Document:

EX 10.7 11 2014 Exh 2015 Incentive Plan

Exhibit 10.7                                        
	
		
	 
	Board Approved 12/1/11

	 
	(Technical Amendments

	 
	Adopted 3/19/12;

	 
	Additional Amendments Adopted

	 
	5/18/2012

	 
	Updated 11/15/12;

	 
	Amended 5/29/13;

	 
	Amended 9/13/13;

	 
	Effective as of 12/1/11;

	 
	Updated 11/22/13;

	 
	Amended and Updated 11/20/14;

	 
	Amended 1/29/15)

                                        

Federal Home Loan Bank of Indianapolis
Incentive Plan

(Effective as of January 1, 2012)
(As Amended March 19, 2012)
(As Further Amended May 18, 2012)
(As Updated November 15, 2012 to Reflect 2013 Performance Goals)
(Amended May 29, 2013)
(Amended September 13, 2013, Effective as of December 1, 2011)
(As Updated November 22, 2013, to Reflect 2014 Performance Goals)
(As Amended and Updated November 20, 2014, to Reflect 2015 Performance Goals)
(Amended January 29, 2015)

ESTABLISHMENT OF ANNUAL AND LONG-TERM 2015-2018
INCENTIVE PLAN GOALS FOR THE 
FEDERAL HOME LOAN BANK OF INDIANAPOLIS
INCENTIVE PLAN
Pursuant to resolutions adopted by the Board of Directors of the Federal Home Loan Bank of Indianapolis (the "Bank"), the undersigned hereby execute the Federal Home Loan Bank of Indianapolis Incentive Plan, effective as of January 1, 2012, and setting forth goals effective as of January 1, 2015, as amended on the date set forth below, on behalf of the Bank, in the form attached hereto.
Dated this 29th day of January, 2015.
FEDERAL HOME LOAN BANK OF INDIANAPOLIS
By:  /s/ James D. MacPhee            
James D. MacPhee, Chairman
By:  /s/ Michael J. Hannigan, Jr.        
Michael J. Hannigan, Jr., Vice Chairman
ATTEST:
By:  /s/ Kania D. Warbington            
Kania D. Warbington, Corporate Secretary

FEDERAL HOME LOAN BANK OF INDIANAPOLIS
INCENTIVE PLAN
TABLE OF CONTENTS    	
				
	 
	 
	PAGE

	Article I
	INTRODUCTION
	1
	

	 
	 
	 

	Section 1.1
	Purpose
	1
	

	Section 1.2
	Effective Date
	1
	

	Section 1.3
	Administration
	1
	

	Section 1.4
	Supplements
	1
	

	Section 1.5
	Definitions
	1
	

	 
	 
	 

	Article II
	ELIGIBILITY AND PARTICIPATION
	2
	

	 
	 
	 

	Section 2.1
	Eligibility
	2
	

	Section 2.2
	Participation
	2
	

	 
	 
	 

	Article III
	AWARDS AND EXTRAORDINARY OCCURENCE
ADDITIONS/REDUCTIONS
	2
	

	 
	 
	 

	Section 3.1
	Awards
	2
	

	Section 3.2
	Performance Goals
	4
	

	Section 3.3
	Earning and Vesting of Awards for Level I Participants
	5
	

	Section 3.4
	Earning and Vesting of Awards for Level II Participants
	5
	

	Section 3.5
	Special Gap Year Awards for Level I Participants
	6
	

	Section 3.6
	Effect of Termination of Service and Amendment of
Prior Long-Term Plans
	6
	

	Section 3.7
	Effect of Reorganization
	9
	

	Section 3.8
	Payment of Awards
	10
	

	Section 3.9
	Reduction or Forfeiture of Awards
	11
	

	 
	 
	 

	Article IV
	ADMINISTRATION
	12
	

	 
	 
	 

	Section 4.1
	Appointment of the Committee
	12
	

	Section 4.2
	Powers and Responsibilities of the Committee
	12
	

	Section 4.3
	Income and Employment Tax Withholding
	12
	

	Section 4.4
	Plan Expenses
	12
	

	 
	 
	 

	Article V
	BENEFIT CLAIMS
	13
	

	 
	 
	 

	Article VI
	AMENDMENT AND TERMINATION OF THE PLAN
	13
	

	 
	 
	 

	Section 6.1
	Amendment of the Plan
	13
	

	Section 6.2
	Termination of the Plan
	13
	

	 
	 
	 

	
				
	 
	 
	PAGE

	Article VII
	MISCELLANEOUS
	13
	

	 
	 
	 

	Section 7.1
	Governing Law
	13
	

	Section 7.2
	Headings and Gender
	13
	

	Section 7.3
	Spendthrift Clause
	13
	

	Section 7.4
	Counterparts
	14
	

	Section 7.5
	No Enlargement of Employment Rights
	14
	

	Section 7.6
	Limitations on Liability
	14
	

	Section 7.7
	Incapacity of Participant
	14
	

	Section 7.8
	Evidence
	14
	

	Section 7.9
	Action by Bank
	14
	

	Section 7.10
	Severability
	14
	

	Section 7.11
	Information to be Furnished by a Participant
	14
	

	Section 7.12
	Attorneys' Fees
	14
	

	Section 7.13
	Binding on Successors
	15
	

	Section 7.14
	Retention of Former Plans
	15
	

	 
	 
	 

	APPENDIX I - 2015 PERFORMANCE PERIOD AWARDS FOR 
LEVEL II PARTICIPANTS
	16
	

	APPENDIX II - 2015 PERFORMANCE PERIOD AWARDS FOR
LEVEL I PARTICIPANTS
	21
	

	APPENDIX III - ANNUAL AWARD TARGETS FOR 2010 AND 2011
LONG TERM INCENTIVE PLANS [Completed]
	23
	

	APPENDIX IV - AWARDS ADDRESSING 2015 GAP YEAR FOR 
LEVEL I PARTICIPANTS
	24
	

	APPENDIX V - FORM OF NON-SOLICITATION AND
NON-DISCLOSURE AGREEMENT
	26
	

ARTICLE I
INTRODUCTION
Section 1.1    Purpose. The purpose of the Federal Home Loan Bank of Indianapolis Incentive Plan (the "Plan") is to attract, retain and motivate employees of the Federal Home Loan Bank of Indianapolis (the "Bank") and to focus their efforts on continued improvement in the profitability of the Bank while maintaining the Bank's safety and soundness. The Plan is a cash-based incentive plan that provides award opportunities based on achievement of performance goals.

Section 1.2    Effective Date. The "Effective Date" of the Plan is January 1, 2012.

