Document:

Unassociated Document

    Exhibit
10.2

    

    TierOne
CORPORATION

    INCENTIVE
STOCK OPTION AGREEMENT

    AMENDED
AND RESTATED 2003 STOCK OPTION PLAN

    

    AN
INCENTIVE STOCK OPTION ("Option") to purchase a total of 300,000 shares of the
common stock, par value $.01 per share ("Common Stock"), of TierOne Corporation,
Lincoln, Nebraska, (the "Corporation") is hereby granted to Michael J. Falbo
(the "Optionee") pursuant to the Amended and Restated 2003 Stock Option Plan
("Plan") of the Corporation.  The Option granted hereby is subject to
all the terms and conditions of the Plan and this Agreement.  The Plan
is incorporated by reference herein.  Defined terms, unless otherwise
defined herein, shall have the same meaning as set forth in the
Plan.

    

    1.           Option
Price.  The option price shall be $ 0.8701 for each share
of Common Stock eligible to the exercised hereunder, which price is 100% of the
Fair Market Value, as defined in Section 3.15 of the Plan, of the Common Stock
on the date of grant of this Option.

    

    2.           Exercise of
Option.  This Option shall be exercisable pursuant to the
provisions of Article VIII, Section 8.03 of the Plan, as follows:

    

    (a)         Schedule of Right of
Exercise.

    

    
      
        	
                
                  Years
      of Continuous 
Employment After Date of 
Grant of
      Option

                

              	 	
                
                  Percentage
      of Total Shares of Common 
Stock Subject to Option Which May be
      
Exercised

                

              
	
                 

                after
      1 year

              	 	
                 

                     20%

              
	
                 

                after
      2 years

              	 	
                 

                  40

              
	
                 

                after
      3 years

              	 	
                 

                  60

              
	
                 

                after
      4 years

              	 	
                 

                 80

              
	
                 

                after
      5 years

              	 	
                 

                100

              
	 
      	 	 
      

      

    

    

    The right
to exercise the Option pursuant to the above schedule is
cumulative.

    

    Notwithstanding
the foregoing, the Option shall become immediately vested and exercisable in
full on the date the Optionee terminates his employment with the Corporation or
a Subsidiary Company (as defined in Section 3.25 of the Plan) because of his
death or Disability (as defined in Section 3.10 of the Plan). Notwithstanding
the provisions of Section 8.03(b) of the Plan, accelerated vesting of the Option
shall not occur in the event of a Change in Control (as such term is defined in
Section 3.04 of the Plan) of the Corporation or TierOne Bank (the “Bank”) if at
the time of a Change in Control either the Corporation or the Bank is deemed to
be in “troubled condition” as defined in 12 C.F.R. Section 563.555 (or any
successor thereto) unless, prior to or in connection with the Change in Control,
the OTS, and, to the extent required, the Federal Deposit Insurance Corporation,
has approved or not objected to the acceleration under the terms of Section
8.03(b) of the Plan of this Option pursuant to the provisions of 12 C.F.R. Part
359.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (b)         Method of
Exercise.  This Option shall be exercisable by written notice
to the Secretary of the Corporation on the Incentive Stock Option Exercise Form
provided herewith which shall:

    

    (i)          state
the election to exercise the Option, the number of shares with respect to which
it is being exercised, the person in whose name the stock certificate or
certificates for such shares of Common Stock is to be registered, his address
and Social Security number (or if more than one, the names, addresses and Social
Security numbers of such persons);

    

    (ii)         be
signed by the person or persons entitled to exercise the Option and, if the
Option is being exercised by any person or person other than the Optionee, be
accompanied by proof, satisfactory to counsel for the Corporation, of the right
of such person or persons to exercise the Option;

    

    (iii)        be
in writing and delivered in person or by certified mail to the Secretary of the
Corporation at its executive office located at 1235 N Street, Lincoln, Nebraska
68508, Attention: Eugene B. Witkowicz; and

    

    (iv)        be
accompanied by payment for, or irrevocable instructions to a broker to sell, the
shares of Common Stock with respect to which the Option is being exercised
(payment for the Option in this manner will result in the loss of the
tax-advantaged nature of the Option).

