FINAL
Board Approved 12/1/11

[afhlbilogomarkonlyrgb.jpg]
Federal Home Loan Bank of Indianapolis
Incentive Plan

(Effective as of January 1, 2012)

1

--------------------------------------------------------------------------------

ADOPTION OF
FEDERAL HOME LOAN BANK OF INDIANAPOLIS
INCENTIVE PLAN
Pursuant to resolutions adopted by the Board of Directors of the Federal Home
Loan Bank of Indianapolis (the “Bank”), the undersigned officers of the Bank
hereby execute the Federal Home Loan Bank of Indianapolis Incentive Plan,
effective as of January 1, 2012, on behalf of the Bank, in the form attached
hereto.
Dated this 1st day of December, 2011.
FEDERAL HOME LOAN BANK OF INDIANAPOLIS
By: /s/PAUL CLABUESCH
Paul Clabuesch, Chairman
By: /s/JEFFREY A. POXON
Jeffrey A. Poxon, Vice Chairman
ATTEST:
By: /s/KANIA D.WARBINGTON
Kania D. Warbington, Corporate Secretary

2

--------------------------------------------------------------------------------

FEDERAL HOME LOAN BANK OF INDIANAPOLIS
INCENTIVE PLAN
TABLE OF CONTENTS
    
 
 
PAGE
Article I
INTRODUCTION
1

 
 
 
Section 1.1
Purpose
1

Section 1.2
Effective Date
1

Section 1.3
Administration
1

Section 1.4
Supplements
1

Section 1.5
Definitions
1

 
 
 
Article II
ELIGIBILITY AND PARTICIPATION
2

 
 
 
Section 2.1
Eligibility
2

Section 2.2
Participation
2

 
 
 
Article III
AWARDS AND EXTRAORDINARY OCCURENCE ADDITIONS/REDUCTIONS
3

 
 
 
Section 3.1
Awards
3

Section 3.2
Performance Goals
4

Section 3.3
Earning and Vesting of Awards for Level I Participants
5

Section 3.4
Earning and Vesting of Awards for Level II Participants
6

Section 3.5
Special Gap Year Awards for Level I Participants
6

Section 3.6
Effect of Termination of Service and Amendment of Prior Long-Term Plans
7

Section 3.7
Effect of Reorganization
10

Section 3.8
Payment of Awards
11

Section 3.9
Reduction or Forfeiture of Awards
11

 
 
 
Article IV
ADMINISTRATION
12

 
 
 
Section 4.1
Appointment of the Committee
12

Section 4.2
Powers and Responsibilities of the Committee
12

Section 4.3
Income and Employment Tax Withholding
13

Section 4.4
Plan Expenses
13

 
 
 
Article V
BENEFIT CLAIMS
13

 
 
 
Article VI
AMENDMENT AND TERMINATION OF THE PLAN
13

 
 
 
Section 6.1
Amendment of the Plan
13

Section 6.2
Termination of the Plan
14

3

--------------------------------------------------------------------------------

Article VII
MISCELLANEOUS
14

 
 
 
Section 7.1
Governing Law
14

Section 7.2
Headings and Gender
14

Section 7.3
Spendthrift Clause
14

Section 7.4
Counterparts
14

Section 7.5
No Enlargement of Employment Rights
14

Section 7.6
Limitations on Liability
14

Section 7.7
Incapacity of Participant
14

Section 7.8
Evidence
15

Section 7.9
Action by Bank
15

Section 7.10
Severability
15

Section 7.11
Information to be Furnished by a Participant
15

Section 7.12
Attorneys' Fees
15

Section 7.13
Binding on Successors
15

Section 7.14
Retention of Former Plans
15

 
 
 
APPENDIX I - 2012 PERFORMANCE PERIOD AWARDS FOR LEVEL II PARTICIPANTS
16

APPENDIX II - 2012 PERFORMANCE PERIOD AWARDS FOR LEVEL I PARTICIPANTS
19

APPENDIX III - ANNUAL AWARD TARGETS FOR 2010 AND 2011 LONG TERM INCENTIVE PLANS
23

APPENDIX IV - AWARDS ADDRESSING 2015 GAP YEAR FOR LEVEL I PARTICIPANTS
25

APPENDIX V - FORM OF NON-SOLICITATION AND NON-DISCLOSURE AGREEMENT
27

4

--------------------------------------------------------------------------------

    
    

5

--------------------------------------------------------------------------------

ARTICLE I
INTRODUCTION
Section 1.1    Purpose. The purpose of the Federal Home Loan Bank of
Indianapolis Incentive Plan (the “Plan”) is to attract, retain and motivate
employees of the Federal Home Loan Bank of Indianapolis (the “Bank”) and to
focus their efforts on continued improvement in the profitability of the Bank
while maintaining the Bank's safety and soundness. The Plan is a cash-based
incentive plan that provides award opportunities based on achievement of
performance goals.

Section 1.2    Effective Date. The “Effective Date” of the Plan is January 1,
2012.

Section 1.3    Administration. The Plan will be administered by an
administrative committee (the “Committee”) appointed by the Bank's Board of
Directors (the “Board”), which initially will be the Human Resources Committee
of the Board. Notwithstanding the foregoing, the term Committee shall also refer
to the Executive Governance Committee of the Board who will administer the Plan
with respect to the Bank's Chief Executive Officer. The Committee, from time to
time, may adopt any rules and procedures it deems necessary or desirable for the
proper and efficient administration of the Plan that are consistent with the
terms of the Plan. Any notice or document required to be given or filed with the
Committee will be properly given or filed if delivered to or mailed by
registered mail, postage paid, to the General Counsel, Federal Home Loan Bank of
Indianapolis, 8250 Woodfield Crossing Blvd., Suite 400, Indianapolis, Indiana
46240.

Section 1.4    Supplements. The provisions of the Plan may be modified by
supplements to the Plan with Board approval. The terms and provisions of each
supplement are a part of the Plan and supersede any other provisions of the Plan
to the extent necessary to update or eliminate any inconsistencies between the
supplement and any other Plan provisions.

Section 1.5    Definitions. The following terms are defined in the Plan in the
following Sections:

1

--------------------------------------------------------------------------------

Term
Plan Sections
2009 LTIP
3.6(d)(v)
2010 LTIP
3.6(d)(v)
2011 LTIP
3.6(d)(v)
Annual Award
3.3(a), 3.4(a)
Award
3.1
Bank
1.1
Board
1.3
Cause
3.6(d)(i)
Committee
1.3
Compensation
3.1
Deferral Performance Period
3.1(a)
Deferred Award
3.3(b)
Disability
3.6(d)(ii)
Discretionary Award
3.1(d)
Effective Date
1.2
Extraordinary Occurrences
3.1(e)
FHFA
3.6(d)(i)
Final Award
3.1(e)
Fully Meets Expectations
3.3(a)(ii)
Gap Year Award
3.5(a)
Gap Year Performance Period
3.5(b)
Good Reason
3.6(d)(iii)
Level I Participant
3.1(c)
Level II Participant
3.1(c)
Maximum
3.2(b)(iii)
Non-Solicitation Agreement
2.1
Participant
2.1
Performance Goals
3.2
Performance Period
3.1(a)
Plan
1.1
Position
3.6(d)(iii)(A)
Reduction in Force
3.6(d)(iv)
Reorganization
3.7(b)
Retirement
3.6(d)(v)
Satisfactory
3.3(a)(ii)
Termination of Service
3.6(d)(vi)
Target
3.2(b)(ii)
Threshold
3.2(b)(i)

2

--------------------------------------------------------------------------------

ARTICLE II

ELIGIBILITY AND PARTICIPATION

Section 2.1    Eligibility. Any employee of the Bank, hired before October 1st
of the calendar year, will become a “Participant” in the Plan for that calendar
year, provided the employee is not classified as a “temporary,” an “intern,”
“contract” or “temporary agency” employee, and does not participate in the
Federal Home Loan Bank of Indianapolis Internal Audit Incentive Plan. Level I
Participants, as defined in subsection 3.1(c), must have an executed agreement
on file with the Bank containing non-solicitation and non-disclosure provisions
in a form similar to the form provided in Appendix V to the Plan
(“Non-Solicitation Agreement”).

Section 2.2    Participation. A designated employee or otherwise eligible
employee will become a Participant as of the later of the Effective Date, the
employee's date of hire, or the date on or after the Effective Date the employee
satisfies the automatic eligibility provisions described in Section 2.1. Any
Participant may be removed as an active Participant by the Board effective as of
any date.

