MIME-Version: 1.0 Content-Location: file:///C:/E368AEED/eth_107605.htm.htm Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii" Code of Conduct and Ethics

Code of Conduct and Ethics

 

INTRODUCTION

 

In order to assure the proper and ethical performance = of our business and to maintain the confidence of the public, our customers and our shareholders in TierOne Corporation (the "Company") and its subsidiaries, all Directors, Officers and Employees of the Company are expe= cted to act in accordance with the highest standards of personal and professional integrity in all aspects of their activities, to comply with applicable law= s, rules and regulations and to avoid misconduct and conflicts of interest and= the appearance of conflicts of interest.

 

To promote these standards and values, the Board of Directors of the Company has established and adopted this Code of Conduct a= nd Ethics to provide guidance concerning the standards of ethical conduct by, = and responsibilities of, persons employed by the Company or its subsidiaries and Directors of the Company and its subsidiaries. This Code applies to the Com= pany and all of its subsidiaries.

 

This Code outlines the broad principles of legal and e= thical business conduct embraced by the Company. To assist you, certain sections of this Code describe clarifying examples or hypothetical situations that might arise within the context of the particular section. These are illustrative = only and are not intended to limit the scope of the section. However, a written = code cannot answer all questions raised in the context of business relationships. Therefore, this Code must be applied using common sense and good judgment. Issues with respect to conflicts, legality or ethics may not always be clear cut and Officers and Employees should consult with higher levels of managem= ent, the Human Resources Department or the Internal Auditor/Compliance Officer a= nd Directors should discuss the matter with the Internal Auditor/Compliance Of= ficer or outside counsel.

 

Gilbert G. Lundstrom

Chairman and Chief Executive Officer

 

CODE OF CONDUCT AND ETHICS -- INDEX

 

DEFINITIONS

ETHICAL PRINCIPLES AND CORPORATE VALUES

CONFLICTS OF INTEREST

 

Compensation and Gifts

Business Gratuities

Transactions with Insiders

CONFIDENTIAL INFORMATION

 

Confidential Information Regarding Customers and Other= s

Permissible Dissemination of Confidential Information =

Confidential Information Regarding Current or Former Directors and Employees

Company Resources; Proprietary Information =

PERSONAL INVESTMENTS AND FINANCES

 

Trading in Company Securities

Personal Investments

Purchase of Company Owned Property

Loans

BUSINESS CONDUCT

 

Business and Accounting Practices

Political Contributions; Expenditures for Political Pu= rposes

Outside Business Interests

Management Interlocks

SPECIAL ETHICS OBLIGATIONS FOR EMPLOYEES WITH FINANCIAL REPORTING RESPONSIBILITIES

REPORTING VIOLATIONS

CONCLUSION

 

EXHIBIT A

EXHIBIT B

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I. DEFINITIONS

 

Bank: TierOne Bank.

Code: This Code of Conduct and Ethics adopted by the B= oard of Directors of TierOne Corporation.

Company: TierOne Corporation and/or all subsidiaries currently existing or hereafter formed or acquired, which employ personnel = or have Boards of Directors.

Director; Board(s) of Directors: Includes all members = of the Boards of Directors of the Company and its subsidiaries.

Employee: Includes all Employees and Officers of the C= ompany and its subsidiaries.

Immediate Family: Includes father, mother, spouse and children of a Person. These may be blood relationships, step relationships,= or adoptions.

Officer: Includes all Persons employed by the Company = with the title Assistant Vice President or higher.

Person: Any individual or group of individuals identif= ied in D, E and G above.

Regulation O: Refers to Regulation O promulgated by the Board of Governors of the Federal Reserve System, as amended from time to t= ime, to implement the lending restrictions set forth in the Federal Reserve Act regarding loans and other extensions of credit made to executive officers, directors, principal shareholders and other insiders.