    

    Payment
in full of the purchase price for shares of Common Stock purchased pursuant to
the exercise of any Option shall be made to the Corporation upon exercise of the
Option.  All shares sold under the Plan shall be fully paid and
nonassessable.  Payment for shares may be made by the Optionee (i) in
cash or by check, (ii) by delivery of a properly executed exercise notice,
together with irrevocable instructions to a broker (which shall be unrelated to
the Corporation or the Optionee) to sell the shares and then to properly deliver
to the Corporation the amount of sale proceeds to pay the exercise price, all in
accordance with applicable laws and regulations and Emerging Issues Task Force
Issue No. 00-23 and Financial Accounting Standards Board Statement No. 123R, or
(iii) at the discretion of the Board or the Committee, by delivering shares of
Common Stock (including shares acquired pursuant to the previous exercise of an
Option) equal in Fair Market Value to the purchase price of the shares to be
acquired pursuant to the Option, by withholding some of the shares of Common
Stock which are being purchased upon exercise of an Option, or any combination
of the foregoing.  With respect to subclause (iii) hereof, the shares
of Common Stock delivered to pay the purchase price must have either been (x)
purchased in open market transactions or (y) issued by the Corporation pursuant
to a plan thereof, in each case more than six months prior to the exercise date
of the Option (or one year in the case of previously exercised Incentive Stock
Options).

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    

    (c)         Restrictions on
Exercise.  This Option may not be exercised if the issuance of
the shares of Common Stock upon such exercise would constitute a violation of
any applicable federal or state securities law or regulation or any other law or
valid regulation.  As a condition to the exercise of this Option, the
Corporation may require the person exercising this Option to make any
representation or warranty to the Corporation as may be required by any
applicable law or regulation, and may require the Optionee to comply with the
matters set forth in  Sections 4.05 and 4.06 of the Plan.

    

    3.           Non-transferability of
Option.  This Option may not be transferred or assigned in any
manner otherwise than by will or the laws of descent or distribution and may be
exercised during the lifetime of the Optionee only by him. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.

    

    4.           Term of
Option.   This Option may not be exercised later than the
earlier to occur of (i) ten years from the date of grant of this Option, or (ii)
six (6) months after the date on which the Optionee ceases to be employed by the
Corporation and all Subsidiary Companies except as set forth below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Agreement.  If the Optionee terminates his employment with the
Corporation or a Subsidiary Company as a result of Disability or Retirement (as
defined in Section 3.24 of the Plan) without having fully exercised his Option,
the Optionee shall have the right, during the three (3) year period following
his termination due to Disability or Retirement, to exercise such Option to the
extent such Option has vested in accordance with the terms hereof and the Plan
at the time of termination for Disability or Retirement.  If the
Optionee dies while in the employ of the Corporation or a Subsidiary Company or
terminates employment with the Corporation or a Subsidiary Company as a result
of Disability or Retirement and dies without having fully exercised his vested
Option, the executors, administrators, legatees or distributees of his estate
shall have the right, during the one (1) year period following his death, to
exercise such Option. If the Optionee terminates his employment with the
Corporation or a Subsidiary Company following a Change in Control without having
fully exercised his Option, the Optionee shall have the right to exercise such
Option to the extent vested at the time of such termination during the remainder
of the original ten (10) year term of the Option from the date of
grant.  Exercise of the Option more than three (3) months (or one (1)
year in certain cases) after termination will result in the loss of the
tax-advantaged nature of the Option.

    

    5.           Tax
Status.  To the extent that the aggregate Fair Market Value of
the stock with respect to which incentive stock options are exercisable by the
Optionee for the first time during any calendar year (under all stock option
plans of the Corporation and its Subsidiary Companies) exceeds $100,000, such
Options are not incentive stock options.  For the purposes of this
Section 5, the Fair Market Value of stock shall be determined as of the time the
option with respect to such stock is granted.  This Section 5 shall be
applied by taking options into account in the order in which they were
granted.  To the extent that this Option is to become exercisable for
the first time during any calendar year with respect to a number of shares that
exceeds the foregoing limitation, this Option shall be considered to consist of
(i) an incentive stock option to acquire the maximum number of shares permitted
under this Section 5 and (ii) a compensatory stock option to acquire the excess
shares on the same terms described in this Agreement.

