Document:

exv10w5

 

Exhibit 10.5

TierOne BANK

AMENDED AND RESTATED THREE-YEAR CHANGE IN CONTROL AGREEMENT

     THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (this “Agreement”) is effective the
27th day of July 2006, among TierOne Bank, a federally-chartered savings bank (the
“Bank”), TierOne Corporation, a Wisconsin corporation and
the holding company of the Bank (the “Company”), and                              
(the “Executive”). The Company and the Bank are
collectively referred to as the “Employers”.

INTRODUCTION

     The Bank and the Executive previously entered into a certain Three-Year Change in Control
Agreement dated as of                      ___, 2002 (the “Prior Agreement”). This Agreement amends and
restates the Prior Agreement in its entirety as hereinafter set forth in order to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
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.

WITNESSETH

     WHEREAS, the Executive is presently an officer of the Bank;

     WHEREAS, the Employers desire to be ensured of the Executive’s continued active participation
in the business of the Employers; and

     WHEREAS, in order to induce the Executive to remain in the employ of the Employers and in
consideration of the Executive’s agreeing to remain in the employ of the Employers, the parties
desire to specify the severance benefits which shall be due the Executive in the event that his
employment with the Employers is terminated under specified circumstances;

     NOW THEREFORE, in consideration of the mutual agreements herein contained, and upon the other
terms and conditions hereinafter provided, the parties hereby agree as follows:

     1. Definitions. The following words and terms shall have the meanings set forth below for the
purposes of this Agreement:

     (a) Annual Compensation. The Executive’s “Annual Compensation” for purposes of this Agreement
shall be deemed to mean the highest level of aggregate base salary and cash incentive compensation
paid to the Executive by the Employers or any subsidiary thereof during the calendar year in which
the Date of Termination occurs (determined on an annualized basis) or either of the

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two calendar
years immediately preceding the calendar year in which the Date of Termination occurs.

     (b) Cause. Termination of the Executive’s employment for “Cause” shall mean termination
because of personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or final
cease-and-desist order. For purposes of this paragraph, no act or failure to act on the
Executive’s part shall be considered “willful” unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that the Executive’s action or omission was in the
best interests of the Employers.

     (c) Change in Control. “Change in Control” shall mean a change in the ownership of the Bank
or the Company, a change in the effective control of the Bank or the Company or a change in the
ownership of a substantial portion of the assets of the Bank or the Company as provided under
Section 409A of the Code and the regulations thereunder.

     (d) Code. “Code” shall mean the Internal Revenue Code of 1986, as amended.

     (e) Date of Termination. “Date of Termination” shall mean (i) if the Executive’s employment
is terminated for Cause, the date on which the Notice of Termination is given, and (ii) if the
Executive’s employment is terminated for any other reason, the date specified in the Notice of
Termination.

     (f) Disability. “Disability” shall mean 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.

     (g) Good Reason. Termination by the Executive of the Executive’s employment for “Good Reason”
shall mean termination by the Executive following a Change in Control based on:

     (i) Without the Executive’s express written consent, the assignment by the Employers to
the Executive of any duties which are materially inconsistent with the Executive’s
positions, duties, responsibilities and status with the Employers immediately prior to a
Change in Control, or a material change in the Executive’s reporting responsibilities,
titles or offices as an employee and as in effect immediately prior to such a Change in
Control, or any removal of the Executive from or any failure to re-elect the Executive to
any of such responsibilities, titles or offices, except in connection with the

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termination
of the Executive’s employment for Cause, Disability or Retirement or as a result of the
Executive’s death or by the Executive other than for Good Reason;

     (ii) Without the Executive’s express written consent, a reduction by either of the
Employers in the Executive’s base salary as in effect immediately prior to the date of the
Change in Control or as the same may be increased from time to time thereafter or a
reduction in the package of fringe benefits provided to the Executive;

     (iii)
A change in the Executive’s principal place of employment by a distance in
excess of 25 miles from its location immediately prior to the Change in Control;

     (iv) Any purported termination of the Executive’s employment for Disability or
Retirement which is not effected pursuant to a Notice of Termination satisfying the
requirements of paragraph (i) below; or

     (v) The failure by the Employers to obtain the assumption of and agreement to perform
this Agreement by any successor as contemplated in Section 10 hereof.