Section 1.3    Administration. The Plan will be administered by an administrative committee (the "Committee") appointed by the Bank's Board of Directors (the "Board"), which initially will be the Human Resources Committee of the Board. Notwithstanding the foregoing, the term Committee shall also refer to the Executive Governance Committee of the Board who will administer the Plan with respect to the Bank's Chief Executive Officer. The Committee, from time to time, may adopt any rules and procedures it deems necessary or desirable for the proper and efficient administration of the Plan that are consistent with the terms of the Plan. Any notice or document required to be given or filed with the Committee will be properly given or filed if delivered to or mailed by registered mail, postage paid, to the General Counsel, Federal Home Loan Bank of Indianapolis, 8250 Woodfield Crossing Blvd., Suite 400, Indianapolis, Indiana 46240.

Section 1.4    Supplements. The provisions of the Plan may be modified by supplements to the Plan with Board approval. The terms and provisions of each supplement are a part of the Plan and supersede any other provisions of the Plan to the extent necessary to update or eliminate any inconsistencies between the supplement and any other Plan provisions. Any substantive supplement to the Plan shall be submitted to the FHFA for non-objection after full review prior to implementation.

Section 1.5    Definitions. The following terms are defined in the Plan in the following Sections:	
		
	Term
	Plan Sections

	2009 LTIP
	3.6(d)(v)

	2010 LTIP
	3.6(d)(v)

	2011 LTIP
	3.6(d)(v)

	Annual Award
	3.3(a), 3.4(a)

	Award
	3.1

	Bank
	1.1

	Board
	1.3

	Cause
	3.6(d)(i)

	Committee
	1.3

	Compensation
	3.1

	Deferral Performance Period
	3.1(a)

	Deferred Award
	3.3(b)

	Disability
	3.6(d)(ii)

	Discretionary Award
	3.1(d)

	Effective Date
	1.2

1

	
		
	Extraordinary Occurrences
	3.1(e)

	FHFA
	3.6(d)(i)

	Final Award
	3.1(e)

	Fully Meets Expectations
	3.3(a)(ii)

	Gap Year Award
	3.5(a)

	Gap Year Performance Period
	3.5(b)

	Good Reason
	3.6(d)(iii)

	Level I Participant
	3.1(c)

	Level II Participant
	3.1(c)

	Maximum
	3.2(b)(iii)

	Non-Solicitation Agreement
	2.1

	Participant
	2.1

	Performance Goals
	3.2

	Performance Period
	3.1(a)

	Plan
	1.1

	Position
	3.6(d)(iii)(A)

	Reduction in Force
	3.6(d)(iv)

	Reorganization
	3.7(b)

	Retirement
	3.6(d)(v)

	Satisfactory
	3.3(a)(ii)

	Termination of Service
	3.6(d)(vi)

	Target
	3.2(b)(ii)

	Threshold
	3.2(b)(i)

ARTICLE II

ELIGIBILITY AND PARTICIPATION

Section 2.1    Eligibility. Any employee of the Bank, hired before October 1st of the calendar year, will become a "Participant" in the Plan for that calendar year, provided the employee is not classified as a "temporary," an "intern," "contract" or "temporary agency" employee, and does not participate in the Federal Home Loan Bank of Indianapolis Internal Audit Incentive Plan. Level I Participants, as defined in subsection 3.1(c), must have an executed agreement on file with the Bank containing non-solicitation and non-disclosure provisions in a form similar to the form provided in Appendix V to the Plan ("Non-Solicitation Agreement").

Section 2.2    Participation. A designated employee or otherwise eligible employee will become a Participant as of the later of the Effective Date, the employee's date of hire, or the date on or after the Effective Date the employee satisfies the automatic eligibility provisions described in Section 2.1. Any Participant may be removed as an active Participant by the Board effective as of any date.

ARTICLE III

AWARDS AND EXTRAORDINARY OCCURRENCE ADDITIONS/REDUCTIONS

Section 3.1    Awards. At the beginning of each Performance Period, the Board will make an "Award" to eligible Participants. As described in this Article, Awards may be Annual Awards (as defined in subsection 3.3(a)), Deferred Awards (as defined in subsection 3.3(b)), Gap Year Awards (as defined in subsection 3.5(a)) or Discretionary Awards (as defined in subsection 3.1(d)). Each Award will be equal to 

2

a percentage of the Participant's annual Compensation, as described in the applicable Appendices for Level I Participants and Level II Participants. "Compensation" means the Participant's annual earned base salary or wages for hours worked, including overtime and hours paid under the Bank's paid-time-off policies, as applicable, but in any case excluding any bonus, incentive compensation, or long-term disability insurance payments paid for the current or a prior year. In the event a Participant receives a raise during a calendar year, the Participant's Compensation for the year will reflect the actual wages paid to the Participant for the year.

		
	(a)
	Performance Periods. A "Performance Period" is the one-calendar year period over which an Annual Award can be earned and vested pursuant to subsections 3.3(a) and 3.4(a). A "Deferral Performance Period" is the three-calendar year period over which a Deferred Award can be earned and vested pursuant to subsection 3.3(b). A Deferral Performance Period begins on the January 1st immediately following the Performance Period to which such Deferred Award applies.

		
	(b)
	Award Notification. Participants will be notified of an Annual Award, a Deferred Award or Discretionary Award by the Bank by posting the Performance Goals and other necessary terms and conditions applicable to the Annual Award, Deferred Award or Discretionary Award on SharePoint on the Bank's intranet.

		
	(c)
	Award Levels. Participants will receive varying Awards for each Performance Period based on their position with the Bank. A "Level I Participant" is the Bank's President and Chief Executive Officer, Executive Vice President or Senior Vice President of the Bank or any other individual designated as a Level I Participant by the Board. A "Level II Participant" is any participating employee who is not a Level I Participant. If a Participant receives a new position within the Bank which position changes the Participant's Award eligibility, level, or opportunity, each of the Awards for which Participant is or was eligible during the calendar year will be prorated to reflect the portion of the calendar year during which the Participant was eligible for each such Award, level, or opportunity.

		
	(d)
	Discretionary Award. The President may recommend to the Board that an additional discretionary Award (the "Discretionary Award") be made to a Level II Participant to address external market considerations, recruiting needs, special projects and extraordinary individual or team efforts. The aggregate pool of funds available for Discretionary Awards to Level II Participants will not exceed 20 percent of the annual aggregate Awards for still eligible Level I Participants.

