Document:

ex99-102.htm

    Exhibit
10.2

    
 

    TierOne
bank

    AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

    

    

    This
AMENDED AND RESTATED AGREEMENT is made effective as of December 17, 2008,
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 and as previously amended and restated effective as of July 27,
2006 (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 and as previously amended and restated effective as of July 27, 2006
and as amended effective as of December 20, 2006, which is being further amended
and restated as of the date hereof (the “Company Employment
Agreement”);

    

    WHEREAS, the Bank desires to amend and
restate the Bank Employment Agreement in order to make changes to comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), as
well as certain other changes;

    

    WHEREAS, the Bank desires to assure
itself of the continued availability of the Executive's services as provided in
this Agreement; and

    

    WHEREAS, the Executive is willing to
serve the Bank on the terms and conditions hereinafter set forth;

    

    NOW,
THEREFORE, in consideration of the 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.

    
      
         

      

      
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    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, 2008 and shall continue for a period of
thirty-six (36) full calendar months thereafter. Commencing on the first
anniversary date of January 1, 2008 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 $377,500 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.

    
      
         

      

      
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    (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 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 (or
in lieu of an automobile allowance, regular transportation to and from work in a
manner consistent with the transportation that has been provided) 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.  Any such reimbursement shall
be paid promptly by the Bank and in any event no later than March 15 of the year
immediately following the year in which such expenses were
incurred.

    

    (d)           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;
or (ii) the Executive's termination for Good Reason (as defined in Section
4(a)(ii)(A) and (B) of this Agreement), which shall mean a termination based on
the following:

     

    (A) any
material breach of this Agreement by the Bank, including without limitation any
of the following: (1) a material diminution in the Executive’s base
compensation, (2) a material diminution in the Executive’s authority, duties,
titles or

    
      
         

      

      
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      responsibilities
as prescribed in Section 1, or (3) a material diminution in the authority,
duties or responsibilities of the officer to whom the Executive is required to
report, or

    

    

    
      (B) any
material change in the geographic location at which the Executive must perform
his services under this Agreement;

    

    

    provided,
however, that prior to any termination of employment for Good Reason, the
Executive must first provide written notice to the Bank within ninety (90) days
of the initial existence of the condition, describing the existence of such
condition, and the Bank shall thereafter have the right to remedy the condition
within thirty (30) days of the date the Bank received the written notice from
the Executive.  If the Bank remedies the condition within such thirty
(30) day cure period, then no Good Reason shall be deemed to exist with respect
to such condition.  If the Bank does not remedy the condition within
such thirty (30) day cure period, then the Executive may deliver a notice of
termination for Good Reason at any time within sixty (60) days following the
expiration of such cure period.

    

    (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 taxable compensation from
the Bank for the five most recent taxable years ending prior to the year in
which the Date of Termination occurs.  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 and
shall be paid within sixty (60) days after the Bank or any 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” 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, in each case 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
termination of his employment for Good Reason, unless such termination is due to
one of the events governed by Section 11 hereof or is a 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,

    
      
         

      

      
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    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 taxable compensation from the Bank for the five
most recent taxable years ending prior to the year in which the Date of
Termination occurs. 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 and shall be paid within sixty (60) days after the Bank or any
successor thereto is in capital compliance.  Such payments shall not
be reduced in the event the Executive obtains other employment following
termination of employment.

    

    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.

    
      
         

      

      
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    8.           NOTICE.

    

    (a)           Any
purported termination by the Bank or by the Executive shall be communicated by a
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.

    

    (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

    
      
         

      

      
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    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 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

    
      
         

      

      
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    of not
less than three months under an accident and health plan covering employees of
the Bank and its subsidiaries and affiliates.

    

    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
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 effect 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.

    
      
         

      

      
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    (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.

    

    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 its 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 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.

    
      
         

      

      
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    (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.

    

    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

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    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.

    

    
      	
              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), with 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, as of the date first written
above.

    

    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

    

    

    WITNESS:

    

    /s/  Judith A.
Klinkman                                                      

    Judith A.
Klinkman

    Assistant
Secretary

     

     

    12ex-103.htm

    Exhibit
10.3

     

    TierOne
corporation

    AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

    

    

    This AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “Agreement") is made and entered into as of December 17, 2008 by
and between TierOne Corporation, a business corporation organized and existing
under the laws of the State of Wisconsin (the "Company"), and Gilbert G.
Lundstrom (the "Executive").

    

    W I T N E
S S E T H :

    

    WHEREAS, the Executive is currently
employed as the Chairman of the Board and Chief Executive Officer of the Company
pursuant to an employment agreement between the Company and the Executive
entered into as of October 1, 2002, which was amended and restated effective
July 27, 2006 and amended as of December 14, 2006 (the “Company Employment
Agreement”);

    

    WHEREAS, the Executive is currently
employed as the Chairman of the Board and Chief Executive Officer of TierOne
Bank (the “Bank”) pursuant to an amended and restated employment agreement
between the Bank and the Executive entered into as of February 23, 1995, as
subsequently amended effective December 18, 1996 and November 17, 2004 or
by subsequent resolutions of the Board of Directors and as amended and restated
effective July 27, 2006, and which is being further amended and restated as of
the date hereof (the “Bank Employment Agreement”);

    

    WHEREAS, the Company desires to amend
and restate the Company 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 Company 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 Company on the terms and conditions hereinafter set
forth;

    

    NOW, THEREFORE, in consideration of the
premises and the mutual covenants and conditions hereinafter set forth, the
Company and the Executive hereby agree as follows:

    

    
      
        SECTION
1.         
EFFECTIVE
DATE; EMPLOYMENT.

