Document:

ltip_doc.htm

     

    

    

    

    

    

    

    

    

    

    

    

    FEDERAL
HOME LOAN BANK OF TOPEKA

     

    Long-Term
Incentive Plan

     

     

    Effective
January 1, 2009

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FEDERAL
HOME LOAN BANK OF TOPEKA

    Long-Term
Incentive Plan

     

    TABLE
OF CONTENTS

     

    

    

    1.0   Plan
Objectives

    2.0   Definitions

    3.0   Eligibility

    4.0   Base
Award Opportunity

    5.0   Performance
Measures

    6.0   Final
Award

    7.0   Distribution
of Final Awards

    8.0   Plan
Communication

    9.0   Administrative
Control

    10.0 Miscellaneous
Conditions

    Appendices

    
      
        
        

         

      

      
         

        
          

        

      

      
         

      

    

    FEDERAL
HOME LOAN BANK OF TOPEKA

    Long-Term
Incentive Plan

     

    PLAN
DOCUMENT

     

    1.0 Plan
Objectives

     

    
      	
              1.1  

            	
              The
      purpose of the Federal Home Loan Bank of Topeka Long-Term Incentive Plan
      is to:

            

    

     

    
      	
              1.1.1  

            	
              Promote
      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;

            

    

     

    
      	
              1.1.2  

            	
              Promote
      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;

            

    

     

    
      	
              1.1.3  

            	
              Increase
      FHLBank Topeka’s capacity to attract, retain and motivate key employees by
      enhancing its ability to offer competitive total compensation to key
      employees who are also vital to FHLBank Topeka’s future
      success.

            

    

     

    Payments
awarded under this plan, when combined with base salary, Short Term Incentive
Plan (STIP) awards, and other benefits are designed to provide competitive total
compensation to key employees for achieving FHLBank Topeka’s desired strategic
objectives.  Total compensation is targeted to be at the 50th
percentile relative to similar key employee positions at other
FHLBanks.  If total targeted compensation is above the 50th
percentile, then the Compensation Committee may recommend a corresponding
decrease in the STIP targeted award during that corresponding
period.

     

    
      	
              1.2  

            	
              The
      Plan is a cash-based long-term incentive plan that establishes individual
      Base Award Opportunities related to achievement of FHLBank Topeka
      performance hurdles relative to the other FHLBanks and individual
      performance over a three-year Performance
  Period.

            

    

     

    
      	
              1.3  

            	
              The
      Base Award Opportunity, Performance Measures, Final Value of Incentive,
      Participants, and other terms are set forth in
      Appendix A.

            

    

     

    2.0 Definitions

     

    
      	
              2.1  

            	
              When
      used in this Long-Term Incentive Plan, the following words and phrases
      shall have the following meaning:

            

    

     

    
      	
              2.1.1  

            	
              Base Award Opportunity
      means the award that may be earned during a Performance Period for
      achieving target performance levels under each Performance
      Measure;

            

    

     

    
      	
              2.1.2  

            	
              Board means FHLBank
      Topeka’s Board of Directors;

            

    

     

    
      	
              2.1.3  

            	
              Compensation Committee
      means the Compensation Committee of the
Board;

            

    

     

    
      	
              2.1.4  

            	
              Extraordinary
      Occurrences means those events that, in the opinion and discretion
      of the Compensation Committee, are outside the significant influence of
      the Participants 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;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              2.1.5  

            	
              FHFA means Federal
      Housing Finance Agency;

            

    

     

    
      	
              2.1.6  

            	
              FHLBank Topeka means
      Federal Home Loan Bank of Topeka;

            

    

     

    
      	
              2.1.7  

            	
              Final Award means the
      amount ultimately paid to a Participant under the Plan for a Performance
      Period;

            

    

     

    
      	
              2.1.8  

            	
              Participant means a
      person who is eligible to take part in the Plan for a designated
      Performance Period;

            

    

     

    
      	
              2.1.9  

            	
              Performance Measure
      means each performance factor that is taken into consideration under the
      Plan in determining the value of the Final
  Award;

            

    

     

    
      	
              2.1.10  

            	
              Performance Period
      means a three-year period over which FHLBank Topeka’s performance is
      measured, with the current period to be as set forth at
      Appendix A;

            

    

     

    
      	
              2.1.11  

            	
              Plan means the Federal
      Home Loan Bank of Topeka Long-Term Incentive
  Plan;

            

    

     

    
      	
              2.1.12  

            	
              Plan Award means an
      amount that is provisionally determined at the end of the Performance
      Period subject to adjustment as provided in
    Section 6.4;

            

    

     

    
      	
              2.1.13  

            	
              Strategic Planning
      Group means the group of management employees assigned to the
      Strategic Planning Group of FHLBank
Topeka.

            

    

     

    3.0 Eligibility

     

    
      	
              3.1  

            	
              Individual
      employees eligible for participation for a Performance Period will be
      recommended by the President/CEO to the Compensation Committee for
      approval.  In the case of the President/CEO, the Compensation
      Committee has sole authority to approve the President/CEO’s eligibility
      during that applicable Performance
Period.

            

    

     

    
      	
              3.2  

            	
              Eligibility
      shall be limited to a select group of management or other
      highly-compensated employees (i.e., key employees), but normally will be
      further limited to the President/CEO and senior officers who are members
      of the Strategic Planning Group.  Other key employees may be
      recommended as Participants on a limited basis to address extraordinary
      performance and/or other criteria and considerations as determined by the
      Compensation Committee.

            

    

     

    
      	
              3.3  

            	
              There
      will be four levels of
participation:

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              Level
      I:

            	
              President
      & CEO

            
	 
      	 
      
	
              Level
      II:

            	
              Chief
      Operating Officer; Chief Financial Officer

            
	 
      	 
      
	
              Level
      III:

            	
              Other
      Senior Officers who are members of the Strategic Planning
      Group

            
	 
      	 
      
	
              Level
      IV:

            	
              Other
      Key Employees

            
	 
      	 
      

    

    
      	
              3.4  

            	
              The
      list of eligible Participants is set forth at Appendix A.

            

    

     

    
      	
              3.5  

            	
              An
      employee who is otherwise eligible under this Plan as set forth above
      remains otherwise subject to and shall cease to remain a Participant
      within the Plan for violation of either or both of the following
      requirements:

            

    

     

    
      	
              a)  

            	
              Non-disclosure.  In
      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 or any subsidiary, parent or other affiliate 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
      furtherance of FHLBank Topeka business and 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
      continued employment and for the one-year period following termination of
      such relationship, directly or indirectly, either by himself 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 the FHLBank
      Topeka’s present or past customers that otherwise exist at the time of
      termination, or such customers of any affiliated or related
      companies;

            

    

     

    
      	
              b.  

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

            

    

     

    
      	
              c)  

            	
              Remedies.  By
      virtue of his signing of the Participation Agreement set forth at
      Appendix B, Participant acknowledges the terms and conditions of that
      Agreement, as well as 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 subparagraph a or b
      above.  Accordingly, in the event of a threatened, attempted or
      actual breach by Participant of any provision of the Plan, or subparagraph
      a or b, in addition to all other remedies to which FHLBank Topeka is
      entitled at law, in equity or otherwise, FHLBank Topeka may be entitled to
      a temporary restraining order and a permanent injunction or a decree of
      specific performance of any provision of subparagraph a or
      b.  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.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.0 Base
Award Opportunity

     

    
      	
              4.1  

            	
              No
      later than the beginning of each Performance Period, FHLBank Topeka will
      present a Base Award Opportunity to Participants.  The Base
      Award Opportunity is equal to a percentage of each Participant’s annual
      base salary at the beginning of the Performance Period as described in
      Appendix A.  Certain
      key employees have a greater and more direct impact than others on the
      annual success of FHLBank Topeka; therefore, these differences are
      recognized by varying Base Award Opportunities for each Participant by
      level of participation.

            

    

     

    
      	
              4.2  

            	
              No
      later than the beginning of the Performance Period, the President/CEO may
      recommend to the Compensation Committee that a discretionary award
      opportunity (the President’s Award) be made to a Level II or Level III
      Participant and/or a Level IV Participant for extraordinary performance
      and/or other criteria and considerations as determined by the Compensation
      Committee.