    
      
         

      

      
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    6.           Notice of Disposition;
Withholding; Escrow.  Optionee shall immediately notify the
Corporation in writing of any sale, transfer, assignment or other disposition
(or action constituting a disqualifying disposition within the meaning of
Section 421 of the Internal Revenue Code of 1986, as amended) of any shares of
Common Stock acquired through exercise of this Option, within two (2) years
after the date of the grant of the Option or within one (1) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of.  The Corporation shall be entitled to withhold from any
compensation or other payments then or thereafter due to the Optionee such
amounts as may be necessary to satisfy any withholding requirements of federal
or state law or regulation and, further, to collect from the Optionee any
additional amounts which may be required for such purpose.  The
Committee or the Board may, in their discretion, require shares of Common Stock
acquired by an Optionee upon exercise of this Option to be held in an escrow
arrangement for the purpose of enabling compliance with the provisions of
Section 8.09(c) of the Plan.

    

    7.           Administration.  The
authority to manage and control the operation and administration of this
Agreement shall be vested in the Committee, and the Committee shall have all
powers with respect to this Agreement as it has with respect to the
Plan.  Any interpretation of the Agreement by the Committee and any
decision made by it with respect to the Agreement is final and binding in the
absence of action by the Board.

    

    8.           Terms and
Conditions.  The terms and conditions included in the Plan are
incorporated herein by reference, and to the extent that any conflict may exist
between the terms and conditions included in the Plan and the terms of this
Agreement, then the terms and conditions included in the Plan shall
control.

    

    9.           Not an Employment
Contract.  The Option will not confer on the Optionee any right
with respect to continuance of employment or other service with the Corporation
or any Subsidiary Company, nor will it interfere in any way with any right the
Company or any Subsidiary Company would otherwise have to terminate or modify
the terms of the Optionee's employment or other service at any
time.

    

    10.         Notices.  Any
written notices provided for in this Agreement or the Plan shall be in writing
and shall be deemed sufficiently given if either hand delivered or if sent by
fax or overnight courier, or by postage paid first class
mail.  Notices sent by mail shall be deemed received three business
days after mailing but in no event later than the date of actual
receipt.  Notices shall be directed, if to the Optionee, at the
Optionee's address indicated by the Corporation's records, or if to the
Corporation, at the Corporation's executive office.

    

    11.         No Rights As
Shareholder.  The Optionee shall not have any rights of a
shareholder with respect to the shares subject to the Option until a stock
certificate has been duly issued following exercise of the Option as provided
herein.

    
      
         

      

      
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    12.         Amendment.  This
Agreement may be amended by written agreement of the Optionee and the
Corporation, without the consent of any other person; provided, however, in no
event shall the Board or the Committee without shareholder approval amend the
Option in any manner that effectively allows the repricing of the Option either
through a reduction in the exercise price or through the cancellation and
regrant of a new Option in exchange for the cancelled Option (except as
permitted pursuant to Article IX of the Plan in connection with a change in the
Corporation's capitalization).

    

    

    
      	
              ATTEST:

            	 
      	
              TierOne CORPORATION

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
              /s/ Judith A. Klinkman

            	 
      	
              By:

            	
              /s/ Charles W. Hoskins

            
	
              Judith
      A. Klinkman

            	 
      	 
      	
              Charles
      W. Hoskins

            
	
              Assistant
      Secretary

            	 
      	 
      	
              Lead
      Director

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
              (Seal)

            	 
      	
              OPTIONEE

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
              /s/ Michael J. Falbo

            
	 
      	 
      	
              Name:
      Michael J. Falbo

            
	
              Date
      of Grant:  January 28,
2010

            

    

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    TierOne CORPORATION

    INCENTIVE
STOCK OPTION EXERCISE FORM

    

    ___________________________

    Date

    

    
      	
              Attn:

            	
              Eugene
      B. Witkowicz, Secretary

              
                TierOne
      Corporation

                1235
      N Street

                Lincoln,
      Nebraska 68508

              

            

    

    
    

     

    Dear Mr.
Witkowicz:

    

    The
undersigned elects to exercise his/her Incentive Stock Option to purchase _____
shares, par value $.01 per share, of Common Stock  of TierOne
Corporation (the “Option Shares”).

