Document:

Exhibit 10.13

                                  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, 2003.

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 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, 2003.

      g.    "Performance Measures" shall be defined and calculated as follows:

            Profitability Criteria

            1.    Realize earnings at the Holding Company level for calendar
                  year 2003 of:

                      $18,062,500 net income              Minimum
                      $21,250,000 net income              Target
                      $24,437,500 net income              Maximum

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      No awards (except the discretionary element of the plan) will be payable
      under the plan if the minimum realized earnings 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 earnings goal is calculated on a calendar year
      basis at the Holding Company level. Percentage accomplishments for the
      realized earnings and earnings per share goals will be interpolated
      between the minimum and maximum range. All goals are exclusive of gains
      associated with or expenses incurred in connection with merger or deposit
      acquisition transactions (whether or not completed), changes in accounting
      treatment for option plans, and/or special counsels', experts' and
      accountants' statements for the goodwill litigation case. Due to the time
      lag in reporting peer group performance, bank goals which compare to peer
      performance are judged on the quarters ending 12/31/02, 3/31/03, 6/30/03
      and 9/30/03. 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 earnings per share at the Holding Company level for
                  2003 of:

                           $0.89                              Minimum
                           $1.04                              Target
                           $1.20                              Maximum

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

                           95% of Peer Group Average          Minimum
                           100% of Peer Group Average         Target
                           105% 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, 2003, and dividing by the average of Line 90, Schedule SC,
      "Consolidated Statement of Condition" for the same four quarters.*

      Interest Margin Criteria:

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

                           100% of Peer Group Average         Minimum
                           105% of Peer Group Average         Target
                           110% of Peer Group Average         Maximum

      Return on Average Assets to be calculated by adding Line 311 of Schedule
      SO "Consolidated Statement of Operations", for the four quarters ending
      September 30, 2003, and dividing by the average of Line 90, Schedule SC,
      "Consolidated Statement of Condition" for the same four quarters.*
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      Asset Quality Criteria:

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

             80% of Peer Group Average                   Minimum
             70% of Peer Group Average                   Target
             60% 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
      10 of Schedule CCR, "Consolidated Capital Requirement"* for the four
      quarters ending September 30, 2003.

      Efficiency Measure:

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

             103% of Peer Group Average performance      Minimum
             100% of Peer Group Average performance      Target
             97% of Peer Group Average performance       Maximum

      Efficiency ratio to be calculated by adding Line 51 of Schedule SO,
      "Consolidated Statement of Operations" for the four quarters ending
      September 30, 2003, divided by the sum of the four quarters of Line 311
      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.

      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, 2003 is:

             Anchor Bancorp Wisconsin, Inc., Madison, WI
             Dime Community Bancshares, Brooklyn, NY
             Fidelity Bancshares, Inc., West Palm Beach, FL
             First Federal Capital Corp., LaCrosse, WI
             First Federal America Bancorp, Swansea, MA
             Flushing Financial Corp., Flushing, NY
             Ocean Financial Corp., Toms River, NJ
             Penn Federal Financial Services, Inc., West Orange, NJ
             St. Francis Capital Corp., Brookfield, WI
             Superior Federal Bank, Fort Smith, AK
             Matrix Capital Bank, Las Cruces, NM
             Boston Fed Savings Bank, Burlington, MA

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      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, gains and losses on the sale of assets, or change in
      accounting principles that affect the plan components.

Discretionary Incentive:

      Regardless of performance of the Company to the above goals, 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.

5.    ADMINISTRATION

      The Plan shall be administered by the Incentive Committee, which shall
      report to the Board of Directors and which 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 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 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 Board of Directors' approval.

      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.

6.    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 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.

7.    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 as soon as possible after the Committee has made its decision
      (Annual Notification Letter). 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.

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8.    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 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 vary by position.

      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.

      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 Net Income 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 Board
      of Directors. 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.

9.    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.

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      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.

10.   AMENDMENT OR TERMINATION OF PLAN

      Subject to 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.

11.   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.Exhibit 10.14

                                  TIERONE BANK

                           DEFERRED COMPENSATION PLAN

                                   ARTICLE 1.
                        ESTABLISHMENT AND PURPOSE OF PLAN

      1.1 Establishment of Plan. This Deferred Compensation Plan is established
by TierOne Bank.

      1.2 Purpose of Plan. The purpose of the Plan is to provide a deferred
compensation arrangement and deferred bonus arrangement for a select group of
management or highly compensated employees of Employers (as defined below). The
Plan is intended to be an unfunded plan qualifying as a "top hat" plan for
purposes of Title I of the Employee Retirement Income Security Act of 1974
("ERISA") and for purposes of the Internal Revenue Code of 1986, as amended (the
"Code").

