exv10w9



 






Exhibit 10.9




Amended March15, 2007




Federal Home Loan Bank of Topeka

Performance Pay Plan



1. Purpose. The purpose of the Performance Pay Plan (Plan) of the Federal Home Loan Bank of Topeka
(Bank) is to attract, motivate and reward employees who are important to the Bank’s success and to
provide an incentive to employees to exert their best efforts on behalf of the Bank. Under the
Plan, incentive compensation shall be earned by the participants defined below for the performance
of services to the Bank during a calendar year (Plan Year) in the amounts provided for.



2. Eligibility and Performance Payments. All regular full-time and part-time employees employed by
the Bank at any time during the Plan Year are eligible to participate in the Plan and are
designated as participants in the Plan (“regular full-time employees” are employees who have a
scheduled work week of at least 40 hours; “regular part-time employees” are employees who regularly
work an average of at least 1,000 hours per year). Participants must be employed in good standing
as of the end of the relevant measurement period. Awards under the Plan shall be based on the
attainment of performance objectives, as set and determined below. Participants are eligible to
receive incentive compensation based upon the percentages of the participant’s regular wage
compensation (exclusive of any awards under this Plan or any other similar incentive plan adopted
by the Bank) actually earned for the Plan Year (“Annual Salary”) or for a calendar quarter
(“Quarterly Salary”) indicated for the level to which the participant has been assigned. The board
of directors shall designate the applicable payout percentage (“level”) at the outstanding level of
achievement for the CEO and his direct reports (“Executives”) and the CEO shall designate the
levels to which all other participants are assigned except that the Audit Committee to the board of
directors will assign the level of the Internal Audit Director and other Internal Audit department
employees. The applicable payout at the outstanding level of achievement for each level is as
follows: Level 1 — 15 percent; Level 2 — 25 percent; Level 3 — 35 percent, Level 4 — 45 percent
and Level 5 — 55 percent.



3. Administration. Except where noted otherwise above or below, the Compensation Committee to the
board shall administer the Plan and shall have full power and authority to construe, interpret,
implement and administer the Plan. Awards to the CEO and the Executives under the Plan shall be
based on the attainment of performance objectives as determined by the Compensation Committee to
the board. Awards to the Internal Audit Director and other Internal Audit employees under the plan
shall be based on the attainment of performance objectives as determined by the Audit Committee to
the board. For all other awards under the Plan, the Compensation Committee delegates to the CEO the
determination whether the performance objective or objectives under which the performance payment
is to be paid has or have been achieved. Except with respect to performance payments payable to
the CEO, Executives, the Internal Audit Director or


 









 






other Internal Audit department employees, the CEO in his or her own discretion has the authority
to reduce or eliminate the amount of a bonus otherwise payable. Similarly, the Compensation
Committee to the board in its discretion has the authority to reduce or eliminate the amount of a
bonus otherwise payable to the CEO or Executives and the Audit Committee to the board in its
discretion has the authority to reduce or eliminate the amount of a bonus otherwise payable to the
Internal Audit Director or other Internal Audit department employees.



4. Performance Objectives. The Compensation Committee to the board shall establish annually the
objectives, percentage weightings and percentage holdback applicable to the CEO and Executives,
subject to final board approval. The Audit Committee to the board of directors shall establish
annually the objectives, percentage weightings and percentage holdback of the Internal Audit
Director and other Internal Audit department employees. The CEO shall establish annually the
objectives, percentage weightings in Level 1, 2, or 3 and percentage holdback applicable to all
other employees. The percentage holdback is a discretionary percentage amount which may be held
back each quarter for eventual payment at year-end, provided average profitability for the plan
year at least meets the annual threshold requirement for the profitability objective. The CEO shall
provide the board of directors an annual report of all objectives set for employees and shall
regularly update the board of directors on the Bank’s performance relative to those objectives.



5. Award of Performance Payments. Each participant will be entitled to incentive compensation based
on the achievement of the objectives assigned to that participant. A participant will not be
entitled to any payout for achievement of threshold or less with respect to an objective.
Achievement of outstanding will entitle a participant to the outstanding percentage payout for the
participant’s payout level multiplied times the participant’s Annual Salary or Quarterly Salary
(depending on the frequency of the payout). Except as may be further defined with respect to a
specific objective, achievement between the threshold and outstanding levels of achievement, or
above the outstanding level of achievement, will entitle the participant to received a pro rata
payout for that objective based on the relative achievement level compared to the threshold and
outstanding performance criteria. Incentive compensation shall be paid to each participant as soon
as practicable after the close of the quarter or year, as applicable to the objective, but in any
event not later than March 15 of the year immediately succeeding the Plan Year of the award. The
Bank shall deduct and withhold from any payment to be made pursuant to the Plan the amount of taxes
required by law to be deducted and withheld from the payment of wages.



6. Termination of Participants. Participants who are not employed by the Bank at the end of a
calendar quarter (with respect to quarterly objectives) or at the end of the Plan Year (with
respect to annual objectives) will be ineligible to receive incentive compensation for that quarter
or year. However, if a participant, other than the CEO, Executives, the Internal Audit Director or
the Internal Audit department employees, terminates from the employ of the Bank because of death,
disability, the elimination of the participant’s job or retirement at normal retirement age as
defined by the Social Security Administration, awards may be prorated through the date of
termination at the discretion of the CEO. If the CEO, Executives, the Internal Audit Director or
other Internal Audit department employees terminate from the employ of the Bank for one of


 









 






the above-described reasons, awards may be prorated through the date of termination at the
discretion of the Compensation Committee to the board, in the case of the CEO or Executives, or the
Audit Committee to the board, in the case of the Internal Audit Director or the Internal Audit
department employees.



7. Forfeiture. Notwithstanding anything in the Plan to the contrary, a participant, other than the
CEO, Executives, the Internal Audit Director or the Internal Audit department employees, shall
forfeit any amount which may become due under this Plan upon termination of the participant’s
employment with the Bank for cause, or for any other act or conduct which, in the judgment of the
CEO, is prejudicial to or in conflict with the best interests of the Bank. Similarly, the CEO or
executive shall forfeit any amount which may become due under this Plan upon termination of the
CEO’s or executive’s employment with the Bank for cause, or for any other act or conduct which, in
the judgment of the Compensation Committee to the board, is prejudicial to or in conflict with the
best interests of the Bank. In addition, the Internal Audit Director or the Internal Audit
department employees shall forfeit any amount which may become due under this Plan upon termination
of the Director’s or other employee’s employment with the Bank for cause, or for any other act or
conduct which, in the judgment of the Audit Committee to the board, is prejudicial to or in
conflict with the best interests of the Bank.



8. Termination or Amendment. The board of directors may terminate or amend the Plan at any time. A
participant has no vested right to receive any award or benefit under the Plan until it has
actually been paid.



9. No Right to Employment; Alienability. Neither the adoption of the Plan nor its operation shall
be construed to constitute or be evidence of an agreement or understanding expressed or implied on
the part of the Bank to employ or retain any participant or in any way affect the right and power
of the Bank to dismiss any officer, employee or agent, or otherwise terminate the employment or
take other action including, but not limited to, removing the employee from participation in the
Plan, at any time, for any reason, with or without cause. No participant has the right to alienate,
assign, encumber, hypothecate or pledge his or her interest in any award under the Plan,
voluntarily or involuntarily, and any attempt to do so is void.