            

    

     

    5.0 Performance
Measures

     

    
      	
              5.1  

            	
              Three
      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.

            
	 
      	 
      
	
              Maximum

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

            
	 
      	 
      

    

    
      	
              5.2  

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

            

    

     

    
      	
              5.3  

            	
              Performance
      Measures for a Performance Period will be established by the Compensation
      Committee.

            

    

     

    6.0 Final
Award Determination

     

    
      	
              6.1  

            	
              Except
      as provided in Section 6.3, Plan Awards are based on the achievement
      of Bankwide performance goals and Participants achieving satisfactory
      levels of individual performance; provided, however, if FHLBank Topeka
      fails to achieve performance at or above the Performance Measure(s) set
      forth in Section 5, Plan Awards may be reduced or eliminated for that
      Performance Period.

            

    

     

    
      	
              6.2  

            	
              A
      Participant’s Plan Award for a Performance Period equals the Base Award
      Opportunity plus any discretionary awards that may be granted under the
      President’s Award as set forth on
  Appendix A.

            

    

     

    
      	
              6.3  

            	
              Final
      Awards for a Performance Period are determined by the Compensation
      Committee promptly after the Performance Period based upon the
      Compensation Committee’s analysis of all applicable standards set forth
      herein and/or 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 Final Awards and may adjust the Performance Measures to ensure
      that the purpose of the Plan is
served.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              6.4  

            	
              The
      above notwithstanding, a Final Award shall not be payable for any
      Performance Period under the following
  circumstances:

            

    

     

    
      	
              a)  

            	
              FHLBank
      Topeka receives a cumulative “4” rating in its FHFA examination, or other
      equivalent “operating in an unsafe or unsound condition, or with unsafe or
      unsound practices” rating from applicable regulatory authorities during
      any year within the Performance
Period.

            

    

     

    
      	
              b)  

            	
              FHLBank
      Topeka has negative net income, as defined and in accordance with GAAP
      accounting standards, for the cumulative Performance
    Period.

            

    

     

    
      	
              c)  

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

            

    

     

    
      	
              6.5  

            	
              The
      Final Award shall be reduced by 1/3 for each year during the Performance
      Period in which FHLBank Topeka has negative net income, as defined and in
      accordance with GAAP accounting
standards.

            

    

     

    7.0 Distribution
of Final Awards

     

    
      	
              7.1  

            	
              All
      Final Awards will be paid out in cash and will be subject to appropriate
      payroll tax withholdings.

            

    

     

    
      	
              7.2  

            	
              No
      Final 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 FHLBank
      Topeka.

            

    

     

    
      	
              7.3  

            	
              Final
      Awards will be made as soon as practical following the end of the
      Performance Period, but no later than 2 1⁄2 months following the end of the
      applicable Performance Period.

            

    

     

    8.0 Plan
Communication

     

    
      	
              8.1  

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

            

    

     

    
      	
              Fourth
      quarter of the year preceding the Performance Period

            	
              Communicate
      Performance Measures and identify Plan Participants for the next
      Performance Period.

            
	 
      	 
      
	
              First
      quarter of the Performance Period

            	
              Communicate
      Performance Measures and specific hurdles for the Performance
      Period.

            
	 
      	 
      
	
              Annually

            	
              Interim
      assessments of progress toward achieving Performance
    Measures.

            
	 
      	 
      
	
              End
      of Performance Period

            	
              Final
      assessment of FHLBank Topeka and individual
performance.

            
	 
      	 
      

    

    9.0 Administrative
Control

     

    
      	
              9.1  

            	
              Oversight
      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
      President/CEO, Human Resources Department, or other employees as
      applicable.

            

    

     

    
      	
              9.2  

            	
              The
      Compensation Committee, in consultation with the President/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.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10.0 Miscellaneous
Conditions

     

    
      	
              10.1  

            	
              Except
      as provided in Section 10.3, Participants must be employed by FHLBank
      Topeka on the date of payment for the Performance Period, and otherwise
      not in violation of Section 3.5, to receive a Final
      Award.

            

    

     

    
      	
              10.2  

            	
              Employees
      of FHLBank Topeka who are hired, transferred, or promoted into an eligible
      position during the first six months of the Performance Period may be
      recommended for participation in the Plan in accordance with
      Section 3.1, and receive a prorated Base Award Opportunity calculated
      as a percentage of the employee’s new base salary at the time of the
      promotion.

            

    

     

    
      	
              10.3  

            	
              Notwithstanding
      the provisions of Section 10.1, if a Participant incurs a Termination
      of Service (i) due to death, (ii) due to Disability,
      (iii) due to Retirement, (iv) by the Participant for Good Reason
      or (v) by the Bank without Cause during the Performance Period any
      portion of his or her Plan Award eligible to become earned in the
      Performance Periods in which the termination occurs will, to the extent
      the Performance Measures for such Performance Periods are satisfied, be
      treated as earned and payable to the Participant or his or her beneficiary
      (as designated under a completed Beneficiary Designation) in a pro rata
      manner equivalent to the period of time during the Performance Periods
      that the Participant participated in the
Plan.

            

    

     

    
      	
              a)  

            	
              For
      purposes of the Plan and this section, 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 12 out of 15 consecutive months and, within 30 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)  

            	
              Retirement means the
      planned and voluntary termination of the Participant’s employment on or
      after the Participant has attained age 62 with five years of
      employment.

            

    

     

    
      	
              c)  

            	
              For
      purposes of the Plan, “Good Reason” will mean a Termination of Service by
      the Participant under any of the following
  circumstances:

            

    

     

    
      	
              a.  

            	
              During
      the period:  (A) beginning with the earliest to occur of
      the following three dates, as applicable:  (I) 12 months
      prior to the execution of a definitive agreement regarding a
      Reorganization of FHLBank Topeka or (II) if a Reorganization has been
      mandated by federal statute, rule, regulation or directive, 12 months
      prior to the effective date of such Reorganization or (III) 12 months
      prior to the adoption of a plan or proposal for the liquidation or
      dissolution of FHLBank Topeka, and (B) ending on the effective date
      of such Reorganization.

            

    

     

    i. a
material change in the Participant’s status, position, job title or principal
duties and responsibilities as a key employee of FHLBank Topeka which does not
represent a promotion from the Participant’s status and position as in effect as
of the date hereof (hereinafter, Position), or

     

    ii. the
assignment to the Participant of any duties or responsibilities (or removal of
any duties or responsibilities), which assignment or removal is materially
inconsistent with such Position, or

     

    iii. any
removal of the Participant from such Position (including, without limitation,
all demotions and harassing assignments), except in connection with the
termination of the Participant’s employment for Cause or Disability, or as a
result of the Participant’s death;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              b.  

            	
              any
      material breach by FHLBank Topeka of any provisions of this Plan or any
      other agreement with the Participant;
or

            

    

     

    
      	
              c.  

            	
              any
      failure by FHLBank Topeka or its successors and assigns to obtain the
      assumption of this Plan by any successor or assign of FHLBank
      Topeka.

            

    

     

    
      	
              d)  

            	
              For
      purposes of the Plan, “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 demand for
      performance by the Board; (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); or (3) removal of the Participant for cause by the FHFA
      pursuant to 12 U.S.C.  1422b(a)(2), or by any successor agency
      to the FHFA pursuant to a similar
statute.

            

    

     

    
      	
              10.4  

            	
              The
      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.

            

    

     

    
      	
              10.5  

            	
              The
      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.

            

    

     

    
      	
              10.6  

            	
              No
      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 Plan 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 Plan Award under
      this Plan.

            

    

     

    
      	
              10.7  

            	
              This
      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 Plan Award under this
program.

            

    

     

    
      	
              10.8  

            	
              Except
      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 Award 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 (the “Code”).  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.

            

    

     

    
      	
              10.9  

            	
              The
      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.

            

    

     

    
      	
              10.10  

            	
              This
      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.