                                   ARTICLE 2.
                                   DEFINITIONS

      2.1 Beneficiary. "Beneficiary" means the person, persons or entity
designated by the Participant, as provided in Article 5, to receive any benefits
payable under the Plan.

      2.2 Board. "Board" means the Board of Directors of Sponsoring Employer.

      2.3 Change in Control. "Change in Control" means, with respect to an
Employer, the occurrence of any of the following events:

            (a) Approval by the stockholders of the Employer of either a
      reorganization, or merger, or consolidation, with respect to which persons
      who were the stockholders of the Employer immediately prior to such
      reorganization, merger or consolidation do not, immediately thereafter,
      own more than fifty percent (50%) of the combined voting power entitled to
      vote generally in the election of directors of the reorganized, merged or
      consolidated entities then outstanding voting securities, or a liquidation
      or dissolution of Employer, or the sale of all or substantially all of the
      assets of the Employer; or

            (b) Any other event or series of events which is determined by the
      Board to constitute a Change in Control for purposes of the Plan.

      2.4 Committee. "Committee" means the Committee appointed to administer the
Plan pursuant to Article 3.

      2.5 Compensation. "Compensation" or "Total Compensation" means the Base
Salary and Incentive Compensation payable to a Participant during a Plan Year.

            (a) Base Salary. "Base Salary" means all cash payable to a
      Participant by the Employer as remuneration for services rendered during a
      Plan Year, and shall be determined prior to any reduction for amounts
      deferred by a Participant under the Employer-sponsored 401 (k) plan. Base
      Salary shall also be calculated so as to exclude any employer-matching
      contributions or other

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      contributions to the Participant's 401(k) plan account, as well as any
      other nontaxable and/or noncash compensation payable to the Participant by
      his/her Employer.

            (b) Incentive Compensation. "Incentive Compensation" means any cash
      bonus paid to a Participant by the Employer during a Plan Year.

      2.6 Contribution Date. "Contribution Date" means the date Participant
would have received the Compensation or, if applicable, Participant's 401(k)
account or ESOP account would have been credited, but for the Deferral Election.

      2.7 Declared Rate. "Declared Rate" means an interest rate determined from
time to time by the Committee in its discretion which is based on the three (3)
or five (5) year certificate of deposit rate.

      2.8 Deferral Election. "Deferral Election" means Participant's written
election to Committee to defer Base Salary and/or Incentive Compensation.

      2.9 Deferred Compensation. "Deferred Compensation" means the amount of
Base Salary and/or Incentive Compensation deferred by a Participant pursuant to
the Deferral Election in effect at the time of deferral.

      2.10 Deferred Compensation Account. "Deferred Compensation Account" means
the account maintained on the books of account of Employer for each Participant
employed by it which reflects the amount of Deferred Compensation accrued for
the Participant under the Plan. A Participant's Deferred Compensation Account
shall not constitute or be treated as a trust fund of any kind.

      2.11 Determination Date. "Determination Date" means any date in which a
debit or a credit is made to Participant's Deferred Compensation Account.

      2.12 Disability. "Disability" or "Disabled Participant" means a physical
or mental condition of a Participant, resulting from a bodily injury or disease
or mental disorder, which renders a Participant incapable of continuing the
further performance of the Participant's normal employment activities with
his/her Employer. A Participant who has been determined to be disabled for
purposes of receiving benefits under a long-term disability plan maintained by
his/her Employer shall be automatically designated as a "Disabled Participant."
If his/her Employer does not maintain a long_term disability plan, the
Committee, in its sole and absolute discretion, shall determine if a Participant
is "Disabled" for purposes of the Plan.

      2.13 Employee. "Employee" means any person who performs services for
Employer and to whom Employer pays Compensation on a regular basis.

      2.14 Employer. "Employer" means TierOne Bank and any successor to the
business thereof and any subsidiary whose board of directors adopts this Plan.

      2.15 Fixed Income Fund. "Fixed Income Fund" means an investment fund for
Deferred Compensation which provides interest on the Deferred Compensation
Account as set forth in Section 4.7(a) below.

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      2.16 Investment Direction. "Investment Direction" means a Participant's
written direction to the Committee to invest the Participant's Deferred
Compensation Account in the Fixed Income Fund and/or the Investment Fund.

