Exhibit 10.21

# CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED.                                 CONFIDENTIAL INFORMATION HAS BEEN
DESIGNATED BY ***

# TIERONE BANK

# MANAGEMENT INCENTIVE
COMPENSATION PLAN

|1. | NAME
|-- | ----

| | The
name of the plan shall be the TierOne Bank Management Incentive Compensation Plan.
| | ----------------------------------------------------------------------------------------

|2. | EFFECTIVE
DATE
|-- | --------------

| | The
effective date of the Plan shall be January 1, 2005.
| | --------------------------------------------------------

|3. | PURPOSE
|-- | -------

| | The
purpose of the Plan is to build into the compensation plan for officers and key employees
a direct financial incentive for striving continually for more effective operation of
TierOne Bank and to further the Companys earning power.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | DEFINITIONS:
|-- | ------------

| | a. | Plan or
Management Incentive Plan means the Annual                Management
Incentive Compensation Plan herein described, as the same may be                amended
from time to time.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b. | Company means
TierOne Bank.
| | -- | -----------------------------

| | c. | Incentive
Award or Award means any amount paid to a                Participant
under the Plan.
| | -- | --------------------------------------------------------------------------------------------------

| | d. | Year,
unless otherwise specified, means the calendar year.
| | -- | ------------------------------------------------------------

| | e. | Incentive
Committee or Committee means the Committee                appointed by
the Compensation Committee of the Board of Directors to administer                the
Plan.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | f. | Base
Salary means the individual participants base                compensation
without regard to any bonus or any other form of compensation                provided by
the Bank, as of January 1, 2005.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | g. | The
Compensation Committee shall mean the Committee appointed
               annually by the Board of Directors to administer compensation matters or
it                shall mean the Board of Directors if no Compensation Committee has been
               appointed.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|TierOne Bank Management Incentive Compensation Plan | 2
|--------------------------------------------------- | -
|                                                   

|5. | PERFORMANCE
MEASURES
|-- | --------------------

| | Performance
Measures shall be defined and calculated as follows:
| | ------------------------------------------------------------------

| | Profitability
Criteria
| | ----------------------

| | 1. | Realize
diluted earnings per share at the Holding Company level for 2005 of:
| | -- | ----------------------------------------------------------------------------

|$ *** | Minimum
|----- | -------
|$ *** | Target 
|$ *** | Maximum

| | No
awards (except the discretionary element of the plan) will be payable under the plan if
the minimum realized diluted earnings per share goal is not met. In addition,
TierOne Bank must be classified as an adequately capitalized
institution as defined by the Assessment Risk Classification letter from the FDIC.
The realized diluted earnings per share goal is calculated on a calendar year basis at the Holding Company level. Percentage accomplishment for the realized diluted earnings
per share goal will be interpolated between the minimum and maximum range but no
interpolation will be applied to the other four goals All goals are exclusive of
gains associated with or expenses incurred in changes in accounting treatment for
option plans (other than the *** per share which was assumed in developing these
targets), and/or special counsels, experts and accountants professional
statements for the goodwill litigation and related tax case. Due to the time lag
in reporting peer group performance, bank goals which compare to peer performance
are judged on the quarters ending 12/31/04, 3/31/05, 6/30/05 and 9/30/05. All peer
group goals are at the bank level, not the Holding Company level. If a member of
the peer group stops filing a TFR, that member will be removed from the group for the
entire years performance.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Realize
a Return on Average Assets (ROAA) at the bank level compared to           the Peer
Group as follows:
| | -- | ------------------------------------------------------------------------------------------------------------

|***% of Peer Group Average | Minimum
|-------------------------- | -------
|***% of Peer Group Average | Target 
|***% of Peer Group Average | Maximum

| | Return
on Average Assets to be calculated by adding Line 91 of Schedule SO, Consolidated
Statement of Operations, for the four quarters ending September 30, 2005, and
dividing by the average of Line 90, Schedule SC, Consolidated Statement of
Condition for the same four quarters.*
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Interest
Margin Criteria:
| | -- | -------------------------

| | Realize
a Net Interest Margin Ratio to Average Asset Ratio at the bank level compared to the Peer
Group as follows:
| | -------------------------------------------------------------------------------------------------------------------

|***% of Peer Group Average | Minimum
|-------------------------- | -------
|***% of Peer Group Average | Target 
|***% of Peer Group Average | Maximum

