Document:

Exhibit 10.3.2

FEDERAL HOME LOAN BANK OF BOSTON

2007 EXECUTIVE INCENTIVE PLAN

February 2007

Purpose

The Federal Home Loan
Bank of Boston (Bank) has established an Executive Incentive Plan (EIP) to:

·                  promote
achievement of the Bank’s financial plan and strategic objectives as spelled
out in the 2007 Strategic Business Plan;

·                  provide
total annual compensation (i.e., salary plus incentive) that is competitive
with other financial institutions in the employment markets in which the Bank
competes, including other Federal Home Loan Banks; and

·                  facilitate
the retention and commitment of corporate officers.

Bank’s Objectives for 2007

The focus of the Bank’s
2007 Strategic Business Plan is summarized in two words: profitable
growth.  The Bank is targeting steady growth
in business with members in terms of both advances and mortgages. While the
Bank’s focus will be profitable growth, we will continue to enhance the Bank’s
operational infrastructure, and we will maintain and reinforce the Bank’s
commitment to conservative and prudent risk management and compliance.

Also for 2007, the Bank
has identified three all-encompassing long-term strategic goals that
demonstrate our commitment to the Bank’s mission, vision, the needs of its
stakeholders, and the well-being of the New England region:

1.               to foster a
member-centric organization;

2.               to maintain trust
and confidence among stakeholders; and

3.               to harness the
power of technology to maintain maximum efficiency and productivity.

The goals in the
2007 incentive plan are designed to reinforce the focus of the Bank’s 2007
Strategic Business Plan.

 1
 

2007 Executive
Incentive Plan

The incentive goals are
summarized in the following table with more detail following:

	
  Goal

  	
   

  	
  Weight

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Excess

  
	
   

  	
   

  	
  Pres.

  	
   

  	
  1

  	
   

  	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pre-tax ROE
  (Adjusted for Net Prepayment Fees) Spread to LIBOR

  	
   

  	
  20% 

  	
   

  	
  20% 

  	
   

  	
  20% 

  	
   

  	
  300 basis points 

  	
   

  	
  400 basis points 

  	
   

  	
  500 basis points 

  
	
  Percentage
  Growth in Average Member Credit Extension (Advances and Letters of Credit,
  net of CDA and NEF) Balances 2007 Over 2006 With National, Growth-Oriented,
  and Insurance Company Segments

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  Maintain 2006 average

  	
   

  	
  4 percent

  	
   

  	
  8 percent

  
	
  Percentage
  Growth in Average Member Credit Extension (Advances and Letters of Credit,
  net of CDA and NEF) Balances 2007 Over 2006 With Community Bank and Credit
  Union Segments

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  3 percent

  	
   

  	
  5 percent

  	
   

  	
  8 percent

  
	
  Percentage
  Growth in Targeted Mission-Related Advances Programs (CDA and NEF) 2007 Over
  2006

  	
   

  	
  5%

  	
   

  	
  5%

  	
   

  	
  0%

  	
   

  	
  10 percent

  	
   

  	
  20 percent

  	
   

  	
  30 percent

  
	
  Examination
  Results

  	
   

  	
  15%

  	
   

  	
  15%

  	
   

  	
  15%

  	
   

  	
  N.A.

  	
   

  	
  “2” rating in 2007 exam
  report

  	
   

  	
  “1” rating in 2007 exam
  report

  
	
  Operational
  Component

  	
   

  	
  15%

  	
   

  	
  25%

  	
   

  	
  30%

  	
   

  	
  As defined

  	
   

  	
  As defined

  	
   

  	
  As defined

  
	
  Discretionary
  Component

  	
   

  	
  25%

  	
   

  	
  15%

  	
   

  	
  15%

  	
   

  	
  As documented by
  supervisor

  	
   

  	
  As documented by
  supervisor

  	
   

  	
  As documented by
  supervisor

  

 

Profitability Goal

	
  2007 Goal:

  	
  Pre-tax ROE (Adjusted for Net Prepayment Fees) Spread to LIBOR

  
	
