Attached files
| file | filename |
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| 8-K - TIERONE CORP | v187352_8k.htm |
| EX-10.3 - TIERONE CORP | v187352_ex10-3.htm |
| EX-10.2 - TIERONE CORP | v187352_ex10-2.htm |
Exhibit
10.1
UNITED
STATES OF AMERICA
Before
the
OFFICE
OF THRIFT SUPERVISION
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In
the Matter of
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Order
No.: CN 10-22
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TIERONE
CORPORATION
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Effective
Date: June 3, 2010
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Lincoln,
Nebraska
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OTS
Docket No. H3867
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ORDER TO CEASE AND
DESIST
WHEREAS, TierOne Corporation,
Lincoln, Nebraska, OTS Docket No. H3867 (Holding Company), by and through its
Board of Directors (Board), has executed a Stipulation and Consent to Issuance
of an Order to Cease and Desist (Stipulation); and
WHEREAS, the Holding
Company, by
executing the Stipulation, has consented and agreed to the issuance of this
Order to Cease and Desist (Order) by the Office of Thrift Supervision (OTS)
pursuant to 12 U.S.C. § 1818(b); and
WHEREAS, pursuant to delegated
authority, the OTS Regional Director for the Central Region (Regional Director)
is authorized to issue Orders to Cease and Desist where a savings and loan
holding company has consented to the issuance of an order.
NOW, THEREFORE, IT IS ORDERED
that:
Cease and
Desist.
1. The
Holding Company and its directors, officers, employees, and agents shall cease
and desist
from any action (alone or with another or others) for or toward causing,
bringing about, participating in, counseling or the aiding and abetting in the
unsafe or unsound practices that resulted in operating the Holding Company with
an inadequate level of capital for the volume, type, and quality of assets held
by the consolidated Holding Company and with inadequate earnings to fund
expenses.
TierOne
Corporation
Order to
Cease and Desist
Page 1 of
8
Recapitalization
Requirements.
2. By
May 31, 2010, the Holding Company shall ensure that its wholly-owned subsidiary,
TierOne Bank, Lincoln, Nebraska, OTS Docket No. 03309 (Association), complies
with the recapitalization requirements set forth in Sections 1.1 and 1.2 of the
Prompt Corrective Action Directive issued by the OTS against the Association,
OTS Order No. CN 10-14, effective March 31,
2010.
Capital
Plan.
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3.
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(a)
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By
July 15, 2010, the Holding Company shall submit to the Regional Director
a Capital Plan covering the period beginning with the quarter
ending June 30, 2010 through the quarter ending December 31,
2011. At a minimum, the Capital Plan shall
include:
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(i) establishment
of a minimum tangible capital ratio of tangible equity capital to total tangible
assets commensurate with the Holding Company’s stand alone risk
profile;
(ii) specific
strategies for increasing and maintaining tangible equity capital of the Holding
Company at the Board established targets no later than September 30,
2010;
(iii) operating
strategies to achieve net income levels that will result in profitability and
adequate debt service at the Holding Company without reliance on dividends from
the Association;
TierOne
Corporation
Order to
Cease and Desist
Page 2 of
8
(iv) specific
plans to reduce the risks to the Holding Company from its current debt servicing
requirements;
(v) detailed
scenarios to stress-test the consolidated capital targets based on continuing
operating results, economic conditions and risk profile of consolidated
assets;
(vi) detailed
quarterly pro forma consolidated and unconsolidated Holding Company balance
sheets and income statements for the period beginning with the quarter ending
June 30, 2010 through the quarter ending December 31, 2011 that reflect maintenance of
the Board-established minimum tangible equity capital ratio from September 30,
2010 throughout the remaining period of the Capital Plan; and
(vii) detailed
descriptions of all relevant assumptions and projections and the supporting
documentation for all relevant assumptions and projections.
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(b)
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Upon
written notification from the Regional Director that the Capital Plan is
acceptable, the Holding Company shall implement the Capital
Plan. Within five (5) days of Board approval of the Capital
Plan, the Holding Company shall send a copy of the Capital Plan to the
Regional Director.
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(c)
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Once
the Capital Plan is implemented, the Holding Company shall operate within
the parameters of its Capital Plan. Any proposed material
deviations from or changes to the Capital Plan shall be submitted for the
prior, written non-objection of the Regional Director. Requests
for any material deviations or changes must be submitted at least thirty
(30) days before a proposed deviation or change is
implemented.
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TierOne
Corporation
Order to
Cease and Desist
Page 3 of
8
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(d)
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The
Holding Company shall notify the Regional Director regarding any material
event affecting or that may affect the balance sheet, capital, or the cash
flow of the Holding Company within five (5) days after such
event occurs.
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4.
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(a)
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Within
forty-five (45) days after the end of
each quarter, beginning with the quarter ending June 30, 2010, the Board
shall review a written report prepared by management that compares
projected operating results contained within the Capital Plan to actual
results (Variance Report). The Board’s review of each Variance
Report and assessment of the Holding Company’s compliance with the Capital
Plan shall be fully documented in the appropriate Board meeting
minutes.
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(b)
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Within
fifty (50) days
after the end of each quarter, beginning with the quarter ending June 30,
2010, the Holding Company shall provide the Regional Director with a copy
of each Variance Report.
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Dividends.
