FEDERAL HOME LOAN BANK OF PITTSBURGH
KEY EMPLOYEE INCENTIVE COMPENSATION PLAN

I.    EFFECTIVE DATE

This Key Employee Incentive Compensation Plan (“Key Employee Plan” or “Plan”) of
the Federal Home Loan Bank of Pittsburgh was originally established effective as
of January 1, 2013. Incentive Awards (“Awards”) may be paid for the Plan Year
(January 1 to December 31 of each year) in accordance with the provisions of
this Plan. The goals for the Plan Year and terms of the Awards shall be set
forth in a separate Attachment to this Plan. This Plan shall continue until
terminated.

II.    PURPOSE AND OBJECTIVES

The Plan is designed to retain and motivate key employees and reward the: (i)
achievement of key annual goals and (ii) maintenance of satisfactory financial
condition and member value over the longer term.

III.    PLAN ADMINISTRATION

The Plan is administered by the President; subject to review of aggregate Award
payments to be made to Plan participants by the Human Resources Committee of the
Board of Directors (the “Committee”) and the Board of Directors (the “Board”).

A.
Responsibilities of the President

The President is responsible for approval of: Plan participation, performance
goals, Bank achievements, and Awards regarding individual or group goal
achievement for participants under this Plan. The President will review with the
Committee and the Board the aggregate amount of Awards to be paid to Plan
participants.

B.    Responsibilities of the Committee

The Committee will review recommendations from the President and present final
recommendations to the Board for its approval.

C.    Responsibilities of the Board

The Board will review and approve (as it determines appropriate) recommendations
from the Committee and the President.

IV.    ELIGIBILITY

The Bank’s key employees are eligible to participate on the terms described in
this Key Employee Plan. Upon designation as a participant, each participant will
be provided a copy of the Plan.

V.
KEY EMPLOYEE PLAN AWARD OPPORTUNITY LEVELS

A summary of the Award levels is attached as Attachment A. Each participant
shall be provided with a separate document showing his/her level of
participation in the Plan.

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VI.    PERFORMANCE MEASURES

The Plan Year for the Award opportunity shall mean the annual period ending
December 31 (unless otherwise specifically stated in regard to a goal(s) in the
applicable goal attachment to this Key Employee Plan for the Plan Year). The
Plan goals can be both quantitative and qualitative. Overall performance of Bank
goals, and individual and group goals (as applicable), as well as individual
performance objectives as measured through the Bank’s performance evaluation
process, in aggregate, quantify the performance measures under the Plan that
will be considered when determining overall actual performance and any Award
payout amount.

Certain positions have a greater and more direct impact than others on the
achievement of Bank performance. Those differences are recognized by varying the
incentive opportunity expressed as a percentage of a participant's base salary.
For key employees, generally, the greater the control and influence a
participant can exert over Bank goals, the larger a portion of their Award will
be based on Bank performance. Key employee goals may consist solely of Bank
goals or they may include a combination of Bank goals and individual or group
goals as determined by the President.

In general, goals requiring attainment of specified performance or completion of
specified tasks and activities shall not be considered as having been met when
the actual performance as measured by completion of the activities has not been
attained. Interpolation of Award amounts is permissible for achieved performance
(measured by completion of the stated goals) at levels between threshold and
target, and target and maximum. Awards for performance results between the
threshold and target levels are calculated as a percentage of the target level.
Awards for performance between the target and maximum levels are calculated as a
percentage of the maximum level. Additionally, the specific terms of an approved
goal(s) may establish further standards for interpolation.

VII.
AWARD DETERMINATION AND PAYMENT

No participant has a vested right to any Award under the Plan until: (i) the
determinations of Award payments have been made by the Board and the President
as set forth below; (ii) the participant has met all applicable requirements for
such Award and for receiving payment of such an Award, including, without
limitation, any continued service and performance requirements as set forth in
this Plan; and (iii) all the other conditions and criteria regarding payment of
such Award as set forth in this Key Employee Plan are met.

At the conclusion of the applicable Plan Year, the President, after considering
the Bank's performance against the Bank goal(s), individual performance, actual
overall Bank performance, and other factors, as he deems appropriate, shall
recommend to the Committee and the Board the aggregate amount of Awards to be
paid to participants under this Plan. Thereafter, following the Board’s
determination, the President is responsible for approval of specific Awards to
be paid to participants in accordance with the terms of this Plan.

A participant who is on formal corrective action for performance at any time
during the Plan Year, or is rated as “Needs Improvement” or “Unsatisfactory” on
their most recent performance evaluation will be ineligible to receive any
payment of any Award.

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In order for any Award payment to be made, the most recent examination by the
Federal Housing Finance Agency (“Finance Agency”) of the participant’s area(s)
of responsibility must not have identified any unsafe or unsound practice or
condition.