      

    

    

    This Agreement shall be effective on
the date first written above (the “Effective Date”). The Company agrees to
employ the Executive, and the Executive hereby agrees to such employment, during
the period and upon the terms and conditions set forth in this
Agreement.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    SECTION
2.          EMPLOYMENT
PERIOD.

    

    (a)           The
terms and conditions of this Agreement shall be and remain in effect during the
period of three years beginning on October 7, 2008 (the “Commencement Date”) and
ending on the third anniversary of the Commencement Date, plus such extensions,
if any, as are provided pursuant to Section 2(b) hereof (the "Employment
Period").

    

    (b)           Except
as provided in Section 2(c), beginning on the Commencement Date, on each day
during the Employment Period, the Employment Period shall automatically be
extended for one additional day, unless either the Company, on the one hand, or
the Executive, on the other hand, elects not to extend the Agreement further by
giving written notice thereof to the other party, in which case the Employment
Period shall end on the third anniversary of the date on which such written
notice is given. Upon termination of the Executive's employment with the Company
for any reason whatsoever, any daily extensions provided pursuant to this
Section 2(b), if not theretofore discontinued, shall automatically
cease.

    

    (c)           Nothing
in this Agreement shall be deemed to prohibit the Company at any time from
terminating the Executive's employment during the Employment Period with or
without notice for any reason, provided that the relative
rights and obligations of the Company and the Executive in the event of any such
termination shall be determined under this Agreement.

    

    
      SECTION
3.           DUTIES.

    

    

    Throughout the Employment Period, the
Executive shall serve as the Chairman of the Board of Directors of the Company
(the “Company Board”) and as the Chief Executive Officer of the Company, having
such power, authority and responsibility and performing such duties as are
prescribed by or under the Bylaws of the Company and as are customarily
associated with such positions.  The Executive shall devote his full
business time, attention, skills and efforts (other than during weekends,
holidays, vacation periods, and periods of illness or leaves of absence and
other than as permitted or contemplated by Section 7 hereof) to the business and
affairs of the Company as he has customarily done as an officer and employee of
the Bank and shall use his best efforts to advance the interests of the
Company.

    

    
      SECTION
4.           CASH
COMPENSATION.

    

    

    (a)           In
consideration for the services to be rendered by the Executive hereunder, the
Company and/or its subsidiaries shall pay to him a salary of five hundred
seventy-five thousand dollars ($575,000) annually (“Base
Salary”).  The Executive's Base Salary shall be payable in
approximately equal installments in accordance with the Company’s and its
applicable subsidiaries’ customary payroll practices for senior
officers.  Base Salary shall include any amounts of compensation
deferred by the Executive under any tax-qualified retirement or welfare benefit
plan or any other deferred compensation arrangement.  The Company
Board and the Board of Directors of the Bank (the “Bank Board”) shall review the
Executive's annual rate of salary at such times during the Employment Period as
they deem appropriate, but not less frequently than once every twelve months,
and may, in their respective discretion, approve an increase
therein.  In addition to salary, the Executive may receive other cash
compensation from

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    the
Company or its subsidiaries for services hereunder at such times, in such
amounts and on such terms and conditions as the Company Board or the Bank Board
may determine from time to time.  Any increase in the Executive’s
annual salary shall become the Base Salary of the Executive for purposes
hereof.  The Executive’s Base Salary as in effect from time to time
cannot be decreased by the Company and/or the Bank without the Executive’s
express prior written consent.

    

    (b)           The
Executive shall be entitled to participate in an equitable manner with all other
executive officers of the Company in discretionary bonuses as authorized by the
Company Board to executive officers.  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 Company
Board.

    

    (c)           The
Executive shall be entitled to receive fees for serving as a director of the
Company or as a member of any committee as received by other members of the
Company Board.

    

    
      SECTION
5.           EMPLOYEE
BENEFIT PLANS AND PROGRAMS.

    

    

    During the Employment Period, the
Executive shall be treated as an employee of the Company and the Bank and shall
be entitled to participate in and receive benefits under any and all qualified
or non-qualified retirement, pension, savings, profit-sharing or stock bonus
plans, any and all group life, health (including hospitalization, medical and
major medical), dental, accident and long term disability insurance plans, and
any other employee benefit and compensation plans (including, but not limited
to, any incentive compensation plans or programs, stock option and appreciation
rights plans and restricted stock plans) as may from time to time be maintained
by, or cover employees of, the Company and the Bank, in accordance with the
terms and conditions of such employee benefit plans and programs and
compensation plans and programs and consistent with the Company's and the Bank’s
customary practices.  The Company agrees to maintain its current
benefit restoration plan (or benefits equivalent thereto) for the Executive
while he is employed by the Company but not beyond the expiration of the
Employment Period.  Nothing paid to the Executive under any such plan
or program will be deemed to be in lieu of other compensation to which the
Executive is entitled under this Agreement.