  Weight:

  	
  President: 20 percent; Tier 1: 20 percent; Tier
  2: 20 percent

  
	
  Threshold:

  	
  300 basis points

  
	
  Target:

  	
  400 basis points

  
	
  Excess:

  	
  500 basis points

  

 2
 

 

The metric will be the
spread by which the Bank’s pre-tax (i.e., pre-REFCorp and pre-AHP) ROE
(adjusted for net prepayment fees) exceeds the daily average of the
bond-equivalent yield of three-month LIBOR. 
The projection for this metric in the 2007 Strategic Business Plan’s
base case is 402 basis points.

The difference between “ROE” and “ROE Adjusted for Net
Prepayment Fees” is that the latter defers the net effect of prepayment fee
income from advances or investments and associated debt retirement and hedge
unwind expenses over the expected remaining lives of the assets that were
prepaid.  The exclusion of prepayment fee
income and associated debt retirement and swap unwind expense from the core ROE
metric removes the potential for “windfall” compensation in the event of heavy
prepayment fee income and removes a conflict with the objective of prudent
asset-liability management by excluding the otherwise punitive cost of debt
retirement and swap unwind expense.

The metric is not
distorted by the general level of interest rates (which affects both dollar
earnings and prepayment speeds on advances), and it is independent of the Bank’s
asset size.  It also eliminates a tax
bias associated with REFCorp and AHP.  It
does, however, implicitly factor in operating efficiencies, since projected
core ROE will be impaired to the extent the Bank’s budget is exceeded.

Growth Goals

	
  2007 Goal:

  	
   

  	
  Growth in Average Member Credit
  Extensions (Advances and Letters of Credit, net of CDA and NEF) with
  National, Growth-Oriented, and Insurance Company Accounts

  
	
  Weight:

  	
   

  	
  President: 10 percent; Tier 1: 10 percent; Tier
  2: 10 percent

  
	
  Threshold:

  	
   

  	
  Maintain 2006 average

  
	
  Target:

  	
   

  	
  4 percent

  
	
  Excess:

  	
   

  	
  8 percent

  
	
   

  	
   

  	
   

  
	
  2007
  Goal:

  	
   

  	
  Growth in Average Member Credit Extensions
  (Advances and Letters of Credit, net of CDA and NEF) with Community Bank and
  Credit Union Segments

  
	
  Weight:

  	
   

  	
  President: 10 percent; Tier 1: 10 percent; Tier
  2: 10 percent

  
	
  Threshold:

  	
   

  	
  3 percent

  
	
  Target:

  	
   

  	
  5 percent

  
	
  Excess:

  	
   

  	
  8 percent

  
	
   

  	
   

  	
   

  
	
  2007
  Goal:

  	
   

  	
  Growth in Average Targeted Mission-Related
  Advances Programs

  
	
  Weight:

  	
   

  	
  President: 5 percent; Tier 1: 5 percent; Tier 2:
  0 percent

  
	
  Threshold:

  	
   

  	
  10 percent

  
	
  Target:

  	
   

  	
  20 percent

  
	
  Excess:

  	
   

  	
  30 percent

  

 

 3
 

To achieve the projected
level of growth, management will implement the member differentiation strategy
that began in 2006.  This effort will
begin with the alignment of processes, structures, people and systems to support
and deliver the core elements of the strategy. 
Other processes that are integral to the strategy will also be
identified and aligned.  Top priority
within this strategy will be given to delivering solutions to the national
account segment and implementing collateral policy and process changes in
support of solutions for all segments.