            

    

     

    
      	
              10.11  

            	
              The
      individual members of the Board and Compensation Committee will, in
      accordance with FHLBank Topeka’s By-laws 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.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              10.12  

            	
              If
      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 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.

            

    

     

    
      	
              10.13  

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

            

    

     

    
      	
              10.14  

            	
              Any
      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).

            

    

     

    
      	
              10.15  

            	
              In
      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.

            

    

     

    
      	
              10.16  

            	
              A
      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 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 Committee.

            

    

     

    
      	
              10.17  

            	
              The
      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.

            

    

     

    
      
        
        

         

      

      
         

        
          

        

      

      
         

      

    

    FEDERAL
HOME LOAN BANK OF TOPEKA

    Long-Term
Incentive Plan

     

    Appendix A

     

    2009-2011
Performance Period

     

    Performance
Period

     

    The
Performance Period described in this Appendix shall be January 1, 2009
through December 31, 2011.

     

    Eligibility

     

    The
following individuals are eligible to participate in the 2009 – 2011 Performance
Period

     

    Base
Award Opportunity Percentage

     

    Level
I:                      40% 

    Andrew J. Jetter,
President &
CEO                                                                                                                                

     

    Level
II:                      30%                                                                                     

    David
S. Fisher, SEVP & Chief Operating Officer

    Mark E.
Yardley, EVP & Chief Financial Officer

     

    Level
III:                      20%

    Patrick
C. Doran, SVP & General Counsel

    Sonia
Betsworth, SVP& Member Products

    Brad
Hodges, SVP & Director of Corporate Services

    Dan
Hess, FVP & Director of Sales

    Wil
Osborn, FVP & Director of Banking Strategies

     

    Level
IV:

    To be
nominated by President/CEO subject to Compensation Committee

     

    
      
        
        

         

      

      
         

        
          

        

      

      
         

      

    

    Appendix A
(cont.)

     

    Performance
Measures

     

    In
calculating Base Award amounts, performance shall be measured by evaluating the
following:

     

    
      	 
      	
              Minimum

            	
              Threshold

            	
              Target

            	
              Maximum

            
	
              Total
      Return(1)

            	
              >9/12
      vs FHLBanks

            	
              9/12
      vs FHLBanks

            	
              6/12
      vs FHLBanks

            	
              2/12
      or 1/12 vs FHLBanks

            
	
              Applicable
      Salary

            	 
      	 
      	 
      	 
      
	
              Performance
      Measure Percentage

            	
              0%

            	
              50%

            	
              100%

            	
              150%

            
	
              Weighting

            	
              0.75

            	
              0.75

            	
              0.75

            	
              0.75

            
	
              Dollar
      Value (Salary x Performance Measure Percentage x Weight)

            	
              $

            	
              $

            	
              $

            	
              $

            
	 
      	 
      	 
      	 
      	 
      
	
              Expense
      Growth(2)

            	
              >9/12
      vs FHLBanks

            	
              9/12
      vs FHLBanks

            	
              6/12
      vs FHLBanks

            	
              2/12
      or 1/12

              vs
      FHLBanks

            
	
              Applicable
      Salary

            	 
      	 
      	 
      	 
      
	
              Performance
      Measure Percentage

            	
              0%

            	
              50%

            	
              100%

            	
              150%

            
	
              Weighting

            	
              0.25

            	
              0.25

            	
              0.25

            	
              0.25

            
	
              Dollar
      Value (Salary x Performance Measure Percentage x Weight)

            	
              $

            	
              $

            	
              $

            	
              $

            
	 
      	 
      	 
      	 
      	 
      
	
              Total Value (Dollar
      Value for Total Return + Dollar Value for Expense Growth)

            	
              $

            	
              $

            	
              $

            	
              $

            
	 
      	 
      	 
      	 
      	 
      
	
              Base
      Award Opportunity Percentage

                          Level
      I   (40%)

                          Level
      II  (30%)

                          Level
      III (20%)

            	
              %

            	
              %

            	
              %

            	
              %

            
	
              Total Base Award (Total
      Value x Base Award Opportunity Percentage)

            	
              $

            	
              $

            	
              $

            	
              $

            

    

    Footnotes:

    
      	
               
      

            	
              1)

            	
              Total
      Return.  Total Return equals the Total Dividends, plus
      the Change in Retained Earnings, divided by the Average Capital. For
      FHLBank Topeka: Total Dividends is defined as the sum of the actual
      dividends paid on required Class A Common Stock and all Class B Common
      Stock during the three-year Performance Period; Change in Retained
      Earnings is defined as the change in retained earnings from 12/31/08 to
      12/31/11; and Average Capital is defined as the average daily ending
      balance of required Class A Common Stock and all Class B Common
      Stock.  For the other FHLBanks, unless determined otherwise by
      the Compensation Committee: Total Dividends is defined as all dividends
      paid on all capital stock during the three-year period; Change in Retained
      Earnings is defined as the change in retained earnings from 12/31/08 to
      12/31/11; and Average Capital is defined as the average of all capital
      stock outstanding for the 12 quarter ending dates starting with 03/31/09
      and ending 12/31/11.  For performance comparison purposes,
      FHLBank Topeka will be ranked against the other FHLBanks, with the highest
      total return being the best performance, and ranking 1st
      out of the 12 FHLBanks.

            

    

    

    
      	
               
      

            	
              2)

            	
              Expense
      Growth.  Expense growth is the dollar amount of the
      change in operating expenses (including salaries and benefits, costs of
      quarters and other operating expenses) at FHLBank Topeka from calendar
      year 2008 to calendar year 2011.  For performance comparison
      purposes, FHLBank Topeka will be ranked against the other FHLBanks, with
      the lowest increase (or greatest decrease) being the best performance, and
      a 1st out of the 12 FHLBanks being the highest
  ranking.

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Final
Award Calculation:

     

    The
value of the Final Award at the end of the Performance Period shall be
determined as follows:

     

    
      	
              1.  

            	
              After
      the Performance Period ends, determine actual FHLBank Topeka performance
      under the Performance Measure criteria (i.e., Minimum, Threshold, Target
      or Maximum) set forth above.

            

    

     

    
      	
              2.  

            	
              Multiply
      the performance measure percentage achieved in step 1 for each performance
      measure by its respective
weighting.

            

    

     

    
      	
              3.  

            	
              Multiply
      the product from step 2 by the Participant’s Base Salary to equal initial
      Dollar Value of award for each performance
  measure.

            

    

     

    
      	
              4.  

            	
              Add
      the respective Dollar Value for each performance measure to determine
      Total Value amount.

            

    

     

    
      	
              5.  

            	
              Determine
      the applicable Base Award Opportunity Percentage, based on applicable
      eligibility Level (i.e., Level I, II or III, but not Level
      IV).

            

    

     

    
      	
              6.  

            	
              Multiple
      Total Value by Base Award Opportunity Percentage to determine Base Award
      amount.

            

    

     

    
      	
              7.  

            	
              Add
      President’s Award, if applicable, to determine Final Award
      amount.

            

    

     

    
      	
              8.  

            	
              Ensure
      that all conditions for receipt of a Final Award described in the Plan
      have been met in accordance with
  Section 6.4.

            

    

     

    
      
        
                                                                     

        

         

      

      
         

        
          

        

      

      
         

      

    

    Appendix B

     

    Participation
Agreement

     

    
      	
              Participant:                                                                       

            	
              Social
      Security
      No.:                                                             

            
	 
      	 
      
	
              Address:                                                                       

            	
              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 Long-Term Incentive 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 this 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
this 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; (4) no benefits will be paid under this Plan if
I am terminated for “Cause” as set forth in the Plan; (5) no benefits will
be paid under this 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 this Plan, if applicable; (6) the
benefits of this Plan may be subject to FICA taxes before such amounts are
actually paid to me; and (7) all amounts received under this 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:                                                                      

            
	
              “FHLBank
      Topeka”

            

    

    
      
        
          1712899.10
                                                                  

        

         

      

      
         

        
          

        

      

      
         

      

    

    LONG-TERM
INCENTIVE PLAN

     

    FEDERAL
HOME LOAN BANK OF TOPEKA

     

    BENEFICIARY
DESIGNATION

     

    CAREFULLY
READ THE INSTRUCTIONS FOUND AT THE END

     

    OF THIS
FORM BEFORE PROCEEDING.

