RETIREMENT AND TRANSITION AGREEMENT
Exhibit
10.3
This Retirement and Transition
Agreement (the “Agreement”) is made this 28th day of
January 2010, by and among Xxxxxxx X. Xxxxxxxxx (the “Vice Chairman”), TierOne
Corporation, a Wisconsin corporation (the “Company”), and its wholly owned
subsidiary, TierOne Bank, a federally chartered savings bank with its principal
office in Lincoln, Nebraska (the “Bank”).
WITNESSETH:
WHEREAS, the Vice Chairman currently
serves as Chairman of the Board and Chief Executive Officer of the Company and
the Bank (collectively, “TierOne”);
WHEREAS, the Vice Chairman currently is
a party to amended and restated employment agreements with both the Company and
the Bank, each dated as of December 17, 2008 (the “Employment Agreements”),
setting forth the terms and conditions of his employment; and
WHEREAS,
the Vice Chairman desires to retire from his current positions, and the parties
hereto desire to set forth the terms and conditions under which the Vice
Chairman will provide certain transitional and other services to
TierOne.
NOW, THEREFORE, in consideration of the
mutual premises and covenants contained herein, and intending to be legally
bound, the parties agree as follows:
Section
1. New
Position; Term.
As of
January 28, 2010 (the “Effective Date”), Xx. Xxxxxxxxx is hereby appointed as
the Vice Chairman of the Board of Directors of each of the Company and the Bank
for a period of one year following the Effective Date; provided, however, that
the Board of Directors of the Company, the Board of Directors of the Bank or the
Vice Chairman may terminate this Agreement by giving at least 30 days’ prior
written notice to the other parties.
Section
2. Duties as Vice
Chairman.
During the term of this Agreement, the
Vice Chairman shall provide the following services: (a) assistance to the new
Chairman of the Board and Chief Executive Officer of the Company and the Bank in
order to ensure a smooth transition; (b) assistance with the pending branch sale
by the Bank; (c) assistance with the raising of additional capital; and (d) such
other duties as shall be mutually agreed to by the Chairman and Chief Executive
Officer of Tier One and the Vice Chairman. The Vice Chairman shall
report directly to the Chairman and Chief Executive Officer of TierOne and shall
provide him periodically and no less frequently than monthly a written report
summarizing the status of the various projects and matters on which he is
assisting the Chairman and Chief Executive Officer. Such report shall describe
the work performed for the period covered by the report. The Company and the
Bank reasonably anticipate that the level of services to be provided by the Vice
Chairman to the Company and the Bank after the Effective Date will permanently
decrease to no more than twenty percent (20%) of the average level of the Vice
Chairman’s bona fide services to the Company and the Bank over the immediately
preceding thirty-six (36) month period prior to the Effective
Date.
Section
3. Compensation as Vice
Chairman.
(a) In
consideration of his performing the services required under Section 2 of this
Agreement, the Vice Chairman shall receive a Vice Chairman fee of $12,500 per
month, payable monthly starting in February 2010. The Vice Chairman
fee shall be in addition to and not in lieu of any Board fees or committee fees
otherwise payable to the Vice Chairman in his capacity as a director of the
Company and the Bank. No Vice Chairman fee shall be payable by the
Company or the Bank (i) in the event of the failure of the Vice Chairman to
provide the services required to be provided under Section 2 hereof or (ii)
following the expiration or termination of this Agreement in accordance with its
terms.
(b) The
Vice Chairman shall be entitled to receive insurance coverage on the same terms
as other non-employee directors of the Company and the Bank.
Section
4. Working
Facilities and Expenses.
The Company and the Bank shall provide
the Vice Chairman with an office for his use at the principal executive
offices of the Company and the Bank in Lincoln, Nebraska, or at such other
location as the Chief Executive Officer and the Vice Chairman may mutually agree
upon. TierOne shall provide the Vice Chairman with a private office,
secretarial services and other support services and facilities suitable to his
position with TierOne and necessary or appropriate in connection with the
performance of his assigned duties under this Agreement. TierOne
shall reimburse the Vice Chairman for his ordinary and necessary business
expenses attributable to TierOne’s business in accordance with the policies and
practices of TierOne and that are customarily incurred by persons with similar
duties and positions, including the Vice Chairman's travel and entertainment
expenses incurred in connection with the performance of his duties for TierOne
under this Agreement, in each case upon presentation to TierOne of an itemized
account of such expenses in such form as TierOne may reasonably
require. Such reimbursement shall be paid promptly by
TierOne.
Section
5. Continued
Indemnification.