      2.17 Investment Fund. "Investment Fund" means an investment fund for
Deferred Compensation consisting of investment in mutual funds and/or other
marketable securities, by a Participant; provided, however, said investment must
be reported to Employer from the broker on a consolidated statement.

      2.18 Participant. "Participant" means any Employee identified and selected
for participation in the Plan by the Committee and who elects to defer
compensation.

      2.19 Participation Agreement. "Participation Agreement" means the
agreement in such form as may be determined by the Committee from time to time
between Employer and a Participant respecting the Participant's participation in
the Plan.

      2.20 Payment Event. "Payment Event" shall have the meaning set forth in
Section 5.1 below.

      2.21 Phantom 401(k) Contribution. "Phantom 401(k) Contribution" shall have
the meaning as set forth in Section 6.1 of this Agreement.

      2.22 Phantom ESOP Contribution. "Phantom ESOP Contribution" shall have the
meaning as set forth in Section 6.2 of this Agreement.

      2.23 Plan. "Plan" means the Deferred Compensation Plan.

      2.24 Plan Year. "Plan Year" means a twelve (12) month period commencing
each January 1 and ending each December 31 or such other Plan Year as determined
by the Committee.

      2.25 Service Period. "Service Period" means any period of time during
which a Participant performs services for which he/she earns Compensation during
a Plan Year. A Service Period may not commence prior to the end of the current
pay period for a Participant and may extend for any period of time elected by a
Participant, but shall not be less than one (1) calendar month.

      2.26 Sponsoring Employer. "Sponsoring Employer" means TierOne Bank.

      2.27 Spouse. "Spouse" means a Participant's wife or husband who was
lawfully married to the Participant prior to and at the time of the
Participant's retirement, disability, death or severance from service.

      2.28 Unforeseeable Emergency. "Unforeseeable Emergency" means a severe
financial hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of a dependent of the Participant,
loss of the Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant or any other circumstance deemed by the
Committee in its sole discretion as an appropriate circumstance to trigger a
Payment Event. The circumstances that will constitute an "Unforeseeable
Emergency" will depend upon the facts of each case, but, in any case, payment
may not be made in the event that such hardship is or may be relieved:

                                      -3-
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            (a) Through reimbursement or compensation by insurance or otherwise;

            (b) By liquidation of the Participant's assets, to the extent that
      liquidation of such assets would not itself cause severe financial
      hardship; or

            (c) By cessation of deferrals under the Plan.

                                   ARTICLE 3.
                                 ADMINISTRATION

      3.1 Committee; Duties.

            (a) Generally. The Plan shall be administered by the Incentive
      Compensation Committee or any successor committee thereto appointed by the
      Board. Members of the Committee may be Participants under the Plan. The
      Committee shall also have the authority to make, amend, interpret and
      enforce all appropriate rules and regulations for the administration of
      the Plan and decide or resolve any and all questions, including
      interpretations of the Plan, as may arise in connection with the Plan.

            (b) Selection and Termination of Participants. The Committee shall
      identify and select Employees who shall be eligible to participate in the
      Plan. The Committee may terminate participation of any Participant on a
      prospective basis at any time upon written notice to the Participant.

      3.2 Agents. In the administration of the Plan, the Committee may, from
time to time, employ an agent and delegate to it such administrative duties as
it sees fit and may, from time to time, consult with counsel who may be counsel
to Employers.

      3.3 Binding Effect of Decisions. The decision or action of the Committee
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any interest in the Plan.

      3.4 Indemnity of Committee. Employer shall indemnify and hold harmless the
members of the Committee against any and all claims, loss, damage, expense or
liability arising from any action or failure to act with respect to the Plan,
except in the case of gross negligence or willful misconduct by the Committee or
any of its members.

                                   ARTICLE 4.
                          DEFERRED COMPENSATION ACCOUNT

      4.1 Participation Agreement; Account. Each Participant shall enter into a
Participation Agreement with Employer at the time of initial participation in
the Plan. Employer shall establish a Deferred Compensation Account for each
Participant employed by it which shall be administered pursuant to the terms and
provisions of this Plan. If Sponsoring Employer serves as a common pay master,
the Participation Agreements may be entered into by the Sponsoring Employer on
behalf of the Employers.