     (h) IRS. “IRS” shall mean the Internal Revenue Service.

     (i) Notice of Termination. Any purported termination of the Executive’s employment by the
Employers for any reason, including without limitation for Cause, Disability or Retirement, or by
the Executive for any reason, including without limitation for Good Reason, shall be communicated
by written “Notice of Termination” to the other party hereto. For purposes of this Agreement, a
“Notice of Termination” shall mean a dated notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets 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, (iii) specifies a Date of Termination, which shall be not less than thirty
(30) nor more than ninety (90) days after such Notice of Termination is given, except in the case
of the Employers’ termination of the Executive’s employment for Cause, which shall be effective
immediately; and (iv) is given in the manner specified in Section 11 hereof.

     (j) Retirement. “Retirement” shall mean voluntary termination by the Executive in accordance
with the Employers’ retirement policies, including early retirement, generally applicable to their
salaried employees.

     2. Term of Agreement. The term of this Agreement shall be for three years, commencing as of
October 1, 2005 (the “Start Date”). Commencing on the first anniversary of the Start Date, the
term of this Agreement shall extend for an additional year on each annual anniversary of the Start
Date of this Agreement until such time as the Boards of Directors of the Employers or the Executive
give notice in accordance with the terms of Section 11 hereof of their or his election,
respectively, not to extend the term of this Agreement. Such written notice of the election not to
extend must be given not less than thirty (30) days prior to any such anniversary date. If any
party

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gives timely notice that the term will not be extended as of any annual anniversary date,
then this Agreement shall terminate at the conclusion of its remaining term. The Boards of
Directors of the Employers will review this Agreement and the Executive’s performance
annually for purposes of determining whether to extend this Agreement. References herein to the
term of this Agreement shall refer both to the initial term and successive terms.

     3. Benefits Upon Termination. If the Executive’s employment by the Employers shall be
terminated subsequent to a Change in Control and during the term of this Agreement by (i) the
Employers for other than Cause, Disability, Retirement or the Executive’s death or (ii) the
Executive for Good Reason, then the Employers shall:

     (a) pay to the Executive in a lump sum as of the Date of Termination a cash severance amount
equal to three (3) times the Executive’s Annual Compensation; and

     (b) maintain and provide for a period ending at the earlier of (i) the expiration of the
remaining term of this Agreement as of the Date of Termination or (ii) the date of the Executive’s
full-time employment by another employer (provided that the Executive is entitled under the terms
of such employment to benefits substantially similar to those described in this subparagraph (b)),
at no cost to the Executive, the Executive’s continued participation in all group insurance, life
insurance, health and accident insurance, disability insurance and other employee benefit plans,
programs and arrangements offered by the Employers in which the Executive was entitled to
participate immediately prior to the Date of Termination (excluding (w) the Employers’
Employee Stock Ownership Plan, (y) stock option and restricted stock plans of the Employers and (z)
cash incentive compensation included in Annual Compensation), provided that in the event that the
Executive’s participation in any plan, program or arrangement as provided in this subparagraph (b)
is barred, or during such period any such plan, program or arrangement is discontinued or the
benefits thereunder are materially reduced, the Employers shall arrange to provide the Executive
with benefits substantially similar to those which the Executive was entitled to receive under such
plans, programs and arrangements immediately prior to the Date of Termination. If substantially
similar benefits cannot be provided to the Executive, then the Employers shall pay to the Executive
a cash amount equal to the Executive’s cost of obtaining such benefits on his own, adjusted
for any federal or state income taxes the Executive has to pay on the cash amount); provided
further, however, that if the provision of any of the benefits covered by this Section 3(b) would
trigger the 20% tax and interest penalties under Section 409A of the Code either due to the nature
of such benefit or the length of time it is being provided, then the benefit(s) that would trigger
such tax and interest penalties due to the nature of the benefit shall not be provided at all and
the benefit(s) that would trigger the tax and interest penalties if provided beyond the “limited
period of time” set forth in the regulations under Section 409A shall not be provided beyond such
limited period of time (collectively, the “Excluded Benefits”), and in lieu of the Excluded
Benefits the Employers shall pay to the Executive, in a lump sum within 30 days following
termination of employment or within 30 days after such determination should it occur after
termination of employment, a cash amount equal to the cost to the Employers of providing the
Excluded Benefits.