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II. ETHICAL PRINCIPLES AND CORPORATE VALUES

 

The nature of the business of the Company requires car= eful observance of applicable laws and regulations. High standards of conduct and personal integrity are essential for the Company to maintain the confidence= of its shareholders, customers, Employees, and the general public. To ensure t= hat the Company and all Persons embrace and promote sound ethical business practices, the Company requires that all Persons agree that they will:

 

Act with honesty and integrity, avoiding actual or app= arent conflicts of interest in personal and professional relationships;

Comply with rules and regulations of federal, state and local governments, and other appropriate regulatory agencies;

Act in good faith, responsibly, and with due care, competence and diligence, without misrepresenting material facts or allowing one's independent judgment to be impaired;

Provide information that is accurate, complete, object= ive, relevant, timely and understandable to ensure full, fair, accurate, timely,= and understandable disclosure in reports and documents; and

Promptly report any conduct that the individual believ= es to be a violation of law or business ethics or of any provision of the Code, including any transaction or relationship that reasonably could be expected= to give rise to a conflict of interest.

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III. CONFLICTS OF INTEREST

 

A conflict of interest exists whenever a Person (or a = member of his or her Immediate Family) has a personal interest in any entity or ma= tter that may influence a decision or cloud that Person's judgment in the discha= rge of his or her responsibilities to the Company. It is the duty of every Pers= on to avoid situations from which he or she (or an Immediate Family member) mi= ght benefit personally, directly or indirectly, or that give the perception tha= t the Person (or an Immediate Family member) is benefiting personally, from busin= ess decisions, use of Company facilities or from relationships with Company customers, vendors or contacts.

 

If a business opportunity relating to the Company's li= nes of business becomes available to or is made known to a Person, subject to pre-existing continual agreements with the Company and such Person, it must first be made available to the Company before being acted upon by that Pers= on, by his or her Immediate Family or by any other Person.

 

Employees are prohibited from underwriting, approving = or granting Bank loans to companies in which the Employee has a substantial interest as an owner, director, officer, or partner, or to companies in whi= ch a member of his or her Immediate Family has such an interest; or to a member = of his or her Immediate Family. Such loans must be directed to another loan officer. When that is not possible, the application may be taken and proces= sed, but must be reviewed and approved by another loan officer.

 

Employees should avoid any relationship that would cau= se a conflict of interest with their duties and responsibilities at the Company. Employees are expected to disclose any situations that may involve inappropriate or improper conflicts of interests affecting them personally = or affecting other employees or those with whom the Company does business. Wai= vers of conflicts of interest involving executive officers require the approval = of the Board of Directors or an appropriate committee.

 

To avoid conflicts of interest, Directors are expected= to disclose to their fellow Directors any personal interest they may have in a transaction upon which the Board passes and to recuse themselves from participation in any decision in which there is a conflict between their personal interests and the interests of the Company.

 

Compensation and Gifts.

The Bank Bribery Act prohibits any Person or agent of = the Company or attorney representing the Company from offering or receiving anything of value where the item of value is offered with the intent of influencing the Person, agent or attorney or a business transaction. This l= aw is broad and carries civil and criminal penalties, including fines and/or imprisonment. Gifts or awards given in recognition of a Person's service or accomplishment in civic, charitable, educational, or religious organizations are not prohibited by this Code. Generally, there is no threat of a violati= on of the Bank Bribery Act if acceptance of a gift or benefit is based on an Immediate Family (or other familial relationship) or personal relationship, which exists independent of any business with the Company or if the gift or benefit is made available to the general public under the same conditions on which it is made available to a Person.

 

General Prohibitions: Except as provided below, Person= s are prohibited from soliciting or receiving anything of value in any amount in connection with the business of the Company, including but not limited to money, goods, or services. This prohibition applies whether such was obtain= ed as a gratuity/gift or as a "quid pro quo" exchange (something received or given as a reward for preferential action or service rendered b= y a Director or Employee). Additionally, this prohibition includes receiving co= mpensation of any kind from any source for rendering services of a type that are perfo= rmed or offered by the Company. A Director or Employee may not do indirectly wha= t he or she is prohibited from doing directly; for example, arrange to have a prohibited gift made to a member of his or her Immediate Family. Similarly,= a Person may not give gifts, meals, or entertainment (including a quid pro quo exchange) which are intended to influence, or that might give the appearanc= e of influencing, another Person or a business contact in a business decision. A= ny action by a Person perceived to compromise another's judgment is prohibited= .

 

Example: An Employee may not solicit any sort of perso= nal compensation in return for making a loan to a customer.