For purposes of the 2007
EIP, the five member segments have been aggregated into two groups with similar
characteristics.  An average growth
target based on advances and letters of credit has been established for each
group.(i)  The table below shows the
starting and target ending balances for these two groups:

	
  $Billions

  	
   

  	
  2006 Projected Average

  Advances and Letters of

  Credit (Net of CDA and NEF)

  Base

  	
   

  	
  Target Growth

  	
   

  	
  2007 Projected Average

  Advances and Letters of Credit

  (Net of CDA and NEF)

  	
   

  
	
  National,
  Growth-

  Oriented, and Insurance

  Company Accounts

  	
   

  	
  $

  	
  31.5 billion

  	
   

  	
  4 percent

  	
   

  	
  $

  	
  32.8 billion

  	
   

  
	
  Community Bank and

  Credit Union Accounts

  	
   

  	
  $

  	
  8.0 billion

  	
   

  	
  5 percent

  	
   

  	
  $

  	
  8.4 billion

  	
   

  

 

The Bank currently holds
a 68 percent market share of the wholesale funding used by national accounts
and a 80 percent market share of wholesale funding used by growth oriented
institutions.  The Bank will aggressively
seek to expand its market share in 2007 through pricing, product development
and streamlining internal policies and procedures to create a more
user-friendly experience for members.  In
addition, the Bank is expanding its efforts to reach the insurance industry
with products that address their business needs.  These institutions do not access the
traditional wholesale funding market used by banks.

In contrast, the Bank
enjoys a nearly 100 percent market share of wholesale funding used by community
institutions and credit unions.  Growth
in advances from this segment will be dependent on the Bank’s ability to help
members expand their own market share pursuant to their own business
plans.  The Bank will also compete for
funding increasingly being diversified into brokered CD and repurchase
agreements.

Member demand for letters
of credit is increasing for targeted purposes. 
The Bank earns a spread that is comparable to advances and remains well
protected from credit and other potential sources of risk.  As a result, management has included letters
of credit in the base and projections as a valuable product to the membership
that provides a reasonable return at reasonable risk to the Bank.

Management is managing
MPF volume by not seeking master commitments from its largest PFIs.  As a result, MPF volume is not included in
the 2007 EIP goals.

The focus of the
mission-related metric will be to expand member lending activities in the
communities they serve through the Bank’s Community Development Advances (CDA)
and New England Fund (NEF) advances.(ii)

 4
 

The projected average CDA
and NEF advances balance for 2006 is $1.8 billion.  A twenty percent increase would grow average
mission-related advances to $2.2 billion. 
This increase would be driven by relatively small advances
disbursements.

Bank staff will actively
use the outreach and education tools available to achieve the goal, including
the successful Community Development Consult program, funding strategies,
training programs, and publication of examples of successful initiatives.

Exam
Goal

	
  2007 Goal:

  	
   

  	
  Examination Result

  
	
  Weights:

  	
   

  	
  President: 15 percent; Tier 1: 15 percent; Tier
  2: 15 percent

  
	
  Threshold:

  	
   

  	
  None

  
	
  Target:

  	
   

  	
  “2” rating in 2007 exam report

  
	
  Excess:

  	
   

  	
  “1” rating in 2007 exam report

  

In the 2007 exam
report, the Federal Housing Finance Board (Finance Board) will rate the Bank “1,”
“2,” “3,” or “4.”, with “1” being the highest possible rating and “4” being the
lowest.  A payment on this goal will be
made at target if the Bank’s rating is “2.” 
A “1” rating will result in an excess payout on this goal.

Operational
Component

	
  Weights:

  	
   

  	
  President: 15 percent; Tier 1: 25 percent; Tier
  2: 30 percent with individualized weightings on each operational initiative.

  
	
  Threshold:

  	
   

  	
  As defined below

  
	
  Target:

  	
   

  	
  As defined below

  
	
  Excess:

  	
   

  	
  As defined below

  

 

Payments awarded
under the Operational Component will be based on the individual weighting for
each participant and the Bank’s achievement, as assessed by management at the
end of the plan-year and approved by the Personnel Committee, on the following
key Bank-wide initiatives, which support the Bank’s all-encompassing three
strategic goals:

To foster a
member-centric organization

 

Continue to engage the
entire organization in the Competitive Positioning Initiative:

·                  Threshold:
Implement the member differentiation strategy that began in 2006 by
establishing written account plans for selected members.