    

    
      SECTION
6.           INDEMNIFICATION
AND INSURANCE.

    

    

    (a)           During
the Employment Period and for a period of six years thereafter, the Company
shall cause the Executive 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 or service in other capacities
at the request of the Company.  The coverage provided to the Executive
pursuant to this Section 6 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.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (b)           To
the maximum extent permitted under applicable law, during the Employment Period
and for a period of six years thereafter, the Company shall indemnify the
Executive against and hold him harmless from any costs, liabilities, losses and
exposures that may be incurred by the Executive in his capacity as a director or
officer of the Company or any subsidiary or affiliate.

    

    
      	
              SECTION
      7.

            	
              OUTSIDE
      ACTIVITIES.

            

    

    

    The Executive may (a) serve as a member
of the boards of directors of such business, community and charitable
organizations as he may disclose to and as may be approved by the Company Board
(which approval shall not be unreasonably withheld), and (b) perform duties as a
trustee or personal representative or in any other fiduciary capacity, provided that in each case
such service shall not materially interfere with the performance of his duties
under this Agreement or present any conflict of interest.  The
Executive may also engage in personal business and investment activities which
do not materially interfere with the performance of his duties hereunder, provided that such activities
are not prohibited under any code of conduct or investment or securities trading
policy established by the Company and generally applicable to all similarly
situated executives. If the Executive is discharged or suspended, or is subject
to any regulatory prohibition or restriction with respect to participation in
the affairs of the Bank, he shall continue to perform services for the Company
in accordance with this Agreement but shall not directly or indirectly provide
services to or participate in the affairs of the Bank in a manner inconsistent
with the terms of such discharge or suspension or any applicable regulatory
order.

    

    
      	
              SECTION
      8.

            	
              WORKING
      FACILITIES AND EXPENSES.

            

    

    

    It is understood by the parties that
the Executive's principal place of employment shall be at the Company's principal
executive office located in Lincoln, Nebraska, or at such other location within
25 miles of the
address of such principal executive office, or at such other location as the
Company and the Executive may mutually agree upon.  The Company shall
provide the Executive at his principal place of employment with a private
office, secretarial services and other support services and facilities suitable
to his position with the Company and necessary or appropriate in connection with
the performance of his assigned duties under this Agreement.  The
Company shall reimburse the Executive for his ordinary and necessary business
expenses attributable to the Company’s business, including, without limitation,
the Executive's travel and entertainment expenses incurred in connection with
the performance of his duties for the Company under this Agreement, in each case
upon presentation to the Company of an itemized account of such expenses in such
form as the Company may reasonably require.  Such reimbursement shall
be paid promptly by the Company and in any event no later than March 15 of the
year immediately following the year in which such expenses were
incurred.  In addition, the Company and/or its subsidiaries shall
provide the Executive with an automobile allowance payable annually in such
amount as shall be determined by the Board of Directors to cover the Executive’s
costs of operating the automobile in connection with the business of the Company
and its subsidiaries.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    SECTION
9.          TERMINATION OF
EMPLOYMENT WITH BENEFITS.

    

    (a)           Subject
to Section 9(d), the Executive shall be entitled to the benefits described in
Section 9(b) in the event that:

    

    (i)           his
employment with the Company terminates during the Employment Period as a result
of the Executive's termination for Good Reason (as
defined in Section 9(a)(i)(A) and (B) of this Agreement), which shall mean a
termination based on the following:

    

    (A) any material breach of this Agreement by the
Company, including without limitation any of the following: (1)
a material diminution in the Executive’s base compensation, (2) a material
diminution in the Executive’s authority, duties, titles or
responsibilities as prescribed in Section 3, or (3) any requirement that the Executive report to a
corporate officer or employee of the Company instead of
reporting directly to the Board of Directors of the Company,
or

    

    (B) any material change in the geographic
location at which the Executive must perform hisservices under
this Agreement;

    

    provided, however, that prior to any
termination of employment for Good Reason, the Executive must first provide
written notice to the Companywithin ninety (90) days of the initial existence of the
condition, describing the existence of such condition, and the Companyshall
thereafter have the right to remedy the condition within thirty (30) days of the
date the Companyreceived the written notice from the
Executive.  If the Companyremediesthe condition
within such thirty (30) day cure period, then no Good Reason shall be deemed to
exist with respect to such condition.  If the Companydoesnot remedy the condition within such thirty (30) day
cure period, then the Executive may deliver a notice of termination for Good
Reason at any time within sixty (60) days following the expiration of such cure
period; or

    

    (ii)           the
Executive's employment with the Company is terminated by the Company during the
Employment Period for any reason other than for "cause," death or “Disability,”
as provided in Section 10(a).