     

    
      	
              Participant:                                                                       

            	
              Social
      Security
      No.:                                                             

            
	 
      	 
      
	
              Address:                                                                       

            	
              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 Long-Term Incentive 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.

     

    
      
        
        

         

      

      
         

        
          

        

      

      
         

      

    

    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:                                                                                

            
	 
      	 
      
	 
      	 
      

    

    
      
        
        

         

      

      
         

        
          

        

      

      
         

      

    

    INSTRUCTIONS
FOR COMPLETION OF

     

    BENEFICIARY
DESIGNATION FORM

     

    As a
participant in the Federal Home Loan Bank of Topeka Long-Term Incentive 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,
One Security Benefit Pl., Suite 100, P.O.  Box 176, Topeka KS
66601-0176, and to the attention of Mr. Kurt Burger.  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.bep_doc.htm

    Federal
Home Loan Bank of Topeka

     

    Benefit
Equalization Plan

     

    (Restated
effective December 31, 2008)

     

    This
Plan amends the Bank’s Benefit Equalization Plan, which was previously amended
and restated in its entirety effective March 23, 2006.  The Bank’s
prior Benefit Equalization Plan was effective January 1, 1987 (“1987
Plan”).  Any employee that was a member of the 1987 Plan and that is
or becomes a Member under this Plan shall not be entitled to receive any
benefits under the 1987 Plan, but shall be entitled to receive benefits solely
under this Plan.  Any employee that was a member of the 1987 Plan and
is not, nor becomes, a Member of this Plan shall only be entitled to receive
benefits under the 1987 Plan and shall only be entitled to benefits accrued
through December 31, 1994 (i.e., based solely on years of employment and
compensation paid prior to December 31, 1994).  Except as herein
provided, the 1987 Plan was terminated and replaced with this Plan effective
March 23, 2006.  This is an unfunded Plan that is primarily intended
to provide deferred compensation for a select group of management or highly
compensated employees, and is intended to comply with all applicable law,
including IRC Section 409A.

     

    Article
1. Definitions

     

    When
used in the Plan, the following terms shall have the following
meanings:

     

    1.01 “Account”
means the account established and maintained hereunder to record the
contributions deemed to be made by the Member and the Bank, as well as the
increase in value attributable to the earnings thereon, all as described
hereafter.

     

    1.02 “Actuary”
means the independent consulting actuary retained by the Bank to assist the
Committee in its administration of the Plan.

     

    1.03 “Adoption
Date” means the date of the adoption of the Plan by the Board of
Directors.

     

    1.04 “Bank”
means the Federal Home Loan Bank of Topeka.

     

    1.05 “Base
Salary” means the annual cash compensation relating to services performed during
any calendar year, excluding distributions from nonqualified deferred
compensation plans, bonuses, commissions, overtime, fringe benefits, relocation
expenses, incentive payments, non-monetary awards, and automobile and other
allowances paid to a Member for employment services rendered (whether or not
such allowances are included in the Member’s gross income). Base Salary shall be
calculated before reduction for compensation voluntarily deferred or contributed
by the Member pursuant to all qualified or nonqualified plans of the Bank and
shall be calculated to include amounts not otherwise included in the Member’s
gross income under IRC Sections 125, 132, 402(e)(3), 402(h), or 403(b) pursuant
to plans or arrangements established by the Bank; provided, however, that all
such amounts will be included in compensation only to the extent that had there
been no such plan, the amount would have been payable in cash to the Member.
Notwithstanding anything in this Plan to the contrary, “Base Salary” shall not
include any amount paid pursuant to a disability plan or pursuant to a
disability insurance policy.

     

    1.06 “Beneficiary”
means the beneficiary or beneficiaries designated in accordance with Article 6
of the Plan to receive the benefit, if any, payable upon the death of a Member
of the Plan.

     

    1.07 “Board
of Directors” means the Board of Directors of the Bank.

     

    1.08 “Change
of Control” has the meaning set forth in IRC Section 409A.

     

    1.09 “Committee”
means the Administrative Committee appointed by the Board of Directors to
administer the Plan.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.10 “Deferral
Agreement” means the agreement under which a Member elects to defer compensation
under the Plan in accordance with the provisions of Section 4.04.

     

    1.11 “Disability”
or “Disabled” means the Member meets one of the following
requirements:

     

    (a) The
Member is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of twelve
(12) months.

     

    (b) The
Member is, by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, receiving income
replacement for a period of not less than three (3) months under an accident and
health plan covering employees of the Bank.

     

    Member
will be deemed Disabled under this Section 1.11 if determined to be disabled by
the Social Security Administration.  Furthermore, Member will be
deemed Disabled under this Section 1.11 if determined to be disabled in
accordance with a disability insurance program, provided that the definition
under such program complies with Subsection 1.11 (a) or (b), or IRC Section
409A, as applicable.

     

    1.12 “Distribution
Event” means the date the Member retires on or after the Member attains
Retirement Age, the Member’s death, Disability, other termination of employment
with the Bank, or Change of Control of the Bank.

     

    1.13 “Effective
Date” means January 1, 1995.

     

    1.14 “Retirement
Age” means age 62.

     

    1.15 “Retirement
Fund” means the Comprehensive Retirement Program of the Financial Institutions
Retirement Fund, a qualified and tax exempt defined benefit pension plan and
trust under Sections 401(a) and 501(a) of the IRC, as adopted by the
Bank.

     

    1.16 “Incentive
Compensation” means bonuses and other incentive compensation payments payable to
a Member under any incentive compensation plans adopted by the Bank from time to
time.

     

    1.17 “IRC”
means the Internal Revenue Code of 1986, and any applicable Treasury Regulations
promulgated thereunder, as amended from time to time, or any successor
thereto.

     

    1.18 “IRC
Limitations” means the cap on compensation taken into account by a plan under
IRC Section 401(a)(17), the limitations on 401(k) contributions necessary to
meet the average deferral percentage (“ADP”) test under IRC Section
5401(k)(3)(A)(ii), the limitations on employee and matching contributions
necessary to meet the average contribution percentage (“ACP”) test under IRC
Section 401(m), the dollar limitations on elective deferrals under IRC Section
402(g) and the overall limitations on contributions and benefits imposed on
qualified plans by IRC Section 415, as such provisions may be amended from time
to time, and any similar successor provisions of federal tax law.

     

    1.19 “Member”
means any person included in the membership of the Plan as provided in Article
2.

     

    1.20 “Plan”
means the Federal Home Loan Bank of Topeka Benefit Equalization Plan, as set
forth herein and amended from time to time.

     

    1.21 “Thrift
Plan” means the Financial Institutions Thrift Plan, a qualified and tax exempt
defined contribution plan and trust under Sections 401(a) and 501(a) of the IRC,
as adopted by the Bank.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Article
2. Membership

     

    2.01 Members of the
Plan.  Each of the following employees of the Bank is hereby
made a member of the Plan:  Sonia R. Betsworth, Patrick C. Doran,
David S. Fisher, Bradley P. Hodges, Andrew J. Jetter, Frank M. Tiernan, and Mark
E. Yardley.

     

    2.02 Addition or Termination of
Members.  The Board of Directors may add additional employees
as Members to the Plan and may, subject to Article 8, terminate the
participation in the Plan of any employee.

     

    2.03 Events Upon Which Benefits
Payable.  A benefit shall be payable under the Plan to or on
account of a Member only upon the occurrence of a Member’s Distribution Event,
except as provided in Section 4.10 or Article 8.  If the Bank
authorizes a Member to take a paid or an unpaid leave of absence from
employment, and such leave of absence does not constitute a termination of
employment in accordance with this Plan and IRC Section 409A, the Member shall
continue to be considered eligible for the benefits provided in Articles 3 and
4, in accordance with the provisions of those Articles.  In the event
that Member’s leave of absence from the Bank constitutes a termination of
employment in accordance with this Plan and IRC Section 409A, the Member’s
Account balance shall be distributed to the Member in accordance with this
Plan.