		
	(e)
	Final Award and Extraordinary Occurrences. The "Final Award" is the amount of an earned and vested Annual Award, Deferred Award, Gap Year Award or Discretionary Award, as adjusted based upon the level at which the Performance Goals have been achieved, that is ultimately paid to a Participant under the Plan. The amount of a Final Award may be increased or decreased at the Board's discretion to account for performance that is not captured in the Performance Goals. The Board, in its discretion, may also consider Extraordinary Occurrences when assessing performance results and determining Final Awards. "Extraordinary Occurrences" mean those events that, in the opinion and discretion of the Board, are outside the significant influence of the Participant or the Bank and are likely to have a significant unanticipated effect, whether positive or negative, on the Bank's operating and/or financial results. Examples of Extraordinary Occurrences include, but are 

3

not limited to, change in law, regulation, or regulatory policy, or systemic macroeconomic events outside of management's control.

		
	(f)
	Transition Goals for Replaced Long-Term Incentive Programs. Upon adoption of this Plan, the "Performance Goals" required by the 2010 LTIP and 2011 LTIP for calendar years 2012 and 2013 shall be as set forth in Appendix III.

Section 3.2    Performance Goals. "Performance Goals" are the performance factors established by the Board for each Performance Period, Deferral Performance Period and Gap Year Performance Period, as set forth in the applicable Appendices to the Plan, which are taken into consideration in determining the value of an Annual Award, Deferred Award or Gap Year Award. The Board may, for any reason or for an Extraordinary Occurrence, adjust the Performance Goals for a Performance Period, Deferral Performance Period or Gap Year Performance Period to ensure the purposes of the Plan are served. Any such adjustment to Performance Goals shall be submitted to the FHFA for review prior to implementation.

		
	(a)
	Establishment of Performance Goals. Performance Goals for Performance Periods, Deferral Performance Periods or the Gap Year Performance Period commencing on and after January 1, 2012, will be communicated to Participants via SharePoint on the Bank's intranet after they have been established by the Board.

		
	(b)
	Achievement Level. Three achievement levels will be defined for each Performance Goal in determining how much of an Award is earned.

		
	i.
	Threshold. The "Threshold" achievement level is the minimum achievement level accepted for a Performance Goal.

		
	ii.
	Target. The "Target" achievement level is the planned achievement level for a Performance Goal.

		
	iii.
	Maximum. The "Maximum" achievement level is achievement that substantially exceeds the Target achievement level.

		
	(c)
	Interpolation. Achievement levels that discreetly fall in between Threshold-, Target-, and Maximum, will be interpolated, unless otherwise described in a Performance Goal. 

		
	(d)
	Considerations in Establishing Performance Goals. In determining appropriate Performance Goals and the relative weight accorded each Performance Goal, the Committee must:

		
	i.
	Balance risk and financial results in a manner that does not encourage Participants to expose the Bank to imprudent risks;

		
	ii.
	Make such determination in a manner designed to ensure that Participants' overall compensation is balanced and not excessive in amount and that the Annual Awards, Deferred Awards and Gap Year Awards are consistent with the Bank's policies and procedures regarding such compensation arrangements; and

4

		
	iii.
	Monitor the success of the Performance Goals and weighting established in prior years, alone and in combination with other incentive compensation awarded to the same Participants, and make appropriate adjustments in future calendar years as needed so that payments appropriately incentivize Participants and appropriately reflect risk.

Section 3.3    Earning and Vesting of Awards for Level I Participants.

		
	(a)
	Earning and Vesting of Annual Awards. Fifty percent of an Award to a Level I Participant will become earned and vested on the last day of the Performance Period, provided the following requirements are met (an "Annual Award"):

		
	i.
	The applicable Performance Goals for the Performance Period are satisfied;

		
	ii.
	The Participant received (or, in the case of a Termination of Service described in Section 3.6(b) or Section 3.6(c) or a Reorganization described in Section 3.7, the President-CEO determines that the Participant would have received) a performance rating for the Performance Period of at least Fully Meets Expectations or Satisfactory; and

		
	iii.
	The Participant is actively employed on the last day of the Performance Period, unless otherwise provided in Section 3.6 or Section 3.7.

		
	(b)
	Earning and Vesting of Deferred Awards. The remaining 50 percent of an Award to a Level I Participant will become earned and vested on the last day of the Deferral Performance Period, provided the following requirements are met (a "Deferred Award"):

		
	i.
	The applicable Performance Goals for the Deferral Performance Period are satisfied;

		
	ii.
	The Participant received (or, in the case of a Termination of Service described in Section 3.6(b) or Section 3.6(c) or a Reorganization described in Section 3.7, the President-CEO determines that the Participant would have received) an average performance rating for the Deferral Performance Period of at least Fully Meets Expectations or Satisfactory; and

		
	iii.
	The Participant is actively employed on the last day of the Deferral Performance Period, unless otherwise provided in Section 3.6 or Section 3.7.

		
	(c)
	Calculation of Awards. The value of Awards to Level I Participants will be calculated in accordance with the applicable Appendix to the Plan.

Section 3.4    Earning and Vesting of Awards for Level II Participants.

		
	(a)
	Earning and Vesting of Awards. An Award to a Level II Participant will become earned and vested on the last day of the Performance Period provided the following requirements are met (also an "Annual Award"):

		
	i.
	The applicable Performance Goals for the Performance Period are satisfied;

5

		
	ii.
	The Participant received (or, in the case of a Termination of Service described in Section 3.6(b) or Section 3.6(c), the President-CEO determines that the Participant would have received) a performance rating for the Performance Period of at least Fully Meets Expectations or Satisfactory; and

		
	iii.
	The Participant is actively employed on the last day of the Performance Period, unless otherwise provided in Section 3.6.

		
	(b)
	Calculation of Awards. The value of Awards to Level II Participants will be calculated in accordance with the applicable Appendix to the Plan.

Section 3.5    Special Gap Year Awards for Level I Participants.

		
	(a)
	Background. The Board has determined it is appropriate to make a special Award to Level I Participants solely for calendar year 2012 (a "Gap Year Award") to address a gap in payment of incentive compensation during calendar year 2015 which arises as a result of the planned discontinuation of the 2011 LTIP and the implementation of this Plan. 

		
	(b)
	Earning and Vesting of Awards. Notwithstanding Sections 3.3 and 3.4, a Gap Year Award will become earned and vested over a three-year period beginning on January 1, 2012 and ending on December 31, 2014 (the "Gap Year Performance Period") to the extent:

		
	i.
	The Performance Goals for the Gap Year Performance Period, as set forth in the applicable Appendix to the Plan, are satisfied;

		
	ii.
	The Level I Participant received (or, in the case of a Termination of Service described in Section 3.6(b) or Section 3.6(c) or a Reorganization described in Section 3.7, the President-CEO determines that the Participant would have received) an average performance rating for the Gap Year Performance Period of at least Fully Meets Expectations or Satisfactory; and

		
	iii.
	The Level I Participant is actively employed on the last day of the Gap Year Performance Period, unless otherwise provided in Section 3.6 or Section 3.7.

