Attached files
| file | filename |
|---|---|
| 8-K - 8-K - TIERONE CORP | v172595_8k.htm |
| EX-3.1 - EX-3.1 - TIERONE CORP | v172595_ex3-1.htm |
| EX-10.2 - EX-10.2 - TIERONE CORP | v172595_ex10-2.htm |
| EX-99.1 - EX-99.1 - TIERONE CORP | v172595_ex99-1.htm |
| EX-10.3 - EX-10.3 - TIERONE CORP | v172595_ex10-3.htm |
Exhibit
10.1
TierOne CORPORATION AND TierOne
BANK
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (this
“Agreement”) is made and entered into as of January 28, 2010 by and between
TierOne Corporation, a business corporation organized and existing under the
laws of the State of Wisconsin (the “Company”), TierOne Bank, a federally
chartered stock savings bank, and Michael J. Falbo (the
“Executive”).
WITNESSETH:
WHEREAS, the Company and the Bank
(collectively, the “Employers”) each desire to employ the Executive as Chief
Executive Officer;
WHEREAS, the Company and the Bank
desire to assure themselves of the continued availability of the Executive’s
services as provided in this Agreement; and
WHEREAS, the Executive is willing to
serve the Company and the Bank 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, the Bank and the Executive hereby agree as follows:
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SECTION
1.
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EFFECTIVE
DATE; EMPLOYMENT.
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This Agreement shall be effective on
the date first written above (the “Effective Date”). The Company and
the Bank agree 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.
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SECTION
2.
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EMPLOYMENT
PERIOD.
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(a) The
terms and conditions of this Agreement shall be and remain in effect for a
period of one year beginning on the Effective Date, plus such extensions, if
any, as are provided pursuant to Section 2(b) hereof (the “Employment
Period”).
(b) Except
as provided in Sections 2(c) and 2(d), prior to the first annual anniversary of
the Effective Date and each annual anniversary thereafter, the Boards of
Directors of the Employers shall consider and review (after taking into account
all relevant factors, including the Executive’s performance) a one-year
extension of the term of this Agreement, and the term shall continue to extend
each year (beginning with the first annual anniversary date) if the Boards of
Directors so approve such extension, unless the Executive gives written notice
to the Employers of the Executive’s election not to extend the term, with such
notice to be given by the Executive not less than ninety (90) days prior to any
such anniversary date. If either Board of Directors elects not to
extend the term, it shall give written notice of such decision to the Executive
not less than ninety (90) days prior to any such anniversary date. If the
Executive does not receive such notice, he may, by written notice given at any
time during the ninety (90) days prior to the relevant anniversary date, request
from the Board of Directors written confirmation that the term has been extended
and, if such confirmation is not received by the Executive within thirty (30)
days after the request therefor is made, the Executive may treat the term as
having not been extended. Upon termination of the Executive’s
employment with either of the Employers for any reason whatsoever, any annual
extensions provided pursuant to this Section 2(b), if not theretofore
discontinued, shall automatically cease. All actions to be taken by
the Board of Directors under this Section 2(b) may be taken by the Compensation
Committee of the Board of Directors.
(c) Notwithstanding
Section 2(b) above, if at the time the term of this Agreement would otherwise
renew pursuant to Section 2(b) above either (i) the Bank’s Supervisory Agreement
with the Office of Thrift Supervision (the “OTS”) dated as of January 15, 2009
(the “Supervisory Agreement”) requires the non-objection of the OTS to such
renewal after notice is first provided to the OTS or (ii) either Employer is
deemed to be in “troubled condition”) as defined in 12 C.F.R. §563.555 or is
otherwise subject to 12 C.F.R. Part 359, then the term of this Agreement shall
not renew unless and until all regulatory non-objections, approvals and consents
required to be obtained pursuant to the Supervisory Agreement and 12 C.F.R. Part
359 are obtained by the Employers.
(d) Nothing
in this Agreement shall be deemed to prohibit the Employers 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 Employers and the Executive in the event of any
such termination shall be determined under this Agreement.
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SECTION
3.
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DUTIES.
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(a) Throughout
the Employment Period, the Executive shall serve as the Chief Executive Officer
of each of the Employers, having such power, authority and responsibility and
performing such duties as are prescribed by or under the Bylaws of each of the
Employers and as are customarily associated with such position. 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 Employers and shall use his best
efforts to advance the interests of the Employers.