     

    2.04 Top Hat Plan
Exemption.  This Plan is intended to be a “top hat plan,” with
a primary purpose to provide deferred compensation for a select group of
management or highly compensated employees.  No employee may be a
Member of the Plan unless the employee is an officer of the Bank having an
annual compensation greater than 50 percent of the amount in effect under IRC
Section 415(b)(1)(A) for any such plan year or is a highly compensated employee
as defined in IRC Section 414(q).

     

    Article
3. Amount
and Payment of Pension Benefits

     

    3.01 Annual Pension Benefit
Payable.  For Plan years prior to 2009, the amount, if any, of
the annual pension benefit payable to or on account of a Member pursuant to the
Plan shall equal the excess of (a) over (b), as determined by the Committee,
where:

     

    (a) is
the annual pension benefit (as calculated by the Retirement Fund on the basis of
the form of payment elected by the Member) that would otherwise be payable to or
on account of the Member by the Retirement Fund if its provisions were
administered

     

    (i) without
regard to the IRC Limitations,

     

    (ii) with
the inclusion in the definition of “Salary” for the year deferred of any amount
deferred by a Member under Section 4.01 and 4.02 of this Plan, and

     

    (b) is
the annual pension benefit (as calculated by the Retirement Fund on the basis of
the form of payment elected by the Member) that is payable to or on account of
the Member by the Retirement Fund.

     

    For
purposes of this Section 3.01 “annual pension benefit” includes any “Active
Service Death Benefit,” “Retirement Adjustment Payment,” “Annual Increment” and
“Single Purchase Fixed Percentage Adjustment” which the Bank elected to provide
its employees under the Retirement Fund.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    For
Plan years on or after January 1, 2009, the amount, if any, of the annual
pension benefit payable to or on account of a Member pursuant to the Plan shall
equal:

     

    (a) the
annual pension benefit (as calculated by the Retirement Fund on the basis of the
form of payment elected by the Member) that would otherwise be payable to or on
account of the Member by the Retirement Fund if its provisions were
administered:

     

    (i) without
regard to the IRC Limitations; and

     

    (ii) with
the inclusion in the definition of Base Salary for the year deferred of any
amount deferred by a Member under Section 4.01 and 4.02 of this Plan,
and

     

    (b) offset
by the annual pension benefit (as calculated by the Retirement Fund on the basis
of the form of payment elected by the Member) that is payable to or on account
of the Member by the Retirement Fund, up to the applicable limitation of IRC
Section 402(g).

     

    3.02 Regular Form of
Payment.  Unless the Member elects an optional form of payment
under the Plan pursuant to Section 3.03 below, the annual pension benefit, if
any, payable to or on account of a Member under Section 3.01 above, shall be
converted by the actuary and shall be payable to or on account of the Member in
the “Regular Form” of payment, utilizing for that purpose the same actuarial
factors and assumptions then used by the Retirement Fund to determine actuarial
equivalence.  For purposes of the Plan, the “Regular Form” of payment
means a lump sum paid 90 days after the Member’s Distribution
Event.

     

    3.03 Optional Form of
Payment.

     

    (a) A
Member may elect in writing to have the Regular Form of benefit, if any, payable
to or on account of a Member under Section 3.02 above, converted by the actuary
to any optional form of payment permitted under the Retirement
Fund.  The actuary shall utilize for the purpose of that conversion
the same actuarial factors and assumptions then used by the Retirement Fund to
determine actuarial equivalence.  An election to receive an optional
form of benefit must be made at least twelve (12) months before the originally
scheduled Distribution Event, and shall not commence sooner than a date that is
at least five (5) years after the originally scheduled Distribution
Event.

     

    (b) If
a Member who had elected an optional form of payment under this Section 3.03
dies after the date the Member’s benefit payments under the Plan have commenced,
the only death benefit, if any, payable under the Plan in respect of said Member
shall be the amount, if any, payable under the optional form of payment which
the Member had elected under the Plan.  If a Member who had elected an
optional form of payment under this Section 3.03 dies before the date the
Member’s benefit payments under the Plan commence, the Member’s election of an
optional form of benefit shall be inoperative.

     

    (c) An
election of an optional form of payment under this Section 3.03 may be made only
on the form prescribed by the Committee and filed by the Member with the
Committee at least twelve (12) months before the originally scheduled
Distribution Event, and shall not commence sooner than a date that is at least
five (5) years after the originally scheduled Distribution Event.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.04 Death
Benefit.  Upon the death of a Member who had not elected an
optional form of payment under Section 3.03 above, a death benefit shall be paid
to the Beneficiary in a lump sum equal to the excess, if any, of (a) over (b),
where:

     

    (a) is
the sum of the benefit payments that would otherwise be payable to or on account
of the Member under this Plan; and and

     

    (b) is
the sum of the benefit payments, if any, which the Member had received under the
Plan.

     

    3.05 Death Prior to Commencement
of Payments.  If a Member to whom an annual pension benefit is
payable under the Plan dies before commencement of the payment of the Member’s
benefit, the death benefit payable under Section 3.04 shall be payable to the
Beneficiary as if the payment of the Member’s benefit had commenced on the first
day of the month in which the Member’s death occurred.

     

    3.06 Automatic Distribution of
Account Balances Less Than IRC Section 402(g)
Limitation.  Notwithstanding any other provision of this Plan,
in the event that a Member has experienced a Distribution Event described in
Section 2.03 and has not directed otherwise as part of a prior election, and if
the Member’s Account balance is less than the allowable limit under IRC Section
402(g) for that year, the Member’s entire benefit shall automatically be paid in
the form of a lump sum payment, which shall commence 90 days after the
Distribution Event. Notwithstanding the preceding sentence, if it is
administratively impracticable to make the payment by the required payment date,
and such impracticability is unforeseeable, then such payment shall be made as
soon as administratively practicable.  The amount of the lump sum
payment shall be the equivalent actuarial value of the benefit otherwise due the
Member using the same actuarial factors and assumptions then used by the
Retirement Fund to determine actuarial equivalence.

     

    3.07 Payment of
Benefits.  All benefits under the Plan shall commence 90 days
after the Member’s Distribution Event.  Notwithstanding the preceding
sentence, if it is administratively impracticable to make the payment by the
required payment date, and such impracticability is unforeseeable, then such
payment shall be made as soon as administratively practicable.

     

    Article
4. Amount
and Payment of Thrift Benefits

     

    4.01 Thrift
Contributions.  During each calendar year after 1994 and before
January 1, 2009, if the Member’s 401(k) account contributions under the Thrift
Plan for such year have reached the maximum permitted by the IRC Limitations as
determined by the Committee, and if the Member has elected to reduce the
Member’s compensation for such calendar year in accordance with the provisions
of Section 4.04, then such Member shall be credited with an elective
contribution addition under this Plan equal to the reduction in the Member’s
compensation made in accordance with such election; provided, however, that the
sum of all such elective contribution additions for a Member with respect to any
single calendar year shall not be greater than the excess of (a) over (b),
where

     

    (a) is
an amount equal to the maximum 401(k) account contribution permitted under the
Thrift Plan for the calendar year as determined under the Thrift Plan if its
provisions were administered without regard to the IRC Limitations and if
compensation as defined in the Thrift Plan included any deferrals made under
this Section 4.01 or Section 4.02; and

     

    (b) is
an amount equal to his/her regular account and 401(k) account contributions,
including contributions made from Incentive Compensation otherwise payable
during such year, actually made under the Thrift Plan for the calendar
year.

     

    If
the reduction in a Member’s compensation under such election is determined to
exceed the maximum allowable elective contribution additions for such year, the
excess and any related earnings credited under Section 4.06 shall be paid to
such Member within the first two and one half months of the succeeding calendar
year.