                                      -4-
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      4.2 Deferral Election. A Participant may elect to defer the receipt of any
or all of his/her Base Salary by delivering a Deferral Election to the Committee
at least fourteen (14) days prior to the beginning of the calendar quarter for
which the deferral is to apply or, if applicable, within twenty (20) days of
notification by the Committee that he/she is eligible to participate in the
Plan. The deferral percentage elected in each Deferral Election shall be applied
to the Participant's Base Salary at the beginning of the first Service Period to
which the Deferral Election applies and the resulting dollar amount shall be the
amount of Base Salary that will be deferred in each pay period until the
Deferral Election is terminated. A Participant may elect to defer the receipt of
any or all of his/her Incentive Compensation by delivering a Participation
Agreement to the Committee prior to the date the Board makes a final
determination to award Incentive Compensation to such Participant.

      4.3 Termination of Deferral Election. The Deferral Election of any
Participant whose future participation in the Plan is terminated by the
Committee shall be deemed terminated immediately upon notice of termination of
participation by the Committee. Any Participant who elects to defer his/her Base
Salary or Incentive Compensation may terminate the election by delivering
written notice to the Committee at least thirty (30) days prior to the date on
which the deferral is to terminate. A Participant who terminates his/her
deferral election may not reelect to defer his/her Base Salary or Incentive
Compensation until the beginning of the Plan Year following the close of the
Plan Year in which the termination occurred.

      4.4 Vesting. A Participant shall be one hundred percent (100%) vested in
his/her Deferred Compensation Account at all times.

      4.5 Withholding. Any amounts required to be withheld from the
Participant's Deferred Compensation pursuant to federal, state or local law
shall be withheld first from the non_deferred portion of the Participant's
Compensation and, to the extent necessary, from the Deferred Compensation. Upon
the occurrence of a Payment Event, to the extent required by law in effect at
the time payments are made, the Employer shall withhold from payments made
hereunder any taxes required to be withheld pursuant to federal, state or local
law.

      4.6 Investment Direction. At anytime, a Participant may submit to the
Committee a completed Investment Direction directing investment contributions in
his/her Deferred Compensation Account in either the Fixed Income Fund or the
Investment Fund. The Committee shall, as soon as reasonably possible, implement
the investments as directed by Participant. Neither Committee nor Employer shall
be liable for any damages resulting from any loss in the value to a
Participant's Deferred Compensation Account for implementing the Investment
Direction as soon as reasonably possible. "As soon as reasonably possible" shall
mean at least two (2) business days following the day in which the Investment
Direction is received by Employer and, may, under the then current
circumstances, constitute an additional period of time.

      4.7 Determination of Deferred Compensation Account. A Participant's
Deferred Compensation Account shall consist of an investment in the Fixed Income
Fund, if applicable, and in the Investment Fund, if applicable. A Participant's
investment in either the Fixed Income Fund or the Investment Fund shall be
maintained and administered as provided in (a) and (b) below.

            (a) Fixed Income Fund. A Participant's investment in the Fixed
      Income Fund shall be calculated as of each Determination Date and shall
      consist of the balance of the Fixed Income Fund as of the most recent
      Determination Date credited by an amount equal to the Deferred
      Compensation directed by the Participant to be invested in the Fixed
      Income Fund or otherwise required pursuant

                                      -5-
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      to this Plan to be invested in the Fixed Income Fund since the most recent
      Determination Date. Said Account shall be debited by the amount of any
      distributions from said Account since the most recent Determination Date.
      After adjustment as provided above, interest shall be credited to the
      Account at the Declared Rate.

            (b) Investment Fund. At each Determination Date, a Participant's
      investment in the Investment Fund shall be credited with the amount of
      Deferred Compensation directed by the Participant to be invested in the
      Investment Fund. In addition, a Participant's investment in the Investment
      Fund shall be debited for all costs, fees or commissions assessed in
      connection with the purchase and sale of securities as directed by
      Participant.

      4.8 Annual Reporting. Within one hundred twenty (120) days following the
end of each Plan Year, the Committee shall provide to each Participant a
statement setting forth the value as of the last day of the preceding Plan Year
in the Participant's Deferred Compensation Account, including the contributions,
withdrawals, earnings and losses.

      4.9 Rabbi Trust Account. Employer may, at any time, in its sole and
absolute discretion, transfer a Participant's Deferred Compensation Account into
a Rabbi Trust then in existence for Employer's Deferred Compensation Plan;
provided, however, said Trust shall substantially comply with the terms and
provisions of the model Rabbi Trust as set forth in Rev. Proc. 92-64, 1992-2 CB
422 as now existing or as subsequently modified.