    

    Delivered
herewith in satisfaction of the required purchase price is (select applicable
choice(s):

     

    
      	
              ____

            	
              (a)

            	
              Cash
      or a check payable to TierOne Corporation or in the amount of
      $____________ ;

            

    

    

    
      	
              ____

            	
              (b)

            	
              Certificate(s)
      for ________ shares of Common Stock having a value of $__________ as of
      the date of this notice;

            

    

    

    
      	
              ____

            	
              (c)

            	
              irrevocable
      instructions to a broker to sell ________ Option Shares and then to
      properly deliver to the Corporation the amount of sale proceeds to pay the
      exercise price and any applicable tax withholding (which manner of payment
      I acknowledge will result in a disqualifying disposition of my Option and
      the loss of the tax-advantaged nature of the Option to the extent
      exercised).

            

    

    

    If Common
Stock is enclosed or being used in full or partial consideration of the purchase
price pursuant to items (b) and/or (c) above, I am also attaching a written
notification from the Committee advising:  (i) that such means of
payment has been authorized to be used by me with respect to the Option Shares
and (ii) as to the fair market value of the shares proposed to be tendered by me
as required by the provisions of the Plan.

     

    
      
         

      

      
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    The name
or names to be on the stock certificates and the address and Social Security
number or addresses and Social Security numbers of such person or persons is as
follows:

    

    
      
        	
                Name:

              	 
      
	 
      	 
      
	
                Address:

              	 
      
	 
      	 
      
	 
      
	 
      	
                City

              	 
      	
                State

              	 
      	
                Zip
      Code

              
	 
      	 
      
	
                Social
      Security Number:

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                Very
      truly yours,

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                (Signature
      of Person or Persons

              	 
      
	 
      	 
      	 
      	
                exercising
      the Option)

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                (Print
      Name and Address)

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                Date
      received by the Corporation:

              	 
      	 
      

      

    

     

    
      
         

      

      
        7Unassociated Document

    Exhibit
10.3

    

    RETIREMENT AND TRANSITION
AGREEMENT

    

    This Retirement and Transition
Agreement (the “Agreement”) is made this 28th day of
January 2010, by and among Gilbert G. Lundstrom (the “Vice Chairman”), TierOne
Corporation, a Wisconsin corporation (the “Company”), and its wholly owned
subsidiary, TierOne Bank, a federally chartered savings bank with its principal
office in Lincoln, Nebraska (the “Bank”).

    

    WITNESSETH:

    

    WHEREAS, the Vice Chairman currently
serves as Chairman of the Board and Chief Executive Officer of the Company and
the Bank (collectively, “TierOne”);

    

    WHEREAS, the Vice Chairman currently is
a party to amended and restated employment agreements with both the Company and
the Bank, each dated as of December 17, 2008 (the “Employment Agreements”),
setting forth the terms and conditions of his employment; and

    

    WHEREAS,
the Vice Chairman desires to retire from his current positions, and the parties
hereto desire to set forth the terms and conditions under which the Vice
Chairman will provide certain transitional and other services to
TierOne.

    

    NOW, THEREFORE, in consideration of the
mutual premises and covenants contained herein, and intending to be legally
bound, the parties agree as follows:

    

    Section
1.  New
Position; Term.

    

    As of
January 28, 2010 (the “Effective Date”), Mr. Lundstrom is hereby appointed as
the Vice Chairman of the Board of Directors of each of the Company and the Bank
for a period of one year following the Effective Date; provided, however, that
the Board of Directors of the Company, the Board of Directors of the Bank or the
Vice Chairman may terminate this Agreement by giving at least 30 days’ prior
written notice to the other parties.

    

    Section
2.   Duties as Vice
Chairman.

