EXECUTIVE INCENTIVE COMPENSATION PLAN

Affordable

 

 

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Exhibit 10.1

 

 

EXECUTIVE INCENTIVE COMPENSATION PLAN

 

December 14, 2018

 

 

Policy Information

 

Document Title:

Executive Incentive Compensation Plan

Content Owner:

Director of Human Resources and Inclusion (HRI)

Certification of Compliance Contact:

N/A

Policy Category:

FHLBank Policy

FHLBank-Level Approver:

President and CEO

Board-Level Approver:

Full Board (Compensation, Human Resources and Inclusion)

Review Frequency:

Annually

Initial Effective Date:

1/1/2012

Last CEO Approval Date:

11/29/2018

Next Review Date:

12/2019

 

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Table of Contents

1.0Plan Objectives2

2.0Definitions3

3.0Eligibility4

4.0Total Base Opportunity6

5.0Performance Measures6

6.0Award Determination7

7.0Distribution of Awards8

8.0Plan Communication8

9.0Administrative Control9

10.0Miscellaneous Conditions9

Appendices 15

 

 

1.0Plan Objectives

1.1The purpose of the Federal Home Loan Bank of Topeka Executive Incentive
Compensation Plan is to:

1.1.1Promote consistently high value creation for FHLBank Topeka members by
promoting the long-term growth and profitability of FHLBank Topeka in accordance
with the achievement of its long-term strategic objectives and mission;

1.1.2Promote the mission and financial performance of FHLBank Topeka by
providing incentives to key employees for accomplishing annual goals that are
aligned with FHLBank Topeka’s mission and business objectives;

1.1.3Promote key employee loyalty and dedication to FHLBank Topeka and its
strategic objectives by rewarding performance that facilitates the growth and
financial stability and success of FHLBank Topeka; and

1.1.4Enhance FHLBank Topeka’s capacity to attract, retain, and motivate key
employees by offering competitive short-term and long-term total incentive
compensation opportunities, including those Deferred Incentive opportunities
provided in Plan Section 2.1.7, to key employees who are also vital to FHLBank
Topeka’s future success.

1.2Payments awarded under this Plan, when combined with base salary and other
benefits, are designed to provide competitive total compensation to key
employees for achieving FHLBank Topeka’s desired strategic objectives.

1.3The Plan is a cash-based annual incentive plan with a long-term deferral
component that establishes individual incentive compensation award opportunities
related to achievement of performance objectives by FHLBank Topeka and by
Participants during Base or Deferral Performance Periods.

2.0Definitions

2.1When used in this Plan, the following words and phrases shall have the
following meaning:

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2.1.1Base Performance Period means the period over which FHLBank Topeka’s
performance is measured based on parameters set forth in the Target Document,
and over which a Cash Incentive can be earned and vested;

2.1.2Board means FHLBank Topeka’s Board of Directors;

2.1.3Cash Incentive means the portion of the Total Base Opportunity that is not
the Deferred Incentive, and becomes payable to the Participant (i) no later than
2 ½   months following the later of the end of the Base Performance Period upon
achievement of the Performance Measures, or (ii) as soon as practicable after a
determination of the director of the FHFA that the director will not act upon
his authority to prohibit compensation that is not reasonable and comparable to
compensation paid to executives at other financial institutions.

2.1.4Cause has the meaning given to it in Section 10.4.b;

2.1.5CEO means the Chief Executive Officer of FHLBank Topeka;

2.1.6Compensation Committee means the Compensation, Human Resources and
Inclusion Committee of the Board;

2.1.7Deferred Incentive means 50% of the Total Base Opportunity, which shall be
deferred for the Deferral Performance Period and is subject to adjustment as
stated herein and in the Target Document;

2.1.8Deferral Performance Period is the three-year period directly following
each Base Performance Period;

2.1.9Disability has the meaning given to it in Section 10.4.a;

2.1.10Extraordinary Occurrences means those events that, in the opinion and
discretion of the Compensation Committee, are outside the significant influence
of the Participant or FHLBank Topeka and are likely to have a significant
unanticipated effect, whether positive or negative, on FHLBank Topeka’s
operating and/or financial results;

2.1.11FHFA means the Federal Housing Finance Agency or any successor;

2.1.12FHLBank Topeka means the Federal Home Loan Bank of Topeka;

2.1.13Final Deferred Incentive Award means the Deferred Incentive ultimately
paid to a Participant under the Plan for a Deferral Performance Period, as
otherwise applicable herein;

2.1.14Interest Rate Credit means the interest rate credit applied to a Deferred
Incentive before payout, determined by the Compensation Committee and as stated
in the Target Document, to calculate the Final Deferred Incentive Award.

