Exhibit 10.1

 
TierOne bank
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made and entered
into as of December 17, 2008, by and between TierOne Bank, a federally chartered
savings bank with its principal office in Lincoln, Nebraska (the “Bank”), 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 Bank pursuant to an amended and restated
employment agreement between the Bank 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 and as
previously amended and restated effective as of July 27, 2006 (the “Bank
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 Bank
(the “Company”) pursuant to an employment agreement between the Company and the
Executive entered into as of October 1, 2002 and as previously amended and
restated effective as of July 27, 2006 and as amended effective as of December
20, 2006, which is being further amended and restated as of the date hereof (the
“Company Employment Agreement”);

WHEREAS, the Bank desires to amend and restate the Bank 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 Bank 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 Bank 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 Bank, and shall be accountable to
the Board of Directors of the Bank, 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 Bank 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 Bank;

(b)           hiring, making job assignments, compensating and discharging of
the Bank’s employees;

(c)           recommending to the Bank’s Board of Directors policies for pricing
deposits of the Bank and then implementing such pricing policies as the Bank’s
Board of Directors approves;

(d)           recommending loan policies to the Bank’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 Bank’s Board of Directors concerning
compliance with all of the normal and necessary operating needs of an insured
savings and loan association; and

(f)           performing such other duties and making such other recommendations
to the Bank’s Board of Directors as the Bank’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 Bank.

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 for other  than
“Cause” (as defined in Section 6(b) hereof), 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 $575,000 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 Bank agrees to continue to employ
Mercer or some

 
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other mutually acceptable consulting firm which can provide comparable
compensation data for the entire term of this Agreement, including any extension
thereof.

Any increase in Base Salary or other compensation shall in no way limit or
reduce any other obligation of the Bank 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 Bank
in discretionary bonuses as authorized and declared by the Board of Directors of
the Bank 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 Bank) in performing services hereunder, provided that the Executive properly
accounts therefor in accordance with Bank policy.  Such reimbursement shall be
paid promptly by the Bank and in any event no later than March 15 of the year
immediately following the year in which such expenses were incurred.

(d)           Supplemental Benefit.  In addition, the Executive shall receive
certain deferred compensation and insurance benefits pursuant to the terms of
his 1993 Supplemental Retirement Plan Agreement with the Bank, as amended and
restated (the “SERP”), and his Split Dollar Agreement with the Bank dated
January 2, 1994, as amended from time to time (the “Split Dollar Agreement”).

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 Bank’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 Bank’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.

 
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4.           Term.  The term of employment under this Agreement shall be for an
initial period of three years commencing on January 1, 2008 (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 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 Bank 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
Bank and its affiliated companies as in effect generally at any time with
respect to other senior executives of the Bank 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 Bank’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

 
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in the course of his employment with the Bank; (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 act, on
the Executive’s part shall be considered “willful” unless the Bank’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 Bank.

(c)           Termination by Regulatory Action.

(i)           If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank’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 Bank’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 Bank
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 Bank’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 Bank 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 Bank 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 Bank: (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 enters into an agreement to provide assistance to
or on behalf of the Bank 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 Bank or when the Bank 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

 
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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, a
termination for “Good Reason” shall mean a termination based on the following:

(A) any material breach of this Agreement by the Bank, including without
limitation any of the following: (1) a material diminution in the Executive’s
base compensation, (2) a material diminution in the Executive’s authority,
duties, titles or responsibilities as prescribed in Section 1, or (3) any
requirement that the Executive report to a corporate officer or employee of the
Bank instead of reporting directly to the Board of Directors of the Bank, or

(B) any material change in the geographic location at which the Executive must
perform his services under this Agreement;

provided, however, that prior to any termination of employment for Good Reason,
the Executive must first provide written notice to the Bank within ninety (90)
days of the initial existence of the condition, describing the existence of such
condition, and the Bank shall thereafter have the right to remedy the condition
within thirty (30) days of the date the Bank received the written notice from
the Executive.  If the Bank remedies the condition within such thirty (30) day
cure period, then no Good Reason shall be deemed to exist with respect to such
condition.  If the Bank does not remedy the condition within such thirty (30)
day cure period, then the Executive may deliver a Notice of Termination for Good
Reason at any time within sixty (60) days following the expiration of such cure
period.