    

    (b)           Subject
to Section 9(d) and if the Executive has offered to continue to provide services
on the terms contemplated by this Agreement and such offer has been declined,
upon the termination of the Executive’s employment pursuant to Section 9(a) of
this Agreement, the Company shall pay and provide to the Executive (or, in the
event of his subsequent death, to his estate):

    

    (i)           his
earned but unpaid Base Salary (including, without limitation, all items which
constitute wages under applicable law and the payment of which is not otherwise
provided for in this Section 9(b)) as of the date of the termination of his
employment, with such payment to be made at the time and in the manner
prescribed by law applicable to the payment of wages but in no event later than
30 days after termination of employment;

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    (ii)           the
benefits, if any, to which he is entitled under the employee benefit plans and
programs and compensation plans and programs maintained for the benefit of the
Company's and the Bank’s officers and employees through the date of the
termination of his employment;

    

    
      (iii)         
continued
group life, health (including hospitalization, medical and major medical),
dental, accident and long term disability insurance benefits, in addition to
that provided pursuant to Section 9(b)(ii), and after taking into account the
coverage provided by any subsequent employer, if and to the extent necessary to
provide for the Executive, for the  period beginning on the date on
which his employment terminates and ending on the last day
of the Employment Period (the “Remaining Employment Period”) and at no cost to
the Executive, coverage equivalent to the coverage to which he would have been
entitledunder such plans if he had continued to be employed during such period
at the highest annual rate of salary achieved during the Employment Period;
provided that any insurance premiums payable by
the Company or any successors pursuant to this Section 9(b)(iii)
shall be payable at such times and in such amounts (except that the Company shall also pay any employee
portion of the premiums) as if the
Executive was still an employee of the Company, subject to
any increases in such amounts imposed by the insurance company or COBRA, and the
amount of insurance premiums required to be paid by the Company in any
taxable year shall not affect the amount of insurance premiums required to be
paid by the Company in any other taxable year; and provided further that if the Executive’s
participation in any group insurance plan is barred, the Company shall either
arrange to provide the Executive with insurance benefits substantially similar
to those which the Executive was entitled to receive under such group insurance
plan or, if such coverage cannot be obtained, pay a lump sum cash equivalency
amount within thirty (30) days following the date of termination based on the
annualized rate of premiums being paid by the Company as of the date of
termination;

    

    

    (iv)           within
30 days following the date on which his employment terminates, a lump sum
payment, in an amount equal to
the present value of the Base Salary that the Executive would have earned if he
had continued to be employed during the Remaining Employment Period at the
highest annual rate of Base Salary achieved during the Employment Period, with
such present value to be determined using a discount rate equal to the
applicable short-term federal rate prescribed under Section
1274(d) of the Code, compounded using the compounding periods corresponding to
the Company's and the Bank’s regular payroll periods for their officers, and
with such lump sum to be paid in lieu of all other payments of Base Salary
provided for under this Agreement in respect of the Remaining Employment
Period;

    

    (v)           within
30 days following the date on which his employment terminates, a lump sum
payment in an amount equal to the excess, if any, of:

    

    (A)           the
present value of the aggregate benefits to which he would be entitled under any
and all qualified defined benefit pension plans and non-qualified plans related
thereto maintained by, or covering employees of, the Company and the Bank if he
were 100% vested thereunder and had continued to be employed

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    during
the Remaining Employment Period at the highest annual rate of Base Salary
achieved during the Employment Period; over

    

    (B)           the
present value of the benefits to which he is actually entitled under such
defined benefit pension plans as of the date on which his employment terminates,
with such present values to be determined using the mortality tables prescribed
under Section 415(b)(2)(E)(v) of the Code and a discount rate, compounded
monthly, equal to the annualized rate of interest prescribed by the Pension
Benefit Guaranty Corporation for the valuation of immediate annuities payable
under terminating single-employer defined benefit plans for the month in which
the Executive's employment terminates ("Applicable PBGC Rate");

    

    (vi)           within
30 days following the date on which his employment terminates, a lump sum
payment in an amount equal to the present value of the additional employer
contributions to which he would have been entitled under any and all qualified
defined contribution plans and non-qualified plans related thereto maintained
by, or covering employees of, the Company and the Bank as if he were 100% vested
thereunder and had continued to be employed during the Remaining Employment
Period at the highest annual rate of Base Salary achieved during the Employment
Period and making the maximum amount of employee contributions, if any, required
or permitted under such plan or plans, with such present value to be determined
on the basis of a discount rate, compounded using the compounding period that
corresponds to the frequency with which employer contributions are made to the
relevant plan, equal to the Applicable PBGC Rate, provided that no payments
shall be made pursuant to this subsection (vi) with respect to the Company’s
Employee Stock Ownership Plan (“ESOP”) if the ESOP  is terminated
effective as of a date within one year of the date of the termination of the
Executive’s employment;

    

    (vii)           within
30 days following the  date on which his employment terminates, a lump
sum payment in an amount equal to the present value of the payments that would
have been made to the Executive under any cash bonus or long-term or short-term
cash incentive compensation plan maintained by, or covering employees of, the
Company and the Bank if he had continued to be employed during the Remaining
Employment Period and had earned in each calendar year that ends during the
Remaining Employment Period a bonus or incentive award that equals the highest
annual bonus or incentive award paid to the Executive during the preceding 36
calendar months, with the present value of such payments to be determined using
a discount rate equal to the applicable short-term federal rate prescribed under
Section 1274(d) of the Code, compounded using the compounding periods
corresponding to the Company’s schedule of paying bonuses; and

    

    (viii)          within
30 days following the occurrence of an event described in Section 9(a), upon the
surrender of then outstanding options or appreciation rights previously issued
to the Executive under any stock option and appreciation rights plan or program
maintained by, or covering employees of, the Company, a lump sum payment in an
amount equal to the product of:

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (A)           the
excess of (I) the fair market value of a share of stock of the same class as the
stock subject to the option or appreciation right, determined as of the date on
which his employment terminates, over (II) the exercise price per share for such
option or appreciation right, as specified in or under the relevant plan or
program; multiplied by

    

    (B)           the
number of shares with respect to which options or appreciation rights are being
surrendered.