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(b) The
Executive shall be appointed to the Board of Directors of the Company (the
“Company Board”) and the Board of Directors of the Bank (the “Bank Board”) as of
the Effective Date. Throughout the Employment Period, the Bank Board
(or, if applicable, its nominating committee) shall nominate the Executive to be
a director of the Bank when his term expires, subject to the fiduciary duties of
the Bank Board, and the Company agrees to approve his election as a director of
the Bank. Throughout the Employment Period, the Company Board (or, if
applicable, its nominating committee) shall nominate the Executive to be a
director of the Company when his term expires and recommend his election to the
shareholders of the Company, subject to the fiduciary duties of the Company
Board.
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SECTION
4.
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CASH
COMPENSATION.
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(a) In
consideration for the services to be rendered by the Executive hereunder, the
Employers shall pay to him a salary of five hundred thousand dollars ($500,000)
annually (“Base Salary”). The Executive’s Base Salary shall be
payable in approximately equal installments in accordance with the Employers’
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 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 Base Salary, the Executive may receive other
cash compensation from the Employers 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 Employers in discretionary bonuses as authorized by
the Company Board or the Bank 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 or the Bank Board.
(c) Within
ten business days following the Effective Date, the Employers shall pay to the
Executive in a single lump sum a signing bonus in the amount of
$50,000.
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SECTION
5.
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EMPLOYEE
BENEFIT PLANS AND PROGRAMS.
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(a) 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. 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.
(b) During
the Employment Period, the Employers shall provide the Executive with the use of
an automobile leased or purchased by the Employers. The Employers
shall pay for all costs of insurance of coverage, repairs, maintenance and other
incidental expenses, including fuel and oil.
(c) During
the Employment Period, the Employers will reimburse and/or pay for the
Executive’s costs of membership in a club located in Lincoln, Nebraska and in
the Nebraska Club (or such other dining club as reasonably agreed to by the
Employers and the Executive), including all membership bonds or surety,
initiation or membership fees, annual dues and capital assessments (“Club
Expenses”). The Executive shall be reimbursed for the cost of Club
Expenses expended by the Executive no later than March 15 of the year
immediately following the year in which the Club Expenses were
incurred.
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SECTION
6.
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INDEMNIFICATION
AND INSURANCE.
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(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.
(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.
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SECTION
7.
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OUTSIDE
ACTIVITIES.
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The Executive may 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 and the Bank
Board (which approval shall not be unreasonably withheld), 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 either Employer 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.
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SECTION
8.
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WORKING
FACILITIES AND EXPENSES.
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It is understood by the parties that
the Executive’s principal place of employment shall be at the Employers’ principal
executive office located in Lincoln, Nebraska, or at such other office within
25 miles of the
address of such principal executive office, or at such other office as the
Employers and the Executive may mutually agree upon. The Employers
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 Employers and necessary or appropriate in connection
with the performance of his assigned duties under this Agreement. The
Executive shall perform his duties in person at such office, other than when he
is required to travel for business purposes. The Employers shall
reimburse the Executive for (i) his ordinary and necessary business expenses
attributable to the Employers’ business in accordance with the policies and
practices of the Employers, including the Executive’s travel and entertainment
expenses incurred in connection with the performance of his duties for the
Employers under this Agreement, and (ii) his travel expenses to and from his
home state of Wisconsin in such amounts and at such times during the term of
this Agreement as shall be reasonably acceptable to the Employers, in each case
upon presentation to the Employers of an itemized account of such expenses in
such form as the Employers may reasonably require. Such reimbursement
shall be paid promptly by the Employers and in any event no later than March 15
of the year immediately following the year in which such expenses were
incurred.
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SECTION
9.
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TERMINATION
WITHOUT ADDITIONAL COMPANY
LIABILITY.