---

*** indicates that material has been
omitted and confidential treatment has been requested therefore.  All such omitted
material has been filed separately with the Securities and Exchange Commission pursuant
to Rule 24b-2.

---

|TierOne Bank Management Incentive Compensation Plan | 3
|--------------------------------------------------- | -
|                                                   

| | Net
Interest Margin Criteria to be calculated by adding Line 312 of Schedule SO
Consolidated Statement of Operations, for the four quarters ending
September 30, 2005, and dividing by the average of Line 90, Schedule SC,
Consolidated Statement of Condition for the same four quarters.*
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | Asset
Quality Criteria:
| | -- | -----------------------

| | Realize
Non-performing Assets to Tangible Capital Ratio at the bank level compared to the Peer
Group as follows:
| | ----------------------------------------------------------------------------------------------------------------

|***% of Peer Group Average | Minimum
|-------------------------- | -------
|***% of Peer Group Average | Target 
|***% of Peer Group Average | Maximum

| | Non-performing
Assets to Tangible Capital Ratio to be calculated by adding Line 30 of Schedule PD,
Past Due and Non accrual, and Line 40 of Schedule SC, Consolidated
Statement of Condition, and dividing by Line 20 of Schedule CCR, Consolidated
Capital Requirement* for the four quarters ending September 30, 2005.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | Efficiency
Measure:
| | -- | -------------------

| | Realize
an efficiency ratio at the Bank level compared to the Peer Group as follows:
| | ------------------------------------------------------------------------------------

|***% of Peer Group Average | Minimum
|-------------------------- | -------
|***% of Peer Group Average | Target 
|***% of Peer Group Average | Maximum

| | Efficiency
ratio to be calculated by adding Line 51 of Schedule SO, Consolidated Statement of
Operations for the four quarters ending September 30, 2005, divided by the sum
of the four quarters of Line 312 and Line 40 of Schedule SO, Consolidated Statement
of Operations. In calculating the efficiency ratio, the previously defined
Excluded Expenses will be removed before making this calculation.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | *Figures
required to calculate ratios are obtained from the Office of Thrift Supervision, Thrift
Financial Report.
| | ------------------------------------------------------------------------------------------------------------------

---

*** indicates that material has been
omitted and confidential treatment has been requested therefore.  All such omitted
material has been filed separately with the Securities and Exchange Commission pursuant
to Rule 24b-2.

---

|TierOne Bank Management Incentive Compensation Plan | 4
|--------------------------------------------------- | -
|                                                   

| | The
Peer Group may need to be modified or adjusted from time to time because of mergers or
changes in operating strategies, etc.
| | --------------------------------------------------------------------------------------------------------------------------------

| | The
Peer Group as of January 1, 2005 is:
| | ----------------------------------------

| | Anchor
Bancorp Wisconsin, Inc., Madison, WI                   Fidelity Bancshares, Inc., West
Palm Beach, FL                   Bank Mutual Corp, Milwaukee, WI                   Bank
Atlantic, Ft. Lauderdale, FL                   First Niagara Bank, Lockport, NY
                  Ocean Financial Corp., Toms River, NJ                   Penn Federal
Financial Services, Inc., West Orange, NJ                   First Federal of Charleston,
Charleston, SC                  Boston Fed Savings Bank, Burlington, MA
                  Sterling Financial Corp., Spokane, WA
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Compensation Committee of the Board of Directors will review extraordinary gains and
losses for inclusion or exclusion from various components of the Plan. Any inclusions or
exclusions will be applied uniformly to the peer group as well as TierOne Bank. This will
include such items as one-time SAIF premium assessments, or change in accounting
principles that affect the plan components.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Discretionary
Incentive:
| | ------------------------