A.
Assessment of Performance

Following December 31 of each Plan Year and the review by the Board of the
aggregate Award amounts to be paid to the participants under this Plan for the
Plan Year, each participant’s individual Total Award will be determined by the
President. Then, such Total Award, if any, will be divided such that: 1) 70
percent of the Total Award shall be referred to as the “Current Incentive Award”
and 2) the remaining 30 percent of the Total Award shall be referred to as the
“Deferred Incentive Award.” The following illustrates how the 2013 Current
Incentive Award and Deferred Incentive Award would be paid:

Payment
Description
Payment Year*
Current Incentive Award
70% of the Total Award
2014
Deferred Incentive Award installment
Up to 10% of the Deferred Incentive Award
2015
Deferred Incentive Award installment
Up to 10% of the Deferred Incentive Award
2016
Deferred Incentive Award installment
Up to 10% of the Deferred Incentive Award
2017

*Payment will be made no later than March 15 in the year indicated.

All payments are subject to the terms of this Plan, including Section B below.
Acceptance of any Award shall constitute agreement by the participant to all
obligations, terms, conditions, and restrictions so imposed.

B.
Payment of Each Deferred Incentive Award Installment Contingent on the Bank
Continuing to Meet Stated Criteria and Contingent on the Participant Meeting
Stated Payment Criteria

1.    Maintenance of Satisfactory Bank Performance

Except as set forth in Subsection 2., it is intended that a condition to payment
of each Deferred Incentive Award installment is that in the annual period
preceding the designated Payment Year for such installment, the Board determines
that the Bank has met at least one (1) of the Deferred Incentive Award criteria
set forth in Attachment B to this Plan. The Board’s determinations regarding
whether such criteria have been met for purposes of the Executive Officer
Incentive Compensation Plan (“Executive Plan”) shall also govern the payment of
each Deferred Incentive Award installment due under this Plan. This provision
shall not in any manner limit the President’s and Board’s authority under
Articles VIII. and IX. of the Plan.

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2.
Board Discretion—Strategic Transactions

If prior to payout of all Deferred Incentive Award payments, the Board approves
a PLMBS risk reduction strategy as defined in the Executive Plan, then, in such
case, the Bank does not have to meet any of the Deferred Incentive Award
criteria in the annual period preceding each designated Payment Year and the
Board may waive this condition separately on a year-by-year basis as to each
remaining unpaid Deferred Incentive Award installment. The Board’s waiver
determinations under the Executive Plan with respect to an installment
payment(s) shall also govern the payment of the applicable Deferred Incentive
Award installment(s) due under this Plan.

If prior to the payout of all Deferred Incentive Award payments a Change in
Control event occurs (as defined in the Executive Plan) then, in such case, all
unpaid Deferred Incentive Awards: (i) shall vest 30 days after the Finance
Agency issues its written approval of such a transaction and (ii) shall be paid
to the participants 30 days after the closing of the transaction.

3.
Termination of Employment; Pro-Rated and Deferred Incentive Award Payments;
Participant Performance Condition

Participants who terminate employment with the Bank for any reason, other than
death, disability, or retirement prior to the Current Incentive Award payout
date will not be eligible for an Award. Participants who are hired during the
Plan Year or whose employment ends due to involuntary termination(1) (excluding
involuntary termination for cause(2)), death, disability, or retirement prior to
the Current Incentive Award payout date may be eligible to be considered for a
pro-rated Current Incentive Award.(3)

(1) “Involuntary termination” shall be interpreted consistent with “separation
from service” as defined in the IRS 409A Regulations and exclude termination for
cause and shall include a “resignation for good reason” as defined by the IRS
409A Regulations.

(2) For purposes of the Plan, “cause” means: (1) continued failure of the
Participant to perform his or her duties with the Bank (other than any such
failure resulting from disability), after a demand for performance, pursuant to
a resolution of the Board, is delivered to the participant by the chair of the
board, which specifically identifies the manner in which the participant has not
performed his or her duties; (2) personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, or willful violation of any law, rule, or
regulation (other than routine traffic violations or similar offenses); or (3)
removal of the participant by or at the direction of the Federal Housing Finance
Agency pursuant to federal laws, rules, and regulations, including 12 U.S.C.
§4501 et. seq. as amended or by any successor agency to the Federal Housing
Finance Agency pursuant to a similar statute.

(3) “Retirement” for purposes of this Plan is defined as a participant meeting
one of the following criteria: (1) 60 years of age or older with at least 5
years of service; (2) 65 years of age or older regardless of service; (3) age 55
or older with at least 10 years of service; or (4) the combination of the
participant’s age and years of service equals or exceeds 80; provided that, in
each such case, the participant enters into a non-solicitation agreement in the
form required by the Bank regarding the Bank’s customer’s and employees.
“Disability” shall be interpreted consistent with IRS 409A Regulations.