2.1.15Participant means a person who is eligible to take part in the Plan for
the designated Base or Deferral Performance Period as determined by the Board;

 

 

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2.1.16Participation Agreement means the agreement between FHLBank Topeka and a
Participant, the terms of which govern a Participant’s participation in this
Plan, an example of which is set forth in Appendix A;

2.1.17Performance Measure means each performance factor that is taken into
consideration under the Plan in determining the value of a Cash Incentive or
Final Deferred Incentive Award;

2.1.18Plan means the Federal Home Loan Bank of Topeka Executive Incentive
Compensation Plan;

2.1.19Retirement means a Participant meeting one of the following criteria: (1)
55 years of age or older with at least 10 years of service; (2) 60 years of age
or older with at least 5 years of service; (3) 65 years of age or older
regardless of service; or (4) the combination of the Participant’s age and years
of service equals or exceeds 80; provided that, in each case, the Participant
enters into a non-solicitation agreement in the form required by the FHLBank;

2.1.20Target Document means the document in effect for a Base Performance Period
and Deferral Performance Period, as approved and adopted by the Board, that sets
forth the Total Base Opportunity, Performance Measures, Interest Rate Credit and
other applicable terms and conditions relevant to the operation of this Plan;

2.1.21Termination of Service means the occurrence of any act or failure to act
that actually or effectively causes or results in a Participant ceasing, for
whatever reason, to be an employee of FHLBank Topeka; and

2.1.22Total Base Opportunity means the percentage of a Participant’s base salary
on the first day of the Base Performance Period that will be provisionally
awarded to a Participant as incentive compensation for achieving performance
levels under each Performance Measure during the Base Performance Period, 50% of
which shall be the Cash Incentive, and 50% of which shall be the Deferred
Incentive which is subject to adjustment, and both of which are subject to the
other provisions of this Plan.

3.0Eligibility

3.1Individual employees eligible for participation in the Plan for each Base
Performance Period and corresponding Deferral Performance Period will be
recommended by the CEO to the Board for approval. In the case of the CEO, the
Board has sole authority to approve the CEO’s eligibility during the applicable
periods.

3.2Eligibility shall be limited to a select group of key management or other
highly-compensated employees (i.e., key employees), but normally will be further
limited to the CEO and senior officers who are recommended as a Participant by
the CEO. Other key employees may be recommended by the CEO to participate on a
limited basis to address extraordinary performance and/or other criteria and
considerations as approved by the Board.

3.3There will be three levels of participation by eligible employees based on
the eligible employee’s position and responsibility. The Board shall determine
each Participant’s level of participation.  

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3.4The list of Participants for each Base Performance Period and corresponding
Deferral Performance Period shall be established by the Board.  

3.5An eligible employee shall become a Participant in the Plan through the
signing of a Participation Agreement, and shall cease to be a Participant in the
Plan upon Termination of Service, or through a violation of either of the
following obligations:

a)Non-disclosure. During and as a result of the Participant’s employment with
FHLBank Topeka, Participant is or will be making use of, acquiring knowledge of
and/or adding to confidential or proprietary information relating to FHLBank
Topeka and its affiliates, including, without limitation, FHLBank Topeka’s
systems, procedures, policies, manuals, trade secrets, business plans, financial
data, strategies, methods of conducting business, processes, procedures,
standards, know-how, manuals, techniques, technology, confidential reports and
all other information, knowledge, or data of any kind or nature relating to the
products, services, or business of FHLBank Topeka (collectively, “Confidential
Information”). As a material inducement to FHLBank Topeka to allow Participant
to be eligible under the Plan, Participant shall not, at any time during or
following the term of his employment with FHLBank Topeka, directly or
indirectly, except in accordance with FHLBank Topeka policies, use, disseminate,
divulge or disclose, for any purpose whatsoever, any Confidential Information.

b)Non-solicitation. In acknowledgement and recognition of the highly competitive
and unique nature of FHLBank Topeka’s business, Participant shall not, during
his or her continued employment and for the one-year period following
Termination of Service, directly or indirectly, either by himself or herself or
through others, as an individual, partner, employee, agent, officer,
stockholder, or otherwise:

a.Solicit, divert, take away, or attempt to take away the business of FHLBank
Topeka’s present or past customers that otherwise exist at the time of
termination, or such customers of any affiliated or related companies; and/or

b.Solicit, hire, employ, or endeavor to employ any of FHLBank Topeka’s employees
or independent contractors.

