Document:

exv10w1

 

Exhibit 10.1

TierOne bank

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

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

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

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

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

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

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

          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, 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 $550,000 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 Association agrees to
continue to employ Mercer or some other mutually acceptable consulting firm which can provide
comparable compensation data for the entire term of this Agreement, including any extension
thereof.

2

 

          Any increase in Base Salary or other compensation shall in no way limit or reduce any other
obligation of the Association 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 Association in discretionary bonuses as
authorized and declared by the Board of Directors of the Association 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 Association) in performing services hereunder, provided that
the Executive properly accounts therefor in accordance with Association policy.

               (d) Supplemental Benefit. In addition, the Executive shall receive certain deferred
compensation and insurance benefits pursuant to the terms of a Supplemental Retirement Plan and
Split Dollar Agreement, as such plan or agreement are amended from time to time.

          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 Association’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 Association’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.

               4. Term. The term of employment under this Agreement shall be for an initial period
of three years commencing on January 1, 2006 (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

3

 

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 Association 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 Association and its affiliated companies
as in effect generally at any time with respect to other senior executives of the Association 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 Association’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 in the course of his employment with the Association; (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

4

 

act, on the Executive’s part shall be considered “willful” unless the Association’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 Association.

               (c) Termination by Regulatory Action.

                    (i) If the Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Association’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 Association’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
Association 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 Association’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 Association 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 Association 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
Association: (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 or Resolution Trust
Corporation enters into an agreement to provide assistance to or on behalf of the Association
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 Association or when the
Association 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 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, “Good Reason” shall mean (A) a change in control of the Association
(as defined below) having occurred not more than 12 months prior to delivery of notice of
termination, (B) any assignment to the Executive of any

5

 

duties significantly different than those contemplated by Section 1 hereof, (C) any limitation of
the powers of the Executive in any respect not contemplated by Section 1 hereof, (D) any removal
of the Executive from or any failure to reelect the Executive to any of the positions indicated in
Section 1 hereof, except in connection with termination of the Executive’s employment for Cause,
(E) a reduction in the Executive’s Base Salary, or a material reduction in the Executive’s fringe
benefits (including termination by the Association of the Split Dollar Agreement) or any other
material failure by the Association to comply with Section 2 hereof.

               (e) Notice. Any termination by the Association pursuant to Subsections (b) or (c)
above or by the Executive pursuant to Subsection (d) above 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 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 Association 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 Association 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 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 Company
and its subsidiaries. Any Disability of the Executive shall be certified to the Association 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
Association may, without breaching

6

 

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 Association shall maintain in full
force and effect, for the continued benefit of the Executive for the full term of this Agreement,
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 an amount equal
to the annual contributions, payments, credits or allocations which would have been made by the
Association 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.
After the Executive is replaced, he shall be paid such Disability payments as are provided in the
Supplemental Retirement Plan Agreement.

          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 Association 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.

          9. Termination Benefits.

               (a) General. If the Executive’s employment is terminated by the Association 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 Termination Date; (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 Association for the
time period ending on the Termination Date; (iii) any and all other cash earned through the
Termination Date 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

7

 

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 Association, including but not limited to
his Supplemental Retirement Plan Agreement with the Bank dated October 27, 1993, as amended
(“SERP”) and his Split Dollar Plan Agreement with the Bank dated January 2, 1994, as amended
(“Split Dollar Agreement”), which was in effect on the Termination Date (in the event that any
compensatory fringe benefits or other benefits were reduced or eliminated by the Association
during the 180-day period prior to the Termination Date, 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
Termination Date). Payment of Accrued Benefits shall be made promptly in accordance with the
Association’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 Association. If the Executive’s employment is terminated by
the Association (other than for Cause pursuant to Section 6(b) or by regulatory action pursuant to
Section 6(c)), the Executive shall be entitled to the benefits provided below:

                    (i) The Association 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
Termination Date; plus

                    (ii) The Association shall cause any split dollar life insurance policy on the life of the
Executive to be funded to point of “N pay” (as defined in the Supplemental Retirement Plan
Agreement) and cause the ownership of the policy to be transferred if the policy is purchased in
accordance with the terms of Mr. Lundstrom’s Split Dollar Agreement, as amended.