(a) In
accordance with its existing Employment Agreement with the Vice Chairman, and to
the same extent and scope as provided therein, for a period of six years
following the Effective Date, the Company agrees to cause the Vice Chairman to
be covered by and named as an insured under any policy or contract of insurance
obtained by it to insure its directors and officers against personal liability
for acts or omissions in connection with service as an officer or director of
the Company (including his prior service as Chairman of the Board and Chief
Executive Officer of TierOne) or service in such other capacities at the request
of TierOne. The coverage provided to the Vice Chairman pursuant to
this Section 5(a) shall be of the same scope and on the same terms and
conditions as the coverage (if any) provided to other officers or directors of
the Company or any successor. To the maximum extent permitted under
applicable law, for a period of six years following the Effective Date, the
Company shall indemnify the Vice Chairman against and hold him harmless from any
costs, liabilities, losses and exposures that may be incurred by the Vice
Chairman in his capacity as a director or officer of the Company or any
subsidiary or affiliate (including his prior service as Chairman of the Board
and Chief Executive Officer of TierOne).
2
(b) In
accordance with the provisions of 12 C.F.R. §545.121, the Bank shall save
harmless and indemnify the Vice Chairman against any financial losses, claims,
damages or liabilities arising out of any alleged negligence or other act of the
Vice Chairman occurring while serving as Vice Chairman as well as continue to
indemnify him for any acts or omissions in connection with his prior service as
Chairman of the Board and Chief Executive Officer of the Bank, provided that at
the time of such loss, claim, damage or liability was sustained, the Vice
Chairman was acting in the discharge of his duties hereunder or his prior duties
as Chairman of the Board and Chief Executive Officer of the Bank and such loss,
claim, damage or liability did not result from any willful and wrongful act or
gross negligence of the Vice Chairman in his current or prior
capacities.
Section
6. Termination of Existing
Employment Agreements.
By the
mutual agreement of the parties hereto, the existing Employment Agreements shall
be terminated and be of no further force and effect as of the Effective Date,
and the Vice Chairman shall be entitled to the rights and payments set forth
herein in lieu of any rights and payments under the Employment Agreements,
except that any compensation under the Employment Agreements which has been
earned but remains unpaid as of the Effective Date shall be paid as soon as
practicable following the Effective Date in accordance with TierOne’s regular
payroll practices. The Vice Chairman shall no longer be considered an
officer or employee of the Company or the Bank or any of their respective
subsidiaries as of the Effective Date. This Agreement shall have no
effect on the Vice Chairman’s service as a director of each of the Company and
the Bank or on the Vice Chairman’s rights to receive his vested benefits under
TierOne’s benefit plans.
Section
7. Source
of Payments; No Duplication of Payments.
All payments provided in this Agreement
shall be timely paid in cash or check from the general funds of the Company or
the Bank. Payments pursuant to this Agreement shall be allocated
between the Company and the Bank in proportion to the level of activity and the
time expended on such activities by the Vice Chairman as determined by the
Company and the Bank on a monthly basis, unless the applicable provision of this
Agreement specifies that the payment shall be made either by the Company or the
Bank. In no event shall the Vice Chairman receive duplicate payments
or benefits from the Company and the Bank.
Section
8. Tax
Withholding.
The Company and the Bank may make such
provisions as they deem appropriate for the withholding pursuant to federal or
state income tax laws of such amounts as the Company and the Bank determine they
are required to withhold in connection with the payments to be made pursuant to
this Agreement.
3
Section
9. No
Effect on Employee Benefit Plans or Programs.
Neither the termination of the
Employment Agreements nor the execution and expiration or termination of this
Agreement shall have any effect on the vested rights of the Vice Chairman under
the Company’s or the Bank’s qualified or non-qualified retirement, pension,
savings, thrift, profit-sharing or stock bonus plans, split dollar agreement, or
any other employee benefit plans or programs in which the Vice Chairman was a
participant in his prior capacity as Chairman of the Board and Chief Executive
Officer of TierOne.
Section
10. Confidentiality.
Unless he obtains the prior written
consent of the Company and the Bank, the Vice Chairman shall at all times keep
confidential and shall refrain from using for the benefit of himself, or any
person or entity other than the Company or any entity which is a subsidiary of
the Company or of which the Company is a subsidiary, any material document or
information obtained from the Company, or from its subsidiaries, in the course
of his service to any of them concerning their properties, operations or
business (unless such document or information is readily ascertainable from
public or published information or trade sources or has otherwise been made
available to the public through no fault of his own) until the same ceases to be
material (or becomes so ascertainable or available); provided, however, that
nothing in this Section 10 shall prevent the Vice Chairman, with or without the
consent of the Company and the Bank, from participating in or disclosing
documents or information in connection with any judicial or administrative
investigation, inquiry or proceeding or the Company’s public reporting
requirements to the extent that such participation or disclosure is required
under applicable law.