3.6Remedies. By virtue of signing the Participation Agreement, Participant
acknowledges and agrees to the terms and conditions of that Participation
Agreement and the Plan and further acknowledges that FHLBank Topeka 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 Participant of any
provision of the Plan or the specific provisions of Section 3.5 above.
Accordingly, in the event of a threatened, attempted or actual breach by
Participant of any provision of the Plan, including but not limited to Section
3.5, in addition to all other remedies to which FHLBank Topeka is entitled at
law, in equity or otherwise, Participant shall forfeit any and all further and
unpaid Cash Incentive or Deferred Incentive that he or she would otherwise have
been entitled to under the Plan, and/or FHLBank Topeka may be entitled to a
temporary restraining order and a permanent injunction or a decree of specific
performance of any provision of Plan Section 3.5. The foregoing remedies will
not be deemed to be the exclusive rights or remedies of FHLBank Topeka for any
breach of or noncompliance with the terms of this Plan, or the Participation
Agreement signed by the Participant, but will be in addition to all other rights
and remedies available to FHLBank Topeka at law, in equity, or otherwise.

 

 

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4.0Total Base Opportunity

4.1For each Base Performance Period, the Board will present a Total Base
Opportunity to Participants. Certain key employees have a greater and more
direct impact than others on the success of FHLBank Topeka; therefore, these
differences are recognized by varying Total Base Opportunities for each
Participant by level of participation.

4.2Awards are payable in accordance with Section 6.0. The Deferred Incentive
amount may increase or decrease in accordance with the achievement of
Performance Measures as set forth in the Target Document in effect for the
Deferral Performance Period.

5.0Performance Measures

5.1Three achievement levels will be defined for each Performance Measure:

 

Threshold

The minimum achievement level acceptable for the Performance Measure.

 

Target

The expected achievement level for the Performance Measure.

 

Optimum

The achievement level for the Performance Measure that substantially exceeds the
Target level of achievement.

5.2Performance between Threshold - Target, and Target - Optimum shall be
calculated by linear interpolation of the achievement point in the applicable
performance range, as determined by the Compensation Committee.

5.3Performance Measures shall be established by the Board.

5.4Performance Measures for the Deferred Incentive and for the Cash Incentive
shall be set forth in the Target Document then in effect.

6.0Award Determination

6.1Awards of the Cash Incentive and the Deferred Incentive are as set forth in
the Target Document and achievement of satisfactory levels of individual
performance; provided, however, if FHLBank Topeka fails to achieve performance
at or above threshold Performance Measures, the Compensation Committee has
discretion to reduce or eliminate an award for the Base Performance Period and
for any Deferral Performance Period, if otherwise applicable under the
circumstances.

6.2Awards for a Base Performance Period or Deferral Performance Period are
determined by the Compensation Committee promptly after the Base Performance
Period or Deferral Performance Period based upon the Compensation Committee’s
analysis of all applicable standards set forth herein and consideration of
performance that is not captured in the Performance Measures. The Compensation
Committee may also consider Extraordinary Occurrences when assessing performance
results and determining Cash Incentive or Final Deferred Incentive Award and may
adjust the Performance Measures and/or amounts to ensure that the purpose of the
Plan is served.

6.3The above notwithstanding, the Compensation Committee may, in its discretion,
reduce or eliminate an award for any Base Performance Period or Deferral
Performance Period under any of the following circumstances:

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a)FHLBank Topeka receives a composite “4” or “5” rating in its FHFA examination
in any single year in any single Base Performance Period or Deferral Performance
Period.

b)The Board finds a serious, material safety or soundness problem, or a serious,
material risk-management deficiency exists at FHLBank Topeka, or if: (i)
operational errors or omissions result in material revisions to the financial
results, information submitted to the FHFA, or to 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) FHLBank Topeka fails to
make sufficient progress, as determined by the Board, in the timely remediation
of significant examination, monitoring or other supervisory findings.

c)During the most recent examination of FHLBank Topeka by the FHFA, the FHFA
identified an unsafe or unsound practice or condition that is material to the
financial operation of FHLBank Topeka within the Participant’s area(s) of
responsibility and such unsafe or unsound practice or condition is not
subsequently resolved in favor of FHLBank Topeka by the last day of the Base
Performance Period or Deferral Performance Period.

d)Specific to each Participant only, such Participant does not achieve
satisfactory individual achievement levels during the Deferral Performance
Period. For purposes of the Plan, the determination of whether performance is
deemed “satisfactory” is in the sole discretion of the Compensation Committee.