               (c) Termination by the Executive. If the Executive shall terminate his employment
for Good Reason or otherwise pursuant to Section 6(d) hereof, 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 Association gives notice to the
Executive of the termination of his employment with the Association or (ii) the date upon which
the Executive ceases to serve as an Executive of the Association, and “Change in Control of the
Association” is defined as a change in the ownership of the Association or the Company, a change
in the effective control of the Association or the Company or a change in the ownership of a
substantial portion of the assets of the Association or the Company as provided under Section 409A
of the Code and the regulations thereunder.

8

 

               (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 Association (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 Association 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 Association 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 Association, at the Association’s expense,
shall obtain the opinion (which need not be unqualified) of nationally recognized tax counsel
selected by the Association 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 the principles of Sections 280G(d)(3) and (4) of the Code (or any
successor provisions), which determination shall be provided to the Association and the Executive.
Such opinion shall be dated as of the Termination Date and addressed to the Association and the
Executive and shall be binding upon the Association 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 Association, 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 Termination Date by the
Executive pursuant to the Association’s

9

 

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 of the Association or the
Termination Date.

          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
Association 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 the 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 Sections 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.

          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 Association 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 Association, 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 Association would be required to
perform it if no such succession or assignment had taken place. Failure of the Association to
obtain such an assumption

10

 

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 Association 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), the date on which any such succession becomes
effective shall be deemed the Date of Termination.

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

          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.

11

 

          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 Association (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 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 Association 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 Association regarding the business of the Association, including its customers, products,
prices, manner of operation, without first obtaining the

12

 

Association’s written consent. In the event the Executive breaches this Section, the
Association 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.

          IN WITNESS WHEREOF, the Association 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 above written.

          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
	 	 
	Secretary

	 	President and Chief Operating Officer	 	 
	 
	 	 	 	 
	 
	 	/s/ /Gilbert G. Lundstrom	 	 
	 
	 	 	 	 
	 
	 	Gilbert G. Lundstrom, Executive	 	 

13exv10w2

 

Exhibit 10.2

TierOne bank

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This AMENDED AND RESTATED AGREEMENT is made effective as of July 27, 2006, by and between
TierOne Bank (the “Bank”), a federally-chartered savings bank, with its principal administrative
office at 13th and N Streets, Lincoln, Nebraska 68508, and James A. Laphen (the “Executive”).

     WHEREAS, the Executive is currently employed as the President and Chief Operating Officer of
the Bank pursuant to an employment agreement between the Bank and the Executive entered into as of
September 25, 2000, as subsequently amended by resolutions of the Board of Directors (the “Bank
Employment Agreement”);

     WHEREAS, the Executive is currently employed as the President and Chief Operating 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, which is being
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 mutual covenants herein contained, and upon the other
terms and conditions hereinafter provided, the parties hereby agree as follows:

1. POSITION AND RESPONSIBILITIES.

     During the period of his employment hereunder, the Executive agrees to serve as President and
Chief Operating Officer of the Bank. The Executive shall render administrative and management
services to the Bank such as are customarily performed by persons situated in a similar executive
capacity. The Executive also agrees to perform such other duties, services and responsibilities as
may from time to time be requested by the Bank. During said period of his employment, the Bank
agrees to elect the Executive as a member of the Board of Directors.