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     4. Limitation of Benefits under Certain Circumstances. If the payments and benefits pursuant
to Section 3 hereof, either alone or together with other payments and benefits which the Executive
has the right to receive from the Employers, would constitute a “parachute payment” under Section
280G of the Code, the payments and benefits payable by the Employers pursuant to Section 3 hereof
shall be reduced by the amount, if any, which is the minimum necessary to result in no portion of
the payments and benefits payable by the Employers under Section 3 being non-deductible to the
Employers pursuant to Section 280G of the Code and subject to the excise tax imposed under Section
4999 of the Code. If the payments and benefits under Section 3 are required to be reduced,
the cash severance shall be reduced first, followed by a reduction in the fringe benefits. The
determination of any reduction in the payments and benefits to be made pursuant to Section 3 shall
be based upon the opinion of independent counsel selected by the Employers and paid by the
Employers. Such counsel shall promptly prepare the foregoing opinion, but in no event later than
thirty (30) days from the Date of Termination, and may use such actuaries as such counsel deems
necessary or advisable for the purpose. Nothing contained herein shall result in a reduction of
any payments or benefits to which the Executive may be entitled upon termination of employment
under any circumstances other than as specified in this Section 4, or a reduction in the payments
and benefits specified in Section 3 below zero.

     5. Mitigation; Exclusivity of Benefits.

     (a) The Executive shall not be required to mitigate the amount of any benefits hereunder by
seeking other employment or otherwise. The amount of severance to be provided pursuant to Section
3(a) hereof shall not be reduced by any compensation earned by the Executive as a result of
employment by another employer after the Date of Termination or otherwise, but the amount of
benefits to be provided pursuant to Section 3(b) hereof is subject to reduction as set forth
therein.

     (b) The specific arrangements referred to herein are not intended to exclude any other
benefits which may be available to the Executive upon a termination of employment with the
Employers pursuant to employee benefit plans of the Employers or otherwise.

     6. Withholding. All payments required to be made by the Employers hereunder to the Executive
shall be subject to the withholding of such amounts, if any, relating to tax and other payroll
deductions as the Employers may reasonably determine should be withheld pursuant to any applicable
law or regulation.

     7. Nature of Employment and Obligations.

     (a) Nothing contained herein shall be deemed to create other than a terminable at will
employment relationship between the Employers and the Executive, and the Employers may terminate
the Executive’s employment at any time, subject to providing any payments specified herein in
accordance with the terms hereof.

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     (b) Nothing contained herein shall create or require the Employers to create a trust of any
kind to fund any benefits which may be payable hereunder, and to the extent that the Executive
acquires a right to receive benefits from the Employers hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employers.

     8. Source of Payments. It is intended by the parties hereto that all payments provided in
this Agreement shall be paid in cash or check from the general funds of the Bank. Further, the
Company guarantees such payment and provision of all amounts and benefits due hereunder to the
Executive and, if such amounts and benefits due from the Bank are not timely paid or provided
by the Bank, such amounts and benefits shall be paid or provided by the Company.

     9. No Attachment.

          (a) Except as required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and
of no effect.

          (b) This Agreement shall be binding upon, and inure to the benefit of, the Executive, the Bank
and their respective successors and assigns.

     10. Assignability. The Employers may assign this Agreement and their rights and obligations
hereunder in whole, but not in part, to any corporation, bank or other entity with or into which
either of the Employers may hereafter merge or consolidate or to which either of the Employers may
transfer all or substantially all of its respective assets, if in any such case said corporation,
bank or other entity shall by operation of law or expressly in writing assume all obligations of
the Employers hereunder as fully as if it had been originally made a party hereto, but may not
otherwise assign this Agreement or their rights and obligations hereunder. The Executive may not
assign or transfer this Agreement or any rights or obligations hereunder.