 

Example: A Director who is in a position, whether dire= ctly or indirectly, to sell goods or services to the Company may not give gifts = to the department responsible for making such purchasing decisions.

Permissible Gifts: Any Person may accept anything of v= alue from customers but only if it:

 

a. Is valued at $100 or less;

b. Is not intended to influence any decision by the Pe= rson;

c. Is unsolicited;

d. Is infrequent; and

e. Is not a quid pro quo.

 

 

Notwithstanding the foregoing, under no circumstances = shall any person accept money as a gift from any customer.

 

Examples of Permissible Gifts: Gifts which are likely = to meet these guidelines are: advertising or promotional materials such as tic= kets to sporting events, pens, pencils, key rings, calendars and similar items valued at $100 or less.

 

Additionally, a Person may accept gifts from individua= ls who have both a personal relationship with that Person and a business relations= hip with the Company, for such commonly recognized events or occasions as a pro= motion, wedding, retirement, or religious observance, if valued at $100 or less. If= a Person is offered or receives something of value in excess of the above-sta= ted amounts which he or she believes may be impermissible under this Code, that Person must disclose the matter to the Human Resources Department or the Internal Auditor/Compliance Officer and seek a determination that the item = of value may be accepted or must be returned. The reviewer will give due consideration to the criteria for permissible gifts and whether receipt pos= es a threat to the integrity of the Company.

 

 

Business Gratuities.

Payments for travel, lodging, meals and entertainment = are normally permissible if they (i) are reasonable in amount; (ii) are expende= d in the course of a legitimate business meeting or an event intended to foster better business relations; (iii) would be paid by the Company as a business expense if not paid for by the outside source; and (iv) are unsolicited.

 

If a Person is offered payments of the type which he o= r she believes may be impermissible, that Person must disclose the matter to the Human Resources Department or the Internal Auditor/Compliance Officer and s= eek a determination that the offer may be accepted or must be rejected. The reviewer will give due consideration to the criteria for permissible paymen= ts and whether receipt poses a threat to the integrity of the Company.

 

Example: Activities with existing or potential custome= rs or vendors that are paid for by them (including meals, sporting events and oth= er entertainment, as well as trips to customer and vendor sites, exhibits and other activities) may be accepted only if the activity is a customary, acce= pted and lawful business practice and is of sufficiently limited value that no possible inference can be drawn that participating in the activity could influence you in the performance of your duties for the Company.=

 

 

Transactions with Insiders.

The Company from time to time may purchase or lease re= al or personal property or goods or services from a Person, a member of a Person's Immediate Family, or from business entities in which a Person or in which a member of that Person's Immediate Family is an officer, director and/or controlling shareholder.

 

It is the policy of the Company that any transaction involving insiders, also known as related party transactions, must be condu= cted at arm's length and that any consideration paid or received by the Company = in connection with such a transaction shall be on terms no less favorable than terms available to an unaffiliated third party under the same or similar circumstances. In accordance with the Sarbanes-Oxley Act of 2002, the Director's or Officer's interest in any such transactions, excluding loans, requiring the Audit Committee of the Board of Directors action, shall be disclosed to the Audit Committee of the Board of Directors prior to any act= ion being taken. Any such transactions involving loans to certain officers defi= ned in annual Board of Director resolutions which are restricted by Regulation = O, shall be reported to the Board of Directors.

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IV. CONFIDENTIAL INFORMATION

 

Confidential Information Regarding Customers and Other= s.

Persons must take all reasonable measures to protect t= he confidentiality of non-public information about the Company or its subsidia= ries and their customers, shareholders and suppliers obtained or created in connection with such persons' activities and to prevent the unauthorized disclosure of such information unless required by applicable law or regulat= ion or legal or regulatory process.

 

 

Permissible Dissemination of Confidential Information.=

Dissemination of confidential customer information amo= ng Company subsidiaries is permissible with the exception of those customers w= ho have given written notification to the contrary. Notwithstanding the forego= ing, all queries of a legal nature that involve confidential information relatin= g to a subsidiary's customers must initially be directed to the Company's Corpor= ate Secretary who may refer such matter to the Compliance Officer and or outside counsel if deemed necessary and appropriate.