Participants who terminate employment due to retirement or involuntary
termination (other than for cause) after the Current Incentive Award payout date
but before completion of the payment of all corresponding Deferred Incentive
Award installments (as set forth above) shall receive such Deferred Incentive
Award installment payments at the same time as such payments are made to Plan
participants who are current Bank employees. Participants who otherwise resign
employment before the completion of the payment of all corresponding Deferred
Incentive Award installments shall not receive payment of such installments. Any
participant that is terminated by the Bank for cause (as defined in this Plan)
prior to receiving payment of all corresponding Deferred

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Incentive Award installments shall not receive payment of any remaining unpaid
Deferred Incentive Award installments. This provision shall not in any manner
limit the President’s and Board’s authority under Articles VIII. and IX. of the
Plan.

In the case of a participant whose employment terminates due to death or
disability before completion of the payment of all corresponding Deferred
Incentive Award installments, such installments shall promptly vest following
the death or disability and the remaining installments shall be paid by the Bank
within 90 days of the date of death or determination of disability.

C.    Provisions Applicable to All Awards Under the Plan

Except as expressly set forth otherwise in this Plan, payments under the Plan
are intended to satisfy the “short-term deferral” exception under Section 409A
of the Internal Revenue Code (“Code”). Each payment under the Plan will be
treated as a separate payment for purposes of Section 409A of the Code and
corresponding IRS 409A Regulations. Appropriate provisions shall be made for any
taxes that the Bank determines are required to be withheld from any Awards under
the applicable laws or other regulations of any governmental authority, whether
federal, state, or local. For the avoidance of doubt, participants will be
solely responsible for any applicable taxes (including income and excise taxes)
and penalties, and any interest that accrues thereon, that they incur in
connection with the receipt of any Award under the Plan. The payment of any
Award shall be subject to such obligations, terms, and conditions as the
President, the Committee, or the Board may specify in making the Award and, in
exercising their discretion to make any Award determinations hereunder.
Acceptance of any Award shall constitute agreement by the participant to all
obligations, terms, conditions, and restrictions so imposed.

VIII.    CLAWBACK AND REDUCTION OF AWARDS
In the event of gross misconduct, gross negligence, materially inaccurate
financial statements, erroneous performance metrics related to incentive goal
calculation, or conviction of a felony, the President and the Board will have
the authority to adjust Award amounts or reclaim Award payments. For the
avoidance of doubt, the Bank may in its sole discretion, decline to adjust the
terms of any outstanding Award if it determines that such adjustment would
violate applicable law or result in adverse tax consequences to a participant or
the Bank.
The President or the Board (as applicable) will utilize discretion to reduce the
amount of any Current Incentive Award and Deferred Incentive Award installments
if either determines that:
(i)
Operational errors or omissions result in material revisions to the financial
results, information submitted to the Finance Agency, or data used to determine
Award payment amounts;

(ii)
The submission of information to the Securities and Exchange Commission (“SEC”),
the Office of Finance (“OF”), and/or the Finance Agency has not been provided in
a timely manner; or

(ii)
The Bank fails to make sufficient progress, as determined by the Finance Agency
and communicated to Bank management and/or the Board by the Finance Agency, in
the timely remediation of examination, monitoring, and other supervisory
findings and matters requiring executive management’s attention.

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IX.    TERMINATION OR AMENDMENT

The Plan, in whole or in part, may at any time or from time to time be amended,
suspended, or reinstated and may at any time be terminated by action of the
Board. The President has the power and authority to construe, interpret, and
administer the Plan. Except as otherwise set forth in this Plan, any decision
arising out of or in connection with the construction, interpretation, or
administration of the Plan will lie within the President’s absolute discretion
and will be binding on all parties. No provision of this Plan shall create any
right to continued employment.

Attachments

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Attachment A—Award Levels

Incentive Award Opportunity Levels (expressed as a percentage of base salary)

Participant Level
 Threshold
Incentive Award Opportunity
 Target
Incentive Award Opportunity
 Maximum
Incentive Award Opportunity
Managing Director and Senior Director
18%
27.5%
37%
Director
16%
22%
28%

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Attachment B

2014

Criteria for Payment of Deferred Award Installments

(1) Market Value of Equity to Par Value of Capital Stock (MV/CS) - Maintain
MV/CS above 105% on average throughout the year.
(2) Retained Earnings Level - Maintain enough retained earnings to exceed the
Bank's retained earnings target at each year end of deferred payment period.
The Board will consider the following criteria and may exercise its discretion
to adjust an award based on such criteria:

Remediation of Examination Findings. Defined as the Bank making sufficient
progress, as determined by the FHFA and communicated to Bank management or the
Board of Directors by the FHFA, in the timely remediation of examination,
monitoring, and other supervisory findings and matters requiring executive
management's attention. Refers to examination findings from the examination
during the applicable deferral year for the installment. For example, for the
2014 installment (payable in 2015), the applicable examination is the 2014
examination.