     

    For
each calendar year on or after January 1, 2009, each Member may make Deferral
Elections to defer a percentage of the Member’s annual Base Salary and annual
Incentive Contributions, regardless of IRC Limitations, in accordance with
Sections 4.04 and 4.05 below and subject to any maximum annual limit of deferral
that may be determined by the Board prior to the Members’ deferral election
period.  Each annual Base Salary deferral shall be offset by the
Member’s actual deferrals to the Thrift Plan for that calendar year, up to the
dollar limitation of IRC Section 402(g), including any applicable “catch-up
contributions”.  Matching contributions may be made in accordance with
Section 4.05 below.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.02 Thrift Make Up
Contributions.  During each calendar year after 1994 and before
2009, if a portion of a Member’s regular account contribution or 401(k) account
contribution to the Thrift Plan for the preceding year is returned to a Member
after the end of such preceding year on account of the IRC Limitations, and if
the Member has elected in accordance with the provisions of Section 4.04 to
reduce the Member’s compensation for the current year by an amount up to the sum
of such Thrift Plan contributions and related earnings returned to the Member’s
for the preceding year, then such Member shall be credited with a make up
contribution addition under this Plan equal to the reduction in the Member’s
compensation made in accordance with such election.

     

    For
each calendar year on or after January 1, 2009, deferrals in excess of the IRC
Section 402(g) compensation limitation shall not be offset under this Plan, and
shall remain credited as deferrals under this Plan, up to the maximum annual
Base Salary and Incentive Compensation limitation established by the
Board.  Any amounts credited in excess of the maximum annual Base
Salary and Incentive Compensation limitation shall be paid to the Member within
2 1⁄2 months after the later of:  the tax year in which the
compensation was earned, or the Bank’s fiscal year.  Such excess
amounts shall not be credited as a deferral under this Plan.

     

    4.03 Incentive
Compensation.  For Plan years prior to January 1, 2008, no
Member may defer any Incentive Compensation under the
Plan.  Notwithstanding this prohibition, Incentive Compensation paid
or payable during a calendar year, and contributions made to the Thrift Plan
therefrom, will be included in the calculations made under Section 4.01 for
purposes of determining the maximum percentage of income which can be deferred
and for purposes of determining actual contributions to a Member’s regular and
401(k) account.

     

    For
Plan years beginning on or after January 1, 2009, a Member may defer a portion
of the Member’s Incentive Compensation, up to a maximum amount set by the Board,
to the Plan; provided; the Member must make a deferral election before December
31 of the calendar year preceding the calendar year in which the Incentive
Compensation is earned.  The Member shall elect the amount to be
deferred, which may be expressed as a dollar amount or as a percentage of the
Member’s total Incentive Compensation, as well as the time and form of payment
of the deferred amount.

     

    4.04 Deferral
Election.  A Member’s elections under Sections 4.01 and 4.02
shall be made in accordance with the following provisions:

     

    (a) The
Committee shall provide each Member with a Deferral Agreement at least 30 days
prior to the commencement of the calendar year in which compensation is to be
earned and paid.  Each Member shall execute and deliver the Deferral
Agreement to the Committee no later than the last business day preceding the
calendar year in which compensation is to be earned and paid.

     

    Notwithstanding
the above, a Member who becomes eligible to participate during the calendar year
may execute a Deferral Agreement with respect to the Member’s elections under
Section 4.01 and 4.02 within 30 days of the date the Member becomes eligible to
participate.  An individual who is a Member on the Adoption Date may
file a Deferral Agreement with the Committee within 30 days of the Adoption Date
and in such manner as the Committee may prescribe.  With respect to
Sections 4.01 and 4.02, the Deferral Agreement shall only apply to compensation
earned by the Member in the payroll periods beginning on or after the later of
the date such Agreement is submitted to the Committee or the Adoption
Date.

     

    (b) The
Deferral Agreement shall provide for separate elections with respect to the
elective contribution additions under Section 4.01 and make-up contribution
additions under Section 4.02.

     

    (c) A
Member’s elections on the Member’s Deferral Agreement of the rates which
authorizes deferrals under Sections 4.01 and 4.02 shall be irrevocable for the
calendar year for which the deferral is elected.  Notwithstanding the
foregoing, a Member may, in the event of an unforeseeable emergency which
results in severe financial hardship as defined by IRC Section 409A, request a
suspension of the Member’s salary deferrals under the Plan.  The
request shall be made in a time and manner determined by the
Committee.  The suspension shall be effective with respect to the
portion of the calendar year remaining after the Committee’s determination that
the Member has incurred a severe financial hardship.  The Committee
shall apply standards, to the extent applicable, identical to those described in
Section 4.09 in making its determination.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.05 Matching
Contributions.  Effective May 1, 2004, matching contributions
may be made to the Plan in accordance with the following
provisions:

     

    (a) Except
as provided in Section 4.05(b),(c), and (d) below, for each elective
contribution addition credited to a Member under Section 4.01, such Member shall
also be credited with a matching contribution addition under this Plan equal to
the matching contribution, if any, that would be credited under the Thrift Plan
with respect to such amount if contributed to the Thrift Plan, determined as if
the provisions of the Thrift Plan were administered without regard to the IRC
Limitations and determined after taking into account the Member’s actual
contributions to and actual matching contributions under the Thrift
Plan.  For Plan Years before January 1, 2009, each make-up
contribution addition credited to the Member under Section 4.02, such Member
shall also be credited with a matching contribution addition under this Plan
equal to the matching contribution, if any, that was lost under the Thrift Plan
with respect to the contributions returned for the preceding calendar
year.  For Plan years on or after 2009, matching contributions for
make-up contribution addition credits do not apply unless otherwise set forth by
the Board; matching contributions will apply to all amounts not offset in
accordance with the terms of this Plan.

     

    (b) Each
calendar year, Patrick C. Doran’s Account under the Plan shall be credited with
a matching contribution addition under this Plan equal to (i) minus (ii) but not
below zero,

     

    (i) is
a matching contribution amount equal to 100% of Patrick C. Doran’s
contributions to the Thrift Plan up to 5% of his Salary as defined under the
Thrift Plan; and

     

    (ii) is
the amount of matching contributions actually made to Patrick C. Doran’s
Thrift Plan account for such calendar year.

     

    Further,
Patrick C. Doran shall be entitled to receive matching contributions in
accordance with Section 4.05(a) of the Plan, except that the matching
contribution addition under the Plan shall be based upon a matching formula
equal to 100% of his contributions up to 5% of his compensation, unless Patrick
C. Doran is entitled to receive a greater matching contribution under the Thrift
Plan. In such event, the matching contribution addition, if any, shall be
credited to Patrick C. Doran’s Plan Account based upon the Thrift Plan matching
formula.

     

    (c) Each
calendar year, David S. Fisher’s Account under the Plan shall be credited with a
matching contribution addition under this Plan equal to (i) minus (ii) but not
below zero,

     

    (i) is
a matching contribution amount equal to 100% of David S. Fisher’s contributions
to the Thrift Plan up to 6% of his Salary as defined under the Thrift Plan;
and

     

    (ii) is
the amount of matching contributions actually made to David S. Fisher’s Thrift
Plan account for such calendar year.

     

    Further,
David S. Fisher shall be entitled to receive matching contributions in
accordance with Section 4.05(a) of the Plan, except that the matching
contribution addition under the Plan shall be based upon a matching formula
equal to 100% of his contributions up to 6% of his compensation, unless David S.
Fisher is entitled to receive a greater matching contribution under the Thrift
Plan.  In such event, the matching contribution addition, if any,
shall be credited to David S. Fisher’s Plan Account based upon the Thrift Plan
matching formula.

     

    (d) No
matching contribution will be paid on deferrals of Incentive Compensation unless otherwise set forth and agreed to by the Board,
or as otherwise allowable under this Plan.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.06 Maintenance of
Accounts.  The Committee shall maintain an Account on the books
and records of the Bank for each Member who is a Member by reason of amounts
credited under Section 4.01, 4.02 and 4.05.  The elective contribution
additions, make-up contribution additions and matching contribution additions of
a Member under Sections 4.01, 4.02 and 4.05 shall be credited to the Member’s
Account as soon as practical after the date that the compensation reduced under
Section 4.01 and/or 4.02 would otherwise have been paid to such
Member.