                                   ARTICLE 5.
                        PAYMENT OF DEFERRED COMPENSATION

      5.1 Payment Events. Each Participant shall be entitled to payment of
deferred compensation equal to the amount of the balance of such Participant's
Deferred Compensation Account as of the earliest to occur of the following
events (hereinafter "Payment Event"):

            (a) Termination of employment with Employer regardless of whether
      such termination of employment was voluntary or involuntary, with or
      without cause, reasonable or unreasonable unless the Participant becomes
      employed by another Employer.

            (b) Death.

            (c) Disability (as defined in Section 2.12 above).

      In addition to the above Payment Events, the Committee may, in its sole
and absolute discretion, allow a Participant to withdraw amounts from his/her
Deferred Compensation Account upon the happening of an Unforeseeable Emergency.
A Participant may request a distribution due to an Unforeseeable Emergency by
submitting a written request to the Committee accompanied by evidence to
demonstrate that the circumstances being experienced qualify as an Unforeseeable
Emergency. Any withdrawal approved by the Committee shall not exceed the amount
necessary to meet the Unforeseeable Emergency.

      5.2 Form of Payment. Upon initially electing to participate in the Plan, a
Participant shall also select the form in which deferred compensation is to be
paid to him/her following a Payment Event. The Participant may elect to receive
payment in a lump sum or in monthly cash payments over a period not to

                                      -6-
<PAGE>

exceed one hundred twenty (120) months. The election may not be altered by the
Participant after he/she commences participation in the Plan; however, the
Committee, in its sole and absolute discretion, which may be exercised
unreasonably, may alter the form of payment upon a Participant's request or, on
its own accord, the Committee may accelerate the payments of any amounts due a
Participant. If a Participant fails to elect a form of payment, the Deferred
Compensation shall be paid to him/her in monthly cash payments over a period of
one hundred twenty (120) months; subject, however, to the right of the Committee
to accelerate any payment. The Committee may exercise its discretion pursuant to
this Section 5.2 without regard to the tax or other impact upon the Participant
or the Participant's Beneficiaries.

      5.3 Timing of Payment Event. Within sixty (60) days after the occurrence
of a Payment Event, Employer shall commence payment to the Participant or the
Participant's designated Beneficiary or legal representative, as the case may
be, of the Participant's Deferred Compensation Account. The Deferred
Compensation Account balance shall be paid pursuant to Section 5.2 above.

      5.4 Beneficiary Designation. Each Participant shall have the right to
designate primary and contingent Beneficiaries to receive any payment which may
be payable hereunder following Participant's death. Such beneficiary designation
shall be delivered in writing to the Committee, and may be changed at any time
by a subsequent written notice to the Committee. The last written designation
delivered to the Committee prior to the Participant's death shall control. Such
beneficiary designation shall become effective only when received by the
Committee. If Participant fails to designate a Beneficiary, or if his/her
Beneficiary designation is revoked by operation of law and he/she does not
designate a new Beneficiary, or if all designated Beneficiaries predecease the
Participant or die prior to complete distribution of Participant's Deferred
Compensation Account, remaining payments shall be made to the legal
representative of Participant's estate. Any payment of a Participant's Deferred
Compensation Account in accordance with this Section 5.4 shall release the
Employer from all future liability hereunder.

                                   ARTICLE 6.
                             EMPLOYER CONTRIBUTIONS

      6.1 Phantom 401(k) Contributions. Employer shall conditionally contribute
into a Participant's Deferred Compensation Account on the Contribution Date or,
at such other date pursuant to Employer's 401(k) plan, an amount equal to the
sum which Employer would otherwise contribute into Participant's 401(k) account
with respect to said Deferred Compensation assuming Participant had not deferred
any Compensation ("Phantom 401(k) Contribution"). The amount of a Phantom 401(k)
Contribution shall be in accordance with Employer's 401(k) plan as of the date
of the deferral including any applicable vesting schedule with respect to said
401(k) contribution.

      6.2 Phantom ESOP Contribution. Employer shall conditionally contribute
into a Participant's Deferred Compensation Account on the Contribution Date or
at such other date in accordance with Employer's Employee's Stock Ownership Plan
(the "ESOP") an amount equal to the sum which Employer would otherwise
contribute into the ESOP with respect to said Deferred Compensation assuming
Participant had not deferred any Compensation ("Phantom ESOP Contribution"). The
amount of the Phantom ESOP Contribution and any vesting with respect to said
contribution shall be in accordance with the terms and provisions of Employer's
ESOP as of the time of said contribution.