2. TERMS AND DUTIES.

     (a) The period of the Executive’s employment under this Agreement shall be deemed to have
commenced as of January 1, 2006 and shall continue for a period of thirty-six (36) full

 

 

calendar months thereafter. Commencing on the first anniversary date of January 1, 2006 and
continuing on each anniversary thereafter, the disinterested members of the board of directors of
the Bank (“Board”) may extend the Agreement an additional year such that the remaining term of the
Agreement shall be three (3) years unless the Executive elects not to extend the term of this
Agreement by giving written notice in accordance with Section 8 of this Agreement. The Board will
review the Agreement and the Executive’s performance annually for purposes of determining whether
to extend the Agreement, and the rationale and results thereof shall be included in the minutes of
the Board’s meeting. The Board shall give notice to the Executive as soon as possible after such
review as to whether the Agreement is to be extended.

     (b) During the period of the Executive’s employment hereunder, except for periods of absence
occasioned by illness, reasonable vacation periods (four (4) weeks per year), and reasonable leaves
of absence, the Executive shall devote substantially all his business time, attention, skill, and
efforts to the faithful performance of his duties hereunder including activities and services
related to the organization, operation and management of the Bank and participation in community
and civic organizations; provided, however, that, with the approval the Board, as evidenced by a
resolution of such Board, from time to time, the Executive may serve, or continue to serve, on the
boards of directors of, and hold other offices or positions in, companies or organizations, which,
in such Board’s judgment, will not present any conflict of interest with the Bank, or materially
affect the performance of the Executive’s duties pursuant to this Agreement.

     (c) Notwithstanding anything herein to the contrary, the Executive’s employment with the Bank
may be terminated by the Bank or the Executive during the term of this Agreement, subject to the
terms and conditions of this Agreement.

3. COMPENSATION AND REIMBURSEMENT.

     (a) The Bank shall pay the Executive as compensation a salary of $365,000 per year (“Base
Salary”). Such Base Salary shall be payable in accordance with the normal payroll practices of the
Bank then in effect (but in any event in substantially equal installments, not less frequently than
monthly) and subject to all applicable taxes required to be withheld by the Bank pursuant to
federal, state or local law. During the period of this Agreement, the Executive’s Base Salary shall
be reviewed at least annually; the first such review will be made no later than one year from the
date of this Agreement. Such review shall be conducted by the Board or by a Committee of the Board,
delegated such responsibility by the Board. The Committee or the Board may increase the Executive’s
Base Salary and once established at an increased specified rate shall not thereafter be reduced.
Any increase in Base Salary shall become the “Base Salary” for purposes of this Agreement. In
addition to, and not to be construed as part of, the Base Salary provided in this Section 3(a), the
Bank shall also provide the Executive with all such other benefits as are provided uniformly to
permanent full-time employees of the Bank.

     (b) The Executive shall be entitled to participate in any employee benefit plans, arrangements
and perquisites substantially equivalent to those available to executive officers of the Bank, and
the Bank will not, without the Executive’s prior written consent, make any changes in such plans,
arrangements or perquisites which would materially adversely affect the Executive’s rights or
benefits thereunder, except to the extent such changes are made applicable

2

 

to all Bank employees on a non-discriminatory basis. Without limiting the generality of the
foregoing provisions of this Subsection (b), the Executive shall be entitled to participate in or
receive benefits under any employee benefit plans including, but not limited to, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans, health-and-accident plans,
medical coverage or any other employee benefit plan or arrangement made available by the Bank in
the future to its senior executives and key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans and arrangements.
The Executive shall be entitled to incentive compensation and bonuses as provided in any plan of
the Bank in which the Executive is eligible to participate. Nothing paid to the Executive under any
such plan or arrangement will be deemed to be in lieu of other compensation to which the Executive
is entitled under this Agreement.

     (c) In addition to the Base Salary provided for by paragraph (a) of this Section 3 and other
compensation provided for by paragraph (b) of this Section 3, the Bank shall pay or reimburse the
Executive for (i) a monthly automobile allowance and country club dues in such amounts as may be
agreed to by the Board from time to time, and (ii) all reasonable travel and other reasonable
expenses incurred in the performance of the Executive’s obligations under this Agreement, and the
Bank may provide such additional compensation in such form and such amounts as the Board may from
time to time determine.