·                  Target:
Address the Competitive Positioning Initiative collateral solutions by
developing an implementation plan for a new collateral system and executing in
accordance with the approved plan.(1)

(1)           Project plan development is dependent on the
completion of detailed requirements. 
These requirements are under development.  While it is our desire to complete this
initiative in 2007, final implementation activities may extend into 2008,
depending on the overall scope and complexity of the project, yet to be
determined.

 5
 

·                  Excess:  Meet requirements for Threshold and Target,
plus in the fourth quarter conduct a survey of members focused on satisfaction
level with customer service, ease of doing business with the Bank and
competitiveness of policies and procedures, with particular focus on
collateral.  Overall satisfaction must be
at least a “2” rating on a scale of 1 to 5, with “1” being the highest rating.

Maintain trust and
confidence among stakeholders

 

Ensure Sarbanes-Oxley compliance —

·                  Threshold:   N.A.

·                  Target:   Develop, review and obtain
approval at the February 2007 Audit Committee meeting of a SOX Project Plan
developed to support the internal control assessment by management.  Complete all required SOX 404 implementation
and compliance procedures  in accordance with
SEC deadlines. Provide status updates to the Audit Committee at least once per
quarter.

·                  Excess: Meet requirements for Target, plus complete an initial
project plan directed toward an efficiency review of identified business
processes.

To harness the power of
technology to maintain maximum efficiency and productivity

 

Summit  —

·                  Threshold:
Complete implementation of the derivatives basic accounting phase by June 30,
2007.

·                  Target: Meet
requirements for Threshold, plus complete implementation of the derivatives
valuation phase by year-end 2007.

·                  Excess: Meet
requirements for Threshold, plus complete implementation of the derivatives
valuation phase by August 31, 2007.

To successfully
complete department specific initiatives

 

In addition to the key bank-wide initiatives, there are
department specific initiatives and projects that contribute to the success of
the bank. This section provides for recognition of the participant’s successful
completion of those initiatives.

·                  Threshold: As
determined by the manager

·                  Target: As
determined by the manager

·                  Excess: As
determined by the manager

 6
 

Operational
Component Initiatives Weighted by Individual:

 

	
  Participant

  	
   

  	
  Competitive

  Positioning %

  	
   

  	
  SOX

  %

  	
   

  	
  Summit

  %

  	
   

  	
  Dept. Specific

  Operational

  Initiatives %

  	
   

  	
  Total

  %

  	
   

  
	
  Michael A.
  Jessee

  	
   

  	
  5

  	
   

  	
  5

  	
   

  	
  5

  	
   

  	
  0

  	
   

  	
  15

  	
   

  
	
  Janelle K.
  Authur

  	
   

  	
  5

  	
   

  	
  5

  	
   

  	
  0

  	
   

  	
  15

  	
   

  	
  25

  	
   

  
	
  Earl Baucom

  	
   

  	
  5

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  5

  	
   

  	
  25

  	
   

  
	
  George Collins

  	
   

  	
  5

  	
   

  	
  5

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  25

  	
   

  
	
  M. Susan Elliott

  	
   

  	
  15

  	
   

  	
  5

  	
   

  	
  0

  	
   

  	
  5

  	
   

  	
  25

  	
   

  
	
  William Hamilton

  	
   

  	
  5

  	
   

  	
  5

  	
   

  	
  0

  	
   

  	
  15

  	
   

  	
  25

  	
   

  
	
  Ellen McLaughlin

  	
   

  	
  5

  	
   

  	
  10

  	
   

  	
  0

  	
   

  	
  10

  	
   

  	
  25

  	
   

  
	
  Frank Nitkiewicz

  	
   

  	
  5

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  5

  	
   

  	
  25

  	
   

  
	
  William L.
  Oakley

  	
   

  	
  5

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  0

  	
   

  	
  25

  	
   

  
	
  Daniel Devine

  	
   

  	
  5

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  10

  	
   

  	
  30

  	
   

  
	
  Brian Donahue

  	
   

  	
  0

  	
   

  	
  15

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  30

  	
   

  
	
  Jack Henderson,
  Jr.