ARTICLE III

AWARDS AND EXTRAORDINARY OCCURRENCE ADDITIONA/REDUCTIONS

Section 3.1    Awards. At the beginning of each Performance Period, the Board
will make an “Award” to eligible Participants. As described in this Article,
Awards may be Annual Awards (as defined in subsection 3.3(a)), Deferred Awards
(as defined in subsection 3.3(b)), Gap Year Awards (as defined in subsection
3.5(a)) or Discretionary Awards (as defined in subsection 3.1(d)). Each Award
will be equal to a percentage of the Participant's annual Compensation, as
described in the applicable Appendices for Level I Participants and Level II
Participants. “Compensation” means the Participant's annual earned base salary
or wages for hours worked, including overtime and hours paid under the Bank's
paid-time-off policies, as applicable, but in any case excluding any bonus,
incentive compensation, or long-term disability insurance payments paid for the
current or a prior year. In the event a Participant receives a raise during a
calendar year, the Participant's Compensation for the year will reflect the
actual wages paid to the Participant for the year.
(a)
Performance Periods. A “Performance Period” is the one-calendar year period over
which an Annual Award can be earned and vested pursuant to subsections 3.3(a)
and 3.4(a). A “Deferral Performance Period” is the three-calendar year period
over which a Deferred Award can be earned and vested pursuant to subsection
3.3(b). A Deferral Performance Period begins on the January 1st immediately
following the applicable Performance Period.

(b)
Award Notification. Participants will be notified of an Annual Award, a Deferred
Award or Discretionary Award by the Bank by posting the Performance Goals and
other necessary terms and conditions applicable to the Annual Award, Deferred
Award or Discretionary Award on SharePoint on the Bank's intranet.

(c)
Award Levels. Participants will receive varying Awards for each Performance
Period based on their position with the Bank. A “Level I Participant” is the
Bank's President and Chief Executive Officer, Executive Vice President or Senior
Vice President of the Bank or any other individual designated as a Level I
Participant by the Board. A “Level II Participant” is any participating employee
who is not a Level I Participant.

(d)
Discretionary Award. The President may recommend to the Board that an additional

3

--------------------------------------------------------------------------------

discretionary Award (the “Discretionary Award”) be made to a Level II
Participant to address external market considerations, recruiting needs, special
projects and extraordinary individual or team efforts. The aggregate pool of
funds available for Discretionary Awards to Level II Participants will not
exceed 20 percent of the annual aggregate Awards for still eligible Level I
Participants.

(e)
Final Award and Extraordinary Occurrences. The “Final Award” is the amount of an
earned and vested Annual Award, Deferred Award, Gap Year Award or Discretionary
Award, as adjusted based upon the level at which the Performance Goals have been
achieved, that is ultimately paid to a Participant under the Plan. The amount of
a Final Award may be increased or decreased at the Board's discretion to account
for performance that is not captured in the Performance Goals. The Board, in its
discretion, may also consider Extraordinary Occurrences when assessing
performance results and determining Final Awards. “Extraordinary Occurrences”
mean those events that, in the opinion and discretion of the Board, are outside
the significant influence of the Participant or the Bank and are likely to have
a significant unanticipated effect, whether positive or negative, on the Bank's
operating and/or financial results. Examples of Extraordinary Occurrences
include, but are not limited to, change in law, regulation, or regulatory
policy, or systemic macroeconomic events outside of management's control.

(f)
Transition Goals for Replaced Long-Term Incentive Programs. Upon adoption of
this Plan, the “Performance Goals” required by the 2010 LTIP and 2011 LTIP for
calendar years 2012 and 2013 shall be as set forth in Appendix III.

Section 3.2    Performance Goals. “Performance Goals” are the performance
factors established by the Board for each Performance Period, Deferral
Performance Period and Gap Year Performance Period, as set forth in the
applicable Appendices to the Plan, which are taken into consideration in
determining the value of an Annual Award, Deferred Award or Gap Year Award. The
Board may, for any reason or for an Extraordinary Occurrence, adjust the
Performance Goals for a Performance Period, Deferral Performance Period or Gap
Year Performance Period to ensure the purposes of the Plan are served.

(a)
Establishment of Performance Goals. Performance Goals for Performance Periods,
Deferral Performance Periods or the Gap Year Performance Period commencing on
and after January 1, 2012, will be communicated to Participants via SharePoint
on the Bank's intranet after they have been established by the Board.

(b)
Achievement Level. Three achievement levels will be defined for each Performance
Goal in determining how much of an Award is earned.

i.
Threshold. The “Threshold” achievement level is the minimum achievement level
accepted for a Performance Goal.

ii.
Target. The “Target” achievement level is the planned achievement level for a
Performance Goal.

iii.
Maximum. The “Maximum” achievement level is achievement that substantially
exceeds the Target achievement level.

(c)
Interpolation. Achievement levels that discreetly fall in between Threshold-,
Target-, and Maximum, will be interpolated, unless otherwise described in a
Performance Goal.

4

--------------------------------------------------------------------------------

(d)
Considerations in Establishing Performance Goals. In determining appropriate
Performance Goals and the relative weight accorded each Performance Goal, the
Committee must:

i.
Balance risk and financial results in a manner that does not encourage
Participants to expose the Bank to imprudent risks;

ii.
Make such determination in a manner designed to ensure that Participants'
overall compensation is balanced and not excessive in amount and that the Annual
Awards, Deferred Awards and Gap Year Awards are consistent with the Bank's
policies and procedures regarding such compensation arrangements; and

iii.
Monitor the success of the Performance Goals and weighting established in prior
years, alone and in combination with other incentive compensation awarded to the
same Participants, and make appropriate adjustments in future calendar years as
needed so that payments appropriately incentivize Participants and appropriately
reflect risk.

Section 3.3    Earning and Vesting of Awards for Level I Participants.

(a)
Earning and Vesting of Annual Awards. Fifty percent of an Award to a Level I
Participant will become earned and vested on the last day of the Performance
Period, provided the following requirements are met (an “Annual Award”):

i.
The applicable Performance Goals for the Performance Period are satisfied;

ii.
The Participant received a performance rating for the Performance Period of at
least “Fully Meets Expectations” or “Satisfactory;” and

iii.
The Participant is actively employed on the last day of the Performance Period,
unless otherwise provided in subsection 3.6(a) or 3.6(c) or Section 3.7.

(b)
Earning and Vesting of Deferred Awards. The remaining 50 percent of an Award to
a Level I Participant will become earned and vested on the last day of the
Deferral Performance Period, provided the following requirements are met (a
“Deferred Award”):

i.
The applicable Performance Goals for the Deferral Performance Period are
satisfied;

ii.
The Participant received an average performance rating for the Deferral
Performance Period of at least Fully Meets Expectations or Satisfactory; and

iii.
The Participant is actively employed on the last day of the Deferral Performance
Period, unless otherwise provided in subsection 3.6(a) or 3.6(c) or Section 3.7.

(c)
Calculation of Awards. The value of Awards to Level I Participants will be
calculated in accordance with the applicable Appendix to the Plan.

Section 3.4    Earning and Vesting of Awards for Level II Participants.

(a)
Earning and Vesting of Awards. An Award to a Level II Participant will become
earned and vested on the last day of the Performance Period provided the
following requirements are met (also an “Annual Award”):

i.
The applicable Performance Goals for the Performance Period are satisfied;

ii.
The Participant received a performance rating for the Performance Period of at
least Fully Meets Expectations or Satisfactory; and

iii.
The Participant is actively employed on the last day of the Performance Period,
unless otherwise provided in subsection 3.6(a) or 3.6(c).

5

--------------------------------------------------------------------------------

(b)
Calculation of Awards. The value of Awards to Level II Participants will be
calculated in accordance with the applicable Appendix to the Plan.

Section 3.5    Special Gap Year Awards for Level I Participants.

(a)
Background. The Board has determined it is appropriate to make a special Award
to Level I Participants solely for calendar year 2012 (a “Gap Year Award”) to
address a gap in payment of incentive compensation during calendar year 2015
which arises as a result of the planned discontinuation of the 2011 LTIP and the
implementation of this Plan.

(b)
Earning and Vesting of Awards. Notwithstanding Sections 3.3 and 3.4, a Gap Year
Award will become earned and vested over a three-year period beginning on
January 1, 2012 and ending on December 31, 2014 (the “Gap Year Performance
Period”) to the extent:

i.
The Performance Goals for the Gap Year Performance Period, as set forth in the
applicable Appendix to the Plan, are satisfied;

ii.
The Level I Participant received a performance rating for the Gap Year
Performance Period of at least Fully Meets Expectations or Satisfactory; and

iii.
The Level I Participant is actively employed on the last day of the Gap Year
Performance Period, unless otherwise provided in subsection 3.6(a) or 3.6(c) or
Section 3.7.

(c)
Calculation of Awards. The value of Gap Year Awards will be calculated in
accordance with the applicable Appendix to the Plan.

Section 3.6    Effect of Termination of Service and Amendment of Prior Long-Term
Plans.

(a)
In General.  If a Level I Participant incurs a Termination of Service for any
reason other than a reason set forth in subsection 3.6(b), 3.6(c), or Section
3.7, the Level I Participant's Award will be forfeited, effective as of the date
of such Termination of Service.