    

    The
Company and the Executive hereby stipulate that the damages which may be
incurred by the Executive following any such termination of employment are not
capable of accurate measurement as of the date first written above and that the
payments and benefits contemplated by this Section 9(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage but subject to mitigation as provided in Section
9(d).  The Company and the Executive further agree that the Company
may condition the payments and benefits (if any) due under Sections 9(b)(iii),
(iv), (v), (vi) and (vii) on the receipt of the Executive's resignation from any
and all positions which he holds as an officer, director or committee member
with respect to the Company or any of its subsidiaries or
affiliates.

    

    (c)           If
the Executive’s employment with the Bank is terminated at the same time that his
employment with the Company is terminated pursuant to Section 9(a) hereof, and
if the termination benefits payable by the Bank to the Executive pursuant to
Sections 9(a), 9(b) or 9(c) of the Bank Employment Agreement are limited by
Section 9(e)(ii) of the Bank Employment Agreement, then the Company shall pay to
the Executive the amount by which his termination benefits under the Bank
Employment Agreement are reduced by Section 9(e)(ii) thereof, subject to Section
9(d) of this Agreement and provided further that the termination benefits
payable to the Executive under the Bank Employment Agreement are reduced to
their present value using discounting methods similar to those set forth in
Section 9(b) of this Agreement.

    

    (d)           In
the event that the Executive becomes entitled to liquidated damages pursuant to
this Section 9 and a Change in Control as defined in Section 11(a) hereof has
occurred within one year of the date of termination, the Company's obligations
with respect to damages payable under Sections 9(b)(iii) through 9(b)(vii) and
9(c) shall be reduced by the amount of the Executive's earned income, if any
(within the meaning of Section 911(d)(2)(A) of the Code), during the Remaining
Employment Period.  The Executive agrees that in the event he becomes
entitled to liquidated damages pursuant to this Section 9 and a Change in
Control as defined in Section 11(a) hereof has occurred within one year of the
date of termination, then throughout the Remaining Employment Period, he shall
promptly inform the Company of the nature and amounts of earned income which he
earns from providing services other than to the Company or the Bank, or any of
their respective successors, and shall provide such documentation of such cash
income as the Company may request.  In the event of changes to such
cash income from time to time, the Executive shall inform the Company of such
changes, in each case within five days after the change occurs, and shall
provide such documentation concerning the change as the Company may
request.  If a Change in Control has occurred within one year of the
date of termination, the Executive shall reimburse to the Company the cash
payments or benefits provided by the Company to him pursuant to Sections
9(b)(iii) through 

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    9(b)(vii)
and 9(c), up to the amount of earned income which he earns from providing
services during the Remaining Employment Period.  Such reimbursement
shall be made as and when payments of such earned income are received by the
Executive or within 30 days thereafter.

    

    
      	
              SECTION
      10.

            	
              TERMINATION
      WITHOUT ADDITIONAL COMPANY
LIABILITY.

            

    

    

    (a)           In
the event that the Executive's employment with the Company shall terminate
during the Employment Period on account of:

    

    (i)           
the discharge of the Executive for "cause," which, for purposes of this
Agreement, shall mean a discharge because the Company Board determines that the
Executive has: (A) willfully failed to perform his assigned duties under
this Agreement, other than any failure resulting from the Executive’s incapacity
due to physical or mental injury or illness; (B) committed an act involving
moral turpitude in the course of his employment with the Company and its
subsidiaries; (C) engaged in willful misconduct; (D) breached his fiduciary
duties for personal profit; (E) willfully violated, in any material respect, any
law, rule or regulation (other than traffic violations or similar offenses),
written agreement or final cease-and-desist order with respect to his
performance of services for the Company or the Bank, as determined by the
Company Board; or (F) materially breached the terms of this
Agreement;

    

    (ii)           the
Executive's voluntary resignation from employment (including voluntary
retirement) with the Company for reasons other than those specified in Section
9(a)(i); or

    

    (iii)           
the death of the Executive while employed by the Company, or the termination of
the Executive's employment because of "Disability" as defined in Section 10(c)
below;

    

    then in
any of the foregoing events, the Company shall have no further obligations under
this Agreement, other than (A) the payment to the Executive of his earned but
unpaid Base Salary as of the date of the termination of his employment, (B) the
payment to the Executive of the benefits to which he is entitled under all
applicable employee benefit plans and programs and compensation plans and
programs, including but not limited to such retirement, death or disability
benefits to which he is entitled under his Supplemental Retirement Plan
Agreement with the Bank dated October 27, 1993, as amended (“SERP”) and his
Split Dollar Agreement with the Bank dated January 2, 1994, as amended
(“Split Dollar Agreement”), and (C) the provision of such other benefits, if
any, to which he is entitled as a former employee under the Company's employee
benefit plans and programs and compensation plans and programs.