     (d) The Executive shall be entitled to receive fees for serving as a director of the Bank or
as a member of any committee of the Board of Directors of the Bank.

4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a) Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s
term of employment under this Agreement, the provisions of this Section shall apply. As used in
this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the termination by the Bank of the Executive’s full-time employment hereunder for any reason
other than a termination governed by Section 5(a) hereof, a termination for events governed by
Section 11 hereof, or Termination for Cause, as defined in Section 7 hereof; (ii) the Executive’s
resignation from the Bank’s employ upon any (A) failure to elect or reelect or to appoint or
reappoint the Executive as President and Chief Operating Officer, unless consented to by the
Executive, (B) a material change in the Executive’s function, duties, or responsibilities, which
change would cause the Executive’s position to become one of lesser responsibility, importance, or
scope from the position and attributes thereof described in Section 1 above, unless consented to by
the Executive, (C) a relocation of the Executive’s principal place of employment by more than 60
miles from its location at the effective date of this Agreement, unless consented to by the
Executive, (D) a material reduction in the benefits and perquisites to the Executive from those
being provided as of the effective date of this Agreement, unless consented to by the Executive, or
(E) a breach of this Agreement by the Bank. Upon the occurrence of any event described in clauses
(A), (B), (C), (D) or (E) above, the Executive shall have the right to elect to terminate his
employment under this Agreement by resignation upon not less than sixty (60) days prior written
notice given within six full months after the event giving rise to said right to elect.

3

 

     (b) Upon the occurrence of an Event of Termination, on the Date of Termination, as defined in
Section 8, the Bank shall be obligated to pay the Executive, or, in the event of his subsequent
death, his beneficiary or beneficiaries, or his estate, as the case may be, a lump sum cash amount
within 10 business days following the Date of Termination equal to thirty-six (36) months Base
Salary; provided, however, that any payments pursuant to this subsection shall not, in the
aggregate, exceed three times the Executive’s average annual compensation for the five most recent
taxable years that the Executive has been employed by the Bank or such lesser number of years in
the event that the Executive shall have been employed by the Bank for less than five years. In the
event the Bank is not in compliance with its minimum capital requirements or if such payments
pursuant to this subsection (b) would cause the Bank’s capital to be reduced below its minimum
regulatory capital requirements, such payments shall be deferred until such time as the Bank or
successor thereto is in capital compliance. Such payments shall not be reduced in the event the
Executive obtains other employment following termination of employment.

5. CHANGE IN CONTROL.

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

     (b) If a Change in Control has occurred pursuant to Section 5(a) or the Board has determined
that a Change in Control has occurred, the Executive shall be entitled to the benefits provided in
paragraph (c) of this Section 5 upon his subsequent termination of employment at any time during
the term of this Agreement due to: (1) the Executive’s dismissal or (2) the Executive’s voluntary
resignation following any demotion, loss of title, office or significant authority or
responsibility, material reduction in annual compensation or benefits or relocation of his
principal place of employment by more than 60 miles from its location immediately prior to the
Change in Control, unless such termination is because of his death or termination for Cause.

     (c) Upon the Executive’s entitlement to benefits pursuant to Section 5(b), the Bank shall pay
the Executive, or in the event of his subsequent death, his beneficiary or beneficiaries, or his
estate, as the case may be, a lump sum cash amount within 10 business days following the Date of
Termination equal to (3) times the Executive’s Base Salary; provided however, that any
payment under this provision shall not exceed three (3) times the Executive’s average annual
compensation. In the event the Bank is not in compliance with its minimum capital requirements or
if such payments would cause the Bank’s capital to be reduced below its minimum regulatory capital
requirements, such payments shall be deferred until such time as the Bank or successor thereto is
in capital compliance. Such payments shall not be reduced in the event the Executive obtains other
employment following termination of employment.