		
	(c)
	Calculation of Awards. The value of Gap Year Awards will be calculated in accordance with the applicable Appendix to the Plan.

    
Section 3.6    Effect of Termination of Service and Amendment of Prior Long-Term Plans.

		
	(a)
	In General. If a Level I Participant incurs a Termination of Service for any reason other than a reason set forth in subsection 3.6(b), 3.6(c), or Section 3.7, the Level I Participant's Award will be forfeited, effective as of the date of such Termination of Service. 

If a Level II Participant incurs a Termination of Service for any reason other than a reason set forth in subsection 3.6(b) or 3.6(c), the Level II Participant's Award will be forfeited effective as of the date of such Termination of Service.  

6

		
	(b)
	Termination Due to Death, Disability, or by the Bank without Cause due to a Reduction in Force.  

		
	i.
	Notwithstanding the provisions of Sections 3.3 and 3.5 and subsection 3.6(a), if a Level I Participant incurs a Termination of Service due to death or Disability or by the Bank without Cause due to a Reduction in Force, then the Participant's Deferred Awards (including, without limitation, the Deferred Award attributable to the calendar year in which the Termination of Service occurs) or Gap Year Award will be treated as earned and vested based on the assumption the Bank would have achieved the applicable Performance Goals at the Target achievement level for the Deferral Performance Period(s) and/or Gap Year Performance Period.

		
	ii.
	Notwithstanding the provisions of Sections 3.3 and 3.5 and subsection 3.6(a), if a Level I Participant incurs a Termination of Service due to death or Disability or by the Bank without Cause due to a Reduction in Force, any Annual Award which has not been earned and vested will be treated as earned and vested based on the assumption the Bank would have achieved the Performance Goals at the Target achievement level for the Performance Period.

		
	iii.
	Notwithstanding the provisions of Section 3.4 and subsection 3.6(a), if a Level II Participant incurs a Termination of Service during a Performance Period due to death, Disability, or by the Bank without Cause due to a Reduction in Force, an Annual Award will be treated as earned and vested based on the assumption the Bank would have achieved the Performance Goals at the Target achievement level for the Performance Period.

		
	(c)
	Termination Due to Other Events.

		
	i.
	Termination of Service for Good Reason. Notwithstanding the provisions of Sections 3.3 and 3.5 and subsection 3.6(a), if a Level I Participant incurs a Termination of Service due to Good Reason, an Annual Award, Deferred Award (including, without limitation, the Deferred Award attributable to the calendar year in which the Termination of Service occurs) or Gap Year Award, as the case may be, will be treated as earned and vested to the extent the Performance Goals for the Performance Period, Deferral Performance Period(s) and/or Gap Year Performance Period are satisfied.

		
	ii.
	Termination of Service due to Retirement.

		
	(A)
	Notwithstanding the provisions of Sections 3.3 and 3.5 and subsection 3.6(a), if a Level I Participant incurs a Termination of Service due to Retirement, any Annual Award which has not been earned and vested will be treated as earned and vested to the extent the Performance Goals for the Performance Period are satisfied.  

7

		
	(B)
	Notwithstanding the provisions of Sections 3.3 and 3.5 and subsection 3.6(a), if a Level I Participant incurs a Termination of Service due to Retirement, any Deferred Award (including, without limitation, the Deferred Award attributable to the calendar year in which the Termination of Service occurs) will be treated as earned and vested to the extent the Performance Goals for each applicable Deferral Performance Period are satisfied.  

		
	(C)
	Notwithstanding the provisions of Sections 3.3 and 3.5 and subsection 3.6(a), if a Level I Participant incurs a Termination of Service due to Retirement, any Gap Year Award which has not been earned and vested, will be treated as earned and vested to the extent the Performance Goals for the Gap Year Performance Period are satisfied. 

		
	iii.
	Notwithstanding the provisions of Section 3.4 and subsection 3.6(a), if a Level II Participant incurs a Termination of Service during a Performance Period due to Retirement, an Annual Award will be treated as earned and vested to the extent the Performance Goals for the Performance Period are satisfied.

		
	(d)
	Definitions.

		
	i.
	"Cause" means (A) continued failure of a Participant to perform his or her duties with the Bank (other than any such failure resulting from Disability), after a written demand for performance is delivered to the Participant, which specifically identifies the manner in which the Participant has not performed his or her duties, (B) personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure or omission to perform stated duties, or willful violation of any law, rule or regulation (other than routine traffic violations or similar offenses), or (C) removal of the Participant for cause by the Federal Housing Finance Agency ("FHFA") or at the direction of the FHFA pursuant to 12 U.S.C. 1422b(a)(2), or by any successor agency to the FHFA pursuant to a similar statute.

		
	ii.
	"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 the Bank for an aggregate of 12 out of 15 consecutive months and, within 30 days after a written notice of termination is thereafter given by the Bank to the Participant, the Participant does not return to the full-time performance of the Participant's duties.

		
	iii.
	"Good Reason" means a Termination of Service by a Level I Participant under any of the following circumstances:

		
	(A)
	a material change in the Participant's status, position, job title or principal duties and responsibilities as a key employee of the Bank which does not represent a promotion from the Participant's status and position immediately prior to the change ("Position");

8

		
	(B)
	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;

		
	(C)
	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;

		
	(D)
	any material breach by the Bank of any provisions of this Plan or any other agreement with the Participant; or

		
	(E)
	any failure by the Bank or its successors and assigns to obtain the assumption of this Plan by any successor or assign of the Bank.

		
	iv.
	"Reduction in Force" means an involuntary Termination of Service of a Participant by the Bank in connection with a financial decision by the Board to reduce the number of Bank employees, not due to the Participant's performance, and not due to a Reorganization.

		
	v.
	"Retirement" means the Participant's planned and voluntary termination of employment after the Participant has delivered timely advance written notice of intent to retire to the Bank and has either: (A) attained age 60 with five "Years of Service," or (B) attained the "Rule of 85," which means the Participant has attained a combined age and Years of Service that mathematically is equal to or exceeds the number 85. A "Year of Service" will be calculated in the same manner as under the Pentegra Defined Benefit Pension Plan for Financial Institutions. Advance written notice will be deemed timely given if it is given at least four weeks in advance, as to Vice Presidents, First Vice Presidents, Senior Vice Presidents, Executive Vice Presidents, and the Chief Executive Officer, and at least two weeks in advance, as to all other employees.