| | Regardless
of performance of the Company to the above goals, The Compensation Committee of the Board
of Directors may authorize a discretionary incentive distribution (Incentive
Award). The discretionary incentive award may be utilized to take an
individuals payment to the target level of achievement in the plan. A maximum level
of achievement may be achieved only by performance and not by discretionary award.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | ADMINISTRATION
|-- | --------------

| | The
Plan shall be administered by the Incentive Committee, which shall report to the
Compensation Committee of the Board of Directors. The Incentive Committee shall consist of
a minimum of three Company officers appointed by the Board of Directors. The Incentive
Committee shall have full and final authority in its discretion, but subject to the
direction of the Compensation Committee of the Board of Directors and the express
provisions of the Plan, to prescribe, amend and rescind Plan rules, regulations, and
procedures; to determine eligibility for participation in this Plan; to recommend
performance objectives to the Compensation Committee of the Board of Directors on an
annual basis; to determine individual Incentive Awards and to make all other
determinations necessary for the proper administration of the Plan. Such administrative
action shall be conclusive and binding on all parties, subject to the recommendation and
approval of the Compensation Committee of the Board of Directors and the subsequent
ratification by the Board of Directors of the Compensation Committees action.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Compensation Committee of the Board of Directors will establish incentive compensation for
members of the Incentive Committee and the Board will review and approve the
recommendations of the Committee for all other Plan members.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|TierOne Bank Management Incentive Compensation Plan | 5
|--------------------------------------------------- | -
|                                                   

|7. | ELIGIBILITY
|-- | -----------

| | Eligibility
in this Plan will be limited to those employees of the Company who are in the opinion of
the Incentive Committee (or in the opinion of the Compensation Committee of the Board of
Directors in the case of Incentive Committee members) are deemed to have significant
opportunity to improve the profits and growth of the Company. Officers and key employees
who participate in any other annual incentive compensation plan are not eligible to
participate in the Management Incentive Plan. This includes departmentally sponsored
commission and/or special bonus arrangements.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | PARTICIPANTS
|-- | ------------

| | Before
the beginning of each Plan year, the Incentive Committee shall review the recommendations
of each Senior Officer of officers or key employees they propose to participate in the
Plan for the coming year. The Committee shall consider recommendations during the Plan
year for employees promoted or newly hired into eligible positions on an individual basis.
Employees selected as Participants shall be notified of their selection (Annual
Notification Letter) as soon as possible after the Committee has made its decision .
Selection as a Participant in no way guarantees that an Incentive Award will be paid. The
Senior Officer will be required to submit recommendations on Participants annually.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. | INCENTIVE
AWARDS
|-- | ----------------

| | General
Description. Incentive awards are based on the extent to which predetermined financial
and individual goals are attained as well as by a discretionary bonus. Financial goals are
based on actual performance of the Company; individual goals include key qualitative
and/or quantitative objectives established for specific positions; and discretionary bonus
payments are determined by the Compensation Committee of the Board of Directors for the
CEO and Incentive Plan Committee members and by the CEO, with Committee approval, for
other Participants. The relative weight placed on each component (organizational
performance, individual performance or discretionary), and the potential size of the Award
may vary by position as determined by the Committee.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Individual
Incentive Award Opportunities. Each Participant shall have the opportunity to earn a
specified percentage of base salary as an Incentive Award. The range of the incentive
opportunity depends on the impact level to which the Participants position has been
assigned. The range has three guideposts of Minimum, Target and Maximum which are defined
below.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Individual
Performance Objectives: Participants who have an allocation toward individual goals
will develop performance objectives for the coming Plan year in conjunction with their
managers. These objectives will be submitted to the Committee for review and approval
prior to the beginning of the Plan year. The Committee will prescribe the format and
procedures by which the objectives will be developed. Individual performance below the
Meets Expectations performance level developed for any position will result in
the loss of the right to earn incentive amounts based on Company performance.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the event of a merger or acquisition (whether or not completed), individual goals of
certain personnel may be amended with the approval of the Committee.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------