 

 

Confidential Information Regarding Current or Former Directors and Employees.

All requests for information regarding current or form= er Directors or Employees must be referred to the Human Resources Department. = The amount of information the Human Resources Department may provide is limited= by the Company's internal procedures and applicable laws.

 

 

Company Resources; Proprietary Information.=

Persons are prohibited from selling, disclosing, or otherwise using the Company's physical resources or proprietary information= for personal benefit or for the benefit of any other party. The definition of t= he Company's "physical resources or proprietary information" includes all the Company's intellectual property, including but not limited to any written materials, any computer or network-based information, data, any oth= er types of information or data developed for the Company by an Employee or a vendor, supplier or other contractor of the Company.

 

Example: Employees are prohibited from using the Compa= ny's marketing research for a personal venture or disclosing proprietary informa= tion to a competitor.

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V. PERSONAL INVESTMENTS AND FINANCES

 

Trading in Company Securities.

The Board of Directors of the Company has approved a p= olicy to prevent insider trading. A copy of the Company's insider trading policy = is available upon request from the Stock Compliance Officer.

 

 

Personal Investments.

Directors must disclose to the Chairman of the Board a= nd Employees must disclose to their direct supervisor when they know of any ownership or beneficial interest which they or members of their Immediate Families have with customers or suppliers of the Company if they have responsibility for the account relationship. Persons and their Immediate Families are prohibited from investing in securities of customers or suppli= ers if they hold or share any responsibility for the account relationship, unle= ss the securities are listed on an equities market and the purchase or sale is based upon information available to the general public, or unless approval = is granted by a majority vote of the Board of Directors. In those instances wh= ere a personal investment in a given customer has been approved, Persons must a= void participation in any Company decisions concerning that customer. Example: An Employee who is the account officer for or deals with the loan account of A= BC Company (a customer) may not invest personally in ABC Company without recei= ving prior approval of the Board of Directors. (See also Section V. D. "Loans" below).

 

 

Purchase of Company Owned Property.

Purchase of Company owned or subsidiary owned property= (real or personal) by Persons or members of their Immediate Families is strictly prohibited unless such purchase is on terms no more favorable than would be offered to an unaffiliated third party under the same or similar circumstan= ces. For example, the Company may allow Persons to purchase Company owned vehicl= es at fair market value. Such related party transactions must be approved by t= he Audit Committee of the Board of Directors.

 

 

Loans.

Loans by subsidiaries of the Company are available to Directors and designated Regulation O Officers (except as more restricted f= rom time to time by the provisions of the Bank's Lending Policy Guide) on the s= ame terms and conditions, including interest rates and collateral, as those prevailing for comparable loans with other customers. Such loans must not involve more than the normal risk of repayment or present other unfavorable features.

 

The Securities Exchange Act of 1934, as amended, makes= it unlawful for the Company, directly or indirectly, including through any subsidiary, to extend or maintain credit, arrange for the extension of cred= it or renew the extension of credit in the form of a personal loan to or for a= ny of its Directors or executive officers except Regulation O loans are exempt from this prohibition under a specific provision of the Securities Exchange= Act. The Sarbanes-Oxley Act of 2002 contains similar prohibitions and exemptions= for certain Regulation O loans.

 

Persons are prohibited from lending personal funds to persons known to them as Company customers, except if the customer is an Immediate Family member or other relative including the Person's siblings, grandchildren or the mother, father and siblings of the Person's spouse. Persons may not borrow from a customer unless the customer is a recognized lending institution.

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VI. BUSINESS CONDUCT

 

Business and Accounting Practices.

 

No funds or assets of the Company shall be used for un= lawful purposes.

No unrecorded fund or asset of the Company shall be established or maintained for any purpose.

No false or misleading entries shall be made in the bo= oks and records of the Company for any purpose. All items of income or expense shall be appropriately recorded.

No payment by the Company shall be made with the inten= t or understanding that all or any part of such payment be used for any purpose other than that described in the books and records of the Company.

No payment on behalf of the Company shall be approved without adequate supporting documentation or with the intention or understanding that all or any part of such payment is to be used for any pu= rpose other than that described by the documents supporting the payment.

Compliance is required with generally accepted account= ing principles and procedures and with established internal accounting controls= and procedures.