Effective as of the effective date of the Federal Home Loan Bank of Indianapolis 2009 Incentive Plan (the "2009 LTIP"), the Federal Home Loan Bank of Indianapolis 2010 Incentive Plan (the "2010 LTIP"), and the Federal Home Loan Bank of Indianapolis Long Term Incentive Plan (the "2011 LTIP"), this subsection hereby amends the definition of "Retirement" under the 2009 LTIP, 2010 LTIP and the 2011 LTIP to conform to the definition of Retirement as set forth above, with respect to determining if an employee retired beginning on and after January 1, 2012.
		
	vi.
	"Termination of Service" means the occurrence of any act or event or any failure to act, that actually or effectively causes or results in a Participant ceasing, for whatever reason, to be an employee of the Bank, including, but not limited to, death, Disability, Retirement, termination of the Participant's employment by the Bank (whether for Cause or otherwise), termination by the Participant of his or her employment with the Bank for Good Reason and voluntary resignation or termination by the Participant of his or her employment.

9

Section 3.7    Effect of Reorganization. The following provision applies to Level I Participants only. 

		
	(a)
	Notwithstanding the provisions of Sections 3.3 and 3.6, if a Reorganization of the Bank occurs, then any portion of an Annual Award, Deferred Award (including, without limitation, the Deferred Award attributable to the calendar year in which the Termination of Service occurs), or Gap Year Award which has not otherwise become earned and vested as of the date of the Reorganization will be treated as 100 percent earned and vested effective as of the date of the Reorganization based on the assumption the Bank would have achieved the Performance Goals at the Target achievement level for the Performance Period, the Deferral Performance Period, and/or Gap Year Performance Period.

		
	(b)
	"Reorganization" of the Bank will mean the occurrence at any time of any of the following events:

		
	i.
	The Bank is merged or consolidated with or reorganized into or with another bank or other entity, or another bank or other entity is merged or consolidated into the Bank;

		
	ii.
	The Bank sells or transfers all, or substantially all of its business and/or assets to another bank or other entity;

		
	iii.
	More than 50 percent of the total market value or total voting power of all ownership interests in the Bank is acquired, within any 12-month period, by one person or entity or by more than one person or entity acting as a group; or

		
	iv.
	The liquidation or dissolution of the Bank.

The term "Reorganization" shall not include any Reorganization that is mandated by federal statute, rule, regulation, or directive, including 12 U.S.C. § 1421, et seq., as amended, and 12 U.S.C. § 4501 et seq., as amended, and which the Director of the FHFA (or successor agency) has determined should not be a basis for accelerating vesting under this Plan, by reason of the capital condition of the Bank or because of unsafe or unsound acts, practices, or condition ascertained in the course of the Agency's supervision of the Bank or because any of the conditions identified in 12 U.S.C. § 4617(a)(3) are met with respect to the Bank (which conditions do not result solely from the mandated reorganization itself, or from action that the Agency has required the Bank to take under 12 U.S.C. § 1431(d)).
Section 3.8    Payment of Awards.
		
	(a)
	Payments Related to Termination of Service. The following provisions apply to Final Awards payable as a result of a Termination of Service.

		
	i.
	In the event of a Termination of Service due to a termination by the Bank without Cause due to a Reduction in Force, death, or Disability, 100 percent of a Final Award will be paid in a single sum within 75 days of the date of Termination of Service. Notwithstanding the foregoing, in the event of a Reduction in Force, a 

10

Participant must execute the severance agreement offered by the Bank in order to be eligible to receive payment.

		
	ii.
	In the event of a Termination of Service due to Retirement or a termination by a Level I Participant for Good Reason, payment of a Final Award will be made in a single sum within 75 days following the end of the Performance Period, Deferral Performance Period or Gap Year Performance Period, as applicable.  

		
	(b)
	Payments Not Related to a Termination of Service. Final Awards which become vested for reasons other than a Termination of Service will be paid in a single sum within 75 days following the end of the Performance Period, Deferral Performance Period or Gap Year Performance Period, as applicable.

		
	(c)
	Notwithstanding the foregoing provisions of this Section, Final Awards will be paid upon approval by the Board and after review of the calculations by the Bank's external auditor. However, in the event of a Reorganization, payment of a Final Award will be made in a single sum on the date on which the Reorganization occurs.

Section 3.9    Reduction or Forfeiture of Awards.

		
	(a)
	If during the Deferral Performance Period actual losses or other measures or aspects of performance related to the Performance Period or Deferral Performance Period are realized which would have caused a reduction in amount of the Final Award calculated for the Performance Period or Deferral Performance Period, then the remaining amount of the Final Award to be paid at the end of the Deferral Performance Period will be reduced to reflect this additional information.

		
	(b)
	Notwithstanding any other provision of the Plan, if a Participant violates a Non-Solicitation Agreement, all of his unpaid vested and unvested Awards will be forfeited effective as of the date the Board determines such violation has occurred and gives written notice to the Participant of such determination. Any future payments for a vested Award will cease and the Bank will have no further obligation to make such payments.

		
	(c)
	Notwithstanding any other provision of the Plan, if during the most recent examination of the Bank by the FHFA, the FHFA identified an unsafe or unsound practice or condition that is material to the financial operation of the Bank within the Participant's area(s) of responsibility and such unsafe or unsound practice or condition is not subsequently remediated to the satisfaction of the Board as determined by the Board after reviewing the findings or input from the FHFA, then all (or a portion) of a Participant's vested and unvested Awards will be forfeited as determined by the Board and directed to the participant in writing. Any future payments for a vested Award will, if directed by the Board, cease and the Bank will have no further obligation to make such payments.

		
	(d)
	By resolution, the Board may reduce or eliminate an Award that is otherwise earned under this Plan but not yet paid, if the Board finds that a serious, material safety-soundness problem, or a serious, material risk-management deficiency exists at the Bank, or if: (i) operational errors or omissions result in material revisions to: (A) the financial results, (B) information submitted to the FHFA, or (C) data used to determine incentive payouts; (ii) submission of material information to the SEC, Office of Finance, and/or FHFA is 

11

significantly past due, or (iii) the Bank fails to make sufficient progress, as determined by the Board, in the timely remediation of significant examination, monitoring and other supervisory findings.

ARTICLE IV

ADMINISTRATION

Section 4.1    Appointment of the Committee. The Committee, or a duly authorized officer or officers of the Bank empowered by the Committee to act on its behalf under sub-section 4.2(d), will be responsible for administering the Plan, and the Committee will be charged with the full power and the responsibility for administering the Plan in all its details; provided that the power to determine eligibility pursuant to Article II is reserved to the Board.

