ex99-101.htm


    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:

    


    
      
        
           


        

        
          1

          
            

          

        

        
           


        

      

    

     

    (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

    


    
      
        
           


        

        
          2

          
            

          

        

        
           


        

      

    

    


    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.

    


    
      
        
           


        

        
          3

          
            

          

        

        
           


        

      

    

    


    


    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

    


    
      
        
           


        

        
          4

          
            

          

        

        
           


        

      

    

    


    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

    


    
      
        
           


        

        
          5

          
            

          

        

        
           


        

      

    

    


    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

    


    
      
        
           


        

        
          6

          
            

          

        

        
           


        

      

    

    


    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.

    


    
      
        
           


        

        
          7

          
            

          

        

        
           


        

      

    

    


    


    
      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.

    


    
      
        
           


        

        
          8

          
            

          

        

        
           


        

      

    

    


    (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

    


    
      
        
           


        

        
          9

          
            

          

        

        
           


        

      

    

    


    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.

    


    
      
        
           


        

        
          10

          
            

          

        

        
           


        

      

    

    


    


    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.

    


    
      
        
           


        

        
          11

          
            

          

        

        
           


        

      

    

    


    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

    


    
      
        
           


        

        
          12

          
            

          

        

        
           


        

      

    

    


    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.

    


    


    
      
        
           


        

        
          13

          
            

          

        

        
           


        

      

    

    


    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

     

     

    14