FEDERAL HOME LOAN BANK OF INDIANAPOLIS
DIRECTORS’ COMPENSATION AND EXPENSE REIMBURSEMENT POLICY
Effective January 1, 2018

This policy is designed to set forth expectations for attendance by members of
the Board of Directors (“Board”) of the Federal Home Loan Bank of Indianapolis
(“Bank”) at meetings of the Board and its Committees, and to ensure that each
director is reasonably compensated for the time and effort exerted in the
performance of her or his duties as a member of the Board.

I.
Annual Director Fees

(A).
Each director shall have the opportunity to earn an annual fee (“Annual Fee”),
which will not exceed the maximum amount detailed in the table and note below
(“Annual Fee Limit”).

 
Annual Fee Limit
Board Chair
$125,000
Board Vice Chair
$115,000
All other Directors
$100,000

(B).
Each director who serves as a Committee Chair shall be entitled to a fee in
addition to the Annual Fee (“Committee Chair Fee”).  The director who serves as
the Audit Committee Chair shall be entitled to a Committee Chair Fee in the
maximum annual amount of $15,000.  All other directors who serve as a Committee
Chair shall be entitled to a Committee Chair Fee in the maximum annual amount of
$10,000.  To be eligible for a Committee Chair Fee the director must be
designated by the Board as Chair of a Committee as of the last day of the
quarter, except for the fourth quarter; the Chair designation must be as of
December 15 of that quarter.

(C).
Each director’s Annual Fee and Committee Chair Fee, if applicable, shall be
paid, on a quarterly basis, in an amount equal to approximately one-fourth of
such director’s Annual Fee Limit and Committee Chair Fee, if applicable
(“Quarterly Payment”).

(D).
Quarterly Payments shall be paid in arrears during the last week, generally, of
each March, June, September, and December. The Bank will not advance the payment
of fees to any director.

(E).
The Annual Fees and Committee Chair Fees are established based on an evaluation
of McLagan market research data and a fee comparison among the Federal Home Loan
Banks (“FHLBanks”). The fee structure assists the Bank in recruiting and
retaining highly qualified directors willing to meet their fiduciary duties
while aggressively advocating for the Bank. The fees are also structured to
retain qualified directors during times of economic stress for the Bank or the
industry.

II.
Attendance and Performance

(A).
Regular preparation and attendance at Board and Committee meetings, as well as
related conference calls are all expected elements of the directors’ fiduciary
duties to the Bank. Failure to attend at least seventy-five percent (75%) of all
meetings of the Board and the Committees on which the director serves (whether
such meeting were conducted in person or via conference call) may result in
elimination of the final Quarterly Payment as further explained below.

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Federal Home Loan Bank of Indianapolis
Directors’ Compensation and Expense Reimbursement Policy

(B).
On a quarterly basis, prior to the disbursements of the Quarterly Payments, the
Board Chair shall review director attendance records, as prepared by the
Corporate Secretary. The results of that review will be reported to the Board.
The attendance records shall be used, in addition to considering director
performance, when assisting the Board in determining whether a director’s
Quarterly Payment should be reduced, eliminated, or restored. In the event two
or more Committees on which a director serves are scheduled to meet
concurrently, only one Committee meeting will be required for the purpose of
calculating the director’s attendance. As an ex-officio member of all
Committees, the Board Chair is encouraged, but not required, to attend all
Committee meetings.

(C).
Compensation paid to directors is intended to reflect the time required of them
in the performance of official Bank and Board business. The time required will
be measured principally by attendance and participation at Board and Committee
meetings, as described above, and secondarily by performance of other duties.
These other duties include time spent: (a) preparing for Board and Committee
meetings; (b) chairing meetings as appropriate; (c) reviewing materials sent to
directors on a periodic basis; (d) attending other related events such as
management conferences, FHLBank System meetings, director training, and new
director orientation; and (e) fulfilling the responsibilities of directors.

(D).
Any reports of significantly deficient Board performance or unethical conduct
must be made to the Board Chair, who will then discuss the issue with the
disinterested directors of the full Board in making the final determination of
whether a director’s Quarterly Payment should be reduced. If the Board Chair is
the subject of the report, the report should be made to the Board Vice Chair. If
the Board Vice Chair is also the subject of the report, then the report should
be made to the most tenured disinterested director of the Board, who will then
discuss the issue with the remaining disinterested directors of the full Board.

(E).
Before the fourth Quarterly Payment is made, the Human Resources Committee shall
review the cumulative attendance and performance of each director during the
year. If it is determined that a director has attended less than seventy-five
percent (75%) of the meetings of the Board and the meetings of the Committees to
which the director is assigned (including any meetings held via conference
call), combined, during such year, the director will not receive the fourth
Quarterly Payment. The Board may make any other appropriate adjustments in any
Quarterly Payment to any director who consistently demonstrates a lack of
participation in or preparation for such meetings, to ensure that no director is
paid fees that do not reflect that director’s performance of her/his duties.
Notwithstanding the foregoing, the Human Resources Committee may also recommend
the Board approve restoring and paying the fourth Quarterly Payment, in part or
in full, if it is determined to be appropriate based on the director’s
participation and performance of the director’s other duties as detailed above.