5. Effective
immediately, the Holding Company shall not declare or pay any cash dividends or
other capital distributions or purchase, repurchase or redeem or commit to
purchase, repurchase, or redeem any Holding Company equity stock without the
prior written non-objection of the Regional Director. The Holding
Company shall submit its written request for non-objection to the Regional
Director at least forty-five (45) days prior to the
anticipated date of the proposed dividend, capital distribution, or stock
transaction. The written request for such notice of non-objection
shall: (a) contain current and pro forma projections regarding the Holding
Company’s capital, asset quality, and earnings; and (b) address compliance with
the Capital Plan required by Paragraph 3 of this Order.
TierOne
Corporation
Order to
Cease and Desist
Page 4 of
8
Debt
Restrictions.
6. Effective
immediately, the Holding Company shall not, directly or indirectly, incur,
issue, renew, roll over, redeem, or increase any debt or debt securities or
commit to do so without the prior written non-objection of the Regional
Director. The Holding Company shall submit its written request for
non-objection to the Regional Director at least forty-five (45) days prior to the
anticipated date of the proposed debt transaction. The Holding
Company’s written requests for Regional Director non-objection to engage in such
debt transactions, at a minimum, shall: (a) describe the purpose of the proposed
debt transaction; (b) set forth and analyze the terms of the proposed debt and
covenants; (c) analyze the Holding Company’s current cash flow resources
available to satisfy such debt repayment; and (d) set forth the anticipated
source(s) of repayment of the proposed debt. For purposes of this
Paragraph of the Order, the term “debt” includes, but is not limited to, loans,
bonds, cumulative preferred stock, hybrid capital instruments such as
subordinated debt or trust preferred securities, and guarantees of
debt. For purposes of this Paragraph of the Order, the term “debt”
does not include liabilities incurred in the ordinary course of business to
acquire goods and services and that are normally recorded as accounts payable
under generally accepted accounting principles.
Transactions with
Affiliates.
7. Effective immediately, the Holding
Company shall not engage in any new or modify any
existing transactions
with any subsidiary or affiliate without the prior, written non-objection of the
Regional Director. The Holding Company shall provide thirty (30) days
advance written notice to the Regional Director of any proposed affiliate
transaction and shall include a full description of the
transaction.
TierOne
Corporation
Order to
Cease and Desist
Page 5 of
8
Golden Parachute
Payments.
8. Effective
immediately, the Holding Company shall not make any golden parachute
payment1 unless, with respect to such payment, the
Holding Company has complied with the requirements of 12 C.F.R. Part
359.
Directorate and Management
Changes.
9. Effective
immediately, the Holding Company shall comply with the prior notification
requirements for changes in the Holding Company’s directors and Senior Executive
Officers2 set forth in 12 C.F.R. Part 563, Subpart
H.
Employment Contracts and
Compensation Arrangements.
10. Effective
immediately, the Holding Company shall not enter into any new contractual
arrangement or renew, extend, or revise any contractual arrangement related to
compensation or benefits with any director or Senior Executive Officer of the
Holding Company, unless it provides the Regional Director with not less than
thirty (30) days prior, written notice of the proposed
transaction. The notice to the Regional Director shall include a copy
of the proposed employment contract or compensation arrangement, or a detailed
written description of the compensation arrangement to be offered to such
director or Senior Executive Officer, including all benefits and
perquisites. The Board shall ensure that any contract, agreement, or
arrangement submitted to the Regional Director fully complies with the
requirements of 12 C.F.R. Part 359.
Effective Date,
Incorporation of Stipulation.
11. This
Order is effective on the Effective Date as shown on the first
page. The Stipulation is made a part hereof and is incorporated
herein by this reference.
1 The term
“golden parachute payment” is defined at 12 C.F.R. §
359.1(f).
2 The term
“Senior Executive Officer” is defined at 12 C.F.R. § 563.555.
TierOne
Corporation
Order to
Cease and Desist
Page 6 of
8
Duration.
12. This
Order shall remain in effect until terminated, modified, or suspended by written
notice of such action by the OTS, acting by and through its authorized
representatives.
Time
Calculations.
13. Calculation
of time limitations for compliance with the terms of this Order run from the
Effective Date and shall be based on calendar days, unless otherwise
noted.
14. The
Regional Director, or an OTS authorized representative, may extend any of the
deadlines set forth in the provisions of this Order upon written request by the
Holding Company that includes reasons in support for any such
extension. Any OTS extension shall be made in writing.
Submissions and
Notices.
15. All
submissions, including any reports, to the OTS that are required by or
contemplated by this Order shall be submitted within the specified
timeframes.
16. Except
as otherwise provided herein, all submissions, requests, communications,
consents, or other documents relating to this Order shall be in writing and sent
by first class U.S. mail (or by reputable overnight carrier, electronic
facsimile transmission, or hand delivery by messenger) addressed as
follows:
(a) To the OTS:
Regional Director
Office of Thrift
Supervision
One South Wacker Drive, Suite
2000
Chicago,
Illinois 60606
Facsimile: (312) 917-5001
TierOne
Corporation
Order to
Cease and Desist
Page 7 of
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(b) To the Holding
Company:
Acting Chairman of the
Board
TierOne Corporation
1235 “N” Street
Lincoln,
Nebraska 68508-2008
Facsimile: (402) 435-0427
No Violations
Authorized.
17. Nothing
in this Order or the Stipulation shall be construed as allowing the Holding
Company, its Board, officers, or employees to violate any law, rule, or
regulation.
IT
IS SO ORDERED.
OFFICE
OF THRIFT SUPERVISION
By /s/ Daniel T. McKee
Daniel T. McKee
Regional Director, Central Region
Daniel T. McKee
Regional Director, Central Region
Date: See
Effective Date on page 1
TierOne
Corporation
Order to
Cease and Desist
Page 8 of
8