Section 4.2    Powers and Responsibilities of the Committee. The Committee will have all powers necessary to administer the Plan, including the power to construe and interpret the Plan document; to decide all questions relating to an individual's eligibility to participate in the Plan; to determine the amount, manner and timing of any distribution of benefits under the Plan; to resolve any claim for benefits in accordance with Article V, and to appoint or employ advisors, including legal counsel, to render advice with respect to any of the Committee's responsibilities under the Plan. Any construction, interpretation, or application of the Plan by the Committee will be final, conclusive and binding.

		
	(a)
	Records and Reports. The Committee will be responsible for maintaining sufficient records to determine each Participant's eligibility to participate in the Plan.

		
	(b)
	Rules and Decisions. The Committee may adopt such rules as it deems necessary, desirable, or appropriate in the administration of the Plan. All rules and decisions of the Committee will be applied uniformly and consistently to all Participants in similar circumstances. When making a determination or calculation, the Committee will be entitled to rely upon information furnished by a Participant, the Bank or the legal counsel of the Bank.

		
	(c)
	Application for Benefits. The Committee may require a Participant to complete and file with it an application for a benefit, and to furnish all pertinent information requested by it. The Committee may rely upon all such information so furnished to it, including the Participant's current mailing address.

		
	(d)
	Delegation. The Committee may authorize one or more officers or employees of the Bank to perform administrative responsibilities on its behalf under the Plan. Any such duly authorized officer will have all powers necessary to carry out the administrative duties delegated to such officer by the Committee.

Section 4.3    Income and Employment Tax Withholding. The Bank will withhold from payments to Participants of their Awards, to the extent required by law, all applicable federal, state, city and local taxes.

Section 4.4    Plan Expenses. The expenses incurred for the administration and maintenance of the Plan will be paid by the Bank.

12

ARTICLE V

BENEFIT CLAIMS

If the Committee requires a Participant to file a claim to receive his or her benefit under the Plan, or if he or she wishes to apply for a benefit, the claim must be made in writing and filed with the Committee. If a claim is denied, the Committee will furnish the claimant with written notice of its decision. A claimant may request a full and fair review of the denial of a claim for benefits by filing a written request with the Committee.
ARTICLE VI

AMENDMENT AND TERMINATION OF THE PLAN

Section 6.1    Amendment of the Plan. The Bank, acting through the Board, may amend the Plan at any time in its sole discretion. Notwithstanding the foregoing, the Bank may not amend the Plan to reduce a Participant's Award as determined on the day preceding the effective date of the amendment or to otherwise retroactively impair or adversely affect the rights of a Participant. Any substantive amendment to the Plan shall be submitted to the FHFA for review prior to implementation.

Section 6.2    Termination of the Plan. The Bank, acting through the Board, may terminate the Plan at any time in its sole discretion. Absent an amendment to the contrary, Plan benefits that were earned and vested prior to the termination will be paid at the times and in the manner provided for by the Plan at the time of the termination.

ARTICLE VII

MISCELLANEOUS

Section 7.1    Governing Law. Except to the extent superseded by laws of the United States, the laws of Indiana will be controlling in all matters relating to the Plan without regard to the choice of law principles therein. The Plan and all Awards are intended to comply, and will be construed by the Bank in a manner in 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 or an Award and a provision of Code Section 409A, the applicable provision of Code Section 409A will control.

Section 7.2    Headings and Gender. 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. All calculations of events that last a portion of a calendar year or are to be determined pro rata as to a calendar year will be determined by the actual number of days the condition or event existed and assuming a 365-day year.

Section 7.3    Spendthrift Clause. No benefit or interest available under the Plan will be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or attachment by creditors of a Participant, either voluntarily or involuntarily.

13

Section 7.4    Counterparts. 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.

Section 7.5    No Enlargement of Employment Rights. Nothing contained in the Plan may be construed as a contract of employment between the Bank and any person, nor may the Plan be deemed to give any person the right to be retained in the employ of the Bank or limit the right of the Bank to employ or discharge any person with or without cause.

Section 7.6    Limitations on Liability. The individual members of the Board will, in accordance with the Bank's by-laws, be indemnified and held harmless by the Bank with respect to any alleged breach of responsibilities performed or to be performed hereunder. In addition, notwithstanding any other provision of the Plan, neither the Bank nor any individual acting as an employee or agent of the Bank 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.

Section 7.7    Incapacity of Participant. 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 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 the Bank and the Plan.

Section 7.8    Evidence. 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.

Section 7.9    Action by Bank. Any action required of or permitted by the Bank under the Plan will be by resolution of the Board or by a person or persons authorized by resolution of the Board.

Section 7.10    Severability. 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.

Section 7.11    Information to be Furnished by a Participant. A Participant, or any other person entitled to benefits under the Plan, must furnish the 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 Committee, and on the prompt execution of any document reasonably related to the administration of the Plan requested by the Committee.

Section 7.12    Attorneys' Fees. If any action is commenced to enforce the provisions of the Plan, payment of attorneys' fees will be governed by the terms set forth in the mandatory "Agreement to Arbitrate" entered into between the Bank and the Participant.

14

Section 7.13    Binding on Successors. The Plan will be binding upon and inure to the benefit of the Bank 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 the Bank, but nothing in the Plan will preclude the Bank 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 the Bank hereunder. The Bank 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 the Bank, the term "Bank" will refer to such other organization and the Plan will continue in full force and effect.

Section 7.14    Retention of Former Plans. Each of the 2009 LTIP, 2010 LTIP, and 2011 LTIP, as amended herein, are incorporated herein by reference. Each of the 2009 LTIP, 2010 LTIP, and 2011 LTIP, as so amended, shall survive adoption of this Plan according to its respective terms. In addition, Subsection 3.1(c) of the 2011 LTIP is hereby amended, retroactive to January 1, 2011, by adding the following sentence at the end of such subsection:

"If a Participant receives a new position within the Bank which position changes the Participant's Award eligibility, level, or opportunity, each of the Awards for which such Participant is or was eligible during or relating to a calendar year will be prorated to reflect the portion of the calendar year during which the Participant was eligible for each such Award, level, or opportunity based on such new position."

15

2015 PERFORMANCE GOALS AS APPROVED BY THE BOARD OF DIRECTORS, AS AMENDED:

Pursuant to Section 3.2 of the Federal Home Loan Bank of Indianapolis ("Bank") Incentive Plan, effective as of January 1, 2012, and as amended (the "Plan"), the following Appendices were adopted by the Board of Directors (the "Board") of the Bank on November 20, 2014, and amended by the Board on January 29, 2015, in each case after consideration and review by the Human Resources Committee of the Board. These Appendices to the Plan are effective as of January 1, 2015. All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Plan.