    

    (b)           For
purposes of this Section 10, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the
Company.  Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Company Board or based upon the
written advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company.  The cessation of employment 

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    of the
Executive shall not be deemed to be for "cause" within the meaning of Section
10(a)(i) unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of three-fourths of
the members of the Company Board at a meeting of such Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before
such Board), finding that, in the good faith opinion of such Board, the
Executive is guilty of the conduct described in Section 10(a)(i) above, and
specifying the particulars thereof in detail.

    

    (c)           “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.  The existence of such
physical or mental impairment shall be determined by a physician selected by the
Chief Medical Officer at the University of Nebraska Medical Center at Omaha,
Nebraska, and the physician shall certify the existence or absence of such
impairment to the Company and the Executive.

    

    (d)           During
any period in which the Executive is absent due to physical or mental
impairment, the Company may, without breaching this Agreement, appoint another
person or persons to act as interim Chairman of the Board and interim Chief
Executive Officer pending the Executive’s return to his duties on a full-time
basis hereunder or his termination as a result of such
Disability.  Prior to the Executive’s employment being terminated due
to Disability under Section 10(e) hereof, the Executive shall continue to
receive his full Base Salary, bonuses and other benefits to which he is entitled
under this Agreement, including continued participation in all employee benefit
plans and programs.

    

    (e)           The
Company may provide notice to the Executive in writing that it intends to
terminate the Executive’s employment under this Agreement, with the termination
date to be on or after the date that the Executive has been absent from his
duties hereunder on a full-time basis for six consecutive months due to any
physical or mental impairment.  At the time his employment hereunder
is terminated due to Disability, (i) the Executive shall not be entitled to any
payments or benefits pursuant to Sections 4 and 5 hereof for periods subsequent
to such date of termination, and (ii) the Executive shall become entitled to
receive the Disability payments provided by Section 4 of  his SERP
and/or that may be available under any applicable long-term disability
plan.

    

    
      	
              SECTION
      11.

            	
              TERMINATION
      UPON OR FOLLOWING A CHANGE IN
CONTROL.

            

    

    

    (a)           The
term “Change in Control” 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, in each case as provided under Section 409A of the Code and the
regulations thereunder.  In no event, however, shall a Change in
Control be deemed to have occurred as a result of any 

    

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

acquisition
of securities or assets of the Company, the Bank, or a subsidiary of either of
them, by the Company, the Bank, or any subsidiary of either of them, or by any
employee benefit plan maintained by any of them.

    

    (b)           Upon
the occurrence of a Change in Control prior to the expiration of the Employment
Period, the Company shall pay to the Executive, in addition to any amounts
payable pursuant to Section 9, a severance benefit in a lump sum payment, within
25 days after the effective time of such Change in Control equal to the greater
of (i) the sum of the amounts payable as Base Salary pursuant to Section 4
during the Remaining Employment Period and as additional cash compensation
pursuant to Section 9(b)(vii), or (ii) three times the Executive’s “base amount”
from the Company and its subsidiaries as defined under Section 280G of the Code,
minus $1.00.

    

    
      	
              SECTION
      12.

            	
              TAX
      INDEMNIFICATION.

            

    

    

    (a)           If
the payments and benefits pursuant to this Agreement, either alone or together
with other payments and benefits which the Executive has the right to receive
from the Company and its subsidiaries (including, without limitation, the
payments and benefits which the Executive would have the right to receive from
the Bank pursuant to Section 9 of the Bank Employment Agreement), would
constitute a “parachute payment” as defined in Section 280G(b)(2) of the Code
(the “Initial Parachute Payment”), then the Company shall pay to the Executive,
within ten (10) business days after the date of termination and subject to
applicable withholding requirements, a lump sum cash amount equal to the sum of
the following:

    

    (i)           twenty
(20) percent (or such other percentage equal to the tax rate imposed by Section
4999 of the Code) of the amount by which the Initial Parachute Payment exceeds
the Executive’s “base amount” from the Company and its subsidiaries, as defined
in Section 280G(b)(3) of the Code, with the difference between the Initial
Parachute Payment and the Executive’s base amount being hereinafter referred to
as the “Initial Excess Parachute Payment”; and

    

    (ii)           such
additional amount (tax allowance) as may be necessary to compensate the
Executive for the payment by the Executive of state, local and federal income
and excise taxes on the payment provided under clause (i) above and on any
payments under this clause (ii).  In computing such tax allowance, the
payment to be made under clause (i) above shall be multiplied by the “gross up
percentage” (“GUP”).  The GUP shall be determined as
follows:

    

                
   Tax
Rate                      

    GUP  =   1- Tax
Rate

    