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|TierOne Bank Management Incentive Compensation Plan | 6
|--------------------------------------------------- | -
|                                                   

| | Minimum:
The lowest level of organizational performance needed for payment of an incentive award
based on Company or individual performance. No payment will be made for performance below
this level; however; a discretionary payment may still be received. The Company must
achieve the Minimum level of performance of the Diluted Earnings Per Share Goal before any
payment, other than the discretionary bonus, may be paid.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Target:
The level of Incentive Award payable for achieving the selected performance measurement.
| | ------------------------------------------------------------------------------------------------

| | Maximum:
 The maximum level of Incentive Award that will be paid for performance.
| | ---------------------------------------------------------------------------------

| | Performance
Measures and Standards. Performance measures and standards support the business
objectives and the strategic direction of the Company and will be recommended annually by
the Incentive Committee to the Compensation Committee of the Board of Directors. The
Compensation Committee of the Board of Directors will review and approve the
organizational financial measures.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Organizational
Financial Measures: Organizational financial measures may be measured in terms of
growth, volume or any other criteria selected by the Committee. The Annual Notification
Letter will specify the performance measure(s) and the standards (the performance
requirement associated with minimum, target and maximum incentive opportunities) in effect
for the coming year and the weight assigned to each goal.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10. | PAYMENTS
|--- | --------

| | a. | Form
and Timing. Payments will be made in cash no later than 90 days                after
the end of the Plan year to those Participants who are employed by the
               Company on the last day of the Plan year. Because Peer Group information
for all                quarters is not readily available at year-end, information from
the TFRs                for the four quarters ending September 30 will be used.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b. | New
Participants. If an employee becomes a Participant during the year,
               Awards will be prorated to reflect the actual length of the Participants
               service.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c. | Termination
Due to Death, Total Disability, or Retirement. Awards will be                prorated
to reflect the actual length of the Participants service. In the
               event of a Participants death, payment will be made to the
               Participants estate or designated beneficiary at the time payment is
made                to all other participants.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | d. | Termination
For Reasons Other than Death, Total Disability, or                Retirement. The
Participant shall be ineligible for Awards based on this                Plan.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11. | AMENDMENT
OR TERMINATION OF PLAN
|--- | --------------------------------

| | Subject
to the Compensation Committee of the Board of Directors approval, the Committee may
terminate, amend or modify the Plan at any time, provided that no such termination,
amendment or modification of the Plan shall adversely affect the rights of any Participant
to awards earned, but unpaid, under the Plan. If federal regulations are enacted during
the Plan Year, which negates the validity of the performance measures established in the
Plan, the Plan will be amended to reflect regulatory requirements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|TierOne Bank Management Incentive Compensation Plan | 7
|--------------------------------------------------- | -
|                                                   

|12. | GENERAL
PROVISIONS
|--- | ------------------

| | a. | No
Right of Continued Employment. Nothing contained in the Plan shall
               give any Participant the right to be retained in the employment of the
Company                or affect the right of the Company to dismiss any Participant. The
receipt of an                Incentive Payment for any one year shall not guarantee a
Participant the right                to receive an Incentive Payment for any subsequent
year.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b. | No
Right of Assignment. No right or interest of any Participant in the
               Plan shall be assignable or transferable, of subject to any lien,
directly, by                operation of law, or otherwise, including levy, garnishment,
attachment, pledge                or bankruptcy.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c. | Withholding
for Taxes. The Company shall have the right to deduct from                all amounts
paid under this Plan, any taxes required by law to be withheld with
               respect to such payments.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | d. | Law
to Govern. All questions pertaining to the construction, regulation,
               validity and effect of the provision of the Plan shall be determined in
               accordance with the laws of the State of Nebraska.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------