6.4The Deferred Incentive shall be reduced by one-third for each year during the
Deferral Performance Period in which FHLBank Topeka has negative net income, as
defined and in accordance with Generally Accepted Accounting Principles.

7.0Distribution of Cash Incentives or Final Deferred Incentive Award

7.1All awards will be paid out in cash and will be subject to appropriate
payroll tax withholdings.

7.2No Final Deferred Incentive Award received by a Participant shall be
considered as compensation for purposes of determining benefits under any
employee benefit plan of FHLBank Topeka, except as otherwise determined by the
Compensation Committee. Cash Incentive awards shall be considered as
compensation for purposes of determining benefits under the employee benefit
plans of FHLBank Topeka if the plan so provides.

7.3Awards will be made as soon as practical following the end of the Base
Performance Period or Deferral Performance Period, but no later than (i) 2 ½
months following the later of the end of the applicable Base Performance Period
or Deferral Performance Period, as applicable; or (ii) as soon as practicable
after a determination of the director of the FHFA that the director will not act
upon his authority to prohibit compensation that is not reasonable and
comparable to compensation paid to executives at other financial institutions.

8.0Plan Communication

8.1The Compensation Committee, or its designee(s), shall communicate with
Participant(s) regarding the Plan in accordance with the following schedule:

 

 

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First quarter of the Base Performance Period:

Communicate the Performance Measures and identify the Plan Participants for the
Base and Deferral Performance Periods.

 

First quarter of the Base Performance Period :

Communicate the Performance Measures and the specific hurdles for the Base and
Deferral Performance Periods.

 

Annually :

Interim assessments of the progress towards achieving Performance Measures as
set forth in the Target Document.

 

End of Base and Deferral Performance Periods :

Final assessment of FHLBank Topeka and individual performance during Base and
Deferral Performance Periods.

9.0Administrative Control

9.1Oversight of the Plan’s operation will be provided by the Compensation
Committee. Administration of the Plan shall be provided by the Compensation
Committee, with delegated authority to FHLBank Topeka’s CEO, the HRI Department,
or other employees as applicable.

9.2The Compensation Committee, in consultation with the CEO, has full discretion
and authority and is otherwise responsible for interpreting and applying the
terms of the Plan. These interpretations and applications shall be final and
binding.

10.0Miscellaneous Conditions

10.1Except as provided in Section 10.3, Participants must be employed by FHLBank
Topeka on the final day of the Base Performance Period and/or the Deferral
Performance Period, and otherwise not in violation of Section 3.5, to receive an
award, as applicable.

10.2Employees of FHLBank Topeka who are hired, transferred, or promoted during
the first six months of the Base Performance Period may be recommended for: (i)
participation in the Plan or (ii) participation in the Plan at a level other
than the one originally designated, in accordance with the Target Document then
in effect, and receive a prorated Total Base Opportunity calculated as a
percentage of the employee’s new base salary and/or level of participation at
the time of the promotion.

10.3Notwithstanding the provisions of Section 10.1, the following vesting
provisions shall apply if a Participant incurs a Termination of Service (i) due
to death, (ii) due to Disability, (iii) due to Retirement, or (iv) due to
Termination of Service by FHLBank Topeka without Cause, as defined in Plan
Section 10.4 below, during the Base Performance Period or Deferral Performance
Period:

a)Pro-Rata Vesting of Total Base Opportunity during Base Performance Period.

If a Participant terminates due to death, Disability, Retirement, or termination
without Cause, any portion of his or her Total Base Opportunity eligible to be
awarded to a Participant during the Base Performance Period in which the
termination occurs will, to the extent the Performance Measures for such Base
Performance Period are satisfied, be treated as any other payment awarded under

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this plan made to the Participant or his or her beneficiary (as designated under
a completed beneficiary designation, a sample of which is attached in Appendix
B), except that the Total Base Opportunity of the Participant shall be prorated
equivalent to the period of time during the Base Performance Period that the
Participant participated in the Plan. The Cash Incentive for such Base
Performance Period shall be paid following the end of the Base Performance
Period pursuant to Section 7 of this Plan. The Deferred Incentive shall be paid
in accordance with Section 10.3.b.

b)Vesting of Deferred Incentive during Deferral Performance Period.