If a Level II Participant incurs a Termination of Service for any reason other
than a reason set forth in subsection 3.6(b) or 3.6(c), the Level II
Participant's Award will be forfeited effective as of the date of such
Termination of Service. 
(b)
Termination Due to Death or Disability.

i.
Notwithstanding the provisions of Sections 3.3 and 3.5 and subsection 3.6(a), if
a Level I Participant incurs a Termination of Service due to death or Disability
during a Deferral Performance Period or the Gap Year Performance Period, then
the Participant's Deferred Awards or Gap Year Award for all complete years of
the three-year Deferral Performance Period or Gap Year Performance Period will
be treated as earned and vested based on the assumption the Bank would have
achieved the applicable Performance Goals at the Target achievement level for
the Deferral Performance Period and/or Gap Year Performance Period.

ii.
Notwithstanding the provisions of Sections 3.3 and 3.5 and subsection 3.6(a), if
a Level I Participant incurs a Termination of Service during a Performance
Period due to death or Disability, any Annual Award which has not been earned
and vested as well as the Deferred Award for the year of the Participant's
Termination of Service due to death or Disability, will be treated as earned and
vested for the

6

--------------------------------------------------------------------------------

portion of the Performance Period during which the Participant was employed
based on the assumption the Bank would have achieved the Performance Goals at
the Target achievement level for the Performance Period.
iii.
Notwithstanding the provisions of Section 3.4 and subsection 3.6(a), if a Level
II Participant incurs a Termination of Service during a Performance Period due
to death or Disability, an Annual Award will be treated as earned and vested for
the portion of the Performance Period during which the Participant was employed
as of the date of such Termination of Service based on the assumption the Bank
would have achieved the Performance Goals at the Target achievement level for
the Performance Period.

(c)
Termination Due to Other Events.

i.
Notwithstanding the provisions of Sections 3.3 and 3.5 and subsection 3.6(a), if
a Level I Participant incurs a Termination of Service during a Performance
Period, Deferral Performance Period or Gap Year Performance Period due to:

(A)
Retirement;

(B)
a termination by a Level I Participant for Good Reason; or

(C)
a termination by the Bank without Cause due to a Reduction in Force,

an Annual Award, Deferred Award or Gap Year Award, as the case may be, will be
treated as earned and vested for the portion of the Performance Period, Deferral
Performance Period and/or Gap Year Performance Period during which the
Participant was employed to the extent the Performance Goals for the Performance
Period, Deferral Performance Period and/or Gap Year Performance Period are
satisfied.
ii.
Notwithstanding the provisions of Section 3.4 and subsection 3.6(a), if a Level
II Participant incurs a Termination of Service during a Performance Period due
to:

(A)
Retirement; or

(B)
a termination by the Bank without Cause due to a Reduction in Force,

an Annual Award will be treated as earned and vested for the portion of the
Performance Period during which the Level II Participant was employed to the
extent the Performance Goals for the Performance Period are satisfied.
(d)
Definitions.

i.
“Cause” means (A) continued failure of a Participant to perform his or her
duties with the Bank (other than any such failure resulting from Disability),
after a written demand for performance is delivered to the Participant, which
specifically identifies the manner in which the Participant has not performed
his or her duties, (B) personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure or
omission to perform stated duties, or willful violation of any law, rule or
regulation (other than routine traffic violations or similar offenses), or (C)
removal of the Participant for cause by the Federal Housing Finance Agency
(“FHFA”) or at the direction of the FHFA pursuant to 12 U.S.C. 1422b(a)(2), or
by any successor agency to the FHFA pursuant to a similar statute.

ii.
“Disability” means, as a result of the Participant's incapacity due to physical
or mental illness, the Participant has been absent from his or her duties with
the Bank

7

--------------------------------------------------------------------------------

for an aggregate of 12 out of 15 consecutive months and, within 30 days after a
written notice of termination is thereafter given by the Bank to the
Participant, the Participant does not return to the full-time performance of the
Participant's duties.

iii.
“Good Reason” means a Termination of Service by a Level I Participant under any
of the following circumstances:

(A)
a material change in the Participant's status, position, job title or principal
duties and responsibilities as a key employee of the Bank which does not
represent a promotion from the Participant's status and position as in effect as
of the date hereof (“Position”);

(B)
the assignment to the Participant of any duties or responsibilities (or removal
of any duties or responsibilities), which assignment or removal is materially
inconsistent with such Position;

(C)
any removal of the Participant from such Position (including, without
limitation, all demotions and harassing assignments), except in connection with
the termination of the Participant's employment for Cause or Disability, or as a
result of the Participant's death;

(D)
any material breach by the Bank of any provisions of this Plan or any other
agreement with the Participant; or

(E)
any failure by the Bank or its successors and assigns to obtain the assumption
of this Plan by any successor or assign of the Bank.

iv.
“Reduction in Force” means an involuntary Termination of Service of a
Participant by the Bank in connection with a financial decision by the Board to
reduce the number of Bank employees, not due to the Participant's performance,
and not due to a Reorganization.

v.
“Retirement” means the Participant's planned and voluntary termination of
employment after the Participant has delivered timely advance written notice of
intent to retire to the Bank and has either: (A) attained age 60 with five
“Years of Service,” or (B) attained the “Rule of 85,” which means the
Participant has attained a combined age and Years of Service that mathematically
is equal to or exceeds the number 85.  A “Year of Service” will be calculated in
the same manner as under the Financial Institutions Thrift Plan.  Advance
written notice will be deemed timely given if it is given at least four weeks in
advance, as to Vice Presidents, First Vice Presidents, Senior Vice Presidents,
Executive Vice Presidents, and the Chief Executive Officer, and at least two
weeks in advance, as to all other employees.

Effective as of the effective date of the Federal Home Loan Bank of Indianapolis
2009 Incentive Plan (the “2009 LTIP”), the Federal Home Loan Bank of
Indianapolis 2010 Incentive Plan (the “2010 LTIP”), and the Federal Home Loan
Bank of Indianapolis Long Term Incentive Plan (the “2011 LTIP”), this subsection
hereby amends the definition of “Retirement” under the 2009 LTIP, 2010 LTIP and
the 2011 LTIP to conform to the definition of Retirement as set forth above,
with respect to determining if an employee retired beginning on and after
January 1, 2012.
vi.
“Termination of Service” means the occurrence of any act or event or any failure
to

8

--------------------------------------------------------------------------------

act, that actually or effectively causes or results in a Participant ceasing,
for whatever reason, to be an employee of the Bank, including, but not limited
to, death, Disability, Retirement, termination of the Participant's employment
by the Bank (whether for Cause or otherwise), termination by the Participant of
his or her employment with the Bank for Good Reason and voluntary resignation or
termination by the Participant of his or her employment.

Section 3.7    Effect of Reorganization. The following provision applies to
Level I Participants only.
(a)
Notwithstanding the provisions of Sections 3.3 and 3.6, if a Reorganization of
the Bank occurs, then any portion of an Annual Award or Deferred Award which has
not otherwise become earned and vested as of the date of the Reorganization will
be treated as 100 percent earned and vested effective as of the date of the
Reorganization based on the assumption the Bank would have achieved the
Performance Goals at the Target achievement level for the Performance Period
and/or the Deferral Performance Period.

(b)
“Reorganization” of the Bank will mean the occurrence at any time of any of the
following events:

i.
The Bank is merged or consolidated with or reorganized into or with another bank
or other entity, or another bank or other entity is merged or consolidated into
the Bank;

ii.
The Bank sells or transfers all, or substantially all of its business and/or
assets to another bank or other entity;

iii.
More than 50 percent of the total market value or total voting power of all
ownership interests in the Bank is acquired, within any 12-month period, by one
person or entity or by more than one person or entity acting as a group; or

iv.
The liquidation or dissolution of the Bank.

The term “Reorganization” shall not include any Reorganization that is mandated
by federal statute, rule, regulation, or directive, including 12 U.S.C. § 1421,
et seq., as amended, and 12 U.S.C. § 4501 et seq., as amended, and which the
Director of the FHFA (or successor agency) has determined should not be a basis
for accelerating vesting under this Plan, by reason of the capital condition of
the Bank or because of unsafe or unsound acts, practices, or condition
ascertained in the course of the Agency's supervision of the Bank or because any
of the conditions identified in 12 U.S.C. § 4617(a)(3) are met with respect to
the Bank (which conditions do not result solely from the mandated reorganization
itself, or from action that the Agency has required the Bank to take under 12
U.S.C. § 1431(d)).
Section 3.8    Payment of Awards
.
(a)
Payments Related to Termination of Service. The following provisions apply to
Final Awards payable as a result of a Termination of Service.

i.
In the event of a Termination of Service due to death or Disability, 100 percent
of a Final Award will be paid in a single sum within 75 days of the date of
Termination of Service.

ii.
In the event of a Termination of Service due to Retirement, a termination by a
Level I Participant for Good Reason or a termination by the Bank without Cause
due to a Reduction in Force, payment of a Final Award will be made in a single
sum within

9

--------------------------------------------------------------------------------

75 days following the end of the Performance Period, Deferral Performance Period
or Gap Year Performance Period, as applicable. Notwithstanding the foregoing, in
the event of a Reduction in Force, a Participant must execute the severance
agreement offered by the Bank in order to be eligible to receive payment.