Section
11. Successors and
Assigns.
This Agreement is personal to each of
the parties hereto, and none of the parties may assign or delegate any of its
rights or obligations hereunder without first obtaining the written consent of
the other parties; provided, however, that the Company and the Bank will require
any successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company or the Bank, by an assumption agreement in form and
substance satisfactory to the Vice Chairman, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company and the Bank would be required to perform it if no such succession or
assignment had taken place.
Section
12. Notices.
Any communication required or permitted
to be given under this Agreement, including any notice, direction, designation,
consent, instruction, objection or waiver, shall be in writing and shall be
deemed to have been given at such time as it is delivered personally, or five
days after mailing if mailed, postage prepaid, by registered or certified mail,
return receipt requested, addressed to such party at the address listed below or
at such other address as one such party may by written notice specify to the
other party:
4
If to the Vice Chairman:
Xxxxxxx X. Xxxxxxxxx
At the address last
appearing
on the personnel records
of
the Company and the Bank
If to TierOne:
TierOne Corporation
TierOne Bank
0000 X Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
(or the address of TierOne’s principal
executive offices, if different)
Attention: Chief Executive
Officer
with a copy, in the case of a notice to
TierOne, to:
Elias, Matz, Xxxxxxx & Xxxxxxx
L.L.P.
000 00xx Xxxxxx,
X.X.
Xxxxxxxxxx,
X.X. 00000
Attention: Xxxxxxx X.
Xxxxxxx, Esq.
Xxxxxx
X. Xxxxxx, Xx., Esq.
Section
13. Severability.
A determination that any provision of
this Agreement is invalid or unenforceable shall not affect the validity or
enforceability of any other provision hereof.
Section
14. Waiver.
Failure to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant or condition. A waiver of any
provision of this Agreement must be made in writing, designated as a waiver, and
signed by the party against whom its enforcement is sought. Any
waiver or relinquishment of any right or power hereunder at any one or more
times shall not be deemed a waiver or relinquishment of such right or power at
any other time or times.
Section
15. Counterparts.
This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, and all of
which shall constitute one and the same Agreement.
5
Section
16. Governing
Law.
This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Nebraska
applicable to contracts entered into and to be performed entirely within the
State of Nebraska, except to the extent that federal law controls.
Section
17. Headings and
Construction.
The headings of sections in this
Agreement are for convenience of reference only and are not intended to qualify
the meaning of any section. Any reference to a section number shall
refer to a section of this Agreement, unless otherwise stated.
Section
18. Entire
Agreement; Modifications.
This instrument contains the entire
agreement of the parties relating to the subject matter hereof, and supersedes
in its entirety any and all prior agreements, understandings or representations
relating to the subject matter hereof (including the Employment Agreements,
except for the continued indemnification provisions set forth in Section 5
hereof), except that the parties acknowledge that this Agreement shall not
impact any of the rights and obligations of the parties with respect to the
vested rights of the Vice Chairman under any of TierOne’s benefit plans. No
modifications of this Agreement shall be valid unless made in writing and signed
by the parties hereto.
Section
19. Required Regulatory
Provisions.
Notwithstanding anything herein
contained to the contrary, any payments to the Vice Chairman by the Company or
the Bank, whether pursuant to this Agreement or otherwise, are subject to and
conditioned upon their compliance with Section 18(k) of the Federal Deposit
Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated
thereunder in 12 C.F.R. Part 359.
6
IN WITNESS WHEREOF, the Company and the
Bank have caused this Agreement to be executed and the Vice Chairman has
hereunto set his hand, all as of the day and year first written
above.
| /s/ Xxxxxxx X. Xxxxxxxxx | ||||
| Xxxxxxx X. Xxxxxxxxx, Vice Chairman | ||||
| ATTEST: | TierOne CORPORATION | |||
| By: |
/s/ Xxxxxx X. Xxxxxxxx
|
By: |
/s/ Xxxxxxx X. Xxxxxxx
|
|
|
Xxxxxx
X. Xxxxxxxx
|
Xxxxxxx
X. Xxxxxxx
|
|||
|
Assistant
Secretary
|
Lead
Director
|
|||
| ATTEST: | TierOne BANK | |||
| By: |
By:/s/ Xxxxxx X. Xxxxxxxx
|
By: |
/s/ Xxxxxxx X. Xxxxxxx
|
|
|
Xxxxxx
X. Xxxxxxxx
|
Xxxxxxx
X. Xxxxxxx
|
|||
|
Assistant
Secretary
|
Lead
Director
|
|||
7