 

i)

Death or Disability.  If a Participant terminates employment before the end of
the Deferral Performance Period on account of death or Disability as defined in
Plan Section 10.4.a, the Participant’s Deferred Incentive shall be immediately
100% vested at the Target Performance Measure and shall be paid to the
Participant or his or her beneficiary (as designated under a completed
beneficiary designation form) no later than (i) 2 ½ months following the end of
the year in which death or Disability occurred, or (ii) as soon as practicable
after a determination by the director of the FHFA that the director will not act
upon his authority to prohibit compensation that is not reasonable and
comparable to compensation paid to executives at other financial institutions.

 

ii)

Retirement or Termination without Cause.  If a Participant terminates employment
due to Retirement or Termination of Employment by FHLBank Topeka without Cause,
the Participant’s Deferred Incentive shall be paid to the Participant or his or
her beneficiary (as designated under a completed beneficiary designation form)
based on the Performance Measure achieved at the end of each Deferral
Performance Period or the applicable Interest Rate Credit, as applicable, no
later than (i) 2 ½ months following the end of the Deferral Performance Period,
or (ii) as soon as practicable after a determination by the director of the FHFA
that the director will not act upon his authority to prohibit compensation that
is not reasonable and comparable to compensation paid to executives at other
financial institutions.

Example 1:

Participant becomes Disabled on September 30 and (a) Participant’s Total Base
Opportunity for the Base Performance Period would have been 100% of
Participant’s base salary, and (b) Participant has $50,000 in Deferred Incentive
opportunities from prior year(s).

(a) The Total Base Opportunity of 100% of Participant’s base salary is reduced
pro rata, to account for nine months of the Base Performance Period: 100% × 75%
= 75% of Participant’s base salary paid to Participant on or before March 15
following the Base Performance Period (to include 37.5% of Participant’s base
salary in Cash Incentive and 37.5% of Participant’s base salary from accelerated
Deferred Incentive).  

 

 

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(b) The $50,000 Deferred Incentive from the previous Deferral Performance Period
is paid to the Participant (reflecting an assumed achievement of the Target
Performance Measure), with the payment of the Final Deferred Incentive Award
amount being paid by March 15.

Example 2:

Participant Retires on September 30 and (a) the Participant’s Total Base
Opportunity for the full year would have been 100% of Participant’s base salary,
and (b) Participant has $100,000 in Deferred Incentive opportunities from prior
year(s).

(a) The Total Base Opportunity of 100% of Participant’s base salary is reduced
pro rata, to account for nine months of the Base Performance Period: 100% × 75%
= 75% of Participant’s Total Base Opportunity, 37.5% of which is the Cash
Incentive and 37.5% of which is the Deferred Incentive. The Cash Incentive will
be paid to Participant on or before March 15 following the Base Performance
Period. The Deferred Incentive will be deferred for the Deferral Performance
Period and will be paid as set forth in Section (b) below.  

(b)  The $100,000 Deferred Incentive from the previous Deferral Performance
Period(s) is determined based on the actual Performance Measure achieved for
each relevant Deferral Performance Period or subject to the Interest Rate
Credit, with the payment of the Final Deferred Incentive Award amount being paid
on or before March 15 of the following year after the end of each relevant
Deferral Performance Period.

c)Forfeiture upon voluntary termination or termination for Cause

In the case of the Participant’s voluntary termination or involuntary
termination for Cause prior to the end of the Base Performance Period, 100% of
the Total Base Opportunity shall be forfeited.  In the case of the Participant’s
involuntary termination for cause prior to the end of the Deferral Performance
Period, 100% of the Deferred Incentive shall be forfeited.

10.4For purposes of the Plan and this section the following definitions shall
apply:

a)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
FHLBank Topeka for an aggregate of twelve out of fifteen consecutive months and,
within thirty calendar days after a written notice of termination is thereafter
given by FHLBank Topeka to the Participant, the Participant does not return to
the full-time performance of the Participant’s duties.

b)Cause means (1) continued failure of the Participant to perform his or her
duties with FHLBank Topeka (other than any such failure resulting from
Disability), after a written demand for performance is delivered to the
Participant; (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); (3) willful engagement in any
misconduct in the performance of his duty that materially injures FHLBank
Topeka; or (4) removal of the Participant for cause by the FHFA pursuant to 12
U.S.C. 4636a, or by any successor agency to the FHFA pursuant to a similar
statute.

