Business Partner Severance Policy
June 5, 2017

Policy Information

     
Document Title:
  Business Partner Severance Policy
Content Owner:
  Director of Human Resources and
Inclusion (HRI)
Certification of Compliance Contact:
  N/A
Policy Category:
  Management Policy
FHLBank-Level Approver:
  President and Chief Executive Officer
(CEO)
Board-Level Approver:
  N/A
Review Frequency:
  Every Two Years
Initial Effective Date:
  6/19/2015
Last CEO Approval Date:
  06/05/2017
Next Review Date:
  06/2019

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Introduction

This Management Policy establishes the process for providing severance benefits
to eligible employees (referred to as business partners).

Purpose

The purpose of this Policy is to define the severance process to ensure
effective and consistent support for business partners terminating employment
with FHLBank.

Scope

This Policy provides the process and framework for providing severance benefits.

General Guidelines

1.   Eligibility.

All business partners of FHLBank, except for Executive Incentive Compensation
Plan Participants) are eligible for Severance Pay if FHLBank terminates the
business partner’s employment with or without cause, other than as provided
below. The availability or election of early retirement will not be considered
in determining whether a business partner is eligible to receive Severance Pay,
as defined below.

A business partner is not eligible for Severance Pay if:

a.   The business partner voluntarily terminates employment (including
termination as a result of disability or other failure to return from leave or
due to death); or

b.   The business partner’s employment is terminated by FHLBank for actions or
inactions of the business partner which FHLBank reasonably concludes constitutes
misconduct (misconduct being defined as a business partner willfully (1) failing
to perform the duties of his or her position or (2) acting against the best
interest of FHLBank (in the reasonable opinion of FHLBank), including, but not
limited to, violation of FHLBank policies, insubordination, dishonesty, breach
of trust, disclosure of confidential or proprietary information, violation of
law or commission of an act of moral turpitude, failure to perform the function
of his or her job or to demonstrate adequate efforts to successfully complete a
performance plan, job abandonment, or excessive tardiness or absenteeism).

2.   Amount of Severance Pay.

Provided the other requirements of this Policy are met, and if the business
partner timely provides FHLBank an enforceable release waiving claims against
FHLBank, on a form provided by FHLBank (a Separation Agreement), the business
partner shall be eligible to receive Severance Pay equal to the following amount
of the business partner’s final base salary as indicated for the business
partner’s title (titles not specifically listed shall be paid the amount as the
next lower ranking title specifically listed):

     
Senior Vice Presidents & First Vice Presidents
  6 Months
 
   
All Other Officer Positions
  3 Months
 
   
Non-Officer Positions with minimum of five years of service
  2 Months
 
   
Non-Officer Positions with less than five years of service
  1 Month
 
   

Severance Pay includes the following:

A.   Salary Continuation:

For a period of months defined above, the business partner will continue to
receive his or her regular salary, equal to the base salary received as of the
separation date. These payments will be made in accordance with FHLBank’s
current payroll cycle and subject to all appropriate withholding and taxation.
These payments will be subject to the business partner’s continued adherence to
the terms and provisions of the Separation Agreement and may be subject to
reduction due to any payments the business partner may owe to FHLBank.

B.   Incentive:

Any incentives to be paid to business partners shall be paid in accordance with
the Non-NEO Executive Incentive Compensation Plan or the Short Term Incentive
Plan, as applicable.

C.   Benefit Continuation:

For a period of months defined above, the business partner may elect to
participate in FHLBank’s eligible benefit plans and pay solely the premium as
though an active business partner (note that this premium is subject to possible
increase in FHLBank’s sole discretion). These payments will be deducted from the
business partner’s severance benefit payments. FHLBank will pay the remainder of
the COBRA coverage costs. A business partner will not receive any additional
service credit pursuant to the defined benefit plan or the Benefit Equalization
Plan as a result of salary or benefit continuation.

3.   Policy Administration.

The HRI department is responsible for administering this Policy and decisions
regarding eligibility and Severance Pay shall be in the sole discretion of the
Director of HRI. This Policy does not give any business partner, or any person
whosoever, the right to be retained in the service of FHLBank, and all business
partners shall remain subject to discharge to the same extent as if this Policy
had never been adopted. This Policy may be changed or ended at any time, with or
without prior notice and for any reason at FHLBank’s sole and absolute
discretion.

Exceptions/Violations

Exceptions to this Policy may be approved in writing by the President and CEO.

Policy Review

This Policy shall be reviewed every two years and revised as needed by the
Director of HRI. Following such review, the Policy shall be submitted for review
by the Executive Team and approval by the President and CEO.

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