(b)
Payments Not Related to a Termination of Service. Final Awards which become
vested for reasons other than a Termination of Service will be paid in a single
sum within 75 days following the end of the Performance Period, Deferral
Performance Period or Gap Year Performance Period, as applicable.

(c)
Notwithstanding the foregoing provisions of this Section, Final Awards will be
paid upon approval by the Board and after review of the calculations by the
Bank's external auditor. However, in the event of a Reorganization, payment of a
Final Award will be made in a single sum on the date on which the Reorganization
occurs.

Section 3.9    Reduction or Forfeiture of Awards.

(a)
If during the Deferral Performance Period actual losses or other measures or
aspects of performance related to the Performance Period or Deferral Performance
Period are realized which would have caused a reduction in amount of the Final
Award calculated for the Performance Period or Deferral Performance Period, then
the remaining amount of the Final Award to be paid at the end of the Deferral
Performance Period will be reduced to reflect this additional information.

(b)
Notwithstanding any other provision of the Plan, if a Participant violates a
Non-Solicitation Agreement, all of his unpaid vested and unvested Awards will be
forfeited effective as of the date the Board determines such violation has
occurred and gives written notice to the Participant of such determination. Any
future payments for a vested Award will cease and the Bank will have no further
obligation to make such payments.

(c)
Notwithstanding any other provision of the Plan, if during the most recent
examination of the Bank by the FHFA, the FHFA identified an unsafe or unsound
practice or condition that is material to the financial operation of the Bank
within the Participant's area(s) of responsibility and such unsafe or unsound
practice or condition is not subsequently remediated to the satisfaction of the
Board as determined by the Board after reviewing the findings or input from the
FHFA, then all (or a portion) of a Participant's vested and unvested Awards will
be forfeited as determined by the Board and directed to the participant in
writing. Any future payments for a vested Award will, if directed by the Board,
cease and the Bank will have no further obligation to make such payments.

(d)
By resolution, the Board may reduce or eliminate an Award that is otherwise
earned under this Plan but not yet paid, if the Board finds that a serious,
material safety-soundness problem, or a serious, material risk-management
deficiency exists at the Bank, or if: (i) operational errors or omissions result
in material revisions to: (A) the financial results, (B) information submitted
to the FHFA, or (C) data used to determine incentive payouts; (ii) submission of
material information to the SEC, Office of Finance, and/or FHFA is significantly
past due, or (iii) the Bank fails to make sufficient progress, as determined by
the Board, in the timely remediation of significant examination, monitoring and
other supervisory findings.

10

--------------------------------------------------------------------------------

ARTICLE IV

ADMINISTRATION

Section 4.1    Appointment of the Committee. The Committee, or a duly authorized
officer or officers of the Bank empowered by the Committee to act on its behalf
under sub-section 4.2(d), will be responsible for administering the Plan, and
the Committee will be charged with the full power and the responsibility for
administering the Plan in all its details; provided that the power to determine
eligibility pursuant to Article II is reserved to the Board.

Section 4.2    Powers and Responsibilities of the Committee. The Committee will
have all powers necessary to administer the Plan, including the power to
construe and interpret the Plan document; to decide all questions relating to an
individual's eligibility to participate in the Plan; to determine the amount,
manner and timing of any distribution of benefits under the Plan; to resolve any
claim for benefits in accordance with Article V, and to appoint or employ
advisors, including legal counsel, to render advice with respect to any of the
Committee's responsibilities under the Plan. Any construction, interpretation,
or application of the Plan by the Committee will be final, conclusive and
binding.

(a)
Records and Reports. The Committee will be responsible for maintaining
sufficient records to determine each Participant's eligibility to participate in
the Plan.

(b)
Rules and Decisions. The Committee may adopt such rules as it deems necessary,
desirable, or appropriate in the administration of the Plan. All rules and
decisions of the Committee will be applied uniformly and consistently to all
Participants in similar circumstances. When making a determination or
calculation, the Committee will be entitled to rely upon information furnished
by a Participant, the Bank or the legal counsel of the Bank.

(c)
Application for Benefits. The Committee may require a Participant to complete
and file with it an application for a benefit, and to furnish all pertinent
information requested by it. The Committee may rely upon all such information so
furnished to it, including the Participant's current mailing address.

(d)
Delegation. The Committee may authorize one or more officers or employees of the
Bank to perform administrative responsibilities on its behalf under the Plan.
Any such duly authorized officer will have all powers necessary to carry out the
administrative duties delegated to such officer by the Committee.

Section 4.3    Income and Employment Tax Withholding. The Bank will withhold
from payments to Participants of their Awards, to the extent required by law,
all applicable federal, state, city and local taxes.

Section 4.3    Plan Expenses. The expenses incurred for the administration and
maintenance of the Plan will be paid by the Bank.

11

--------------------------------------------------------------------------------

ARTICLE V

BENEFIT CLAIMS

While a Participant need not file a claim to receive his or her benefit under
the Plan, if he or she wishes to do so, a claim must be made in writing and
filed with the Committee. If a claim is denied, the Committee will furnish the
claimant with written notice of its decision. A claimant may request a full and
fair review of the denial of a claim for benefits by filing a written request
with the Committee.
ARTICLE VI

AMENDMENT AND TERMINATION OF THE PLAN

Section 6.1    Amendment of the Plan. The Bank, acting through the Board, may
amend the Plan at any time in its sole discretion. Notwithstanding the
foregoing, the Bank may not amend the Plan to reduce a Participant's Award as
determined on the day preceding the effective date of the amendment or to
otherwise retroactively impair or adversely affect the rights of a Participant.

Section 6.2    Termination of the Plan. The Bank, acting through the Board, may
terminate the Plan at any time in its sole discretion. Absent an amendment to
the contrary, Plan benefits that were earned and vested prior to the termination
will be paid at the times and in the manner provided for by the Plan at the time
of the termination.

ARTICLE VII

MISCELLANEOUS

Section 7.1    Governing Law. Except to the extent superseded by laws of the
United States, the laws of Indiana will be controlling in all matters relating
to the Plan without regard to the choice of law principles therein. The Plan and
all Awards are intended to comply, and will be construed by the Bank in a manner
in which they are exempt from or comply with the applicable provisions of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). To
the extent there is any conflict between a provision of the Plan or an Award and
a provision of Code Section 409A, the applicable provision of Code Section 409A
will control.

Section 7.2    Headings and Gender. The headings and subheadings in the Plan
have been inserted for convenience of reference only and will not affect the
construction of the Plan provisions. In any necessary construction, the
masculine will include the feminine and the singular the plural, and vice versa.

Section 7.3    Spendthrift Clause. No benefit or interest available under the
Plan will be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or attachment by creditors of a Participant,
either voluntarily or involuntarily.

Section 7.4    Counterparts. This Plan may be executed in any number of
counterparts, each one constituting but one and the same instrument, and may be
sufficiently evidenced by any one counterpart.

12

--------------------------------------------------------------------------------

Section 7.5    No Enlargement of Employment Rights. Nothing contained in the
Plan may be construed as a contract of employment between the Bank and any
person, nor may the Plan be deemed to give any person the right to be retained
in the employ of the Bank or limit the right of the Bank to employ or discharge
any person with or without cause.

Section 7.6    Limitations on Liability. The individual members of the Board
will, in accordance with the Bank's by-laws, be indemnified and held harmless by
the Bank with respect to any alleged breach of responsibilities performed or to
be performed hereunder. In addition, notwithstanding any other provision of the
Plan, neither the Bank nor any individual acting as an employee or agent of the
Bank will be liable to a Participant for any claim, loss, liability or expense
incurred in connection with the Plan, except when the same has been
affirmatively determined by a court order or by the affirmative and binding
determination of an arbitrator, to be due to the gross negligence or willful
misconduct of that person.

Section 7.7    Incapacity of Participant. If any person entitled to receive a
distribution under the Plan is physically or mentally incapable of personally
receiving and giving a valid receipt for any payment due (unless a prior claim
for the distribution has been made by a duly qualified guardian or other legal
representative), then, unless and until a claim for the distribution has been
made by a duly appointed guardian or other legal representative of the person,
the Committee may provide for the distribution to be made to any other
individual or institution then contributing toward or providing for the care and
maintenance of the person. Any payment made for the benefit of the person under
this Section will be a payment for the account of such person and a complete
discharge of any liability of the Bank and the Plan.

Section 7.8    Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person relying
on the evidence considers pertinent and reliable, and signed, made or presented
by the proper party or parties.

Section 7.9    Action by Bank. Any action required of or permitted by the Bank
under the Plan will be by resolution of the Board or by a person or persons
authorized by resolution of the Board.

Section 7.10    Severability. In the event any provisions of the Plan are held
to be illegal or invalid for any reason, the illegality or invalidity will not
affect the remaining parts of the Plan, and the Plan will be construed and
endorsed as if the illegal or invalid provisions had never been contained in the
Plan.