    The Tax Rate for purposes of computing
the GUP shall be the highest marginal federal, state and local income and
employment-related tax rate (including Social Security and Medicare taxes),
including any applicable excise tax rate, applicable to the Executive in the
year in which the payment under clause (i) above is made, and shall also reflect
the phase-out of deductions and the ability to deduct certain of such
taxes.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (b)           Notwithstanding
the foregoing, if it shall subsequently be determined in a final judicial
determination or a final administrative settlement to which the Executive is a
party that the actual excess parachute payment as defined in Section 280G(b)(1)
of the Code (before giving effect to the payments under Sections 12(a)(i) and
(ii) above) is different from the Initial Excess Parachute Payment (such
different amount being hereafter referred to as the “Determinative Excess
Parachute Payment”), then the Company’s independent tax counsel or accountants
shall determine the amount (the “Adjustment Amount”) which either the Executive
must pay to the Company or the Company must pay to the Executive in order to put
the Executive (or the Company, as the case may be) in the same position the
Executive (or the Company, as the case may be) would have been if the Initial
Excess Parachute Payment had been equal to the Determinative Excess Parachute
Payment. In determining the Adjustment Amount, the independent tax counsel or
accountants shall take into account any and all taxes (including any penalties
and interest) paid by or for the Executive or refunded to the Executive or for
the Executive’s benefit.  As soon as practicable after the Adjustment
Amount has been so determined, and in no event
more than thirty (30) days after the Adjustment Amount has been so determined,
the Company shall pay the Adjustment
Amount to the Executive or the Executive shall repay the Adjustment Amount to
the Company, as the case may be.

    

    (c)           In
each calendar year that the Executive receives payments of benefits that
constitute a parachute payment, the Executive shall report on his state, local
and federal income tax returns such information as is consistent with the
determination made by the independent tax counsel or accountants of the Company
as described above.  The Company shall indemnify and hold the
Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorneys’ fees, interest, fines and penalties)
which the Executive incurs as a result of so reporting such information, with such indemnification to be paid by the Company to
the Executive as soon as practicable and in any event no later than March 15 of
the year immediately following the year in which the amount subject to
indemnification was determined. The Executive shall
promptly notify the Company in writing whenever the Executive receives notice of
the institution of a judicial or administrative proceeding, formal or informal,
in which the federal tax treatment under Section 4999 of the Code of any amount
paid or payable under this Section 12 is being reviewed or is in
dispute.  The Company shall assume control at its expense over all
legal and accounting matters pertaining to such federal tax treatment (except to
the extent necessary or appropriate for the Executive to resolve any such
proceeding with respect to any matter unrelated to amounts paid or payable
pursuant to this Section 12) and the Executive shall cooperate fully with the
Company in any such proceeding.  The Executive shall not enter into
any compromise or settlement or otherwise prejudice any rights the Company may
have in connection therewith without the prior consent of the
Company.

    

    
      	
              SECTION
      13.

            	
              SOURCE
      OF PAYMENTS; NO DUPLICATION OF
PAYMENTS.

            

    

    

    (a)           All
payments provided in this Agreement shall be timely paid in cash or check from
the general funds of the Company subject to Section 13(b).

    

    (b)           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 Bank Employment Agreement, such compensation payments and benefits paid by
the Bank will be subtracted from any amount due simultaneously to the Executive
under similar

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    provisions
of this Agreement.  Payments pursuant to this Agreement and the Bank
Employment Agreement (other than severance and change in control payments and
benefits pursuant to Sections 9 and 11 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.

    

    
      	
              SECTION
      14.

            	
              COVENANT
      NOT TO COMPETE.

            

    

    

    The Executive hereby covenants and
agrees that, in the event of his termination of employment with the Company for
any reason prior to the expiration of the Employment Period (other than a
termination of employment in connection with or within 12 months following a
Change in Control), for a period of two years following the date of his
termination of employment with the Company (or, if less, for the Remaining
Employment Period), he shall not, without the written consent of the Company,
become an officer, employee, consultant, director or trustee of any savings
bank, savings and loan association, savings and loan holding company, bank or
bank holding company, or any direct or indirect subsidiary or affiliate of any
such entity, that entails working within any county in which the Company or the
Bank maintains an office.

    

    
      	
              SECTION
      15.

            	
              CONFIDENTIALITY.

            

    

    

    Unless he obtains the prior written
consent of the Company, the Executive 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 parent or subsidiaries, in the course of his
employment with 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 15 shall prevent the Executive, with or without the
Company's consent, 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
      16.

            	
              SOLICITATION.

            

    

    

    The Executive hereby covenants and
agrees that, for a period of two years following his termination of employment
with the Company for any reason (other than a termination of employment in
connection with or within 12 months following a Change in Control), he shall
not, without the written consent of the Company, either directly or
indirectly:

    

    (a)           
solicit, offer employment to, or take any other action intended, or that a
reasonable person acting in like circumstances would expect, to have the effect
of causing any officer or employee of the Company or any of its subsidiaries or
affiliates to terminate his employment and accept employment or become
affiliated with, or provide services for compensation in any capacity whatsoever
to, any savings bank, savings and loan association, bank, bank holding company,
savings and loan holding company, or

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    other
institution engaged in the business of accepting deposits, making loans or doing
business within the counties specified in Section 14;

    

    (b)           provide
any information, advice or recommendation with respect to any such officer or
employee to any savings bank, savings and loan association, bank, bank holding
company, savings and loan holding company, or other institution engaged in the
business of accepting deposits, making loans or doing business within the
counties specified in Section 14, that is intended, or that a reasonable person
acting in like circumstances would expect, to have the effect of causing any
officer or employee of the Company or any of its subsidiaries or affiliates to
terminate his employment and accept employment or become affiliated with, or
provide services for compensation in any capacity whatsoever to, any savings
bank, savings and loan association, bank, bank holding company, savings and loan
holding company, or other institution engaged in the business of accepting
deposits, making loans or doing business within the counties specified in
Section 14; or

    

    (c)           solicit,
provide any information, advice or recommendation or take any other action
intended, or that a reasonable person acting in like circumstances would expect,
to have the effect of causing any customer of the Company or the Bank to
terminate an existing business or commercial relationship with the Company or
the Bank.