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(a) In
the event that the Executive’s employment with the Employers shall terminate
during the Employment Period on account of:
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(i) the
discharge of the Executive for “cause,” which, for purposes of this Agreement,
shall mean a discharge because the Company Board or the Bank Board determines
that the Executive has: (A) committed an act of personal dishonesty or
incompetence; (B) engaged in willful misconduct or fraud; (C) breached his
fiduciary duties for personal profit; (D) intentionally failed to perform
his assigned or stated duties under this Agreement, other than any failure
resulting from the Executive’s incapacity due to physical or mental injury or
illness; (E) willfully violated any law, rule or regulation (other than traffic
violations or similar offenses), written agreement or final cease-and-desist
order; (F) materially breached the terms of this Agreement; (G) committed an act
involving moral turpitude in the course of his employment with the Company and
its subsidiaries; (H) been convicted of a felony; or (I) become the subject of
any proceeding initiated by a federal or state banking agency to remove him from
office;
(ii) the
Executive’s voluntary resignation from employment (including voluntary
retirement) with the Employers for reasons other than those specified in Section
10(b); or
(iii)
the death of the Executive while employed by the Employers, or the termination
of the Executive’s employment because of “Disability” as defined in Section 9(b)
below;
then in
any of the foregoing events, the Employers 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, and (C) the provision of such other benefits, if any, to which he is
entitled as a former employee under the Employers’ employee benefit plans and
programs and compensation plans and programs.
(b) “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 Employers and the Executive.
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(c) During
any period in which the Executive is absent due to physical or mental
impairment, the Employers may, without breaching this Agreement, appoint another
person or persons to act as 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 9(d) 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.
(d) The
Employers 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 that may be available under any applicable
long-term disability plan.
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SECTION
10.
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TERMINATION
UPON OR FOLLOWING A CHANGE IN
CONTROL.
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(a) The
term “Change in Control” shall mean a change in the ownership of the Company or
the Bank or a change in the effective control of the Company or the Bank, in
each case as provided under Section 409A of the Internal Revenue Code of 1986,
as amended (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
of the following events: (i) any 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, (ii) any capital infusion into the Company or the Bank pursuant
to which additional shares of common stock of the Company or the Bank are newly
issued, provided that all shares of common stock of the Company and the Bank
which are outstanding immediately prior to such capital infusion continue to
remain outstanding immediately following such capital infusion, or (iii) any
assisted transaction as described in 12 U.S.C. §1823 or the placement of the
Bank into conservatorship or receivership.
(b) The
term “Good Reason” shall mean a termination by the Executive of his employment
based on the following:
(i) any
material breach of this Agreement by the Employers,
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 Employers instead of reporting directly to the Boards of
Directors of the Employers, or
(ii) any
material change in the geographic location at which the Executive must perform
his services under this Agreement;
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provided,
however, that prior to any termination of employment for Good Reason, the
Executive must first provide
written notice to the Employerswithin
ninety (90) days of the initial existence of the condition, describing the
existence of such condition, and the Employersshall
thereafter have the right to remedy the condition within thirty (30) days of the
date the Employersreceived
the written notice from the Executive. If the Employersremedythe
condition within such thirty (30) day cure period, then no Good Reason shall be
deemed to exist with respect to such condition. If the Employersdo 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.
(c) Subject
to Section 11 below, if the Executive’s employment by the Employers shall be
terminated concurrently with or within one (1) year subsequent to a Change in
Control and during the term of this Agreement by (i) the Employers for other
than Cause, Disability, retirement or the Executive’s death or (ii) the
Executive for Good Reason, then the Employers shall pay to the Executive a
severance benefit in a lump sum payment, within 30 days following the date of
termination of the Executive’s employment, equal to the Executive’s Base Salary
for the period of 12 months based on the annual rate of Base Salary that was
being paid as of the date the Executive’s employment was
terminated.
SECTION
11. LIMITATION
OF BENEFITS UNDER CERTAIN CIRCUMSTANCES.
If the payments pursuant to Section 10
hereof, either alone or together with other payments and benefits which the
Executive has the right to receive from the Employers or their subsidiaries or
affiliates, would constitute a “parachute payment” under Section 280G of the
Code, then the amount payable by the Employers pursuant to Section 10 hereof
shall be reduced by the minimum amount necessary to result in no portion of the
amount payable by the Employers under Section 10 being non-deductible to the
Employers pursuant to Section 280G of the Code and subject to the excise tax
imposed under Section 4999 of the Code. In no event shall the amount payable
under Section 10 exceed three times the Executive’s average taxable income from
the Employers for the five calendar years (or, if less, the number of preceding
years in which the Executive was employed by the Employers) preceding the year
in which the date of termination occurs, with any amounts to be provided
subsequent to the date of termination to be discounted to present value in
accordance with Section 280G of the Code. The determination of any
reduction in the payments to be made pursuant to Section 10 shall be based upon
the opinion of independent tax counsel selected by the Employers and paid by the
Employers. Such counsel shall promptly prepare the foregoing opinion,
but in no event later than thirty (30) days from the date of
termination. Nothing contained in this Section 11 shall result in a
reduction of any payments or benefits to which the Executive may be entitled
upon termination of employment under any circumstances other than as specified
in this Section 10, or a reduction in the payment specified in Section 10 below
zero.