    

    During the term of this Agreement, the
Vice Chairman shall provide the following services: (a) assistance to the new
Chairman of the Board and Chief Executive Officer of the Company and the Bank in
order to ensure a smooth transition; (b) assistance with the pending branch sale
by the Bank; (c) assistance with the raising of additional capital; and (d) such
other duties as shall be mutually agreed to by the Chairman and Chief Executive
Officer of Tier One and the Vice Chairman.  The Vice Chairman shall
report directly to the Chairman and Chief Executive Officer of TierOne and shall
provide him periodically and no less frequently than monthly a written report
summarizing the status of the various projects and matters on which he is
assisting the Chairman and Chief Executive Officer. Such report shall describe
the work performed for the period covered by the report. The Company and the
Bank reasonably anticipate that the level of services to be provided by the Vice
Chairman to the Company and the Bank after the Effective Date will permanently
decrease to no more than twenty percent (20%) of the average level of the Vice
Chairman’s bona fide services to the Company and the Bank over the immediately
preceding thirty-six (36) month period prior to the Effective
Date.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Section
3.  Compensation as Vice
Chairman.

    

    (a)           In
consideration of his performing the services required under Section 2 of this
Agreement, the Vice Chairman shall receive a Vice Chairman fee of $12,500 per
month, payable monthly starting in February 2010.  The Vice Chairman
fee shall be in addition to and not in lieu of any Board fees or committee fees
otherwise payable to the Vice Chairman in his capacity as a director of the
Company and the Bank.  No Vice Chairman fee shall be payable by the
Company or the Bank (i) in the event of the failure of the Vice Chairman to
provide the services required to be provided under Section 2 hereof or (ii)
following the expiration or termination of this Agreement in accordance with its
terms.

    

    (b)           The
Vice Chairman shall be entitled to receive insurance coverage on the same terms
as other non-employee directors of the Company and the Bank.

    

    
      Section
4.  Working
Facilities and Expenses.

    

    

    The Company and the Bank shall provide
the Vice Chairman with an office for his use at the principal executive
offices of the Company and the Bank in Lincoln, Nebraska, or at such other
location as the Chief Executive Officer and the Vice Chairman may mutually agree
upon.  TierOne shall provide the Vice Chairman with a private office,
secretarial services and other support services and facilities suitable to his
position with TierOne and necessary or appropriate in connection with the
performance of his assigned duties under this Agreement.  TierOne
shall reimburse the Vice Chairman for his ordinary and necessary business
expenses attributable to TierOne’s business in accordance with the policies and
practices of TierOne and that are customarily incurred by persons with similar
duties and positions, including the Vice Chairman's travel and entertainment
expenses incurred in connection with the performance of his duties for TierOne
under this Agreement, in each case upon presentation to TierOne of an itemized
account of such expenses in such form as TierOne may reasonably
require.  Such reimbursement shall be paid promptly by
TierOne.

    

    Section
5.  Continued
Indemnification.

    

    (a)           In
accordance with its existing Employment Agreement with the Vice Chairman, and to
the same extent and scope as provided therein, for a period of six years
following the Effective Date, the Company agrees to cause the Vice Chairman to
be covered by and named as an insured under any policy or contract of insurance
obtained by it to insure its directors and officers against personal liability
for acts or omissions in connection with service as an officer or director of
the Company (including his prior service as Chairman of the Board and Chief
Executive Officer of TierOne) or service in such other capacities at the request
of TierOne.  The coverage provided to the Vice Chairman pursuant to
this Section 5(a) shall be of the same scope and on the same terms and
conditions as the coverage (if any) provided to other officers or directors of
the Company or any successor.  To the maximum extent permitted under
applicable law, for a period of six years following the Effective Date, the
Company shall indemnify the Vice Chairman against and hold him harmless from any
costs, liabilities, losses and exposures that may be incurred by the Vice
Chairman in his capacity as a director or officer of the Company or any
subsidiary or affiliate (including his prior service as Chairman of the Board
and Chief Executive Officer of TierOne).

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    (b)           In
accordance with the provisions of 12 C.F.R. §545.121, the Bank shall save
harmless and indemnify the Vice Chairman against any financial losses, claims,
damages or liabilities arising out of any alleged negligence or other act of the
Vice Chairman occurring while serving as Vice Chairman as well as continue to
indemnify him for any acts or omissions in connection with his prior service as
Chairman of the Board and Chief Executive Officer of the Bank, provided that at
the time of such loss, claim, damage or liability was sustained, the Vice
Chairman was acting in the discharge of his duties hereunder or his prior duties
as Chairman of the Board and Chief Executive Officer of the Bank and such loss,
claim, damage or liability did not result from any willful and wrongful act or
gross negligence of the Vice Chairman in his current or prior
capacities.