    

    
      	
              SECTION
      17.

            	
              NO
      EFFECT ON EMPLOYEE BENEFIT PLANS OR
PROGRAMS.

            

    

    

    The termination of the Executive's
employment during the Employment Period or thereafter, whether by the Company or
by the Executive, shall have no effect on the vested rights of the Executive
under the Company's or the Bank’s qualified or non-qualified retirement,
pension, savings, thrift, profit-sharing or stock bonus plans, group life,
health (including hospitalization, medical and major medical), dental, accident
and long term disability insurance plans, SERP, Split Dollar Agreement, ESOP
Supplemental Executive Retirement Plan, 401(k) Supplemental Executive Retirement
Plan or other employee benefit plans or programs, or compensation plans or
programs in which the Executive was a participant.

    

    
      	
              SECTION
      18.

            	
              SUCCESSORS
      AND ASSIGNS.

            

    

    

    (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
Company 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, 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 Company would be required to perform it if no such succession or assignment
had taken place.  Failure of the Company to obtain such an assumption
agreement prior to the effectiveness of any such succession or assignment shall
be a breach of this Agreement and shall entitle the Executive to compensation
from the Company in the same amount and on the same terms as the compensation
pursuant to Sections 9 and 11 hereof.  For purposes
of  implementing the provisions of this

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    Section
18(a), the date which any such succession without an assumption agreement
becomes effective shall be deemed the date of termination of the Executive’s
employment.

    

    (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, devises 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.

    

    
      	
              SECTION
      19.

            	
              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:

    

    If to the Executive:

    

    Gilbert G. Lundstrom

    At the address last
appearing

    on the personnel records
of

    the Company

    

    If to the Company:

    

    TierOne Corporation

    1235 N Street

    Lincoln, Nebraska 68508

    (or the address of the Company’s
principal executive office, if different)

    Attention: President

    

    with a copy, in the case of a notice to
the Company, 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
      20.

            	
              INDEMNIFICATION
      FOR ATTORNEYS' FEES.

            

    

    

    (a)           The
Company shall indemnify, hold harmless and defend the Executive against
reasonable costs, including legal fees and expenses, incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved, as a result of his

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    efforts,
in good faith, to defend or enforce the terms of this Agreement.  For
purposes of this Agreement, any settlement agreement which provides for payment
of any amounts in settlement of the Company's obligations hereunder shall be
conclusive evidence of the Executive's entitlement to indemnification hereunder,
and any such indemnification payments shall be in addition to amounts payable
pursuant to such settlement agreement, unless such settlement agreement
expressly provides otherwise.

    

    (b)           The
Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others.  Unless it is
determined that a claim made by the Executive was either frivolous or made in
bad faith, the Company agrees to pay as incurred (and in any event no later than March 15 of the year
immediately following the year in which incurred), to the full extent
permitted by law, all legal fees and expenses which the Executive may reasonably
incur as a result of or in connection with his consultation with legal counsel
or arising out of any action, suit, proceeding or contest (regardless of the
outcome thereof) by the Company, the Executive or others regarding the validity
or enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable federal rate
provided for in Section 7872(f)(2)(A) of the Code.  This Section 20(b)
shall apply whether such consultation, action, suit, proceeding or contest
arises before, on, after or as a result of a Change in Control.

    

    
      	
              SECTION
      21.

            	
              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
      22.

            	
              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
      23.

            	
              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.

    

    
      	
              SECTION
      24.

            	
              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.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    
      	
              SECTION
      25.

            	
              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
      26.

            	
              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, except that the parties acknowledge that
this  Agreement shall not impact any of the rights and obligations of
the parties to the Bank Employment Agreement or any of the agreements or plans
referenced in the Bank Employment Agreement (including but not limited to the
Executive’s SERP and Split Dollar Agreement, each as amended) except as set
forth in Section 13 hereof.  No modifications of this Agreement shall
be valid unless made in writing and signed by the parties hereto; provided,
however, that if the Company 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 Company may amend this
Agreement to the extent necessary to avoid triggering the tax and interest
penalties imposed by Section 409A of the Code.

    

    
      	
              SECTION
      27.

            	
              REQUIRED
      REGULATORY PROVISIONS.

            

    

    

    Notwithstanding anything herein
contained to the contrary, any payments to the Executive by the Company, 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.

    

    
      SECTION
28.        
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

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    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 any 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.

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

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

    

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

    

    

    

                                                                                                        
/s/ Gilbert G.
Lundstrom

                                                                                                        
Gilbert G. Lundstrom, Executive

    

    

    

    ATTEST:                                                                                  
 TierOne CORPORATION

    

    

    By___/s/ Judith A.
Klinkman                                                  By___/s/ James A.
Laphen

    Name: Judith A.
Klinkman                                                       
Name: James A. Laphen

    Its: Assistant
Secretary                                                           
Its: President and Chief Operating Officer

     

     

     

    

    [Seal]

     

     

    19

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