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SECTION
12.
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SOURCE
OF PAYMENTS; NO DUPLICATION OF
PAYMENTS.
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All payments provided in this Agreement
shall be timely paid in cash or check from the general funds of the Company or
the Bank. Payments pursuant to this Agreement shall be allocated
between the Company and the Bank in proportion to the level of activity and the
time expended on such activities by the Executive as determined by the Company
and the Bank on a quarterly basis, unless the applicable provision of this
Agreement specifies that the payment shall be made by either the Company or the
Bank. In no event shall the Executive receive duplicate payments or
benefits from the Company and the Bank.
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SECTION
13.
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COVENANT
NOT TO COMPETE.
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The Executive hereby covenants and
agrees that, in the event of his termination of employment with the Employers
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 Employers (or, if less, for the Remaining
Employment Period), he shall not, without the written consent of the Employers,
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.
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SECTION
14.
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CONFIDENTIALITY.
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Unless he obtains the prior written
consent of the Employers, 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 14 shall prevent the Executive, with or without the
Employers’ consent, from participating in or disclosing documents or information
in connection with any judicial or administrative investigation, inquiry or
proceeding or the Employers’ public reporting requirements to the extent that
such participation or disclosure is required under applicable law.
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SECTION
15.
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SOLICITATION.
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The Executive hereby covenants and
agrees that, for a period of two years following his termination of employment
with the Employers 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 Employers, either directly or
indirectly:
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(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 other institution engaged in the business of accepting
deposits, making loans or doing business within the counties specified in
Section 13;
(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 13, 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 13; 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.
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SECTION
16.
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NO
EFFECT ON EMPLOYEE BENEFIT PLANS OR
PROGRAMS.
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The termination of the Executive’s
employment during the Employment Period or thereafter, whether by the Employers
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, 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.
10
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SECTION
17.
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SUCCESSORS
AND ASSIGNS.
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(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
Employers 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 Employers, 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 Employers would be required to perform it if no such succession or
assignment had taken place. Failure of the Employers 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 Employers in the same amount and on the same terms as
the compensation pursuant to Section 10 hereof. For purposes of
implementing the provisions of this Section 17(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.
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SECTION
18.
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NOTICES.
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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 parties:
If to the Executive:
Michael J. Falbo
At the address last
appearing
on the personnel records
of
the Employers
11
If to the Employers:
TierOne Corporation
TierOne Bank
1235 N Street
Lincoln, Nebraska 68508
(or the address of the Employers’
principal executive office, if different)
Attention: Chairman of the
Board
with a copy, in the case of a notice to
the Employers, 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.
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SECTION
19.
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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 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 Employers’ 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 Employers’ obligation to make
the payments provided for in this Agreement and otherwise to perform their
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Employers 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 Employers, 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 19(b)
shall apply whether such consultation, action, suit, proceeding or contest
arises before, on, after or as a result of a Change in Control.
12
|
SECTION
20.
|
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
21.
|
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
22.
|
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
23.
|
GOVERNING
LAW.
|
This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
Nebraska applicable to contracts entered into and to be performed
entirely within the State of Nebraska, except to the extent that federal law
controls.
|
SECTION
24.
|
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. If any
statutory or regulatory provision referenced herein is subsequently changed or
re-numbered, or is replaced by a separate provision, then the references in this
Agreement to such statutory or regulatory provision shall be deemed to be a
reference to such section as amended, re-numbered or replaced.
|
SECTION
25.
|
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. No modifications of this
Agreement shall be valid unless made in writing and signed by the parties
hereto; provided, however, that if the Employers determine, after a review of
all applicable IRS guidance regarding Section 409A of the Code, that this
Agreement should be amended to avoid triggering the tax and interest penalties
imposed by Section 409A of the Code, then the Employers may amend this Agreement
to the extent necessary to avoid triggering the tax and interest penalties
imposed by Section 409A of the Code.
13
|
SECTION
26.
|
REQUIRED
REGULATORY PROVISIONS.
|
Notwithstanding anything herein
contained to the contrary, any payments to the Executive by the Employers,
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.