    

    Section
6.  Termination of Existing
Employment Agreements.

    

    By the
mutual agreement of the parties hereto, the existing Employment Agreements shall
be terminated and be of no further force and effect as of the Effective Date,
and the Vice Chairman shall be entitled to the rights and payments set forth
herein in lieu of any rights and payments under the Employment Agreements,
except that any compensation under the Employment Agreements which has been
earned but remains unpaid as of the Effective Date shall be paid as soon as
practicable following the Effective Date in accordance with TierOne’s regular
payroll practices.  The Vice Chairman shall no longer be considered an
officer or employee of the Company or the Bank or any of their respective
subsidiaries as of the Effective Date.  This Agreement shall have no
effect on the Vice Chairman’s service as a director of each of the Company and
the Bank or on the Vice Chairman’s rights to receive his vested benefits under
TierOne’s benefit plans.

    

    Section
7.  Source
of Payments; No Duplication of Payments.

    

    All payments provided in this Agreement
shall be timely paid in cash or check from the general funds of the Company or
the Bank.  Payments pursuant to this Agreement shall be allocated
between the Company and the Bank in proportion to the level of activity and the
time expended on such activities by the Vice Chairman as determined by the
Company and the Bank on a monthly basis, unless the applicable provision of this
Agreement specifies that the payment shall be made either by the Company or the
Bank.  In no event shall the Vice Chairman receive duplicate payments
or benefits from the Company and the Bank.

    

    Section
8.  Tax
Withholding.

    

    The Company and the Bank may make such
provisions as they deem appropriate for the withholding pursuant to federal or
state income tax laws of such amounts as the Company and the Bank determine they
are required to withhold in connection with the payments to be made pursuant to
this Agreement.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    Section
9.  No
Effect on Employee Benefit Plans or Programs.

    

    Neither the termination of the
Employment Agreements nor the execution and expiration or termination of this
Agreement shall have any effect on the vested rights of the Vice Chairman under
the Company’s or the Bank’s qualified or non-qualified retirement, pension,
savings, thrift, profit-sharing or stock bonus plans, split dollar agreement, or
any other employee benefit plans or programs in which the Vice Chairman was a
participant in his prior capacity as Chairman of the Board and Chief Executive
Officer of TierOne.

    

    
      Section
10.  Confidentiality.

    

    

    Unless he obtains the prior written
consent of the Company and the Bank, the Vice Chairman shall at all times keep
confidential and shall refrain from using for the benefit of himself, or any
person or entity other than the Company or any entity which is a subsidiary of
the Company or of which the Company is a subsidiary, any material document or
information obtained from the Company, or from its subsidiaries, in the course
of his service to any of them concerning their properties, operations or
business (unless such document or information is readily ascertainable from
public or published information or trade sources or has otherwise been made
available to the public through no fault of his own) until the same ceases to be
material (or becomes so ascertainable or available); provided, however, that
nothing in this Section 10 shall prevent the Vice Chairman, with or without the
consent of the Company and the Bank, from participating in or disclosing
documents or information in connection with any judicial or administrative
investigation, inquiry or proceeding or the Company’s public reporting
requirements to the extent that such participation or disclosure is required
under applicable law.

    

    
      Section
11.  Successors and
Assigns.

    

    

    This Agreement is personal to each of
the parties hereto, and none of the parties may assign or delegate any of its
rights or obligations hereunder without first obtaining the written consent of
the other parties; provided, however, that the Company and 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 Company or the Bank, by an assumption agreement in form and
substance satisfactory to the Vice Chairman, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company and the Bank would be required to perform it if no such succession or
assignment had taken place.

    

    
      Section
12.  Notices.

    

    

    Any communication required or permitted
to be given under this Agreement, including any notice, direction, designation,
consent, instruction, objection or waiver, shall be in writing and shall be
deemed to have been given at such time as it is delivered personally, or five
days after mailing if mailed, postage prepaid, by registered or certified mail,
return receipt requested, addressed to such party at the address listed below or
at such other address as one such party may by written notice specify to the
other party:

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    If to the Vice Chairman:

    

    Gilbert G. Lundstrom

    At the address last
appearing

    on the personnel records
of

    the Company and the Bank

    

    If to TierOne:

    

    TierOne Corporation

    TierOne Bank

    1235 N Street

    Lincoln, Nebraska 68508

    (or the address of TierOne’s principal
executive offices, if different)

    Attention: Chief Executive
Officer

    

    with a copy, in the case of a notice to
TierOne, to:

    

    Elias, Matz, Tiernan & Herrick
L.L.P.