Section 7.11    Information to be Furnished by a Participant. A Participant, or
any other person entitled to benefits under the Plan, must furnish the Committee
with any and all documents, evidence, data or other information the Committee
considers necessary or desirable for the purpose of administering the Plan.
Benefit payments under the Plan are conditioned on a Participant (or other
person who is entitled to benefits) furnishing full, true and complete data,
evidence or other information to the Committee, and on the prompt execution of
any document reasonably related to the administration of the Plan requested by
the Committee.

Section 7.12    Attorneys' Fees. If any action is commenced to enforce the
provisions of the Plan, payment of attorneys' fees will be governed by the terms
set forth in the mandatory “Agreement to Arbitrate” entered into between the
Bank and the Participant.

Section 7.13    Binding on Successors. The Plan will be binding upon and inure
to the benefit of the

13

--------------------------------------------------------------------------------

Bank and its successors and assigns, and the successors, assigns, designees and
estates of a Participant. The Plan will also be binding upon and inure to the
benefit of any successor organization succeeding to substantially all of the
assets and business of the Bank, but nothing in the Plan will preclude the Bank
from merging or consolidating into or with, or transferring all or substantially
all of its assets to, another organization which assumes the Plan and all
obligations of the Bank hereunder. The Bank agrees that it will make appropriate
provision for the preservation of a Participant's rights under the Plan in any
agreement or plan which it may enter into to effect any merger, consolidation,
reorganization or transfer of assets. Upon such a merger, consolidation,
reorganization or transfer of assets and assumption of Plan obligations of the
Bank, the term “Bank” will refer to such other organization and the Plan will
continue in full force and effect.

Section 7.14    Retention of Former Plans. Each of the 2009 LTIP, 2010 LTIP, and
2011 LTIP, as amended herein, are incorporated herein by reference. Each of the
2009 LTIP, 2010 LTIP, and 2011 LTIP, as so amended, shall survive adoption of
this Plan according to its respective terms.

14

--------------------------------------------------------------------------------

APPENDIX I

2012 PERFORMANCE PERIOD AWARDS FOR LEVEL II PARTICIPANTS
Federal Home Loan Bank of Indianapolis

A.    Incentive Opportunities
 
INCENTIVE DELIVERED IN CASH
AS % OF COMPENSATION*
Position
Threshold
Target
Maximum
1ST VP
20%
25%
30%
VP of Sales
20%
30%
40%
VP
15%
20%
25%
AVP
5%
10%
15%
OTHER Employees
2.5%
7.5%
10%

*Compensation is defined in Section 3.1 of the Federal Home Loan Bank of
Indianapolis Incentive Plan

B.    2012 Performance Goals
MISSION GOALS
WEIGHTED VALUE
MINIMUM THRESHOLD
TARGET
MAXIMUM
Bank
CRM
PROFITABILITY1
30%
10%
100 bp
266 bp
300 bp
 
 
 
 
 
 
ADVANCES
 
 
 
 
 
Member Advance Growth2
10%
5%
0%
3%
5%
 
 
 
 
 
 
Community Bank Financial Institutions (CFIs)/Credit Union Outreach3
10%
5%
75%
80%
95%
 
 
 
 
 
 
MORTGAGE PURCHASE PROGRAM
 
 
 
 
 
MPP Production4
10%
3%
$360 M
$480 M
$750 M
 
 
 
 
 
 
New or Reactivated Traders5
5%
2%
5 members
7 members
10 members
 
 
 
 
 
 
COMMUNITY INVESTMENT6
5%
5%
50 meetings
100 meetings
210 meetings
 
 
 
 
 
 

15

--------------------------------------------------------------------------------

MISSION GOALS
WEIGHTED VALUE
MINIMUM THRESHOLD
TARGET
MAXIMUM
Bank
CRM
 
 
 
 
 
 
 INFORMATION TECHNOLOGY7
10%
5%
3 projects completed
4 projects completed
5 projects completed
      Project A. Security Roadmap
2012 security project list completed
 
 
 
 
 
      Project B. Applications
99.0% availability for the Service Catalog as measured by IT SuccessFactors
 
 
 
 
 
        Project C. Core Banking System
Phase 1 Derivatives-47 future state business processes complete
 
 
 
 
 
        Project D. Data Warehouse
MBS available in the Data Warehouse
 
 
 
 
 
        Project E. Emerging Business
                          Project
Capital Stock Re-Write Business Requirement Design Testing and Implementation
 
 
 
 
 
 
 
 
 
 
 
CORPORATE RISK MANAGEMENT
 
 
 
 
 
Retained Earnings8
10%
10%
3.5%
3.75%
3.9%
CRM Memo and Annual Risk Assessment9 
4%
20%
2 memos + 1RA
4 memos + 1RA
5 memos + 1RA
CRM Reports, ORM Reports and IS Reports
1%
15%
8 CRM reports, 2 ORM reports, and 1 IS report
10 CRM reports, 3 ORM reports, and 2 IS reports
12 CRM reports, 4 ORM reports, and 3 IS reports
Special Risk Assessments, Risk Analysis or Risk Process Improvements10
5%
20%
2
3
4

1Potential Dividend over the Bank's cost of funds is defined as adjusted net
income as a percentage of average total capital stock. Adjusted net income is
adjusted (i) for the effects of current and prior period prepayments and debt
extinguishments, (ii) to exclude mark to market adjustments and other effects
from SFAS 133, (iii) and to exclude the effects from SFAS 150. Assumes no
material change in investment authority under FHFA's regulation, policy or law.

2Member advances are calculated as the growth in the average daily balance of
advances outstanding to members at par. Average daily balances are used instead
of point-in-time balances to eliminate point-in-time activity that may occur and
to reward for the benefit of the income earned on advances balances while
outstanding. The target percentage growth will be calculated to achieve the base
strategic plan forecast for 2012 (Board approved Nov. 2011) based upon year end
2011 total outstanding member advances and assumes that advances grow in a
steady state beginning January 1, 2012. Members that become non-members during
2012 will be excluded from the calculation.
   

16

--------------------------------------------------------------------------------

3Participation in targeted, bank-sponsored events by members that are either
Community Financial Institutions (CFIs) or Credit Unions. Such events would
include bank sponsored workshops; CFI collateral outreach and educational
meetings; regional member meetings; collateral pledge training meetings;
business development calls related to advances, MPP, AHP or CIP; participation
in webinars and member recruitment calls. In calculating the participation rate,
the Bank will identify CFIs based upon the CFI asset cap for 2012, credit union
members as of January 1, 2012, plus any CFIs or credit unions that are approved
for membership or targeted for a recruitment call during 2012.

4Mortgage Purchase Program production, including FHA, will be the amount of all
conventional MDCs traded in 2012. Assumes no capital requirement for MPP. It
also assumes no material change in MPP authority under FHFA's regulation,
policy, or law. When calculating achievement between the minimum threshold and
the performance maximum, no single member can account for more than 25% of
conventional production.

5Members that have never traded or not traded with MPP within the previous 12
months of their 2012 trade would qualify to count toward the goal.

6The number of meetings and presentations made to members on the availability
and benefits of using CIP advances, determined as the total number of actual
meetings, times a multiplier.  Such events would include workshops, Regional
Member Meetings, targeted calls, recruitment calls, business development
in-person call, participation in webinars, etc. when CIP is presented.  Each
member could only count towards one meeting. There is no method to evaluate the
historical presentations on CIP as all past goals have been based upon dollar
amount of CIP advances taken or/and letters of credit issued.  A multiplier will
be calculated to apply to the number of total meetings for this goal related to
CIP. The multiplier is based on one-on-one meetings with “Qualifying Members,”
which are active members that: (a) has received an AHP award over the last three
years, and (b) the debt constituting such award is being provided by the
sponsoring member in addition to the AHP award. The multiplier equals one plus
the product determined as the number of meetings with Qualifying Members,
divided by the total number of Qualifying Members.  For example, if there are 30
members sponsoring AHP projects that involves sponsor provided debt and we have
a one-on-one meeting with 20 of those members, and has meetings with an
additional 15 members, the number of all Member meetings would be multiplied by
1.67, and would equal 1.67 times 350 (total number of meetings), or 58.45
meetings (instead of 35).  

7Status and reporting on these technology projects to be provided in writing by
CIO and confirmed by EVP-CFO.

8 Total Retained Earnings divided by mortgage assets. For the year, measured at
the end of each month taking the twelve-month average of Retained Earnings.
Calculated each month as Total Retained Earnings divided by the sum of the
carrying value of the MBS and MPP portfolios. The year-end calculation will be
the simple average of 12 month-end calculations.

9As per the Board meeting schedule, provide the Board the Corporate Risk
Management (“CRM”) memo and present the Annual Risk Assessment Report.

10CRO will propose and CEO will evaluate whether to categorize these as special
and whether work product was acceptable to count toward this goal.