     

    A
Member shall at all times be 100% vested in his/her Account.  In
addition, the Account of a Member shall be credited (or debited), from time to
time as designated by the Committee, with earnings (or losses) based upon the
investment in the investment vehicle(s) selected by the
Committee.  The Committee has designated the measure of investment
performance under this Section to be the greater of the Bank’s internal return
on equity rate or the Federal Funds Rate existing on the date of
valuation.

     

    4.07 Payment of
Account.  The balance credited to a Member’s Account shall
generally be paid  in a lump sum, which shall commence 90 days after
the Member’s Distribution Event.  Notwithstanding the preceding
sentence, if it is administratively impracticable to make the payment by the
required payment date, and such impracticability is unforeseeable, then such
payment shall be made as soon as administratively practicable.

     

    4.08 Optional
Form of Payment.

     

    (a) Notwithstanding
Section 4.07 above, a Member may elect in writing to have the Member’s Account paid under any optional form of payment
permitted under the Plan.

     

    (b) If
a Member who had elected an optional form of payment under this Section 4.08
dies after the date the Member’s benefit
payments under the Plan have commenced, the only death benefit, if any, payable
under the Plan in respect of said Member shall be the amount, if any, payable
under the optional form of payment which the Member had elected under the
Plan.  If a Member who had elected an optional form of payment under
this Section 4.08 dies before the date the
Member’s benefit payments under the Plan commence, the Member’s election of an optional form of
benefit shall be inoperative.

     

    (c) An
election of an optional form of payment under this Section 4.08 may be made only
on the form prescribed by the Committee and filed by the Member with the
Committee at least twelve (12) months before the originally scheduled
Distribution Event, and shall not commence sooner than a date that is at least
five (5) years after the originally scheduled Distribution
Event.

     

    4.09 Automatic
Distribution of Account Balances Less Than IRC Section 402(g)
Limitation.  Notwithstanding any other provision of this Plan, in the
event that a Member has experienced a Distribution Event described in Section
2.03 and has not directed otherwise as part of a prior election, if the Member’s
Account balance is less than the allowable limit under IRC Section 402(g) for
that year, the Member’s entire benefit shall automatically be paid in the form
of a lump sum payment, which shall commence 90 days after the Distribution
Event. Notwithstanding the preceding sentence, if it is administratively
impracticable to make the payment by the required payment date, and such
impracticability is unforeseeable, then such payment shall be made as soon as
administratively practicable.

     

    4.10 Death of
Member.  If a Member dies prior to receiving the balance
credited to the Member’s Account under Section 4.07 or 4.08 above, the balance
in the Member’s Account shall be paid to the Member’s Beneficiary in a lump sum
payment which shall commence 90 days after the Member’s death. Notwithstanding
the preceding sentence, if it is administratively impracticable to make the
payment by the required payment date, and such impracticability is
unforeseeable, then such payment shall be made as soon as administratively
practicable.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.11 Unforeseeable
Emergency.  While employed by the Bank, a Member may, in the
event of an unforeseeable emergency, request a withdrawal from the Member’s
Account.  The request shall be made in a time and manner determined by
the Committee, shall be for an amount not greater than the lesser of (i) the
amount required to meet the financial hardship, or (ii) the amount of the
Member’s Account, and shall be subject to approval by the
Committee.  For purposes of this Section 4.11, an unforeseeable
emergency means a severe financial hardship resulting from a sudden or
unexpected illness or accident of the Member or one of the Member’s dependents,
loss of property due to casualty or other similar extraordinary and unforeseen
circumstances arising as a result of events beyond the Member’s control and
which hardship the Member is unable to satisfy with funds reasonably available
from other sources.  The circumstances that will constitute an
unforeseeable emergency will depend upon the facts of each case as determined by
the Committee.  Notwithstanding the foregoing, a Member may not
receive a payout from the Plan to the extent that the unforeseeable emergency
would be inconsistent with IRC Section 409A.  If the Committee
approves the Member’s petition for payout because of an unforeseeable emergency,
the Member’s benefit distribution shall occur within thirty (30) days after the
beginning of the calendar quarter following the date of such approval (or at
such later time permitted under IRC Section 409A).

     

    Article
5. Source
and Method of Payments

     

    5.01 Obligations are Unsecured
General Claims.  All payments of benefits under the Plan shall
be paid from, and shall only be a general claim upon, the general assets of the
Bank, notwithstanding that the Bank, in its discretion, may establish a
bookkeeping reserve or a grantor trust (as such term is used in Sections 671
through 677 of the IRC) to reflect or to aid it in meeting its obligations under
the Plan with respect to any Member or prospective Member or
Beneficiary.  No benefit whatever provided by the Plan shall be
payable from the assets of the Retirement Fund or the Thrift Plan.

     

    5.02 Member has no Right to
Specific Assets.  No Member shall have any right, title or
interest whatever in or to any investments which the Bank may make or any
specific assets which the Bank may reserve to aid it in meeting its obligations
under the Plan.  To the extent that any person acquires a right to
receive payments from the Bank under the Plan, such right shall be no greater
than the right of an unsecured general creditor of the Bank.

     

    Article
6. Designation
of Beneficiaries

     

    6.01 Beneficiary
Designation.  Each Member of the Plan may file with the
Committee a written designation of one or more persons as the Beneficiary who
shall be entitled to receive the amount, if any, payable under the Plan upon the
Member’s death.  A Member may, from time to time, revoke or change the
Member’s beneficiary designation without the consent of any prior beneficiary by
filing a new designation with the Committee.  The last such
designation received by the Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Member’s death, and in no event shall it
be effective as of a date prior to such receipt.

     

    6.02 No Designated
Beneficiary.  If no such beneficiary designation is in effect
at the time of a Member’s death, or if no designated beneficiary survives the
Member, or if, in the opinion of the Committee, such designation conflicts with
applicable law, the Member’s estate shall be deemed to have been designated the
Member’s beneficiary and shall be paid the amount, if any, payable under the
Plan upon the Member’s death.  If the Committee is in doubt as to the
right of any person to receive such amount, the Committee may retain such
amount, without liability for any interest thereon, until the rights thereto are
determined, or the Committee may pay such amount into any court of appropriate
jurisdiction and such payment shall be a complete discharge of the liability of
the Plan and the Bank therefore.

     

    Article
7. Administration
of the Plan

     

    7.01 Benefit Equalization Plan
Committee.  The Board of Directors has delegated to the
Benefits Equalization Plan Administrative Committee, subject to those powers
which the Board of Directors has reserved as described in Article 8 below,
general authority over and responsibility for the administration and
interpretation of the Plan.  The Committee shall have full power and
authority to interpret and construe the Plan, to make all determinations
considered necessary or advisable for the administration of the Plan and any
trust referred to in Article 5 above, and the calculation of the amount of
benefits payable thereunder, and to review claims for benefits under the
Plan.  The Committee’s interpretations and constructions of the Plan
and its decisions or actions thereunder shall be binding and conclusive on all
persons for all purposes.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.02 Engagement of
Consultants.  If the Committee deems it advisable, it shall
arrange for the engagement of the actuary, and legal counsel and certified
public accountants (who may be counsel or accountants for the Bank), and other
consultants, and make use of agents and clerical or other personnel, for
purposes of the Plan.  The Committee may rely upon the written
opinions of such actuary, counsel, accountants and consultants, and upon any
information supplied by the Retirement Fund or Thrift Plan for purposes of
Section 3.01 of the Plan, and delegate to any agent or to any sub-committee or
Committee member its authority to perform any act hereunder, including without
limitations those matters involving the exercise of discretion; provided,
however, that such delegation shall be subject to revocation at any time at the
discretion of the Committee.  The Committee shall report to the Board
of Directors, or to a committee designated by the Board, at such intervals as
shall be specified by the Board or such designated committee, with regard to the
matters for which it is responsible under the Plan.

     

    7.03 Composition of
Committee.  The Committee shall consist of at least three
individuals, each of whom shall be appointed by, shall remain in office at the
will of, and may be removed, without or without cause, by the Board of
Directors.  Any Committee member may resign at any time.  No
Committee member shall be entitled to act on or decide any matters relating
solely to such Member or any of that Member’s rights or benefits under the
Plan.  The Committee member shall not receive any special compensation
for serving in such capacity but shall be reimbursed for any reasonable expenses
incurred in connection therewith.  No bond or other security need be
required of the Committee or any member thereof in any
jurisdiction.