Timeliness of FHFA, SEC, and OF Filings. Filings defined as SEC periodic
filings, call report filings with FHFA, and FRS filings with OF that are timely
filed and no material restatement by the Bank is required.
Notes: at least one of the (1) and (2) stated quantifiable criteria above must
have been met in the preceding year in order for any installment payment to be
made. In the event that both of the (1) and (2) stated quantifiable criteria are
met in the preceding year, the payment will be made at 110% of the deferred
amount. In no event shall the aggregate amount of any Current Incentive Award
and Deferred Incentive Award installments paid to a participant in any payment
year exceed 100 percent of the participant's base salary.

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2014 Incentive Goal Scorecard (01/2014)

 
Goal
Weight
Risk
Mgmt. Weight
Threshold
Target
Max
YTD
Full YR. Forecast
Serve the Membership
Core Mission Activities as defined by the Bank *

Increase the average number of Bank products used by members, which includes
execution of the following transactions in 2014 by all members: Advances, LCs,
Safekeeping, MPF Original/Government and MPF Xtra
15%

15%
15%

15%
83.0%

1.70
87.5%

1.80
92.0%

2.00
 
 
Vitalize Communities
Increase the number of members utilizing community investment products, which
includes AHP, BOB, CLP and FFD

15%
15%
109
114
124
 
 
Build Strength and Flexibility
Profitability as measured by adjusted earnings relative to GAAP capital in
excess of average three month LIBOR within identified risk parameters .
See Attachment 1.

Workforce Evaluation as defined by the Bank.
See Attachment 2.
30%

10%
25%

10%
337bp

100% Complete Group A
419bp

100% Completion of Membership and one other unit from
Group B
500bp

100% Completion of the entire Group B
 
 
Operational Excellence
Success on these equally weighted, cross departmental staff goals:

Establish a Capital Plan sufficient for the Bank to (i) become a consistently
high performance FHLBank and (ii) be prepared to successfully address future
uncertainties.

Improve the Bank's capabilities related to business continuity.
15%
20%
Interpolation of results based on completion of the identified staff goals
 
 

* Core Mission Activities: Target is full year average in operating plan.
Threshold and Maximum are based on two standard deviations of annual changes
from 2001 (historical volatility is 2.27%).

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2014 Incentive Goal Scorecard
Attachment 1: Adjusted Earnings Definition

 
Goal
Weight
Risk Mgmt. Weight
Threshold
Target
Max
YTD
Full YR. Forecast
Build Strength and Flexibility
Profitability as measured by adjusted earnings relative to GAAP capital in
excess of average three month LIBOR within identified risk parameters (actual
duration of equity).

GAAP Net Income adjusted for:
•    Advance prepayment fees
•    Mortgage Delivery Commitments (MPF G&L)
•    EaR and unrealized G&L on securities (change from base removed)
•    Legal settlements (i.e., PLMBS litigation)
•    Derivative ineffectiveness
30%
25%
337bp
419bp
500bp
 
 

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2014 Incentive Goal Scorecard
Attachment 2: Workforce Evaluation

 
Goal
Weight
Risk
Mgmt .
Weight
Threshold
Target
Max
YTD
Full YR. Forecast
Build Strength and Flexibility
Workforce Evaluation as defined by the Bank

The workforce evaluation will consist of:
•    Scenario Forecast- The assessment of the unit’s strategic alignment with
the Bank’s Strategic Plan 2014-2018
•    Demand Forecast - A review of several key areas impacting the unit’s human
capital requirements, including skills and competencies
•    Supply Forecast- A review of existing and available resources including
assessments of external and internal resources
•    Gap Analysis and Action Plan - A roadmap for the workforce plan in terms of
talent acquisition, retention, development and/or deployment

The completed workforce evaluations will be evaluated and approved by the CEO
prior to implementation.

Threshold reflects fully completed and operational plans for Group A. Target
will be completion of Membership and one other of the groups from Group B.
Maximum will be completion of the final two groups in Group B.
10%
10%
Group A

Capital Markets

Corporate Risk
•    Credit Risk
•    Market Risk
•    Operations Risk

Technology
•    Business Solutions
•    Data Services
•    Infrastructure and Operations
•    Information Security
•    IT Services

Legal/GR/HR
•    Legal
•    Gov’t Rel.
•    Human Res.
Group B

Membership
•    Member Services
•    Product Delivery
•    Communications
•    Community Investment

Finance

Internal Audit

Strategy
•    Process Mgmt.
•    Administration