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  0

  	
   

  	
  10

  	
   

  	
  30

  	
   

  
	
  Kelly A. LaCava

  	
   

  	
  5

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  30

  	
   

  
	
  Rachele
  McDonough

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  0

  	
   

  	
  15

  	
   

  	
  30

  	
   

  
	
  William J.
  Murphy

  	
   

  	
  15

  	
   

  	
  10

  	
   

  	
  0

  	
   

  	
  5

  	
   

  	
  30

  	
   

  
	
  Paul Pouliot

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  0

  	
   

  	
  15

  	
   

  	
  30

  	
   

  
	
  Allison Powell

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  0

  	
   

  	
  15

  	
   

  	
  30

  	
   

  
	
  Paul Webber

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  0

  	
   

  	
  15

  	
   

  	
  30

  	
   

  
	
  Kevin Whittaker

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  5

  	
   

  	
  10

  	
   

  	
  30

  	
   

  
	
  Kenneth Willis

  	
   

  	
  10

  	
   

  	
  5

  	
   

  	
  0

  	
   

  	
  15

  	
   

  	
  30

  	
   

  

 

Payments awarded to
individual participants under the Operational Component for the Competitive
Positioning, SOX and Summit initiatives will be based on achievement of the
initiative at Threshold, Target or Excess and according to the individual’s
weight for that initiative.  Payments
awarded under the department-specific operational initiatives will be based on
the individual’s combined, overall performance on the one to three operational
initiatives as determined by the manager. 
Managers may select a payout percentage for department-specific
objectives from a range of threshold to a maximum payout at excess.  If the department-specific operational
initiatives are not substantially achieved, the manager may award zero for this
initiative.

Discretionary Component

	
  Weights:

  	
   

  	
  President: 25 percent; Tier 1: 15 percent; Tier
  2: 15 percent

  
	
  Threshold:

  	
   

  	
  As defined by manager/supervisor

  
	
  Target:

  	
   

  	
  As defined by manager/supervisor

  
	
  Excess:

  	
   

  	
  As defined by manager/supervisor

  

 

Payments awarded
under the Discretionary Component will take into consideration the individuals’
contribution toward the Bank’s or department’s specific goals or initiatives.
It is

 7
 

understood that
the success of the bank in achieving its goals as set forth in the Plan
requires individual contribution. This component allows for recognition of that
contribution, as assessed by the manager/supervisor. The contribution may also
be toward a department specific initiative.

There may also be
a subjective element in this component so that a manager/supervisor can award a
participant’s leadership, work ethic, attitude, or other such similar
intangible attribute that contributes to the Bank’s success.  Managers/supervisors need to provide
reasonable documentation that states the basis for whatever award is
recommended under the discretionary component.

Incentive Potential

Eligible employees
will be assigned an incentive award potential expressed as a percentage of the
incumbent’s base salary in effect at year-end 2007 as follows:

 

	
  

  	
   

  	
  Incentive as a Percent of Salary

  	
   

  
	
   

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Excess

  	
   

  
	
   President

  	
   

  	
  25.00

  	
  %

  	
  50.00

  	
  %

  	
  75.00

  	
  %

  
	
   Tier I

  	
   

  	
  18.75

  	
  %

  	
  37.50

  	
  %

  	
  56.25

  	
  %

  
	
   Tier II

  	
   

  	
  15.00

  	
  %

  	
  30.00

  	
  %

  	
  45.00

  	
  %

  

 

2007
Participation

The following individuals
are participants in the EIP for 2007:(iii)

 

	
  President

  	
   

  	
  Tier I

  	
   

  	
  Tier II

  
	
  Michael A. Jessee

  	
   

  	
  Janelle K. Authur

  	
   

  	
  Daniel Devine

  
	
   

  	
   

  	
  Earl Baucom

  	
   

  	
  Brian Donahue

  
	
   

  	
   

  	
  George Collins

  	
   

  	
  Jack Henderson, Jr.

