exv10w12



 







Exhibit 10.12




TIERONE BANK

FOURTH AMENDED AND RESTATED

CONSULTATION PLAN FOR DIRECTORS




FOREWORD



TierOne Bank (“Bank”) hereby approves and adopts this TierOne Bank Fourth Amended and Restated
Consultation Plan for Directors (“Plan”) effective as of July 27, 2006 (the “Effective Date”).



This Plan is being amended and restated in order to comply with the requirements of Section 409A of
the Code (as defined below), including the guidance issued to date by the Internal Revenue Service
(the “IRS”) and the proposed regulations issued by the IRS in the fall of 2005.



The Plan is intended to promote the interests of the Bank by providing: (i) an added incentive to
continue service to the Bank, (ii) for the continued advice of retiring members of its Board of
Directors, and (iii) eligible Directors with retirement income.



This Plan, upon its Effective Date, hereby amends, restates and supersedes all prior plans of the
Bank purporting to grant benefits of a similar nature to its present or retiring Directors, and
specifically supersedes and replaces Board Resolution BD 04-12-24.




SECTION 1

DEFINITIONS



As used herein, the following terms shall have the following respective meanings, unless a
different meaning is required by the context:





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






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






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






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






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




 









 












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




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




1.17 “Separation from Service” means separation from service within the meaning of Section
409A of the Code and the regulations thereunder.



1.18 “Specified Employee” means a key employee as defined in Section 416(i) of the Code
(without regard to Section 416(i)(5) of the Code) and as otherwise defined in Section 409A of the
Code and the regulations thereunder.



1.19 “Spouse” means the spouse of a Participant at the Participant’s date of death.



Except where otherwise clearly indicated by the context, any masculine terminology used herein
shall include the feminine and vice versa and the definition of any term herein in the singular
shall include the plural and vice versa.




SECTION 2

PARTICIPATION





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





SECTION 3

RETIREMENT BENEFITS





	3.1	 	Entitlement to Benefits.






	 	(a)	 	A Participant who:






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




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






	 	(b)	 	A Participant who:






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






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






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





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





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




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




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SECTION 4

MISCELLANEOUS





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




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





SECTION 5

ADMINISTRATION OF THE PLAN





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




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





SECTION 6

AMENDMENT OF THE PLAN





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





SECTION 7

DISCONTINUANCE OF THE PLAN





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




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SECTION 8

CONSTRUCTION OF THE PLAN





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




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




	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	TIERONE BANK	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Eugene
B. Witkowicz

	 	 	 	By:	 	/s/ Gilbert G. Lundstrom	 	 
	 

Secretary

	 	 	 	 	 	 

Chairman and Chief Executive Officer
	 	 







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TIERONE BANK

FOURTH AMENDED AND RESTATED

CONSULTATION PLAN FOR DIRECTORS




DESIGNATION OF BENEFICIARY



I hereby designate the one following named beneficiary to receive from the Fourth Amended and
Restated Consultation Plan For Directors of TierOne Bank (the “Plan”) any amounts payable pursuant
to said Plan by reason of my death:



Beneficiary





                                                                                

Name




                                                                                                                                            

Address                     Street                    City                    State




	 	 	 	 	 
	 

Social Security Number

	 	 

Date of Birth
	 	 





Further, that it shall be the responsibility of said beneficiary to notify the Corporate Secretary
at the home office of the Bank of any change in address.



Further, unless I have a Designation of Beneficiary in effect at the time an amount becomes payable
to a Beneficiary, that amount will be paid in accordance with Section 1.2 of the Plan.



Further, that upon the death of the Beneficiary, no remaining benefits will be paid.




	 	 	 	 	 
	 

	 	 

Director
	 	 
	 
	 	 	 	 
	 

	 	 

Social Security Number
	 	 






	 	 	 	 	 	 	 
	Date Accepted	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 

	 	 
	Title:
	 	 	 	 	 	 
	 

	 

	 	 







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