The following provisions shall be
applicable to the parties to the extent that they are required to be included in
employment agreements between a savings bank and its employees pursuant to
Section 563.39(b) of the Office of Thrift Supervision (“OTS”) Rules and
Regulations, 12 C.F.R. §563.39(b), or any successor thereto, and shall be
controlling in the event of a conflict with any other provision of this
Agreement, including without limitation Section 10 hereof.
(a) If
the Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank's affairs pursuant to notice served
under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act
(“FDIA”)(12 U.S.C. §§1818(e)(3) and 1818(g)(1)), the Bank's obligations under
this Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed,
the Bank may, in its discretion: (i) pay the Executive all or part of
the compensation withheld while its obligations under this Agreement were
suspended, and (ii) reinstate (in whole or in part) any of its obligations which
were suspended.
(b) If
the Executive is removed from office and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. §§1818(e)(4) and
(g)(1)), all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the Executive and the Bank
as of the date of termination shall not be affected.
(c) If
the Bank is in default, as defined in Section 3(x)(1) of the FDIA (12 U.S.C.
§1813(x)(1)), all obligations under this Agreement shall terminate as of the
date of default, but vested rights of the Executive and the Bank as of the date
of termination shall not be affected.
(d) All
obligations under this Agreement shall be terminated pursuant to 12 C.F.R.
§563.39(b)(5), except to the extent that it is determined that continuation of
the Agreement for the continued operation of the Bank is necessary: (i) by the
Director of the OTS, or his/her designee, at the time the Federal Deposit
Insurance Corporation (“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
FDIA (12 U.S.C. §1823(c)); or (ii) by the Director of the OTS, or his/her
designee, at the time the Director or his/her designee approves a supervisory
merger to resolve problems related to operation of the Bank or when the Bank is
determined by the Director of the OTS to be in an unsafe or unsound condition,
but vested rights of the Executive and the Employers as of the date of
termination shall not be affected.
14
SECTION
27. DISPUTE
RESOLUTION.
(a) In
the event of any dispute, claim, question or disagreement arising out of or
relating to this Agreement or the breach hereof, the parties hereto shall use
their best efforts to settle such dispute, claim, question or
disagreement. To this effect, they shall consult and negotiate with
each other, in good faith, and, recognizing their mutual interests, attempt to
reach a just and equitable solution satisfactory to both parties.
(b) If
they do not reach such a solution within a period of thirty (30) days, then the
parties agree first to endeavor in good faith to amicably settle their dispute
by mediation under the Commercial Mediation Rules of the American Arbitration
Association (the “AAA”), before resorting to arbitration.
(c) Thereafter,
any unresolved controversy or claim arising out of or relating to this Agreement
or the breach thereof, upon notice by any party to the other, shall be submitted
to and finally settled by arbitration in accordance with the Commercial
Arbitration Rules (the “Rules”) of the AAA in effect at the time demand for
arbitration is made by any such party. The parties shall mutually
agree upon a single arbitrator within thirty (30) days of such
demand. In the event that the parties are unable to so agree within
such thirty (30) day period, then within the following thirty (30) day period,
one arbitrator shall be named by each party. A third arbitrator shall
be named by the two arbitrators so chosen within ten (10) days after the
appointment of the first two arbitrators. In the event that the third
arbitrator is not agreed upon, he or she shall be named by the
AAA. Arbitration shall occur in Lincoln, Nebraska.
(d) The
award made by all or a majority of the panel of arbitrators shall be final and
binding, and judgment may be entered based upon such award in any court of law
having competent jurisdiction. The award is subject to confirmation,
modification, correction or vacation only as explicitly provided in Title 9 of
the United States Code. The prevailing party shall be entitled to
receive 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.
(signature
page follows)
15
IN WITNESS WHEREOF, the Company and the
Bank have 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/ Michael J.
Falbo
Michael J. Falbo,
Executive
ATTEST:
TierOne CORPORATION
| By: | /s/ Judith A. Klinkman | By: | /s/ Charles W. Hoskins | |
|
Judith
A. Klinkman
|
Charles
W. Hoskins
|
|||
|
Assistant
Secretary
|
Lead
Director
|
[Seal]
ATTEST:
TierOne BANK
| By: | /s/ Judith A. Klinkman | By: | /s/ Charles W. Hoskins | |
|
Judith
A. Klinkman
|
Charles
W. Hoskins
|
|||
|
Assistant
Secretary
|
Lead
Director
|
[Seal]
16