16

APPENDIX I

2015 PERFORMANCE PERIOD AWARDS FOR LEVEL II PARTICIPANTS
Federal Home Loan Bank of Indianapolis

A.    Incentive Opportunities for Level II Participants
	
					
	 
	INCENTIVE DELIVERED IN CASH
AS % OF COMPENSATION (1)

	Position
	Threshold
	Target
	Maximum

	1ST VP
	20%
	25%
	30%

	Calling Officers
	20%
	30%
	40%

	VP
	15%
	20%
	25%

	AVP
	5%
	10%
	15%

	OTHER Employees
	2.5%
	7.5%
	10%

		
	(1) 
	"Compensation" is defined in Section 3.1 of the Federal Home Loan Bank of Indianapolis Incentive Plan

17

B.    2015 Performance Goals	
							
	MISSION GOALS
	WEIGHTED VALUE
	MINIMUM
 THRESHOLD
	TARGET
	MAXIMUM

	Bank (1)
	CRM
	Sales (2)

	1. PROFITABILITY (3)
	25%
	25%
	20%
	350 bp
	590 bp
	700 bp

	 
	 
	 
	 
	 
	 
	 

	2. MEMBER PRODUCTS
	 
	 
	 
	 
	 
	 

	Member Advance Growth (4)
	15%
	15%
	20%
	1%
	2.5%
	8%

	 
	 
	 
	 
	 
	 
	 

	Advance Special Activity (5) 
	10%
	5%
	15%
	4 points
	7 points
	9 points

	 
	 
	 
	 
	 
	 
	 

	MPP Production (6)
	10%
	10%
	10%
	$750 MM
	$1,770 MM
	$2,250 MM

	 
	 
	 
	 
	 
	 
	 

	MPP Participation Rate (7)
	10%
	10%
	15%
	70%
	80%
	90%

	 
	 
	 
	 
	 
	 
	 

	CIP Advances Originated (8)
	5%
	5%
	5%
	$50 MM
	$75 MM
	$100 MM

	 
	 
	 
	 
	 
	 
	 

	3. INFORMATION TECHNOLOGY (9)
	 
	 
	 
	 
	 
	 

	Enhanced Capabilities (10)
	5%
	5%
	5%
	Deliver all Technology Strategy White Papers with proposed technology options.
	Achieve Threshold and deliver a minimum of 6 detailed multi-release phased implementation plans, tied to Technology Strategy White Papers technology options or PPWG Roadmap.
	Achieve Target and release to production at least two releases associated with the 6 multi-release implementation plans. 

	 
	 
	 
	 
	 
	 
	 

	CBS Implementation (11)
	5%
	5%
	5%
	Release to production a minimum of 6 CBS releases
	Achieve Threshold and Release to production a Major Release in CBS that supports CO and DN integration into existing CBS platform.
	Achieve Target and release to production another CBS Major Release.

	 
	 
	 
	 
	 
	 
	 

	4. RISK MANAGEMENT AND REPORTING
	 
	 
	 
	 
	 
	 

	Retained Earnings (12)
	10%
	10%
	3%
	5.7%
	5.9%
	6.3%

	 
	 
	 
	 
	 
	 
	 

	Prudential Management, Risk Oversight Committee Reports, and Risk Appetite Statement Compliance (13)
	5%
	10%
	2%
	2 Prudential Management Self-Assessments and a ROC Report for at least 6 Board meetings.
	Achieve Threshold and remain within Policy and Regulatory Limit for each Risk Type identified in  the RAS Limit and Tolerance Report, as amended from time to time, for each ROC Report.
	Achieve Target and remain within the Tolerance for each Risk Type identified in  the RAS Limit and Tolerance Report, as amended from time to time, for each ROC Report.

18

		
	(1) 
	For all Level II Participants, excluding those addressed in the CRM and Sales columns, and excluding those in the Internal Audit department.

		
	(2) 
	For VP-Business Development Director, VP Account Managers, AVP Account Managers, other Account Managers, and Market Research officers and Staff, excluding their administrative support staff, who fall under the Bank column for the weighted value determination.

		
	(3) 
	For purposes of this goal, profitability is defined as the Bank’s profitability rate in excess of the Bank’s cost of funds rate. Profitability is the Bank’s adjusted net income reduced by the portion of net income to be added to restricted retained earnings under the Joint Capital Enhancement Agreement dated August 5, 2011, as amended, by and among the twelve Federal Home Loan Banks and increased by the Bank’s accruals for incentive compensation. Adjusted net income represents GAAP Net Income adjusted: (i) for the net impact of certain current and prior period Advance prepayments and debt extinguishments, net of the AHP assessment, (ii) to exclude mark-to-market adjustments on derivatives and certain other effects from derivatives and hedging activities, net of the AHP assessment, and (iii) to exclude the effects from interest expense on mandatorily redeemable capital stock. The Bank’s profitability rate is profitability, as defined above, as a percentage of average total regulatory capital stock (B1 weighted at 100% and B2 weighted at 80% to reflect the relative weights of the Bank’s dividend). Assumes no material change in investment authority under the FHFA's regulation, policy, directive, guidance, or law. 

		
	(4) 
	Member advances are calculated as the growth in the average daily balance of advances outstanding to members at par.  Average daily balances are used instead of point-in-time balances to eliminate point-in-time activity that may occur and to reward for the benefit of the income earned on advances balances while outstanding. Members that become non-members during 2015 will be excluded from the calculation. 

		
	(5) 
	For each Advance Special offering (i.e., each advance offering communicated to members on special terms), one (1) point is earned for an Advance Special offering if at least ten (10) members participate in the offering or an aggregate total of $50 million or more is originated pursuant to the offering. 

		
	(6) 
	Mortgage Purchase Program production, including FHA and conventional loans, will be the amount of all Master Delivery Contracts traded in 2015. Assumes no capital requirement for MPP. Excludes Acquired Member Assets ("AMA") obtained from or through other Federal Home Loan Banks. It also assumes no material change in AMA authority under the FHFA's regulation, policy, directive, guidance, or law. When calculating achievement between the minimum threshold and the performance maximum, no single member can account for more than 25% of conventional production. 