(e)           Notice.  Any termination by the Bank pursuant to Subsections (b)
or (c) above or by the Executive pursuant to Subsection (d) above shall be
communicated by a 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 Bank 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 Bank 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

 
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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
Bank and its subsidiaries and affiliates.  Any Disability of the Executive shall
be certified to the Bank 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 Bank may, without
breaching 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 Bank shall
maintain in full force and effect, for the continued benefit of the Executive
for the remaining term of this Agreement as part of his overall disability
benefits, 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 a lump
sum cash amount within thirty (30) days of such bar equal to the annual
contributions, payments, credits or allocations which would have been made by
the Bank 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.

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 Bank 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.

 
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9.           Termination Benefits.

(a)           General.  If the Executive’s employment is terminated by the Bank
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 Date of Termination; (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 Bank for the time period ending on the Date of Termination; (iii)
any and all other cash earned through the Date of Termination 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 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 Bank,
including but not limited to his SERP and his Split Dollar Plan Agreement, which
was in effect on the Date of Termination (in the event that any compensatory
fringe benefits or other benefits were reduced or eliminated by the Bank during
the 180-day period prior to the Date of Termination, 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 Date of Termination). Payment
of Accrued Benefits shall be made promptly in accordance with the Bank’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 Bank.  If the Executive’s employment is
terminated by the Bank (other than for Cause pursuant to Section 6(b) or by
regulatory action pursuant to Section 6(c)), whether before or after a Change in
Control, then the Executive shall be entitled to the benefits provided below:

(i)           The Bank 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
Date of Termination; plus

(ii)           The Bank shall cause any split dollar life insurance policy on
the life of the Executive to be funded to the point of “N pay” (as defined in
the SERP, in the event such policy is not already funded to the point of “N
pay”, and cause the ownership of the policy to be transferred if the policy is
purchased in accordance with the terms of the Split Dollar Agreement, as
amended.

 
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(c)           Termination by the Executive.  If the Executive shall terminate
his employment for Good Reason pursuant to Section 6(d) hereof, whether before
or after a Change in Control, then 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 Bank
gives notice to the Executive of the termination of his employment with the Bank
or (ii) the date upon which the Executive ceases to serve as an Executive of the
Bank, and “Change in Control” is defined as 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 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.

(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 Bank (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 Bank 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 Bank
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 Bank, at
the Bank’s expense, shall obtain the opinion (which need not be unqualified) of
nationally recognized tax counsel selected by the Bank 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

 
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the principles of Sections 280G(d)(3) and (4) of the Code (or any successor
provisions), which determination shall be provided to the Bank and the
Executive. Such opinion shall be dated as of the Date of Termination and
addressed to the Bank and the Executive and shall be binding upon the Bank 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 Bank, 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 Date of Termination by the Executive pursuant to the Bank’s 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 or the
Date of Termination.

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 Bank 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 any 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 Section 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.

 
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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 Bank 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 Bank, 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 Bank would be required to perform it if no such succession or
assignment had taken place. Failure of the Bank to obtain such an assumption
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 Bank 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), if any such succession or assignment occurs without an
assumption agreement, then such event shall be deemed to constitute Good Reason
for purposes of Section 6(d) of this Agreement.

(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
Bank’s executive offices or to the Executive’s last address appearing on the
Bank’s personnel records, as the case may be (provided that all notices to the
Bank shall be directed to the attention of the Board of Directors of the Bank
with a copy to the Secretary of the Bank), 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 Bank 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 Bank may amend this Agreement
to the extent necessary to avoid triggering the tax and interest penalties
imposed by Section 409A of the Code.

 
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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.

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 Bank (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

 
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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 Bank 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 Bank regarding the business of the
Bank, including its customers, products, prices, manner of operation, without
first obtaining the Bank’s written consent. In the event the Executive breaches
this Section, the Bank 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.

 
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IN WITNESS WHEREOF, the Bank 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 written above.

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
Assistant
Secretary                                                         President and
Chief Operating Officer

                                                                                           /s/  Gilbert
G. Lundstrom
                                                                                          
Gilbert G. Lundstrom, Executive
 
 
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