--------------------------------------------------------------------------------

SEVERANCE POLICY

--------------------------------------------------------------------------------

OBJECTIVE

The Bank provides for payment of severance benefits to Eligible Employees upon
Involuntary Termination of employment.

POLICY

Notification

Employees are provided a minimum of two weeks’ notice in the event of the
termination of their employment. The Bank may, at its discretion, provide salary
continuation in lieu of notice.

Separation and Release Agreement

The Bank will require a signed separation and release agreement between the Bank
and the employee relative to any salary, benefits or services offered through
this policy. The agreement includes a description of the severance benefits and
provides a general release by the employee for any claims against the Bank
relative to the separation action as well as any other claims relating to
employment with the Bank.

Payments and Benefits Provided

Salary Continuation

The salary continuation benefit reflects the employee's current salary, position
and length of Bank service. The benefit is calculated as follows:

•
Executive Committee and participants in the Bank’s Key Employee Incentive
Compensation Plan1

•
4 weeks base salary per year of service

•
26-week minimum

•
52-week maximum

___________________________________________________________________________________
1 In addition to current participants in the Key Employee Incentive Compensation
Plan this also includes any employee who has ever been subject to a deferral of
compensation under such Plan or the Chief Internal Auditor Incentive
Compensation Plan.

--------------------------------------------------------------------------------

•
Employees (Analyst 4 and above*)

•
3 weeks base salary per year of service

•
4-week minimum

•
36-week maximum

•
Employees (Analyst 3 and below)

•
2 weeks of base salary per year of service

•
3-week minimum

•
26-week maximum

Under certain circumstances the Bank may extend salary continuation beyond the
described benefit levels.

*Employees in a grade 35 under the previous compensation program who are now
classified in a job family below the Analyst 4 level will qualify for the
Analyst 4 and above level of severance policy benefit.

Years of Service

Years of service are calculated based upon the employee's service years as of
the most recent service anniversary. Employees with more than one year of
service receive no credit for partial years. Employees with less than one full
year of service receive the minimum severance benefit. Any prior service within
Bank system is included as service in the calculation of severance benefits.

Payment

Salary continuation payments shall be subject to all required withholdings. The
payment schedule for salary continuation payments shall be set forth in the
separation and release agreement between the Bank and the employee.

Benefit Continuation

During the salary continuation period, the Bank will make a monthly payment to
the employee as taxable compensation in the amount equivalent to the amount the
Bank contributes to its active employees’ medical coverage. The employee may use
this amount to apply toward the payment of continued medical coverage from the
Bank. The employee is responsible for making payment to the Bank for continued
medical coverage. In such case, the medical plan terms, requirements and level
of coverage (single, two-party, family) remain the same as the employee benefit
election in effect at the time of the termination of employment.

All terminating employees and their dependents who are participants in the
Bank's dental and vision benefits have an option to continue coverage for a
specified number of months following termination of their coverage. The employee
is responsible for the full cost of such continuing coverage plus a 2%
administrative fee. A letter outlining the option of benefit continuation is
sent to employees following termination of their active employee coverage.

Any vested retirement and/or thrift plan benefits are handled in the same manner
as any employee who separates their employment from the Bank. All terminated
employees, regardless of position, receive payment for earned, unused vacation.
With respect to incentive compensation, the terms of any applicable incentive
compensation plan(s) shall govern any incentive compensation and any incentive
compensation payment will be governed by and made in accordance with the terms
of such plan(s) not this policy.

--------------------------------------------------------------------------------

Tuition assistance approved and paid by the Bank prior to the termination date
need not be reimbursed upon termination.

Outplacement Services

As part of this policy, the Bank may provide the following outplacement
services:

•
Executive Committee and participants in the Bank’s Key Employee Incentive
Compensation Plan - formal individualized 12-month executive outplacement
program

•
All Other Employees - appropriate career services or workshops as offered
through the approved outplacement vendor

Outplacement services are required to begin within 30 days of termination. The
Bank
will not pay cash in lieu of outplacement services.
APPROVAL DATE:
December 18, 2014
POLICY OWNER:
Director, Human Resources
APPROVING MANAGEMENT COMMITTEE: 
Executive Committee
APPROVAL FREQUENCY:  
Annual
APPLICABILITY:
Bank-wide
APPROVING BOARD COMMITTEE:
Human Resources Committee

POLICY ADMINISTRATION

Approval of Exceptions. Any exceptions to this Policy must be approved by the
President and in the case of any exception involving an executive officer by the
Human Resources Committee of the Board.

Policy Interpretations. Overall responsibility for this Policy is assigned to
the Director, Human Resources including making Policy interpretations. Bank
management is responsible for identifying and providing written documentation
regarding any reduction in staff. Benefits provided to executive management
under this Policy must be reviewed and approved by the Human Resources Committee
of the Board of Directors.

Right to Amend or Terminate. The Bank reserves the right to amend, modify, or
terminate this Policy at any time without notice.

COMPLIANCE MONITORING

As set forth in the Policy Governance Standards.

APPLICABLE LAWS AND REGULATIONS

12 USC §4501 and 4502
12 C.F.R. Parts 1230 and 1231
26 U.S.C. §409A
26 C.F.R. Part 1.409A
26 U.C.C. Part 105(h)
26 C.F.R. Part 1.105

RELATED POLICIES; PROCEDURES

Human Resources Policy
Policy Governance Standards

--------------------------------------------------------------------------------

DEFINED TERMS

Executive Committee refers to the Bank’s executive officers.

Eligible Employees means full-time and part-time employees (>20 hours per week)
with a minimum of 6 months of service whose employment with the Bank is
discontinued due to, but not limited to, any of the following events:
elimination of employee's position, general reduction in staff, substantial job
modification resulting in employee's inability to qualify or perform the revised
job, changing business needs, reorganization of Bank staff, or reassignment of
staff requiring relocation of employee's primary residence. Eligible Employee
does not include any employee who is terminated for cause and such employees are
not eligible for benefits under this Policy.

Involuntary Termination is intended to be interpreted consistent with the
applicable 409A regulatory definition of “separation from service.”

POLICY HISTORY LOG
Date
Change
Notes
December 18, 2014
Revised benefit continuation portion to comply with self-funding requirements
Annual approval by Board and revision effective 1-1-2015