third arbitrator shall be named by
the two arbitrators so chosen within ten (10) days after the appointment of the
first two arbitrators. In the event that the third arbitrator is not agreed
upon, he or she shall be named by the AAA. Arbitration shall occur in Lincoln,
Nebraska.
               (d) The award made by all or a majority of the panel of
arbitrators shall be final and binding, and judgment may be entered based upon
such award in any court of law having competent jurisdiction. The award is
subject to confirmation, modification, correction or vacation only as explicitly
provided in Title 9 of the United States Code. The prevailing party shall be
entitled to receive an award of pre- and post-award interest as well as
attorney’s fees incurred in connection with the arbitration and any judicial
proceedings relate thereto. The parties acknowledge that this Agreement
evidences a transaction involving interstate commerce. The United States
Arbitration Act and the Rules shall govern the interpretation, enforcement, and
proceedings pursuant to this Section. Any provisional remedy which would be
available from a court of law shall be available from the arbitrators to the
parties to this Agreement pending arbitration. Either party may make an
application to the arbitrators seeking injunctive relief to maintain the status
quo, or may seek from a court of competent jurisdiction any interim or
provisional relief that may be necessary to protect the rights and property of
that party, until such times as the arbitration award is rendered or the
controversy otherwise resolved.
          21. Trade Secrets. The Executive agrees not to disclose to any person
or entity, other than an employee of the Association or a person to whom
disclosure is reasonably necessary or appropriate, any confidential information
of a material nature obtained while in the employ of the Association regarding
the business of the Association, including its customers, products, prices,
manner of operation, without first obtaining the

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Association’s written consent. In the event the Executive breaches this Section,
the Association shall be entitled, among other remedies, to injunctive relief
prohibiting the Executive from disclosing such information. This Section shall
survive termination of this Agreement.
          22. Other Agreements. The parties hereto acknowledge that the terms
and provisions of this Agreement shall not impact any of the rights and
obligations of the parties pursuant to the Company Employment Agreement or the
Executive’s Supplemental Retirement Plan Agreement and Split Dollar Agreement
with the Bank, each as amended from time to time.
          IN WITNESS WHEREOF, the Association has caused this amended and
restated Agreement to be signed and its corporate seal affixed hereto, and the
Executive has executed this Agreement, in duplicate, as of the date first above
written.
          THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.

         
ATTEST:
  TIERONE BANK    
 
       
/s/ Judith A. Klinkman
  /s/ James A. Laphen    
 
Judith A. Klinkman
 
 
James A. Laphen    
Secretary
  President and Chief Operating Officer    
 
       
 
  /s/ /Gilbert G. Lundstrom    
 
       
 
  Gilbert G. Lundstrom, Executive    

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