17

--------------------------------------------------------------------------------

APPENDIX II

2012 PERFORMANCE PERIOD AWARDS FOR LEVEL II PARTICIPANTS
Federal Home Loan Bank of Indianapolis

A.    Incentive Opportunities
 
 
 
 
50% of Total Incentive Earned & Vested At Year-End
50% of Total Incentive Deferred for 3 Years
 
TOTAL INCENTIVE AS % OF COMPENSATION
DFERRED INCENTIVE AS % OF COMPENSATION
DFERRED INCENTIVE AS % OF COMPENSATION
Position
Threshold
Target
Maximum
Threshold
Target
Maximum
Threshold
Target
Maximum
CEO
50%
75%
100%
25.0%
37.5%
50.0%
25.0%
37.5%
50.0%
EVP/SVP
30%
50%
70%
15.0%
25.0%
35.0%
15.0%
25.0%
35.0%

*Compensation is defined in Section 3.1 of the Federal Home Loan Bank of
Indianapolis Incentive Plan.
**Deferred Awards are subject to additional Performance Goals for the Deferral
Performance Period. Depending on the Bank's performance during the Deferral
Performance Period, the Final Award will be worth 75 percent at Threshold, 100
percent at Target or 125 percent at Maximum of the original amount of the
Deferred Award.

B.    2012 Performance Goals
MISSION GOALS
WEIGHTED VALUE
MINIMUM THRESHOLD
TARGET
MAXIMUM
Bank
CRM
PROFITABILITY1
30%
10%
50 bp
266 bp
300 bp
 
 
 
 
 
 
 
 
 
 
 
 
ADVANCES
 
 
 
 
 
Member Advance Growth2
10%
5%
0%
3%
5%
 
 
 
 
 
 
Community Bank Financial Institutions (CFIs)/Credit Union Outreach3
10%
5%
75%
80%
95%
 
 
 
 
 
 
MORTGAGE PURCHASE PROGRAM
 
 
 
 
 
MPP Production4
10%
3%
$360 M
$480 M
$750 M
 
 
 
 
 
 
New or Reactivated Traders5
5%
2%
5 members
7 members
10 members
 
 
 
 
 
 
 
 
 
 
 
 
COMMUNITY INVESTMENT6
5%
5%
50 meetings
100 meetings
210 meetings
 
 
 
 
 
 
 INFORMATION TECHNOLOGY7
10%
5%
3 projects completed
4 projects completed
5 projects completed

18

--------------------------------------------------------------------------------

      Project A. Security Roadmap
2012 security project list completed
 
 
 
 
 
      Project B. Applications
99.0% availability for the Service Catalog as measured by IT SuccessFactors
 
 
 
 
 
        Project C. Core Banking System
Phase 1 Derivatives-47 future state business processes complete
 
 
 
 
 
        Project D. Data Warehouse
MBS available in the Data Warehouse
 
 
 
 
 
        Project E. Emerging Business
                           Project
Capital Stock Re-Write Business Requirement Design Testing and Implementation
 
 
 
 
 
 
 
 
 
 
 
CORPORATE RISK MANAGEMENT
 
 
 
 
 
Retained Earnings8
10%
10%
3.5%
3.75%
3.9%
CRM Memo and Annual Risk Assessment9 
4%
20%
2 memos + 1RA
4 memos + 1RA
5 memos + 1RA
CRM Reports, ORM Reports and IS Reports
1%
15%
8 CRM reports, 2 ORM reports, and 1 IS report
10 CRM reports, 3 ORM reports, and 2 IS reports
12 CRM reports, 4 ORM reports, and 3 IS reports
Special Risk Assessments, Risk Analysis or Risk Process Improvements10
5%
20%
2
3
4

1Potential Dividend over the Bank's cost of funds is defined as adjusted net
income as a percentage of average total capital stock. Adjusted net income is
adjusted (i) for the effects of current and prior period prepayments and debt
extinguishments, (ii) to exclude mark to market adjustments and other effects
from SFAS 133, (iii) and to exclude the effects from SFAS 150. Assumes no
material change in investment authority under FHFA's regulation, policy or law.

2Member advances are calculated as the growth in the average daily balance of
advances outstanding to members at par. Average daily balances are used instead
of point-in-time balances to eliminate point-in-time activity that may occur and
to reward for the benefit of the income earned on advances balances while
outstanding. The target percentage growth will be calculated to achieve the base
strategic plan forecast for 2012 (Board approved Nov. 2011) based upon year end
2011 total outstanding member advances and assumes that advances grow in a
steady state beginning January 1, 2012. Members that become non-members during
2012 will be excluded from the calculation.
   
3Participation in targeted, bank-sponsored events by members that are either
Community Financial Institutions (CFIs) or Credit Unions. Such events would
include bank sponsored workshops; CFI collateral outreach and educational
meetings; regional member meetings; collateral pledge training meetings;
business development calls related to advances, MPP, AHP or CIP; participation
in webinars and member recruitment calls. In calculating the participation rate,
the Bank will identify CFIs based upon the CFI asset cap for 2012, credit union
members as of January 1, 2012, plus any CFIs or credit unions that are approved
for membership or targeted for a recruitment call during 2012.

4Mortgage Purchase Program production, including FHA, will be the amount of all
conventional MDCs traded in 2012. Assumes no capital requirement for MPP. It
also assumes no material change in MPP authority under FHFA's regulation,

19

--------------------------------------------------------------------------------

policy, or law. When calculating achievement between the minimum threshold and
the performance maximum, no single member can account for more than 25% of
conventional production.

5Members that have never traded or not traded with MPP within the previous 12
months of their 2012 trade would qualify to count toward the goal.

6The number of meetings and presentations made to members on the availability
and benefits of using CIP advances, determined as the total number of actual
meetings, times a multiplier.  Such events would include workshops, Regional
Member Meetings, targeted calls, recruitment calls, business development
in-person call, participation in webinars, etc. when CIP is presented.  Each
member could only count towards one meeting. There is no method to evaluate the
historical presentations on CIP as all past goals have been based upon dollar
amount of CIP advances taken or/and letters of credit issued.  A multiplier will
be calculated to apply to the number of total meetings for this goal related to
CIP. The multiplier is based on one-on-one meetings with “Qualifying Members,”
which are active members that: (a) has received an AHP award over the last three
years, and (b) the debt constituting such award is being provided by the
sponsoring member in addition to the AHP award. The multiplier equals one plus
the product determined as the number of meetings with Qualifying Members,
divided by the total number of Qualifying Members.  For example, if there are 30
members sponsoring AHP projects that involves sponsor provided debt and we have
a one-on-one meeting with 20 of those members, and has meetings with an
additional 15 members, the number of all Member meetings would be multiplied by
1.67, and would equal 1.67 times 350 (total number of meetings), or 58.45
meetings (instead of 35).  

7Status and reporting on these technology projects to be provided in writing by
CIO and confirmed by EVP-CFO.

8 Total Retained Earnings divided by mortgage assets. For the year, measured at
the end of each month taking the twelve-month average of Retained Earnings.
Calculated each month as Total Retained Earnings divided by the sum of the
carrying value of the MBS and MPP portfolios. The year-end calculation will be
the simple average of 12 month-end calculations.

9As per the Board meeting schedule, provide the Board the Corporate Risk
Management (“CRM”) memo and present the Annual Risk Assessment Report.

10CRO will propose and CEO will evaluate whether to categorize these as special
and whether work product was acceptable to count toward this goal.

20

--------------------------------------------------------------------------------

C.    2013-2015 Performance Goals

MISSION GOALS
WEIGHTED VALUE
MINIMUM THRESHOLD*
TARGET*
MAXIMUM*
Bank
CRM
 
 
 
 
 
 
1. PROFITABILITY1
35%
35%
25 bp
50 bp
150 bp
 
 
 
 
 
 
2. RETAINED EARNINGS2
35%
35%
3.5%
3.9%
4.3%
 
 
 
 
 
 
3. PRUDENTIAL
30%
30%
Achieve 2 Prudential Standards
---
Achieve all 3 Prudential Standards
         Maintain a regulatory capital-
         to-assets ratio of at least
         4.16% as measured on each
         quarter-end in 2015.
         
 
 
 
 
 
        Without Board pre-approval,
        do not purchase more than
        $2.5 billion of conventional
        MPP assets per plan year.
 
 
 
 
 
        Award to FHLBI members the
        annual AHP funding
        requirement in each plan year.
 
 
 
 
 

1Potential Dividend over the Bank's cost of funds is defined as adjusted net
income as a percentage of average total capital stock. Adjusted net income is
adjusted (i) for the effects of current and prior period prepayments and debt
extinguishments, (ii) to exclude mark to market adjustments and other effects
from SFAS 133, (iii) and to exclude the effects from SFAS 150. Assumes no
material change in investment authority under FHFA's regulation, policy or law.
This will be computed using a simple annual average over the three-year period.

2Total Retained Earnings divided by mortgage assets. For the year, measured at
the end of each month taking the twelve-month average of Retained Earnings.
Calculated each month as Total Retained Earnings divided by the sum of the
carrying value of the MBS and MPP portfolios. The three year-end calculation
will be the simple average of 36 month-end calculations.