(F).
The facts supporting any determination to reduce, eliminate, or restore any
Quarterly Payments will be documented in the Bank’s Board minutes.

(G).
In the event a director serves on the Board for only a portion of a calendar
year, the final Quarterly Payment for such director shall be subject to the same
cumulative attendance and performance review through the director’s final date
of service.

(H).
Participation by telephone will not count as attendance for in-person meetings
and is discouraged unless necessary to attain a quorum. Exceptions to this
paragraph may be granted by the Board Chair, or, in the case of considering
attendance by the Chair, an exception may be granted by the Board Vice Chair.

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Federal Home Loan Bank of Indianapolis
Directors’ Compensation and Expense Reimbursement Policy

(I).
The Bank will not pay a separate fee for a director’s attendance at meetings
other than those described above.

III.
Expense Reimbursement

(A).
Travel expense reimbursement will be provided for Board meetings, Committee
meetings, meetings with regulators, new director orientations, mandatory and
optional training sessions of the Board, educational seminars (pre-approved by
the Bank), member events, FHLBank System meetings, Council of FHLBanks’ meetings
(for Council members), Community Investment conference meetings, or Bank
marketing meetings. Travel expenses include reasonable and necessary
transportation, meals, lodging, entertainment, and incremental charges for
long-distance telephone, internet, and cellular phone.

(B).
No gift or entertainment expenses initiated by a director shall be reimbursed
without being prearranged by the Bank. Each director should review the Bank’s
Code of Conduct regarding gift and entertainment restrictions.

(C).
To qualify for reimbursement, all eligible expenses incurred must be
sufficiently documented according to Internal Revenue Service (“IRS”) guidelines
and submitted to the Bank within sixty (60) days of the date of the
corresponding meeting’s conclusion. The timing requirement may be waived, at the
discretion of the Chief Accounting Officer, in the event of an error or omission
or other reasonable circumstances.

IV.
Reimbursement for Spouse/Guest Travel

(A).
While spouses/guests are welcome to attend Board events, the Bank will not
reimburse the directors for travel expenses incurred by spouses/guests for such
attendance, unless pre-approved by the Chief Accounting Officer as having a bona
fide business purpose. However, spouses/guests may participate, at no charge, in
group meals or entertainment activities as part of a Board meeting or event.
Incidental expenses including, but not limited to, individual meals, personal
hotel or spa services, personal entertainment expenses and similar items, will
not be reimbursed. All IRS requirements shall be met by the Bank regarding
reporting of spouse/guest expenses and reimbursements.

V.
Air Travel and First Class

(A).
The Bank will reimburse the regular coach class airfare expense for a roundtrip
flight between the director’s home airport and the site of a Bank function. The
expense will also include any reasonable fees associated with air travel,
including check-in, seat, and baggage fees. Travel scheduling affecting the air
travel expense shall be reasonable, given the timing of the meetings. The actual
cost of private air travel will not be reimbursed, but the regular coach class
airfare expense may be substituted.

(B).
First-class air travel will be reimbursed at the regular coach rate, unless the
upgrade to first-class was necessary due to scheduling or flight availability.

(C).
If a director’s non-Bank activity requires a route to attend a Bank event that
originates or terminates in a location other than the director’s home location
(airport or residence), the Bank will reimburse the director for the lesser of
(i) the actual cost incurred (airfare or mileage) or (ii) the cost to travel
from the director’s home location (airport or residence) to the Bank event.

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Federal Home Loan Bank of Indianapolis
Directors’ Compensation and Expense Reimbursement Policy

VI.
Mileage Reimbursement

(A).
The Bank will reimburse a director for use of a personal automobile on Bank
business based on the number of business miles driven. The mileage reimbursement
rate will adhere to IRS guidelines. Reimbursable mileage will be based on the
most direct route to and from the destination.

VII.
Issues of Interpretation

(A).
Unless expressly provided herein or in 12 CFR §1261.20-24 (as amended), the
Chief Accounting Officer is authorized to interpret the provisions of and to
address situations not anticipated by this Policy, consistent with the
requirements set forth in the statute or the regulations promulgated by the
Federal Housing Finance Agency or other relevant IRS guidelines, along with the
Bank’s Business Travel & Eligible/Ineligible Expenses Policy.

VIII.
Human Resources Committee Annual Review and Reporting

(A).
The Human Resources Committee shall annually review this Policy and shall submit
its recommendation to the Board for approval no later than the last regularly
scheduled meeting of the Board for the year. Per 12 CFR §1261.22, the Board
shall also submit the annually adopted Directors’ Compensation and Expense
Reimbursement Policy and supporting decisional documentation to the Federal
Housing Finance Agency Director within ten (10) days of Board approval, no later
than December 31 of each calendar year, and at least thirty (30) days prior to
disbursing the first Quarterly Payment to any directors.

(B).
In addition, per 12 CFR §1261.21, no later than the tenth (10th) business day of
each calendar year, the Bank shall report to the Finance Agency the amount of
compensation and expenses paid to each director, along with the total number of
meetings held by the Board and its designated Committees, and the number of
Board and designated Committee meetings each director attended in-person or
through electronic means for the immediately preceding calendar year.

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