     

    7.04 Organization of
Committee.  The Committee shall elect or designate its own
Chairman, establish its own procedures and the time and place for its meetings
and provide for the keeping of minutes of all meetings.  Any action of
the Committee may be taken upon the affirmative vote of a majority of the
members at a meeting or, at the direction of its Chairman, without a meeting by
mail or telephone, provided that all the Committee members are informed in
writing of the vote.

     

    7.05 Claims for
Benefits.  All claims for benefits under the Plan shall be
submitted in writing to the Chairman of the Committee.  Written notice
of the decision on each such claim shall be furnished with reasonable promptness
to the Member or the Member’s Beneficiary (the “claimant”).  The
claimant may request a review by the Committee of any decision denying the claim
in whole or in part.  Such request shall be made in writing and filed
with the Committee within 30 days of such denial, a request for review shall
contain all additional information which the claimant wishes the Committee to
consider.  The Committee may hold any hearing or conduct any
independent investigation which it deems desirable to render its decision, and
the decision on review shall be made as soon as feasible after the Committee’s
receipt of the request for review.  Written notice of the decision on
review shall be furnished to the claimant.  Any decisions on claims
(where no review is requested) and decisions on review (where review is
requested) shall be subject to review by any court of competent
jurisdiction.  A claimant who successfully seeks judicial reversal or
modification of a Committee decision shall be reimbursed by the Bank for that
Claimant’s attorneys’ fees.

     

    7.06 Expenses.  All
expenses incurred by the Committee in its administration of the Plan shall be
paid by the Bank.

     

    Article
8. Amendment
and Termination

     

    Although
the Bank anticipates that it will continue the Plan for an indefinite period of
time, there is no guarantee that the Bank will not terminate the
Plan.  Accordingly, the Board of Directors reserves the right in its
sole and absolute discretion to  amend, suspend or terminate, in whole
or in part, the Plan, including but not limited to the termination of any
Member’s participation in the Plan, without the consent of the Committee, any
Member, Beneficiary or other person, except that no amendment, suspension or
termination shall retroactively impair or otherwise adversely affect the rights
of any Member, Beneficiary or other person to benefits under the Plan which have
accrued prior to the date of such action, as determined by the Committee in its
sole discretion.  The Committee may adopt any amendment or take any
other action which may be necessary or appropriate to facilitate the
administration, management and interpretation of the Plan or to conform the Plan
thereto, provided any such amendment or action does not have a material effect
on the then currently estimated cost to the Bank of maintaining the
Plan.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    In
the event the Plan is terminated, the termination shall occur in a manner
consistent with the requirements of IRC Section 409A, including but not limited
to allowing the Bank to terminate and liquidate the Plan:  (1) when
the Bank has declared bankruptcy, (2) when the Bank has participated in certain
Change of Control events, or (3) at the Bank's discretion, subject to certain
restrictions and limitations described in IRC Section 409A and the regulations
promulgated thereunder.

     

    Article
9. General
Provisions

     

    9.01 Successors and
Assigns.  The Plan shall be binding upon and inure to the
benefit of the Bank and its successors and assigns and the Members, and the
successors, assigns, designees and estates of the Members.  The Plan
shall also be binding upon and inure to the benefit of any successor bank or
organization succeeding to substantially all of the assets and business of the
Bank, but nothing in the Plan shall preclude the Bank from merging or
consolidating into or with, or transferring all or substantially all of its
assets to, another bank which assumes the Plan and all obligations of the Bank
hereunder.  The Bank agrees that it will make appropriate provision
for the preservation of Members’ rights under the Plan in any agreement or plan
which it may enter into to effect any merger, consolidation, reorganization, or
transfer of assets and assumption of Plan obligations of the Bank, the term
“Bank” shall refer to such other bank and the Plan shall continue in full force
and effect.

     

    9.02 No Continued Right to
Employment.  Neither the Plan nor any action taken thereunder
shall be construed as giving to a Member the right to be retained in the employ
of the Bank or as affecting the right of the Bank to dismiss any Member from its
employ.

     

    9.03 Taxes.

     

    (a) For
each Plan Year in which an annual contribution amount credited to a Member’s
Account Balance becomes vested, to the extent applicable and/or required under
applicable law, the Bank shall withhold from that portion of the Member’s Base
Salary, bonus and/or commissions, in a manner determined by the Bank, the
Member’s share of FICA and other employment taxes on the applicable annual
contribution amounts.  The Bank may, in its sole discretion, make or
change any administrative elections necessary to maximize the tax benefit
available to the Bank or the Member.

     

    (b) Distributions.  The
Bank may withhold from any payments made to a Member under this Plan all
federal, state and local income, employment and other taxes required to be
withheld by the Bank in connection with such payments, in amounts and in a
manner to be determined in the sole and absolute discretion of the
Bank.

     

    (c) Income
Inclusion Pursuant to IRC Section 409A.  In the event that any portion
of a Member’s Account balance is required to be included in income by the Member
prior to receipt of any distribution under this Plan because of a violation of
the requirements of IRC Section 409A, the Bank may withhold from the Member all
federal, state and local income, employment and other taxes required to be
withheld by the Bank in connection with such income inclusion, in amounts and in
a manner determined in the sole and absolute discretion of the
Bank.  If necessary, the Member’s annual contribution amount may be
reduced to pay any taxes and to pay income tax withholdings associated with IRC
Section 409A.

     

    9.04 No Disposition of Member’s
Rights.  No right or interest of a Member under the Plan may be
assigned, sold, encumbered, transferred or otherwise disposed of any attempted
disposition of such right or interest shall be null and void.

     

    9.05 Incompetency of Member or
Beneficiary.  If the Committee shall find that any person to
whom any amount is or was payable under the Plan is unable to care for that
Member’s affairs because of illness or accident, or is a minor, or has died,
then any payment, or any part thereof, due to such person or that person’s
estate (unless a prior claim therefor has been made by a duly appointed legal
representative), may, if the Committee is so inclined, be paid to such person’s
spouse, child or other relative, an institution maintaining or having custody of
such person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment.  Any
such payment shall be in complete discharge of the liability of the Plan and the
Bank therefor.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    9.06 Communications to
Committee.  All elections, designations, requests, notices,
instructions, and other communications from a Member, beneficiary or other
person to the Committee required or permitted under the Plan shall be in such
form as is prescribed from time to time by the Committee and shall be mailed by
first-class mail or delivered to such location as shall be specified by the
Committee and shall be deemed to have been given and delivered only upon actual
receipt thereof at such location.

     

    9.07 Benefits
Independent.  The benefits payable under the Plan shall be in
addition to all other benefits provided for employees of the Bank and shall not
be deemed salary or other compensation by the Bank for the purpose of computing
benefits to which s/he may be entitled under any other plan or arrangement of
the Bank.

     

    9.08 No Personal Liability;
Indemnification.  No Committee member shall be personally
liable by reason of any instrument executed by the Committee member or on behalf
of that Committee member, or action taken by the Committee member in capacity as
a Committee member, nor for any mistake of judgment made in good
faith.  The Bank shall indemnify and hold harmless each Committee
member and each employee, officer or director of the Bank, to whom any duty,
power, function or action in respect of the Plan may be delegated or assigned,
or from whom any information is requested for Plan purposes, against any cost or
expense (including fees of legal counsel) and liability (including any sum paid
in settlement of a claim or legal action with the approval of the Bank) arising
out of anything done or omitted to be done in connection with the Plan, unless
arising out of such person’s fraud or bad faith.

     

    9.09 Terminology.  As
used in the Plan, the masculine gender shall be deemed to refer to the feminine,
and the singular person shall be deemed to refer to the plural, wherever
appropriate.

     

    9.10 Captions.  The
captions preceding the Sections of the Plan have been inserted solely as a
matter of convenience and shall not be any manner defined by or limit the scope
or intent of any provisions of the Plan.

     

    9.11 Governing
Law.  The Plan shall be construed according to the laws of the
State of Kansas in effect from time to time.

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