*Deferred Awards are subject to additional Performance Goals for the Deferral
Performance Period. Depending on the Bank's performance during the Deferral
Performance Period, the Final Award will be worth 75 percent at Threshold, 100
percent at Target or 125 percent at Maximum of the original amount.

21

--------------------------------------------------------------------------------

APPENDIX III

ANNUAL AWARD TARGETS FOR 2010 AND 2011 LONG TERM INCENTIVE PLANS
Federal Home Loan Bank of Indianapolis

A.    Calendar Year 2012 for the 2010 LTIP and 2011 LTIP
For purposes of calculating Final Awards* for the 2010 LTIP and 2011 LTIP for
eligible Participants,* with respect to the portion of the Performance Period*
measured as to calendar year 2012, the following table shall be used to
determine the annual achievement average, which shall in turn be multiplied by
the Participant's 2010 base salary for the 2010 LTIP benefit calculation, and by
the Participant's 2011 base salary for the 2011 LTIP benefit calculation. These
calculations are used for purposes of determining the three-year achievement
average percentage pursuant to the terms of the 2010 LTIP and the 2011 LTIP.

* As such terms are defined in the 2010 LTIP and 2011 LTIP, respectively.

2012 MISSION GOALS
WEIGHTED VALUE
MINIMUM THRESHOLD
(60%)
TARGET

(80%)
MAXIMUM

(100%)
Bank
CRM
PROFITABILITY1
50%
50%
100 bp
266 bp
300 bp
RETAINED EARNINGS2
50%
50%
3.5%
3.75%
3.9%
 
 
 
 
 
 

1Potential Dividend over the Bank's cost of funds is defined as adjusted net
income as a percentage of average total capital stock. Adjusted net income is
adjusted (i) for the effects of current and prior period prepayments and debt
extinguishments, (ii) to exclude mark to market adjustments and other effects
from SFAS 133, (iii) and to exclude the effects from SFAS 150. Assumes no
material change in investment authority under FHFA's regulation, policy or law.

2 Year-End Total Retained Earnings divided by mortgage assets. Calculated each
month as Total Retained Earnings divided by the sum of the carrying value of the
MBS and MPP portfolios. The year-end calculation will be the simple average of
12 month-end calculations.

B.    Calendar Year 2013 for the 2011 LTIP
For purposes of calculating Final Awards under the 2011 LTIP for eligible
Participants, with respect to the portion of the Performance Period measured as
to calendar year 2013, the following preliminary table shall be used to
determine the annual achievement average, which shall in turn be multiplied by
the Participant's 2011 base salary for the 2011 LTIP benefit calculation. These
preliminary calculations are used for purposes of determining the three-year
achievement average percentage pursuant to the 2011 LTIP. The Board may review
and revise this table at any time. If the Board does not revise this table, the
preliminary figures shall be deemed to be final.

 2013 MISSION GOALS
WEIGHTED VALUE
MINIMUM THRESHOLD
(60%)
TARGET

(80%)
MAXIMUM

(100%)
Bank
CRM
PROFITABILITY1
50%
50%
100 bp
266 bp
300 bp
RETAINED EARNINGS2
50%
50%
3.5%
3.75%
3.9%
 
 
 
 
 
 

22

--------------------------------------------------------------------------------

1Potential Dividend over the Bank's cost of funds is defined as adjusted net
income as a percentage of average total capital stock. Adjusted net income is
adjusted (i) for the effects of current and prior period prepayments and debt
extinguishments, (ii) to exclude mark to market adjustments and other effects
from SFAS 133, (iii) and to exclude the effects from SFAS 150. Assumes no
material change in investment authority under FHFA's regulation, policy or law.

2 Total Retained Earnings divided by mortgage assets. Calculated each month as
Total Retained Earnings divided by the sum of the carrying value of the MBS and
MPP portfolios. The year-end calculation will be the simple average of the 12
month-end calculations.

23

--------------------------------------------------------------------------------

APPENDIX IV

AWARDS ADDRESSING 2015 GAP YEAR FOR LEVEL I PARTICIPANTS
Federal Home Loan Bank of Indianapolis

A.    Incentive Opportunities
 
LONG-TERM INCENTIVE % OF
ACTUAL 2011 SHORT-TERM
YEAR-END INCENTIVE PAID IN 2012
Position
Award Factor
CEO
60%
EVP/SVP
67%

B.    2012-2014 Performance Plan Goals for Gap Calculation

MISSION GOALS
WEIGHTED VALUE
MINIMUM THRESHOLD
TARGET
MAXIMUM
Bank
CRM
 
PROFITABILITY1
35%
35%
25 bp
50 bp
150 bp
 
 
 
 
 
 
 
 
 
 
 
 
Retained Earnings2
35%
35%
3.5%
3.9%
4.3%
 
 
 
 
 
 
 PRUDENTIAL
30%
30%
Achieve 2 Prudential Standards
---
Achieve all 3 Prudential Standards
Maintain a regulatory capital-to-assets ratio of at least 4.16% as measured on
each quarter-end in 2015.
         
 
 
 
 
 
Without Board pre-approval, do not purchase more than $2.5 billion of
conventional MPP assets per plan year.
 
 
 
 
 
Award to FHLBI members the annual AHP funding requirement in each plan year.
 
 
 
 
 

1Potential Dividend over the Bank's cost of funds is defined as adjusted net
income as a percentage of average total capital stock. Adjusted net income is
adjusted (i) for the effects of current and prior period prepayments and debt
extinguishments, (ii) to exclude mark to market adjustments and other effects
from SFAS 133, (iii) and to exclude the effects from SFAS 150. Assumes no
material change in investment authority under FHFA's regulation, policy or law.
Averaged over the three-year period.

2Total Retained Earnings divided by mortgage assets. For the year, measured at
the end of each month taking the twelve-month average of Retained Earnings.
Calculated each month as Total Retained Earnings divided by the sum of the
carrying value of the MBS and MPP portfolios. The three year-end calculation
will be the simple average of 36 month-end calculations.

24

--------------------------------------------------------------------------------

APPENDIX V

FORM OF NON-SOLICITATION AND NON-DISCLOSURE AGREEMENT

This Agreement is entered into as of the ____ day of _____________, 201_, by and
between the FEDERAL HOME LOAN BANK OF INDIANAPOLIS, a corporation organized
under the laws of the United States (the “Bank”) and ____________________ (the
“Executive”).
WHEREAS, the Bank sponsors the Federal Home Loan Bank of Indianapolis Incentive
Plan (the “Plan”); and
WHEREAS, as a condition of participation in the Plan, the Bank requires that the
Executive agree to the terms and conditions found within this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual promises and
agreements contained herein and other good and valuable consideration, the
receipt, legal adequacy and sufficiency of which are hereby acknowledged, the
parties agree as follows:

1.Non-Disclosure; Return of Confidential Information and Other Property.

(a)
Access to Confidential Information. The Executive understands, acknowledges and
agrees that during the course of his or her employment with the Bank he or she
has gained or will gain information regarding, knowledge of, and familiarity
with, the Confidential Information of the Bank (as defined in subsection (c))
that would cause irreparable damage and harm to the Bank if it was disclosed.
The Executive understands, acknowledges and agrees that the Confidential
Information has substantial economic value because it is not known or readily
ascertainable by proper means by others who could obtain economic value from it.
The Executive also acknowledges and agrees that the Bank uses reasonable means
to maintain the secrecy and confidentiality of the Confidential Information.

(b)
Non-Disclosure. At all times while the Executive is employed by the Bank, and at
all times thereafter, the Executive will not (i) directly or indirectly
disclose, provide or discuss any Confidential Information with or to any Person
(as defined in subsection (d)) other than those directors, officers, employees,
representatives and agents of the Bank who need to know such Confidential
Information for a proper corporate purpose, and (ii) directly or indirectly use
any Confidential Information (A) to compete against the Bank, or (B) for the
Executive's own benefit, or for the benefit of any Person other than the Bank.

(c)
Confidential Information Defined. For purposes of this Agreement, the term
“Confidential Information” means any and all:

(i)
materials, records, data, documents, lists, writings and information (in each
case, whether in writing, printed, verbal, electronic, computerized or
otherwise) (A) relating or referring in any manner to the business, operations,
affairs, financial condition, results of operation, cash flow, assets,
liabilities, sales, revenues, income, estimates, projections, policies,
strategies, techniques, methods, products, developments, suppliers, regulators,
members, relationships and/or customers of the Bank that are confidential,
proprietary or not otherwise publicly available, in any event not without a
breach of this Agreement, or (B) that the Bank has deemed confidential,
proprietary, nonpublic or not otherwise publicly available without

25

--------------------------------------------------------------------------------

breaching this Agreement;

(ii)
trade secrets of the Bank, as defined in Indiana Code Section 24-2-3-2, as
amended, or any successor statute; and

(iii)
any and all copies, summaries, analyses and extracts which relate or refer to or
reflect any of the items set forth in (i) or (ii) above. The Executive agrees
that all Confidential Information is confidential and is and at all times will
remain the property of the Bank.