4

 

6. CHANGE OF CONTROL RELATED PROVISIONS

     Notwithstanding the provisions of Section 5, in no event shall the aggregate payments or
benefits to be made or afforded to the Executive under Section 5 (the “Termination Benefits”)
constitute an “excess parachute payment” under Section 280G of the Code or any successor hereto,
and in order to avoid such a result, the Termination Benefits will be reduced, if necessary, to an
amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount
equal to three (3) times the Executive’s “base amount”, as determined in accordance with said
Section 280G. Any required reduction in the Termination Benefits shall first be made by reducing
the lump sum cash amount payable pursuant to Section 5(c) hereof.

7. TERMINATION FOR CAUSE.

     The term “Termination for Cause” shall mean termination because of the Executive’s personal
dishonesty, incompetence, willful misconduct, any 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 or
material breach of any provision of this Agreement. Notwithstanding the foregoing, the Executive
shall not be deemed to have been Terminated for Cause unless and until there shall have been
delivered to him a Notice of Termination which shall include a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the members of the Board at a meeting of the
Board called and held for that purpose (after reasonable notice to the Executive and an opportunity
for him, together with counsel, to be heard before the Board), finding that in the good faith
opinion of the Board, the Executive’s conduct justified a finding of Termination for Cause and
specifying the particulars thereof in detail. The Executive shall not have the right to receive
compensation or other benefits for any period after Termination for Cause. During the period
beginning on the date of the Notice of Termination for Cause pursuant to Section 8 hereof through
the Date of Termination for Cause, stock options and related limited rights granted to Executive
under any stock option plan shall not be exercisable, nor shall any unvested awards granted to the
Executive under any stock benefit plan of the Bank, the Company or any subsidiary or affiliate
thereof vest. At the Date of Termination for Cause, such stock options and related limited rights
and such unvested awards shall become null and void and shall not be exercisable by or delivered to
the Executive at any time subsequent to such Termination for Cause.

8. NOTICE.

     (a) Any purported termination by the Bank or by the Executive shall be communicated by Notice
of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination”
shall mean a written 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.

5

 

     (b) “Date of Termination” shall mean the date specified in the Notice of Termination (which,
in the case of a Termination for Cause, shall not be less than thirty days from the date such
Notice of Termination is given.).

     (c) If, within thirty (30) days after any Notice of Termination is given, the party receiving
such Notice of Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected) and provided further that the Date of
Termination shall be extended by a notice of dispute only if such notice is given in good faith and
the party giving such notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, in the event the Executive is terminated for
reasons other than Termination for Cause the Bank will continue to pay the Executive his Base
Salary in effect when the notice giving rise to the dispute was given until the earlier of: 1) the
resolution of the dispute in accordance with this Agreement or 2) the expiration of the remaining
term of this Agreement as determined as of the Date of Termination. Amounts paid under this Section
are in addition to all other amounts due under this Agreement and shall not be offset against or
reduce any other amounts due under this Agreement.

9. POST-TERMINATION OBLIGATIONS.

     All payments and benefits, except any benefits which are already vested, to the Executive
under this Agreement shall be subject to the Executive’s compliance with this Section 9 for one (1)
full year after the earlier of the expiration of this Agreement or termination of the Executive’s
employment with the Bank. The Executive shall, upon reasonable notice, furnish such information
and assistance to the Bank as may reasonably be required by the Bank in connection with any
litigation in which it or any of its subsidiaries or affiliates is, or may become, a party.