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10.5The designation of an employee as a Participant in the Plan does not
guarantee employment. Nothing in this Plan will confer on any employee the right
to be retained in the service of FHLBank Topeka nor limit the right of FHLBank
Topeka to terminate or otherwise deal with any employee.

10.6The Board has the right to revise, modify, or terminate the Plan in whole or
in part at any time or for any reason without the consent of any Participant.

10.7No benefit or interest available under the Plan will be subject in any
manner to anticipation or alienation and no Participant has any direct or
indirect right to sell, transfer, assign, pledge, attach, garnish or otherwise
encumber any anticipated Cash Incentive or Final Deferred Incentive Award and
any effort(s) to do so shall be void and unenforceable, and FHLBank Topeka shall
not be liable in any manner for or subject to the debts, contracts, liabilities,
engagements or torts of any person who might anticipate a Cash Incentive or
Final Deferred Incentive Award under the Plan.

10.8The Plan shall at all times be entirely unfunded and no provision shall at
any time be made with respect to segregating assets of FHLBank Topeka for
payment of any Cash Incentive or Final Deferred Incentive Award under this
program.

10.9Except to the extent superseded by laws of the United States, the laws of
the State of Kansas will be controlling in all matters relating to the Plan
without regard to the choice of law principles therein. The Plan and all
Participant Agreements are intended to comply, and will be construed by FHLBank
Topeka in a manner which they are exempt from or comply with the applicable
provisions of Section 409A of the Internal Revenue Code of 1986, as amended. To
the extent there is any conflict between a provision of the Plan and a provision
of Code Section 409A, the applicable provision of Code Section 409A will
control. The Plan and all Participation Agreements are intended to comply, and
will be construed by FHLBank Topeka in a manner such that they comply with
applicable provisions of Section 956 the Dodd-Frank Act, including the proposed
rules at 12 CFR §1232, or any successor rules or applicable guidance issued by
the FHFA.

10.10The 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.

10.11This 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.

10.12The individual members of the Board and Compensation Committee will, in
accordance with FHLBank Topeka’s Bylaws and other Board governance, be
indemnified and held harmless by FHLBank Topeka with respect to any alleged
breach of responsibilities performed or to be performed hereunder. In addition,
notwithstanding any other provision of the Plan, neither FHLBank Topeka nor any
individual acting as an employee or agent of FHLBank Topeka 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.

10.13If 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 Compensation Committee
may provide for the distribution to be

 

 

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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 FHLBank Topeka and the
Plan.

10.14Evidence 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 which is signed, made, or
presented by the proper party or parties.

10.15Any action required of or permitted by FHLBank Topeka under the Plan will
be made by the Compensation Committee through delegated authority of the Board,
or its designated authorities or individual designee(s), as authorized pursuant
to this Plan.

10.16In 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.

10.17A Participant, or any other person entitled to benefits under the Plan,
must furnish the Compensation Committee with any and all documents, evidence,
data, or other information the Compensation 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 Compensation Committee, and on the prompt execution of any
document reasonably related to the administration of the Plan requested by the
Compensation Committee.

10.18The Plan will be binding upon and inure to the benefit of FHLBank Topeka
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 FHLBank Topeka, but nothing in the Plan will preclude
FHLBank Topeka 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 FHLBank Topeka hereunder. FHLBank Topeka 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 FHLBank Topeka, the term “FHLBank Topeka” will refer to such
other organization and the Plan will continue in full force and effect.

10.19From the effective date of this Plan, this Plan shall control and apply to
all outstanding Deferred Incentives under this Plan or any prior version of
FHLBank Topeka’s Executive Incentive Compensation Plan.

 

 

 

Appendix A

 

 

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Participation Agreement

Participant:

Address:

 

Social Security No.:

Date of Birth:

 

 

 

1.

Agreement to Participate. The Participant (identified above and sometimes
hereinafter referred to as “I”) hereby agrees to become a Participant in the
Federal Home Loan Bank of Topeka Executive Incentive Compensation Plan (the
“Plan”).

 

2.