     11. Notice. For the purposes of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below:

	 	 	 	 	 
	 

	 	To the Corporation:
	 	Secretary
	 

	 	 	 	TierOne Corporation
	 

	 	 	 	1235 N Street
	 

	 	 	 	Lincoln, Nebraska 68508

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	 	To the Bank:
	 	Secretary
	 

	 	 	 	TierOne Bank
	 

	 	 	 	1235 N Street
	 

	 	 	 	Lincoln, Nebraska 68508
	 
	 

	 	To the Executive:
	 	                                 
	 

	 	 	 	At the address last appearing
	 

	 	 	 	on the records of the Employers

     12. Amendment; Waiver. No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed
by the Executive and such officer or officers as may be specifically designated by the Boards
of Directors of the Employers to sign on their behalf, except as set forth below. No waiver by any
party hereto at any time of any breach by any other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time. In addition, notwithstanding anything in this Agreement to the contrary, the Employers may
amend in good faith any terms of this Agreement, including retroactively, in order to comply with
Section 409A of the Code.

     13. Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the United States where applicable and otherwise by the
substantive laws of the State of Nebraska.

     14. Headings. The section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement.

     15. Validity. The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement, which shall remain
in full force and effect.

     16. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one and the same
instrument.

     17. Regulatory Provisions.

          (a) The Employers may terminate the Executive’s employment at any time, but any
termination by the Employers, other than termination for Cause, shall not prejudice the
Executive’s right to compensation or other benefits under this Agreement. The Executive
shall not have the right to receive compensation or other benefits for any period after termination
for Cause as defined in Section 1(b) hereof.

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          (b) 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 8(g)(1) of
the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(3) or (g)(1)), the Employers’
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 Employers may in its
discretion (i) pay the Executive all or part of the compensation withheld while their contract
obligations were suspended and (ii) reinstate (in whole or in part) any of the obligations which
were suspended.

          (c) If the Executive is removed and/or permanently prohibited from participating in the
conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the
Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(4) or (g)(1)), all obligations of the
Employers’ under this
Agreement shall terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.

          (d) If the Bank is in default as defined in Section 3(x)(1) of the Federal Deposit Insurance
Act, all obligations of the Employers under this Agreement shall terminate as of the date of
default, but this paragraph shall not affect any vested rights of the contracting parties.

          (e) All obligations under this Agreement shall be terminated, except to the extent determined
that continuation of the Agreement is necessary for the continued operation of the institution: (i)
by the Director of the Office of Thrift Supervision (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 Section 13(c) of the Federal Deposit Insurance
Act; or (ii) by the Director of the Office of Thrift Supervision (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 such action.

          (f) Notwithstanding any other provision of this Agreement to the contrary, any payments made
to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon
their compliance with Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(k)) and
the regulations promulgated thereunder, including 12 C.F.R. Part 359.

     18. Reinstatement of Benefits Under Section 17(b). In the event the Executive is suspended
and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a
notice described in Section 17(b) hereof (the “Notice”) during the term of this
Agreement and a Change in Control, as defined herein, occurs, the Employers will assume their
obligation to pay and the Executive will be entitled to receive all of the termination benefits
provided for under Section 2 of this Agreement upon the Bank’s receipt of a dismissal of
charges in the Notice.

     19. Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel of three
arbitrators

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sitting in a location selected by the Bank within fifty (50) miles from the location of
the Bank’s main office, in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator’s award in any court having
jurisdiction; provided, however, that the Executive shall be entitled to seek specific performance
of his right to be paid until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement, other than in the case of a
termination for Cause.

     20. Payment of Costs and Legal Fees. All reasonable costs and legal fees paid or incurred by
the Executive pursuant to any dispute or question of interpretation relating to this Agreement
shall be paid or reimbursed by the Bank (which payments are guaranteed by the Company pursuant to
Section 8 hereof) if the Executive is successful on the merits pursuant to a legal judgment,
arbitration or settlement.

     21. Entire Agreement. This Agreement embodies the entire agreement between the Employers and
the Executive with respect to the matters agreed to herein. All prior agreements between the
Employers and the Executive with respect to the matters agreed to herein are hereby superseded and
shall have no force or effect, except that this Agreement shall not affect or operate to reduce any
benefit or compensation inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.

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     IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.

          THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Attest:	 	TierOne BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Gilbert G. Lundstrom, Chairman and
Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	Attest:	 	TierOne CORPORATION

(as guarantor)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Gilbert G. Lundstrom, Chairman and
Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	Attest:	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 

10exv10w6

 

Exhibit 10.6

TierOne BANK

AMENDED AND RESTATED TWO-YEAR CHANGE IN CONTROL AGREEMENT

     THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (this “Agreement”) is effective the
27th day of July 2006, among TierOne Bank, a federally-chartered savings bank (the
“Bank”), TierOne Corporation, a Wisconsin corporation and the holding company of the Bank (the
“Company”), and                      (the “Executive”). The Company and the Bank are
collectively referred to as the “Employers”.

INTRODUCTION

     The Bank and the Executive previously entered into a certain Two-Year Change in Control
Agreement dated as of                      ___, 2002 (the “Prior Agreement”). This Agreement amends and
restates the Prior Agreement in its entirety as hereinafter set forth in order to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
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.

WITNESSETH

     WHEREAS, the Executive is presently an officer of the Bank;

     WHEREAS, the Employers desire to be ensured of the Executive’s continued active participation
in the business of the Employers; and

     WHEREAS, in order to induce the Executive to remain in the employ of the Employers and in
consideration of the Executive’s agreeing to remain in the employ of the Employers, the parties
desire to specify the severance benefits which shall be due the Executive in the event that his
employment with the Employers is terminated under specified circumstances;

     NOW THEREFORE, in consideration of the mutual agreements herein contained, and upon the other
terms and conditions hereinafter provided, the parties hereby agree as follows:

     1. Definitions. The following words and terms shall have the meanings set forth below for the
purposes of this Agreement:

     (a) Annual Compensation. The Executive’s “Annual Compensation” for purposes of this Agreement
shall be deemed to mean the highest level of aggregate base salary and cash incentive compensation
paid to the Executive by the Employers or any subsidiary thereof during the calendar year in which
the Date of Termination occurs (determined on an annualized basis) or either of the two calendar
years immediately preceding the calendar year in which the Date of Termination occurs.

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     (b) Cause. Termination of the Executive’s employment for “Cause” shall mean termination
because of personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or final
cease-and-desist order. For purposes of this paragraph, no act or failure to act on the
Executive’s part shall be considered “willful” unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that the Executive’s action or omission was in the
best interests of the Employers.

     (c) Change in Control. “Change in Control” shall mean a change in the ownership of the Bank
or the Company, a change in the effective control of the Bank or the Company or a change in the
ownership of a substantial portion of the assets of the Bank or the Company as provided under
Section 409A of the Code and the regulations thereunder.

     (d) Code. “Code” shall mean the Internal Revenue Code of 1986, as amended.

     (e) Date of Termination. “Date of Termination” shall mean (i) if the Executive’s employment
is terminated for Cause, the date on which the Notice of Termination is given, and (ii) if the
Executive’s employment is terminated for any other reason, the date specified in the Notice of
Termination.

     (f) Disability. “Disability” shall mean 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.

     (g) Good Reason. Termination by the Executive of the Executive’s employment for “Good Reason”
shall mean termination by the Executive following a Change in Control based on:

     (i) Without the Executive’s express written consent, the assignment by the Employers to
the Executive of any duties which are materially inconsistent with the Executive’s
positions, duties, responsibilities and status with the Employers immediately prior to a
Change in Control, or a material change in the Executive’s reporting responsibilities,
titles or offices as an employee and as in effect immediately prior to such a Change in
Control, or any removal of the Executive from or any failure to re-elect the Executive to
any of such responsibilities, titles or offices, except in connection with the termination
of the Executive’s employment for Cause, Disability or Retirement or as a result of the
Executive’s death or by the Executive other than for Good Reason;

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     (ii) Without the Executive’s express written consent, a reduction by either of the
Employers in the Executive’s base salary as in effect immediately prior to the date of the
Change in Control or as the same may be increased from time to time thereafter or a
reduction in the package of fringe benefits provided to the Executive;

     (iii) A change in the Executive’s principal place of employment by a distance in
excess of 25 miles from its location immediately prior to the Change in Control;

     (iv) Any purported termination of the Executive’s employment for Disability or
Retirement which is not effected pursuant to a Notice of Termination satisfying the
requirements of paragraph (i) below; or

     (v) The failure by the Employers to obtain the assumption of and agreement to perform
this Agreement by any successor as contemplated in Section 10 hereof.

