Board Approved 05-18-201210-19-2012

Federal Home Loan Bank of Indianapolis
Directors' Compensation and Travel Expense Reimbursement Policy
Effective January 1, 20132 (Amended May 18, 2012)
    

Annual Director Fees

The annual director fees are generally split in half in the form of an annual
retainer fee with the other half being paid based on attendance. The retainer
and attendance fees will be paid quarterly, on or about the end of each quarter.
The director will be paid a per-day fee for each day a director spends at an
in-person meeting of the Board or its committees. The annual fee schedule for
20132 represents reasonable compensation based on market comparable data for
directorships, including other Federal Home Loan Banks. The fee schedule is
summarized as follows:

 
Total Estimated Annual Fee*
Quarterly
Retainer
Per-Day Attendance Fee
Additional Annual Committee Chair Fees
Chair
$100,000
$12,500
$4,167
$10,000 Finance Committee
Vice Chair
$85,000
$10,625
$3,542
$10,000 Audit Committee
Director
$75,000
$9,375
$3,125
$10,000 Other Committees

*Third or fourth quarter payments may be reduced because payments are subject to
the annual cap. The cap is determined based on director status and committee
chair assignments throughout the year.    

The annual director fees are established based on an evaluation of McLagan
market research data and a fee comparison among the FHLBanks. It is also based
on the Bank's ability to recruit and retain highly qualified directors with
particular emphasis on retaining directors during conditions of economic stress
for the Bank and the industry.
    

Per-Day Fees Defined

Per-day attendance fee will be paid for each day, or partial day, that a
director attends an in-person meeting of the Board or its committees. Per-day
fee payments will also include pre-scheduled director orientations and FHLBank
System meetings, including the Council of FHLBanks. Bank webinar meetings and
member marketing meetings are not included in the per-day fee. Cancellations by
the Bank due to inclement weather or other circumstances beyond a director's
control (except illness) will be reimbursed as a regular per-day meeting fee.

Except as provided below, attendance by conference call for Board or committee
meetings will not be eligible for reimbursement.

Timing of Fee Payments

Fees shall be paid quarterly on or about the last day of each March, June,
September and December and shall be paid to the Director upon timely election by
the Director, or to the Director's employer pursuant to the terms of the
employer's authorized charitable contribution plan. Annual Committee Chair

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Board Approved 05-18-201210-19-2012

fees shall be paid pro-rata on a quarterly basis, and to be eligible for a
Committee Chair fee the Director must be designated by the Board as Chair as of
the last day of the quarter. Directors retiring or resigning from the Board
shall be entitled to a pro-rata payment (measured monthly) of their quarterly
retainer.

Reduction in Compensation

A director's quarterly retainer, payable in the future, will be reduced by a
majority vote of disinterested directors, if a majority of the disinterested
directors determines such director's Board performance, ethical conduct, or
Board meeting attendance is significantly deficient. The facts supporting the
determination and the amount of the reduction will be documented in the Bank's
Board minutes.

 
Attendance Hardship Provision

If a director is unable to attend enough of the meetings of the Board or its
committees in order to receive the full annual fee payment, the director may
petition the Board for consideration of payment based on hardship. The Human
Resources committee will review the petition and will make recommendation to the
Board on whether to make a hardship payment. Hardship will not include other
ordinary business commitments. The Board and Human Resources committee will
consider such petitions on a case-by-case basis.

As part of the hardship provision, the Board may reimburse attendance for Board
or committee meeting conference calls (limited to $250 per call per day) and
other special meetings attended on behalf of the Bank throughout the year,
subject to the annual director fee limit.

Travel Expense Reimbursement

Travel expense reimbursement will be provided for Board meetings, committee
meetings, director orientation, director educational seminars, or member events
scheduled concurrently with board meetings, Federal Housing Finance Agency
System meetings, Council of Federal Home Loan Bank meetings, Community
Investment Conference meetings, or Bank marketing meetings. Travel expenses
include reasonable transportation, food, hotel expenses, and reasonable
long-distance telephone and internet charges.

Expense Procedures

1.
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 concerning gift and entertainment restrictions.

2.
To qualify for reimbursement, all eligible expenses incurred must be submitted
for payment to the Bank within 3 months of the date that the expenses were
incurred. This requirement may be waived, at the discretion of the Chief
Accounting Officer, in the event of an error or omission or other reasonable
circumstances.

Spouse/Guest Travel (Two Events per Year)

Expenses of a director's spouse or guest may be reimbursed in accordance with
the Travel Expense Policy subject to a limit of two travel events per year.
Spousal entertainment expenses incidental to the hotel property or event are
permitted where prearranged by the Bank, subject to two travel events per

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Board Approved 05-18-201210-19-2012

year. Income tax reporting will be made by the Bank as required by law, on
spousal/guest travel if the spouse or guest attends the event without a bona
fide Bank business purpose.

Air Travel and First Class

1.
The Bank will pay the direct common carrier expense (as defined in paragraph 4
below) for a director between the director's residence and the site of a Bank
function and the return. The actual cost of private air travel will not be
reimbursed, but the equivalent direct common carrier expense (as defined in
paragraph 4 below) may be substituted.

2.
First-class air travel will be reimbursed at the regular coach rate, unless the
upgrade was necessary due to scheduling or flight availability.

3.
If a director's non-Bank activity requires a route to attend a Bank function
which originates or terminates in a location other than the place of residence,
the Bank will reimburse the director an amount equal to the direct common
carrier expense from the director's location to the location of the Bank
function and then to the director's next intended destination (without regard to
stops named as temporary layovers), subject to a limit of an amount not to
exceed two times the direct common carrier expense to the Board meeting location
and from the director's residence and return to his residence.

4.
The “direct common carrier expense” shall be the regular market-rate coach or
first-class fare if applicable, and should be documented by the director
submitting an expense report. The direct common carrier expense will also
include any reasonable fees associated with air travel, including baggage fees
and airport fees. These items should be documented by the director and included
in the expense report. Travel scheduling affecting the direct common carrier
expense shall be reasonable, given the timing of the meetings.

Issues of Interpretation

Unless expressly provided herein or in 12 CFR Part 1261.20-24 (as amended), the
Bank's current Travel Policy as contained in the Employee Handbook shall control
with respect to the travel expense reimbursement. The Federal Housing Finance
Agency's former Director Travel Policy (FHFB Resolution 93-12) is superseded,
but may be used as non-binding precedent should issues of interpretation arise.
The General Counsel, and Chief Accounting Officer are authorized, in their
respective reasonable discretion, to interpret the provisions of the policy and
to address situations not anticipated by the policy, consistent with the
requirements set forth in the statute or the regulations promulgated by the
Federal Housing Finance Agency.

 
Human Resources Committee Annual Review and Reporting

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 1261.22, the Board shall also
submit the annually adopted Directors' Compensation and Travel Expense
Reimbursement Policy and supporting decisional documentation to the Federal
Housing Finance Agency Director within ten days of Board approval, no later than
December 31 of each calendar year and at least 30 days prior to disbursing the
first payment to any directors.

In addition, per 1261.21, no later than the tenth 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

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Board Approved 05-18-201210-19-2012

designated committee meetings each director attended in-person or through
electronic means for the immediately preceding calendar year.

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