  
	
   

  	
   

  	
  M. Susan Elliott

  	
   

  	
  Kelly A. LaCava

  
	
   

  	
   

  	
  William Hamilton

  	
   

  	
  Rachele McDonough

  
	
   

  	
   

  	
  Ellen McLaughlin

  	
   

  	
  William J. Murphy

  
	
   

  	
   

  	
  Frank Nitkiewicz

  	
   

  	
  Paul Pouliot

  
	
   

  	
   

  	
  William L. Oakley

  	
   

  	
  Allison Powell

  
	
   

  	
   

  	
   

  	
   

  	
  Paul Webber

  
	
   

  	
   

  	
   

  	
   

  	
  Kevin Whittaker

  
	
   

  	
   

  	
   

  	
   

  	
  Kenneth Willis

  

 

 8
 

EIP
Administration

The EIP is
administered by the Personnel Committee of the Board of Directors (Committee),
which shall have full power and binding authority to construe, interpret, and
administer the EIP, and to adjust it during or at the end of the calendar year
covered by the EIP for extraordinary circumstances.  Extraordinary circumstances may include
changes in business strategy, termination or commencement of business lines,
impact of severe economic fluctuations, significant growth or consolidation of
the membership base, or significant regulatory or other changes impacting the
Bank or Bank System.

The Committee reserves
the right at any time to amend, suspend or terminate the EIP in whole or in
part, for any reason, and without the consent of any EIP participant.

The Bank’s
President and Chief Executive Officer will determine participation in the EIP
with the concurrence of the Committee.

EIP awards shall
not be considered earned or payable, in whole or in part, to any participant
for any reason until they are finally determined by the Bank’s President and
Chief Executive Officer with the concurrence of the Committee following the end
of the plan year.  Moreover, unless
otherwise specifically determined by the President and Chief Executive Officer
with the concurrence of the Committee, a participant will be entitled to
payment of an award only if the participant is employed on the date of payment
of the award.  However, any individual
hired or promoted into an eligible position during the plan year who is granted
an award shall have any such incentive award prorated based on months of EIP
participation, providing he/she has served a minimum of six months in that role
and otherwise satisfies the EIP’s requirements.

Except as set
forth in the following paragraph, any EIP participant who terminates employment
for any reason, whether voluntarily or involuntarily, before the end of the
plan year, defined as the period January 1, 2007 through December 31, 2007,
shall not be entitled to any award, except as otherwise determined by the Bank’s
President and Chief Executive Officer, with the concurrence of the Committee,
at their sole discretion.

EIP participants
who terminate employment with the Bank by reason of death or disability prior
to the conclusion of the plan year will receive a pro rata payment of any
incentive award determined by the Bank’s President and Chief Executive Officer,
with the concurrence of the Committee, based on the months of completed service
as an EIP participant during the year. 
Beneficiaries of such payments will be the same as identified in the
Bank’s group insurance plan.

The Bank may make
such provisions, as it deems appropriate, for withholding payroll taxes in
connection with payment of EIP awards.

The Bank also has
several other incentive programs for staff at the Bank designed to motivate
employees to become more innovative and productive. The Bank’s President is
responsible for the administration of each of these programs and has the
authority to construe, implement, and administer programs, as appropriate.

 9
 

i  Average Advances and Letters of Credit Balances are defined
as the average daily balance of advances and Letters of Credit (net of CDA and
NEF).  If a member merges into a
non-member, the merged entity’s balances will be excluded from the calculation
for 2007 and the average balance for 2006. 
If, for example, a community bank member is merged into a national
account member, all of the merged member’s balances for 2006 and to the 2007
merger date will be included in the national account member group. The 2006
year-end average numbers include Bank of America and exclude all institutions
that were merged or acquired through January 2, 2007.

ii  This goal is measured using the following advance product
types: 822, 873, 877, 878, 879, 903, 904, and 914 and any new housing and
community development product codes introdued during the Plan year.

iii  All
corporate officers are listed as EIP participants with one exception: Paul
Peduto, First Vice President, Sales and Business Development.  Mr. Peduto is a participant in the Bank’s
Sales Incentive Plan and is eligible for an incentive award equivalent to a
Tier II participant in the EIP.