     (h) IRS. “IRS” shall mean the Internal Revenue Service.

     (i) Notice of Termination. Any purported termination of the Executive’s employment by the
Employers for any reason, including without limitation for Cause, Disability or Retirement, or by
the Executive for any reason, including without limitation for Good Reason, shall be communicated
by written “Notice of Termination” to the other party hereto. For purposes of this Agreement, a
“Notice of Termination” shall mean a dated notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets 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, (iii) specifies a Date of Termination, which shall be not less than thirty
(30) nor more than ninety (90) days after such Notice of Termination is given, except in the case
of the Employers’ termination of the Executive’s employment for Cause, which shall be effective
immediately; and (iv) is given in the manner specified in Section 11 hereof.

     (j) Retirement. “Retirement” shall mean voluntary termination by the Executive in accordance
with the Employers’ retirement policies, including early retirement, generally applicable to their
salaried employees.

     2. Term of Agreement. The term of this Agreement shall be for two years, commencing as of
October 1, 2005 (the “Start Date”). Commencing on the first anniversary of the Start Date, the
term of this Agreement shall extend for an additional year on each annual anniversary of the Start
Date of this Agreement until such time as the Boards of Directors of the Employers or the Executive
give notice in accordance with the terms of Section 11 hereof of their or his election,
respectively, not to extend the term of this Agreement. Such written notice of the election not to
extend must be given not less than thirty (30) days prior to any such anniversary date. If any
party gives timely notice that the term will not be extended as of any annual anniversary date,
then this Agreement shall terminate at the conclusion of its remaining term. The Boards of
Directors of the Employers will review this Agreement and the Executive’s performance
annually for purposes of

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determining whether to extend this Agreement. References herein to the
term of this Agreement shall refer both to the initial term and successive terms.

     3. Benefits Upon Termination. If the Executive’s employment by the Employers shall be
terminated subsequent to a Change in Control and during the term of this Agreement by (i) the
Employers for other than Cause, Disability, Retirement or the Executive’s death or (ii) the
Executive for Good Reason, then the Employers shall

     (a) pay to the Executive in a lump sum as of the Date of Termination a cash severance amount
equal to two (2) times the Executive’s Annual Compensation; and

     (b) maintain and provide for a period ending at the earlier of (i) the expiration of the
remaining term of this Agreement as of the Date of Termination or (ii) the date of the Executive’s
full-time employment by another employer (provided that the Executive is entitled under the terms
of such employment to benefits substantially similar to those described in this subparagraph (b)),
at no cost to the Executive, the Executive’s continued participation in all group insurance, life
insurance, health and accident insurance, disability insurance and other employee benefit plans,
programs and arrangements offered by the Employers in which the Executive was entitled to
participate immediately prior to the Date of Termination (excluding (w) the Employers’
Employee Stock Ownership Plan, (y) stock option and restricted stock plans of the Employers and (z)
cash incentive compensation included in Annual Compensation), provided that in the event that the
Executive’s participation in any plan, program or arrangement as provided in this subparagraph (b)
is barred, or during such period any such plan, program or arrangement is discontinued or the
benefits thereunder are materially reduced, the Employers shall arrange to provide the Executive
with benefits substantially similar to those which the Executive was entitled to receive under such
plans, programs and arrangements immediately prior to the Date of Termination. If substantially
similar benefits cannot be provided to the Executive, then the Employers shall pay to the Executive
a cash amount equal to the Executive’s cost of obtaining such benefits on his own, adjusted
for any federal or state income taxes the Executive has to pay on the cash amount; provided
further, however, that if the provision of any of the benefits covered by this Section 3(b) would
trigger the 20% tax and interest penalties under Section 409A of the Code, then the benefit(s) that
would trigger such tax and interest penalties shall not be provided (collectively, the “Excluded
Benefits”), and in lieu of the Excluded Benefits the Employers shall pay to the Executive, in a
lump sum within 30 days following termination of employment or within 30 days after such
determination should it occur after termination of employment, a cash amount equal to the cost to
the Employers of providing the Excluded Benefits.