10. NON-COMPETITION AND NON-DISCLOSURE.

     (a) Upon any termination of the Executive’s employment hereunder pursuant to Section 4 hereof
(other than a termination in connection with or within 12 months following a Change in Control),
the Executive agrees not to compete with the Bank for a period of one (1) year following such
termination in any city, town or county in which the Executive’s normal business office is located,
except as agreed to pursuant to a resolution duly adopted by the Board. The Executive agrees that
during such period and within said cities, towns and counties, the Executive shall not work for or
advise, consult or otherwise serve with, directly or indirectly, any entity whose business
materially competes with the depository, lending or other business activities of the Bank. The
parties hereto, recognizing that irreparable injury will result to the Bank, its business and
property in the event of the Executive’s breach of this Subsection 10(a) agree that in the event of
any such breach by the Executive, the Bank will be entitled, in addition to any other remedies and
damages available, to an injunction to restrain the violation hereof by the Executive, the
Executive’s partners, agents, servants, employees and all persons acting for or under the direction
of the Executive. Nothing herein will be construed as prohibiting the Bank

6

 

from pursuing any other remedies available to the Bank for such breach or threatened breach,
including the recovery of damages from the Executive.

     (b) The Executive recognizes and acknowledges that the knowledge of the business activities
and plans for business activities of the Bank and affiliates thereof, as it may exist from time to
time, is a valuable, special and unique asset of the business of the Bank. The Executive will not,
during or after the term of his employment, disclose any knowledge of the past, present, planned or
considered business activities of the Bank or affiliates thereof to any person, firm, corporation,
or other entity for any reason or purpose whatsoever. Notwithstanding the foregoing, the Executive
may disclose any knowledge of banking, financial and/or economic principles, concepts or ideas
which are not solely and exclusively derived from the business plans and activities of the Bank.
Further, the Executive may disclose information regarding the business activities of the Bank to
the OTS and the Federal Deposit Insurance Corporation (“FDIC”) pursuant to a formal regulatory
request. In the event of a breach or threatened breach by the Executive of the provisions of this
Section, the Bank will be entitled to an injunction restraining the Executive from disclosing, in
whole or in part, the knowledge of the past, present, planned or considered business activities of
the Bank or affiliates thereof, or from rendering any services to any person, firm, corporation or
other entity to whom such knowledge, in whole or in part, has been disclosed or is threatened to be
disclosed. Nothing herein will be construed as prohibiting the Bank from pursuing any other
remedies available to the Bank for such breach or threatened breach, including the recovery of
damages from the Executive.

11. DISABILITY, DEATH, RETIREMENT.

     If the Executive should become disabled or die while this Agreement is in effect, a severance
payment equal to twelve (12) months Base Salary shall be paid to the Executive or his heirs at law,
payable monthly, beginning on the first day of the month following the month in which such event
occurs. If the Executive retires, this Agreement shall terminate and no severance payments shall be
due hereunder. The benefits provided pursuant to this Agreement shall be in addition to any other
benefits provided by the Bank.

     “Disability” shall be deemed to have 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 Company and its
subsidiaries.

12. 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

7

 

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 Sections 4
and 5 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.

13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement and the Company Employment Agreement contain the entire understanding between
the parties hereto and supersede any prior employment agreement between the Bank or any predecessor
of the Bank and the Executive, except that this Agreement shall not affect or operate to reduce any
benefit or compensation inuring to the Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that the Executive is subject to receiving fewer benefits
than those available to him without reference to this Agreement.

14. 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 and the
Bank and their respective successors and assigns.

15. MODIFICATION AND WAIVER.

     (a) This Agreement may not be modified or amended except by an instrument in writing signed by
the 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.

     (b) No term or condition of this Agreement shall be deemed to have been waived, nor shall
there be any estoppel against the enforcement of any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate
only as to the specific term or condition waived and shall not constitute a waiver of such term or
condition for the future as to any act other than that specifically waived.

8

 

16. REQUIRED PROVISIONS.

     (a) The Bank may terminate the Executive’s employment at any time, but any termination by the
Bank, 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 7
hereinabove.

     (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 Bank’s obligations under this
contract 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: (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 its 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 Bank under this
contract 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 (12 U.S.C. §1813(x)(1)), all obligations of the Bank under this contract shall terminate as of
the date of default, but this paragraph shall not affect any vested rights of the contracting
parties.