(d)
Person Defined. For purposes of this Agreement, the term “Person” will mean any
natural person, proprietorship, partnership, corporation, limited liability
company, bank, organization, firm, business, joint venture, association, trust
or other entity and any government agency, body or authority.

(e)
Return of Confidential Information and Other Property. The Executive covenants
and agrees:

(i)
to keep all Confidential Information subject to the Bank's custody and control
and to promptly return to the Bank all Confidential Information that is still in
the Executive's possession or control at the termination of the Executive's
employment with the Bank; and

(ii)
promptly upon termination of the Executive's employment with the Bank, to return
to the Bank, at the Bank's principal office, all vehicles, equipment, computers,
credit cards and other property of the Bank and to cease using any of the
foregoing.

(f)
Exceptions from Confidentiality Obligations. Section 1 shall not be deemed to
prevent the Executive from making disclosures required by applicable regulation,
law, agency order, or court order, to the extent the Executive provides
reasonable written notice of such disclosure requirement to the Bank prior to
such disclosure, to the extent such prior notice is not prohibited, to permit
the Bank to contest the disclosure of such information.

2.Non-Disparagement. The Executive agrees to not communicate disparaging remarks
to third parties about the Bank, its directors, officers or employees. Likewise,
the Bank agrees not to disparage the Executive or his or her skills or job
performance to third parties. However, nothing in this paragraph shall prohibit
the Bank or the Executive from testifying truthfully under oath.

3.Non-Solicitation and No-Hire. The Executive hereby understands, acknowledges
and agrees that, by virtue of his or her position with the Bank, the Executive
has and will have advantageous familiarity and personal contacts with the
employees of the Bank and has and will have advantageous familiarity with the
business, operations and affairs of the Bank. In addition, the Executive
understands, acknowledges and agrees that the business of the Bank is highly
competitive. Accordingly, at all times while the Executive is employed by the
Bank and for a twelve-month period following Termination of Service, the
Executive will not, directly or indirectly, or individually or together with any
other Person, as owner, shareholder, investor, member, partner, proprietor,
principal, director, officer, Executive, manager, agent, representative,
independent contractor, consultant or otherwise induce, request or attempt to
influence any Bank employee who was employed by the Bank during the twelve-month
period prior to Termination of Service, to terminate his or her employment with
the Bank. In addition, the Executive agrees that for a period of twelve months

26

--------------------------------------------------------------------------------

following the Executive's Termination of Service, Executive will not hire any
Bank employee who was employed by the Bank during the twelve-month period prior
to the Executive's Termination of Service.

4.Periods of Noncompliance and Reasonableness of Periods. The restrictions and
covenants contained in Section 3 will not run during all periods of
noncompliance and will apply during the Term of this Agreement and for the full
periods specified in Section 3. The Bank and the Executive understand,
acknowledge and agree that the restrictions and covenants contained in Section 3
are reasonable in view of the nature of the business in which the Bank is
engaged, the Executive's position with the Bank and the Executive's advantageous
knowledge and familiarity with, the Bank's employees, business, operations,
affairs and customers.

The Bank's obligation to pay an award to the Executive pursuant to the Federal
Home Loan Bank of Indianapolis Incentive Plan will immediately terminate in the
event the Executive breaches any of the provisions of Section 1 or 3 and all
outstanding awards will be forfeited. Notwithstanding the foregoing:
(a)
the Executive's covenants set forth in Sections 1 or 3 will continue in full
force and effect and be binding upon the Executive;

(b)
the Bank will be entitled to the remedies specified in Section 6; and

(c)
the Bank will be entitled to its damages, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) resulting from or relating
to the successful prosecution of the Executive's breach of any of the provisions
of Section 1 or 3.

5.Survival of Certain Provisions. Upon any termination of the Executive's
employment with the Bank, the Executive and the Bank hereby expressly agree that
the provisions of Sections 1, 3, 4 and 6 will continue to be in full force and
effect and binding upon the Executive and the Bank in accordance with the
applicable respective provisions of such Sections.

6.Remedies. The Executive agrees that the Bank will suffer irreparable damage
and injury and will not have an adequate remedy at law in the event of any
actual, threatened or attempted breach by the Executive of any provision of
Section 1 or 3. Accordingly, in the event of a threatened, attempted or actual
breach by the Executive of any provision of Section 1 or 3, in addition to all
other remedies to which the Bank is entitled at law, in equity or otherwise, the
Bank may be entitled to a temporary restraining order and a permanent injunction
or a decree of specific performance of any provision of Section 1 or 3. The
foregoing remedies will not be deemed to be the exclusive rights or remedies of
the Bank for any breach of or noncompliance with this Agreement by the Executive
but will be in addition to all other rights and remedies available to the Bank
at law, in equity or otherwise.

7.Severability. In case any one or more of the provisions (or any portion
thereof) contained herein will, for any reason, be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
will not affect any other provision of this Agreement, but this Agreement will
be construed as if such invalid, illegal or unenforceable provision or
provisions (or portion thereof) had never been contained herein. If any
provision of this Agreement will be determined by a court of competent
jurisdiction to be unenforceable because of the provision's scope, duration or
other factor, then such provision will be considered divisible and the court
making such determination will have the power to reduce or limit (but not
increase or make greater) such scope, duration or other factor or to reform (but
not increase or make greater) such provision to make it enforceable to the
maximum extent permitted by law, and such provision will then be enforceable
against the appropriate party hereto in its reformed, reduced or limited form;
provided,

27

--------------------------------------------------------------------------------

however, that a provision will be enforceable in its reformed, reduced or
limited form only in the particular jurisdiction in which a court of competent
jurisdiction makes such determination.

8.Entire Agreement. This Agreement sets forth the entire understanding of the
parties hereto with respect to its subject matter, merges and supersedes all
prior and contemporaneous understandings with respect to its subject matter, and
may not be waived or modified, in whole or in part, except in writing signed by
each of the parties hereto. No waiver of any provision of this Agreement in any
instance will be deemed to be a waiver of the same or any other provision in any
other instance. The recitals set forth above are incorporated herein by this
reference.

9.Effect and Modification. No statement or promise, except as set forth herein,
has been made with respect to the subject matter of this Agreement. No
modification or amendment will be effective unless in writing and signed by the
Executive and an officer of the Bank (other than the Executive).

10.Non-Waiver. The Bank's or the Executive's failure or refusal to enforce all
or any part of, or the Bank's or the Executive's waiver of any breach of this
Agreement, will not be a waiver of the Bank's or the Executive's continuing or
subsequent rights under this Agreement, nor will such failure or refusal or
waiver have any effect on the subsequent enforceability of this Agreement.

11.Non-Assignability. This Agreement contemplates that the Executive will
personally provide the services described herein, and accordingly, the Executive
may not assign the Executive's rights or obligations hereunder, whether by
operation of law or otherwise, in whole or in part, without the prior written
consent of the Bank.

12.Notice. Any notice, request, instruction or other document to be given
hereunder to any party will be in writing and delivered by hand, telegram,
registered or certified United States mail return receipt requested, or other
form of receipted delivery, with all expenses of delivery prepaid, as follows:

If to the Executive:        _________________________
_________________________
_________________________
_________________________
If to the Bank:         Federal Home Loan Bank of Indianapolis
c/o General Counsel
8250 Woodfield Crossing Blvd.
Suite 400
Indianapolis, IN 46240
13.Governing Law. This Agreement is being delivered in and will be governed by
the laws of the State of Indiana without regard to the choice of law principles
thereof. Any dispute regarding this Agreement will be brought in any Indiana
state or federal court having jurisdiction in the matter and located in Marion
County, Indiana, and the Executive expressly consents to the jurisdiction of
such courts.

14.Prior Agreement. The Executive represents and warrants to the Bank that the
Executive is not a party to or otherwise bound by any agreement that would
restrict in any way the performance by the Executive of the Executive's duties,
services and obligations under this Agreement, that the Executive has disclosed
to the Bank all employment type agreements to which the Executive has been
bound, including without limitation employment agreements, consulting
agreements, non-compete agreements or covenants,

28

--------------------------------------------------------------------------------

confidentiality or non-disclosure agreements or covenants, and intellectual
property assignment agreements, and that the Bank will not have any liability to
any third party arising out of the Executive entering into this Agreement or
performing hereunder.

15.Effect of Headings. The descriptive headings of the Sections and, where
applicable, subsections, of this Agreement are inserted for convenience and
identification only and do not constitute a part of this Agreement for purposes
of interpretation.

16.Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original, but all of which collectively will
constitute one and the same instrument.

17.Miscellaneous. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Plan.

IN WITNESS WHEREOF, the Bank, by its officer thereunder duly authorized, and the
Executive, have caused this Non-Competition, Non-Solicitation and Non-Disclosure
Agreement to be executed as of the day and year first above written.
FEDERAL HOME LOAN BANK
OF INDIANAPOLIS    
EXECUTIVE
 
 
By:__________________________________
____________________________________________
Its:__________________________________
 
 
 
By:__________________________________
 
Its:__________________________________
 

            

29