     4. Limitation of Benefits under Certain Circumstances. If the payments and benefits pursuant
to Section 3 hereof, either alone or together with other payments and benefits which the Executive
has the right to receive from the Employers, would constitute a “parachute payment” under Section
280G of the Code, the payments and benefits payable by the Employers pursuant to Section 3 hereof
shall be reduced by the amount, if any, which is the minimum necessary to result in no portion of
the payments and benefits payable by the Employers under Section 3 being non-deductible to the
Employers pursuant to Section 280G of the Code and subject to the excise tax

4

 

imposed under Section
4999 of the Code. If the payments and benefits under Section 3 are required to be reduced, the
cash severance shall be reduced first, followed by a reduction in the fringe benefits. The
determination of any reduction in the payments and benefits to be made pursuant to Section 3 shall
be based upon the opinion of independent counsel selected by the Employers and paid by the
Employers. Such counsel
shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from
the Date of Termination, and may use such actuaries as such counsel deems necessary or advisable
for the purpose. Nothing contained herein shall result in a reduction of any payments or benefits
to which the Executive may be entitled upon termination of employment under any circumstances other
than as specified in this Section 4, or a reduction in the payments and benefits specified in
Section 3 below zero.

     5. Mitigation; Exclusivity of Benefits.

     (a) The Executive shall not be required to mitigate the amount of any benefits hereunder by
seeking other employment or otherwise. The amount of severance to be provided pursuant to Section
3(a) hereof shall not be reduced by any compensation earned by the Executive as a result of
employment by another employer after the Date of Termination or otherwise, but the amount of
benefits to be provided pursuant to Section 3(b) hereof is subject to reduction as set forth
therein.

     (b) The specific arrangements referred to herein are not intended to exclude any other
benefits which may be available to the Executive upon a termination of employment with the
Employers pursuant to employee benefit plans of the Employers or otherwise.

     6. Withholding. All payments required to be made by the Employers hereunder to the Executive
shall be subject to the withholding of such amounts, if any, relating to tax and other payroll
deductions as the Employers may reasonably determine should be withheld pursuant to any applicable
law or regulation.

     7. Nature of Employment and Obligations.

     (a) Nothing contained herein shall be deemed to create other than a terminable at will
employment relationship between the Employers and the Executive, and the Employers may terminate
the Executive’s employment at any time, subject to providing any payments specified herein in
accordance with the terms hereof.

     (b) Nothing contained herein shall create or require the Employers to create a trust of any
kind to fund any benefits which may be payable hereunder, and to the extent that the Executive
acquires a right to receive benefits from the Employers hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employers.

     8. Source of Payments. It is intended by the parties hereto that all payments provided in
this Agreement shall be paid in cash or check from the general funds of the Bank. Further, the
Company guarantees such payment and provision of all amounts and benefits due hereunder to the

5

 

Executive and, if such amounts and benefits due from the Bank are not timely paid or provided by
the Bank, such amounts and benefits shall be paid or provided by the Company.

     9. No Attachment.

          (a) Except as required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and
of no effect.

          (b) This Agreement shall be binding upon, and inure to the benefit of, the Executive, the Bank
and their respective successors and assigns.

     10. Assignability. The Employers may assign this Agreement and their rights and obligations
hereunder in whole, but not in part, to any corporation, bank or other entity with or into which
either of the Employers may hereafter merge or consolidate or to which either of the Employers may
transfer all or substantially all of its respective assets, if in any such case said corporation,
bank or other entity shall by operation of law or expressly in writing assume all obligations of
the Employers hereunder as fully as if it had been originally made a party hereto, but may not
otherwise assign this Agreement or their rights and obligations hereunder. The Executive may not
assign or transfer this Agreement or any rights or obligations hereunder.