    734 15th Street,
N.W.

    Washington,
D.C.  20005

    Attention:   Raymond A.
Tiernan, Esq.

         Gerald
F. Heupel, Jr., Esq.

    

    
      Section
13.  Severability.

    

    

    A determination that any provision of
this Agreement is invalid or unenforceable shall not affect the validity or
enforceability of any other provision hereof.

    

    
      Section
14.  Waiver.

    

    

    Failure to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant or condition.  A waiver of any
provision of this Agreement must be made in writing, designated as a waiver, and
signed by the party against whom its enforcement is sought.  Any
waiver or relinquishment of any right or power hereunder at any one or more
times shall not be deemed a waiver or relinquishment of such right or power at
any other time or times.

    

    
      Section
15.  Counterparts.

    

    

    This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, and all of
which shall constitute one and the same Agreement.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    
      Section
16.  Governing
Law.

    

    

    This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Nebraska
applicable to contracts entered into and to be performed entirely within the
State of Nebraska, except to the extent that federal law controls.

    

    
      Section
17.   Headings and
Construction.

    

    

    The headings of sections in this
Agreement are for convenience of reference only and are not intended to qualify
the meaning of any section.  Any reference to a section number shall
refer to a section of this Agreement, unless otherwise stated.

    

    
      Section
18.  Entire
Agreement; Modifications.

    

    

    This instrument contains the entire
agreement of the parties relating to the subject matter hereof, and supersedes
in its entirety any and all prior agreements, understandings or representations
relating to the subject matter hereof (including the Employment Agreements,
except for the continued indemnification provisions set forth in Section 5
hereof), except that the parties acknowledge that this Agreement shall not
impact any of the rights and obligations of the parties with respect to the
vested rights of the Vice Chairman under any of TierOne’s benefit plans. No
modifications of this Agreement shall be valid unless made in writing and signed
by the parties hereto.

    

    
      Section
19.  Required Regulatory
Provisions.

    

    

    Notwithstanding anything herein
contained to the contrary, any payments to the Vice Chairman by the Company or
the Bank, whether 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. Section 1828(k), and the regulations promulgated
thereunder in 12 C.F.R. Part 359.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the Company and the
Bank have caused this Agreement to be executed and the Vice Chairman has
hereunto set his hand, all as of the day and year first written
above.

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 	 
      	 
      	/s/ Gilbert G. Lundstrom
	 	 
      	 
      	Gilbert
      G. Lundstrom, Vice Chairman
	 	 
      	 
      	 	 
      
	 	 
      	 
      	 	 
      
	 	 
      	 
      	 	 
      
	ATTEST:	 
      	TierOne
      CORPORATION
	 	 
      	 
      	 	 
      
	 	 
      	 
      	 	 
      
	By:
      	
                                      /s/ Judith A. Klinkman

                                    	 
      	By:
      	
                                      /s/ Charles W. Hoskins

                                    
	 	
                                      Judith
      A. Klinkman

                                    	 
      	 	
                                      Charles
      W. Hoskins

                                    
	 	
                                      Assistant
      Secretary

                                    	 
      	 	
                                      Lead
      Director

                                    
	 	 
      	 
      	 	 
      
	 	 
      	 
      	 	 
      
	 	 
      	 
      	 	 
      
	ATTEST:	 
      	TierOne
      BANK
	 	 
      	 
      	 	 
      
	 	 
      	 
      	 	 
      
	By:
      	
                                      By:/s/ Judith A. Klinkman

                                    	 
      	By:
      	
                                      /s/ Charles W. Hoskins

                                    
	 	
                                      Judith
      A. Klinkman

                                    	 
      	 	
                                      Charles
      W. Hoskins

                                    
	 	
                                      Assistant
      Secretary

                                    	 
      	 	
                                      Lead
      Director

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    

    
      
         

      

      
        7

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