 

 10Exhibit
10.7

FEDERAL HOME LOAN
BANK OF BOSTON

2007 DIRECTOR
COMPENSATION POLICY

A fee of $2,000 per
meeting shall be paid to all Directors that attend all or part of a meeting of
the Board of Directors.  A fee of $2,750
per meeting shall be paid to the vice chair of the Board.  A fee of $3,500 per meeting shall be paid to
the chair of the Board.  This fee shall
also be provided to any person elected by the Board to serve as chairman pro
tempore or to the vice chair if the vice chair presides for an entire meeting
of the Board.  There are nine regularly
scheduled meetings in 2007.

A fee of $750 per meeting
shall be paid to all committee members, including ex officio members, who
attend all or any part of any meeting of a committee of the Board.  A fee of $750 shall be paid to any director
who attends all or part of the annual shareholders meeting.

A fee of $500 per meeting
shall be paid to any Director for participation in telephonic conference calls
or when participating by telephone for all or any part of a meeting in which
the Director would be entitled to receive a meeting fee for in-person
attendance at such meeting.

Fees shall be paid per
meeting.  For example, if a Board meeting
and committee meeting occur on the same day, a separate fee shall be payable
for attendance at each meeting. 
Additionally, in the case of a multi-day meeting, a separate fee shall
be payable for each day’s attendance at the same meeting.

In the event that
inclement weather prevents the occurrence of a planned meeting of the Board or
one of its committees, the Directors shall be entitled to receive the
applicable meeting fee called for in the Statement of Policy, minus any fees
received if an in-person meeting is changed to a telephonic meeting.

Maximum Fees

Directors are subject to statutory and regulatory caps
on annual compensation.  Fees earned
above these caps cannot be paid to the Director.

Administrative Matters

The Personnel Committee
shall annually review this policy and shall submit its recommendation to the
Board.  The Board shall consider the
recommendations of the Personnel Committee and shall approve the policy no
later than the first regularly scheduled meeting of the Board in which the
policy shall apply.  The Board is
authorized, in its sole discretion, to interpret the provisions of the policy
and to address situations not anticipated by the policy, consistent with the
requirements set forth in the regulations promulgated by the Federal Housing
Finance Board.

2007 Director
Compensation Policy

The following projections
assume attendance at eight board meetings and three committee meetings.

	
  Director cap:

  	
   

  	
  $17,967

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8
  board meetings

  	
   

  	
  x

  	
   

  	
  $

  	
  2,000

  	
   

  	
  =

  	
   

  	
  $

  	
  16,000

  	
   

  
	
   

  	
   

  	
  3
  committee meetings

  	
   

  	
  x

  	
   

  	
  750

  	
   

  	
  =

  	
   

  	
  2,250

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  18,250

  	
   

  
														

 

	
  Vice Chair cap:

  	
   

  	
  $23,955

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8
  board meetings

  	
   

  	
  x

  	
   

  	
  $

  	
  2,750

  	
   

  	
  =

  	
   

  	
  $

  	
  22,000

  	
   

  
	
   

  	
   

  	
  3
  committee meetings

  	
   

  	
  x

  	
   

  	
  750

  	
   

  	
  =

  	
   

  	
  2,250

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  24,250

  	
   

  
														

 

	
  Chair cap:

  	
   

  	
  $29,944

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8
  board meetings

  	
   

  	
  x

  	
   

  	
  $

  	
  3,500

  	
   

  	
  =

  	
   

  	
  $

  	
  28,000

  	
   

  
	
   

  	
   

  	
  3
  committee meetings

  	
   

  	
  x

  	
   

  	
  750

  	
   

  	
  =

  	
   

  	
  2,250

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  30,250

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]