     11. Notice. For the purposes of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below:

	 	 	 	 	 
	 

	 	To the Corporation:
	 	Secretary
	 

	 	 	 	TierOne Corporation
	 

	 	 	 	1235 N Street
	 

	 	 	 	Lincoln, Nebraska 68508
	 
	 	 	 	 
	 

	 	To the Bank:
	 	Secretary
	 

	 	 	 	TierOne Bank
	 

	 	 	 	1235 N Street
	 

	 	 	 	Lincoln, Nebraska 68508
	 
	 	 	 	 
	 

	 	To the Executive:	 	 
	 

	 	 	 	At the address last appearing
	 

	 	 	 	on the records of the Employers

     12. Amendment; Waiver. No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed by the

6

 

Executive
and such officer or officers as may be specifically designated by the Boards of Directors of the
Employers to sign on their behalf, except as set forth below. No waiver by any party hereto at any
time of any breach by any other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent time. In addition,
notwithstanding anything in this Agreement to the contrary, the Employers may amend in good faith
any terms of this Agreement, including retroactively, in order to comply with Section 409A of the
Code.

     13. Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the United States where applicable and otherwise by the
substantive laws of the State of Nebraska.

     14. Headings. The section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement.

     15. Validity. The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement, which shall remain
in full force and effect.

     16. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one and the same
instrument.

     17. Regulatory Provisions.

          (a) The Employers may terminate the Executive’s employment at any time, but any
termination by the Employers, other than termination for Cause, shall not prejudice the
Executive’s right to compensation or other benefits under this Agreement. The Executive
shall not have the right to receive compensation or other benefits for any period after termination
for Cause as defined in Section 1(b) hereof.

          (b) 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 8(g)(1) of
the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(3) or (g)(1)), the Employers’
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 Employers may in its
discretion (i) pay the Executive all or part of the compensation withheld while their contract
obligations were suspended and (ii) reinstate (in whole or in part) any of the obligations which
were suspended.

          (c) If the Executive is removed and/or permanently prohibited from participating in the
conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the
Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(4) or (g)(1)), all obligations of the
Employers’

7

 

under this Agreement shall terminate as of the effective date of the order, but
vested rights of the contracting parties shall not be affected.

          (d) If the Bank is in default as defined in Section 3(x)(1) of the Federal Deposit Insurance
Act, all obligations of the Employers under this Agreement shall terminate as of the date of
default, but this paragraph shall not affect any vested rights of the contracting parties.

          (e) All obligations under this Agreement shall be terminated, except to the extent determined
that continuation of the Agreement is necessary for the continued operation of the institution: (i)
by the Director of the Office of Thrift Supervision (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 Section 13(c) of the Federal Deposit Insurance
Act; or (ii) by the Director of the Office of Thrift Supervision (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 such action.

          (f) Notwithstanding any other provision of this Agreement to the contrary, any payments made
to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon
their compliance with Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(k)) and
the regulations promulgated thereunder, including 12 C.F.R. Part 359.

     18. Reinstatement of Benefits Under Section 17(b). In the event the Executive is suspended
and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a
notice described in Section 17(b) hereof (the “Notice”) during the term of this
Agreement and a Change in Control, as defined herein, occurs, the Employers will assume their
obligation to pay and the Executive will be entitled to receive all of the termination benefits
provided for under Section 2 of this Agreement upon the Bank’s receipt of a dismissal of
charges in the Notice.

     19. Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel of three
arbitrators sitting in a location selected by the Bank within fifty (50) miles from the location of
the Bank’s main office, in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator’s award in any court having
jurisdiction; provided, however, that the Executive shall be entitled to seek specific performance
of his right to be paid until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement, other than in the case of a
termination for Cause.

     20. Payment of Costs and Legal Fees. All reasonable costs and legal fees paid or incurred by
the Executive pursuant to any dispute or question of interpretation relating to this Agreement
shall be paid or reimbursed by the Bank (which payments are guaranteed by the Company pursuant to
Section 8 hereof) if the Executive is successful on the merits pursuant to a legal judgment,
arbitration or settlement.

8

 

     21. Entire Agreement. This Agreement embodies the entire agreement between the Employers and
the Executive with respect to the matters agreed to herein. All prior agreements
between the Employers and the Executive with respect to the matters agreed to herein are
hereby superseded and shall have no force or effect, except that this Agreement shall not affect or
operate to reduce any benefit or compensation inuring to Executive of a kind elsewhere provided.
No provision of this Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.

     IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.

          THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Attest:	 	TierOne BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Gilbert G. Lundstrom, Chairman and
Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	Attest:	 	TierOne Corporation	 	 
	 	 	(as guarantor)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Gilbert G. Lundstrom, Chairman and
Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	Attest:	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

9

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