Acknowledgements: I hereby acknowledge the following: (1) I have received and
reviewed a copy of the Plan; (2) all benefits under the Plan remain subject to
the claims of the general creditors of Federal Home Loan Bank of Topeka
(“FHLBank Topeka”), and in the event of the bankruptcy, insolvency, or any
similar situation involving FHLBank Topeka, I acknowledge that I would have the
rights of a general unsecured creditor with respect to the benefits under the
Plan; (3) that any right to benefits hereunder are subject to the specific terms
and conditions of the Plan, including any specific Performance Measures set
forth therein or in the Target Document; (4) no benefits will be paid under the
Plan if I am terminated for “Cause” as set forth in the Plan Section 10.4.b; (5)
no benefits will be paid under the Plan or other remedies may be available to
FHLBank Topeka if I violate or fail to fulfill the non-disclosure or
non-solicitation provisions set forth under Section 3.5 in the Plan, if
applicable; (6) the benefits of the Plan may be subject to FICA taxes before
such amounts are actually paid to me; and (7) all amounts received under the
Plan shall be taxable to me as ordinary income.

IN WITNESS WHEREOF, I have executed this Participation Agreement as of the date
set forth below.

Date:_____________ , 20______

Signature of Participant

 

Received and acknowledged this day of __________________, 20 .

FEDERAL HOME LOAN BANK OF TOPEKA

 

 

By:

Print Name:

Print Title:

 

 

 

 

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Appendix B

BENEFICIARY DESIGNATION

CAREFULLY READ THE INSTRUCTIONS FOUND AT THE END
OF THIS FORM BEFORE PROCEEDING.

 

Participant:

Address:

 

Social Security No.:

Date of Birth:

 

The Participant hereby designates the following individual(s) or entity(ies) as
his or her beneficiary(ies) pursuant to the terms of the Executive Incentive
Compensation Plan of Federal Home Loan Bank of Topeka (“FHLBank Topeka”) [Insert
Name, Social Security Number, Relationship, Date of Birth and Address of
Individuals and/or fully identify any trust beneficiary by the Name of the
Trust, Date of Execution of the Trust, the Trustee’s Name, the address of the
trust, and the employer identification number of the trust]:

Primary Beneficiary(ies)SSN/Tax I.D.

 

 

 

Contingent Beneficiary(ies)

 

 

 

The Participant hereby reserves the right to change this Beneficiary
Designation, and any such change shall be effective when the Participant has
executed a new or amended Beneficiary Designation form, and the receipt of such
form has been acknowledged by FHLBank Topeka, all in such manner as specified by
FHLBank Topeka from time to time, or on a future date specified by any such new
or amended Beneficiary Designation form.

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EXECUTIVE INCENTIVE COMPENSATION PLAN

Affordable

 

 

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IN WITNESS WHEREAS, the Participant has executed this Beneficiary Designation on
the date designated below.

Date:_____________ , ______

Signature of Participant

 

 

Received

FEDERAL HOME LOAN BANK OF TOPEKA

 

 

Date:_____________ , ______By:

Print Name:

Print Title:

 

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INSTRUCTIONS FOR COMPLETION
OF BENEFICIARY DESIGNATION FORM

As a participant in the Federal Home Loan Bank of Topeka Executive Incentive
Compensation Plan (the “Plan”), you may be entitled to have certain benefits
paid to a designated beneficiary under the Plan in the event of your death. We
recommend that you consult your attorney concerning the completion of this form
to assure that the desired federal tax consequences are achieved.

The originally-signed copy of this form must be mailed or delivered to FHLBank
Topeka at the following address: Federal Home Loan Bank of Topeka, 500 SW
Wanamaker, P.O. Box 176, Topeka KS 66601-0176, and to the attention of Human
Resource Director. You should also make and keep one copy of the form, and it
should be kept with your other important documents.

If no Primary Beneficiary is alive when the payment becomes due, the benefits
will be paid in equal shares to those of the Contingent Beneficiaries who are
alive when the payment becomes due.

If you fail to designate a beneficiary, or if no designated beneficiaries are
alive when the payment becomes due, or if insufficient information is available
to reasonably determine your intent, the death benefits under the Plan will be
paid to your estate.

THIS BENEFICIARY DESIGNATION DOES NOT ALTER OR MODIFY THE PROVISIONS OF THE
PLAN. IN THE EVENT THAT THIS BENEFICIARY DESIGNATION FORM INADVERTENTLY
CONFLICTS WITH THE PROVISIONS OF THE PLAN, THE PROVISIONS OF THE PLAN SHALL
CONTROL.