The Company may require submission by Directors and Employees of reports or statements in compliance with this section, at such time or from time to time and in such form as the Company may specify.

 

 

 

Political Contributions; Expenditures for Political Purposes.

 

No funds or assets of the Company are to be used to ma= ke any unlawful political contribution. For purposes of this section, the term "political contribution" shall be deemed to include not only the direct or indirect delivery of cash or property of the Company to a politic= al party, candidate, committee or organization but also includes: (a) the reimbursement by the Company to any Person or any other person, for a polit= ical contribution made or to be made by such Person or other person; or (b) the provision of services or the use of property or the making of a loan, to a political party, candidate, committee or organization by the Company, excep= t in the ordinary course of Company business and on customary commercial terms. Purchases of tickets to political dinners or other similar events or of advertisements in political publications are considered to be political contributions and are not reimbursable.

Neither the Company nor any Person acting on its behalf shall establish any program to solicit, collect or distribute political contributions from a Person.

No Person shall be under any obligation of any kind to= the Company or to any other Person, to utilize any of his or her compensation to make political contributions and no Person or any other person acting on the Company's behalf, shall seek to create or enforce any such obligation.

 

You are encouraged to participate in political activit= ies on your own time and in accordance with your individual desires and political preferences. However, it must be clear at all times that your participation= is done as an individual and not as a representative of the Company. Before you become a candidate or appointee to a public office you must notify your supervisor and obtain the Company's approval.

 

 

 

Outside Business Interests.

Prior approval must be obtained in situations where a = Person or his or her Immediate Family members may profit from a relationship with a company or other entity with which that Person deals with in the course of = his or her Company duties.

 

 

Management Interlocks.

Persons should be aware of the various statutes and regulations either prohibiting or restricting dual service by them in the following areas:

 

Service as a director, officer or employee of any other commercial bank, banking association, trust company, savings bank, savings = and loan association, or credit union;

Service in an organization primarily engaged in the is= sue, underwriting, public sale or distribution of stocks, bonds or other securit= ies;

Service as an officer or director of a public utility = or a registered public utility holding company or subsidiary; or

Service as a director, officer, partner, employee, app= ointee or representative of any obligor of securities for which the Company subsid= iary with which he or she is affiliated is the indenture (corporate) trustee.

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VII. SPECIAL ETHICS OBLIGATIONS FOR EMPLOYEES WITH FIN= ANCIAL REPORTING RESPONSIBILITIES

 

(THIS SECTION IS ONLY APPLICABLE TO CERTAIN EXECUTIVES SPECIFIED IMMEDIATELY BELOW.)

 

As a public company, it is critical that the Company's filings with the Securities and Exchange Commission be accurate and timely. Depending on their position with the Company, Persons may be called upon to provide information to assure that the Company's public reports are complet= e, fair and understandable. The Company expects all Persons to take this responsibility seriously and to provide prompt and accurate answers to inquiries related to the Company's public disclosure requirements.

 

All Persons bear a responsibility for promoting integr= ity throughout the Company. The Chief Executive Officer, the Chief Financial Officer, the Treasurer, the Controller, the Investor Relations Officer, the principal accounting officer and all those Persons acting in a similar capa= city have a special role both to adhere to these principles and also to ensure t= hat the Company's corporate culture ensures the fair and timely reporting of the Company's financial results and condition. Because of this special role, the Company's Chief Executive Officer, Chief Financial Officer, Treasurer, Controller, Investor Relations Officer, principal accounting officer and all those Persons acting in a similar capacity of the Company are bound by the following Financial Officer Code of Ethics, and by signing the Certificate = of Compliance attached to this Code as Exhibit A, each agrees that he or she w= ill:

 

Act with honesty and integrity, avoiding actual or app= arent conflicts of interest in personal and professional relationships;

Provide information that is accurate, complete, object= ive, relevant, timely and understandable to ensure full, fair, accurate, timely,= and understandable disclosure in reports and documents that the Company files w= ith, or submits to, government agencies and in other public communications;

Comply with rules and regulations of federal, state and local governments, and other appropriate regulatory agencies;

Act in good faith, responsibly, and with due care, competence and diligence, without misrepresenting material facts or allowing one's independent judgment to be impaired; and

Promptly report to the Company's Chief Executive Offic= er, Chief Financial Officer, or a member of the Company's Audit Committee of the Company's Board of Directors any conduct that the individual believes to be= a violation of law or business ethics or of any provision of the Code of Cond= uct, including any transaction or relationship that reasonably could be expected= to give rise to a conflict of interest.