                                      -7-
<PAGE>

      6.3 Investment of Phantom 401(k) Contribution and Phantom ESOP
Contribution. Any Phantom 401(k) Contribution and/or Phantom ESOP Contribution
made to a Participant's Deferred Compensation Account shall be invested as
directed by Participant pursuant to this Agreement.

                                   ARTICLE 7.
                                 CLAIM PROCEDURE

      7.1 Claim. A Participant, Former Participant, or Beneficiary claiming a
benefit, requesting an interpretation or ruling under the Plan, or requesting
information under the Plan shall present the request in writing to the Committee
which shall respond in writing as soon as practicable. Any notice or filing
required or permitted to be given to the Committee under the Plan shall be
sufficient if in writing and hand delivered, or sent by registered or certified
mail, to the principal office of Employer. Such notice shall be deemed given as
of the date of delivery or, if delivery is made by mail, as of the date shown on
the postmark on the receipt for registration or certification.

      7.2 Denial of Claim. If the claim or request is denied, the written notice
of denial shall state:

            (a) The reasons for denial, with specific reference to the Plan
      provisions on which the denial is based.

            (b) A description of any additional material or information required
      and an explanation of why it is necessary.

            (c) An explanation of the Plan's claim review procedure.

      7.3 Review of Claim. Any Participant, Former Participant or Beneficiary
whose claim or request is denied or who has not received a response within
thirty (30) days may request a review of his/her claim by giving notice in
writing to the Committee. The claim or request shall be reviewed by the
Committee who may, but shall not be required to, grant the claimant a hearing.
On review, the claimant may have representation, examine pertinent documents,
and submit issues and documents in writing.

      7.4 Final Decision. The decision on review shall normally be made within
sixty (60) days after the date on which the claimant requests a review. The
Committee may extend the time for making the final decision by an additional
sixty (60) days by notifying all affected persons in writing. The decision shall
be in writing and shall state the reasons and the relevant Plan provisions. All
decisions on review shall be final and bind all parties concerned.

                                   ARTICLE 8.
                                  MISCELLANEOUS

      8.1 Amendment and Termination of Plan. The Employer may at any time amend
the Plan, provided that no such action shall deprive any Participant, Former
Participant or Beneficiary of any payment of Deferred Compensation to which the
Participant, Former Participant or Beneficiary may have been entitled under the
Plan prior to the effective date of such action. Any Employer may terminate its
participation in the Plan at any time following termination of the Plan, payment
of the Deferred Compensation shall be made in accordance with the provisions of
Article 5.

                                      -8-
<PAGE>

      8.2 Status of Participants. The Plan constitutes a mere promise by
Employers to pay Deferred Compensation to Participants, Former Participants or
Beneficiaries in the future. The right of a Participant, Former Participant or
Beneficiary to receive a payment of Deferred Compensation hereunder shall be an
unsecured claim against the general assets of the applicable Employer, and
neither the Participant, Former Participant nor any Beneficiary shall have any
rights in or against any specific assets of Employer. Neither the Plan nor any
action taken under the Plan shall be construed as giving any employee any right
to be retained in the employ of Employer or any affiliate of Employer.

      8.3 Limitation on Alienation. A Participant's right to receive payments
under this Plan is not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment or garnishment by
creditors of the Participant or the Participant's Beneficiary.

      8.4 Pronouns. Whenever used in this Plan, the singular form, whenever used
herein, shall mean or include the plural form, where applicable, and vice versa.

      8.5 Applicable Law. This Plan shall be construed in accordance with
applicable federal law and, to the extent otherwise applicable, the laws of the
State of Nebraska.

      8.6 Severability. If any provisions of this Plan shall be held invalid or
unenforceable, the remaining provisions of the Plan shall continue to be fully
effective.

      8.7 Successors. The provisions of this Plan shall bind and inure to the
benefit of Employer and its respective successors and assigns. The term
successors as used herein shall include any corporate or other business entity
which shall, whether by merger, consolidation, purchase or otherwise, acquire
all or substantially all of the business and assets of the Employer, and
successors of any such corporation or other business entity.

         [The Remainder of this Page has been Left Intentionally Blank.]

                                      -9-
<PAGE>

      IN WITNESS WHEREOF, TierOne Bank has adopted this Plan as of the 15th day
of August, 2002, pursuant to the authority granted by the Board on July 25,
2002.

                                       TIERONE BANK

                                       By:  /s/ Gilbert G. Lundstrom
                                            ------------------------------------
                                       Its: Chairman and Chief Executive Officer
                                            ------------------------------------

                                      -10-

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