     (e) All obligations of the Bank under this contract shall be terminated, except to the extent
determined that continuation of the contract is necessary for the continued operation of the Bank:
(i) by the Director of the OTS (or his or her designee), at the time the FDIC or the Resolution
Trust 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 (12 U.S.C.
§1823(c)); or (ii) by the Director of the OTS (or his or her designee) at the time the Director or
his or her designee approves a supervisory merger to resolve problems related to the operations 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) Any payments made to the Executive pursuant to this Agreement, or otherwise, are subject
to and conditioned upon compliance with 12 U.S.C. §1828(k) and 12 C.F.R. §545.121 and any rules and
regulations promulgated thereunder, including the regulations in 12 C.F.R. Part 359.

9

 

17. REINSTATEMENT OF BENEFITS LINDER SECTION 16(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 16(b) hereof (the “Notice’)
during the term of this Agreement and a Change in Control, as defined herein, occurs, the Bank will
assume its obligation to pay and the Executive will be entitled to receive all of the termination
benefits provided for under Section 5 of this Agreement upon the Bank’s receipt of a dismissal of
charges in the Notice.

18. SEVERABILITY.

     If, for any reason, any provision of this Agreement, or any part of any provision, is held
invalid, such invalidity shall not affect any other provision of this Agreement or any part of such
provision not held so invalid, and each such other provision and part thereof shall to the full
extent consistent with law continue in full force and effect.

19. HEADINGS FOR REFERENCE ONLY.

     The headings of sections and paragraphs herein are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the provisions of this
Agreement.

20. GOVERNING LAW.

     The validity, interpretation, performance and enforcement of this Agreement shall be governed
by the laws of the State of Nebraska, but only to the extent not superseded by federal law.

21. 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 Executive within fifty (50) miles from the location of the Bank, 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.

     In the event any dispute or controversy arising under or in connection with the Executive’s
termination is resolved in favor of the Executive, whether by judgment, arbitration or settlement,
the Executive shall be entitled to the payment of all back-pay, including salary, bonuses and any
other cash compensation, fringe benefits and any compensation and benefits due the Executive under
this Agreement.

10

 

22. 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 if
the Executive is successful on the merits pursuant to a legal judgment, arbitration or settlement.

23. INDEMNIFICATION.

     (a) The Bank shall provide the Executive (including his heirs, executors and administrators)
with coverage under a standard directors’ and officers’ liability insurance policy at its expense,
and shall indemnify the Executive (and his heirs, executors and administrators) to the fullest
extent permitted under Nebraska law against all expenses and liabilities reasonably incurred by him
in connection with or arising out of any action, suit or proceeding in which he may be involved by
reason of his having been a director or officer of the Bank (whether or not he continues to be a
director or officer at the time of incurring such expenses or liabilities), such expenses and
liabilities to include, but not be limited to, judgments, court costs and attorneys’ fees and the
cost of reasonable settlements.

24. SUCCESSOR TO THE BANK

     The Bank shall require any successor or assignee, whether direct or indirect, by purchase,
merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank,
expressly and unconditionally to assume and agree to perform the Bank’s obligations under this
Agreement, in the same manner and to the same extent that the Bank would be required to perform if
no such succession or assignment had taken place.

11

 

SIGNATURES

     IN WITNESS WHEREOF, TierOne Bank has caused this Agreement to be executed by its duly
authorized officer, and the Executive has signed this Agreement, on the 27th day of July 2006.

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

	 	 	 	 	 
	 	 	TIERONE BANK
	 
	 	 	 	 
	 

	 	By:	 	/s/ Gilbert G. Lundstrom
	 

	 	 	 	 
	 

	 	 	 	Gilbert G. Lundstrom, Chairman of the
	 

	 	 	 	Board and Chief Executive Officer
	 
	 	 	 	 
	 
	 	 	 	/s/ James A. Laphen
	 

	 	 	 	 
	 

	 	 	 	James A. Laphen, Executive

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]