Violations of this Financial Officer Code of Ethics, including failures to report potential violations by others, is a serious matter that may result in disciplinary action, including termination of employment. If any Person believes that a violation of the Financial Officer Code of Ethics has occurred, he or she should promptly contact the Company's Chief Executive Officer, Chief Financial Officer or a member of the Company= 's Audit Committee.

 

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VIII. REPORTING VIOLATIONS

 

The procedures for handling concerns and complaints regarding questionable accounting or auditing matters as adopted by the Aud= it Committee from time to time are attached to this Code as Exhibit B.

 

Anyone who seeks advice, raises a concern or reports misconduct or a violation of this Code is following the requirements of this Code and the desires of our Board of Directors. We encourage such action. T= he procedures for handling reports of illegal or unethical behavior are also s= et forth in Exhibit B. Retaliation against anyone who makes a good faith repor= t of misconduct is illegal and will not be tolerated.

 

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IX. CONCLUSION

 

The Company conducts itself and its business dealings = so as to comply with all applicable laws and regulations. Where the requirements = of such laws and regulations are unclear, the advice of the Internal Auditor/Compliance Officer or outside counsel must be sought to secure interpretation and to ensure compliance. Every Person must understand the Company's internal policies and procedures and the legal and regulatory framework within which the Company operates and must take those steps neces= sary to ensure that any Persons working with or under their supervision understa= nd them. Persons are urged to reread the Code from time to time to refresh the= ir recollection of the statutory and regulatory matters and the policies outli= ned herein.

 

This Code may be amended or modified by the Board of Directors of the Company. Waivers of this Code may only be granted by the B= oard of Directors or a committee of the Board with specific delegated authority. However, with respect to waivers of this Code for executive officers or directors, such waivers may be granted only by the independent members of t= he Board of Directors of the Company. Waivers will be promptly disclosed to shareholders as required by the Securities Exchange Act and the rules thereunder and the applicable rules of the Nasdaq Stock Market. =

 

EXHIBIT A

 

CERTIFICATE OF COMPLIANCE

(Chief Executive Officer, Chief Financial Officer, Treasurer, Controller, Investor Relations Officer, principal accounting officer, and all persons acting in a similar capacity.)

 

* Intentionally Omitted *

 

EXHIBIT B

 

WHISTLEBLOWER PROCEDURES

 

A. Reporting Illegal or Unethical Behavior =

 

If you suspect or know of violations of this Code or i= llegal or unethical business or workplace conduct by employees, officers or Direct= ors then you have an obligation to contact your supervisor or divisional manage= r. If the individuals to whom such information is conveyed are not responsive, or= if there is a reason to believe that reporting to such individuals is inappropriate in particular cases, then you may contact the Chief Executive Officer. Such communications will be kept confidential to the extent feasib= le. If you are still not satisfied with the response, then you may address your concerns to: Audit Committee of the Board of Directors, TierOne Corporation= , P O Box 83009, Lincoln, NE 68501. If concerns or complaints require confidentiality, then this confidentiality will be protected to the extent feasible, subject to applicable law. <= /o:p>

 

B. Accounting Complaints

 

Our policy is to comply with all applicable financial reporting and accounting regulations. If any Director, Officer or Employee = has unresolved concerns or complaints regarding questionable accounting or audi= ting matters, then you are encouraged to submit those concerns or complaints (anonymously, confidentially or otherwise) to the Audit Committee. Subject = to its legal duties, the Audit Committee and the Board will treat such submiss= ions confidentially. Such submissions may be directed to the attention of the Au= dit Committee of the Board of Directors, TierOne Corporation, P O Box 83009, Lincoln, NE 68501.

 

C. Non-Retaliation

 

We prohibit retaliation of any kind against individual= s who have made good faith reports or complaints of violations of this Code or ot= her known or suspected illegal or unethical conduct.

 

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