		
	(7) 
	Mortgage Purchase Program Participation Rate is the measurement of the proportion of approved MPP Participating Financial Institutions ("PFIs") that trade mortgage loans each quarter, divided by the sum of (i) the approved MPP PFIs with open Master Commitment Contracts at the beginning of that quarter, and (ii) those additional MPP PFIs not included in (i) for a quarter that trade mortgage loans in such quarter. MPP PFIs are automatically dropped from the approved MPP PFI list if the PFI: (a) has not traded with the Bank within 12 months of the later of their approval date or their last trade date; (b) has ceased to be a member; (c) has discontinued participation in MPP in accordance with applicable MPP contracts; (d) ceases to have an open Master Commitment Contract at the end of the quarter; or (e) has defaulted under one or more agreements with the Bank.  This rate is measured quarterly, with the 4 quarters’ results averaged. 

		
	(8) 
	"CIP" means Community Investment Program.  "CIP Advances" are newly-originated Community Investment Cash Advances, including CIP and other qualifying Advances and CIP qualified letters of credit, provided in support of targeted projects as defined in 12 C.F.R. Part 1291 and the Federal Home Loan Bank Act. 

		
	(9) 
	Status and reporting on these technology Goals and their attainment will be provided in writing by the Chief Information Officer ("CIO"), Chief Accounting Officer ("CAO"), and Chief Financial Officer ("CFO"), and will be confirmed by the President-CEO. The CIO, CAO, CFO, and the President-CEO will advise the Committee designated in Section 1.3 of the Plan of unanticipated developments that could be expected to materially change the Bank’s ability to achieve these Goals. If one or more of these designated positions are open at the time any of the foregoing approvals are required, the Executive Vice President-Finance will be substituted.

		
	(10) 
	"PPWG" means project prioritization working group.  Production delivery is defined as the implementation in production of software that is identified in a Technology Strategy White Paper and either supports new business capabilities or extends existing business capabilities. This Goal excludes all technology initiatives that are in testing as of November 2014.

		
	(11) 
	A release will be approved by the Core Banking Solution ("CBS") PPWG.  "CO" means consolidated obligation; "DN" means discount notes. A "Major Release" is a CBS software release that provides new functionality or major enhancement to existing functionality, and not fixes to existing functionality or minor enhancements to existing functionality.  The CBS PPWG will determine whether a release is a "Major Release," subject to the review and concurrence of the CIO and President-CEO. 

		
	(12) 
	Total Retained Earnings divided by mortgage assets, measured at the end of each month. Calculated each month as Total Retained Earnings divided by the sum of the carrying value of the MBS and AMA portfolios. The year-end calculation will be the simple average of the 12 month-end calculations. 

19

		
	(13) 
	As per the Board meeting schedule, provide the Board Risk Oversight Committee the CRM report for at least six scheduled in-person meetings. Prudential Management Self-Assessments are performed twice annually to assess compliance with the FHFA Prudential Management & Operations Standards. "ROC" means Risk Oversight Committee of the Board of Directors.  "RAS" means Risk Appetite Statement.  Achievement of these objectives will be documented through RAS Limit and Tolerance Reports that are presented to the ROC.

 

 

20

APPENDIX II

2015 PERFORMANCE PERIOD AWARDS FOR LEVEL I PARTICIPANTS
Federal Home Loan Bank of Indianapolis

A.    Incentive Opportunities for Level I Participants
	
										
	 
	 
	 
	 
	50% of Total Incentive Earned & Vested At Year-End
	50% of Total Incentive Deferred for 3-Years

	 
	TOTAL INCENTIVE AS % OF COMPENSATION (1)
	YEAR-END INCENTIVE AS % OF COMPENSATION (1)
	DEFERRED INCENTIVE
AS % OF COMPENSATION (2)

	Position
	Threshold
	Target
	Maximum
	Threshold
	Target
	Maximum
	Threshold
	Target
	Maximum

	CEO
	50%
	75%
	100%
	25%
	37.5%
	50%
	25%
	37.5%
	50%

	EVP/SVP
	30%
	50%
	70%
	15%
	25%
	35%
	15%
	25%
	35%

		
	(1) 
	Compensation is defined in Section 3.1 of the Federal Home Loan Bank of Indianapolis Incentive Plan.

		
	(2) 
	Deferred Awards are subject to additional Performance Goals during the Deferral Performance Period. Depending on the Bank's performance during the Deferral Performance Period, the Final Award will be worth 75 percent at Threshold, 100 percent at Target or 125 percent at Maximum of the original amount of the Deferred Award.

B.    2015 Performance Goals for Level I Participants
The Mission Goals, Weighted Values, Minimum Threshold, Target, Maximum, and notes set forth in Appendix I.B. above shall apply to Level I Participants as well as Level II Participants, and is incorporated herein by this reference.  For purposes of this Appendix II.B., "Bank" shall refer to Level I Participants other than those in CRM and Internal Audit, and "CRM" shall refer to Level I Participants in CRM.  No Level I Participant qualifies for "Sales."

C.    2016-2018 Performance Goals for Level I Participants
	
						
	MISSION GOALS
	WEIGHTED VALUE
	MINIMUM THRESHOLD (4)
	TARGET (4)
	MAXIMUM (4)

	Bank (3)
	CRM

	1. PROFITABILITY (1)
	35%
	35%
	25 bp
	50 bp
	150 bp

	 
	 
	 
	 
	 
	 

	2. RETAINED EARNINGS (2)
	35%
	35%
	3.5%
	3.9%
	4.3%

	 
	 
	 
	 
	 
	 

	3. PRUDENTIAL
	30%
	30%
	Achieve 2 Prudential Standards
	—
	Achieve all 3 Prudential Standards

	 
	 
	 
	 
	 
	 

	A. Maintain a regulatory capital-to-assets ratio of at least 4.16% as measured on each quarter-end in 2016 through 2018.
	 
	 
	 
	 
	 

	B. Without Board pre-approval, do not purchase more than $2.5 billion of conventional AMA assets per plan year.
	 
	 
	 
	 
	 

	C. Award to FHLBI members the annual AHP Competitive funding requirement in each plan year.
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

21

		
	(1) 
	For purposes of this goal, profitability is defined as the Bank’s profitability rate in excess of the Bank’s cost of funds rate. Profitability is the Bank’s adjusted net income reduced by the portion of net income to be added to restricted retained earnings under the Joint Capital Enhancement Agreement dated August 5, 2011, as amended, by and among the Twelve Federal Home Loan Banks and increased by the Bank’s accruals for incentive compensation. Adjusted net income represents GAAP Net Income adjusted: (i) for the net impact of certain current and prior period Advance prepayments and debt extinguishments, net of the AHP assessment, (ii) to exclude mark-to-market adjustments on derivatives and certain other effects from derivatives and hedging activities, net of the AHP assessment, and (iii) to exclude the effects from interest expense on mandatorily redeemable capital stock. The Bank's profitability rate is profitability, as defined above, as a percentage of average total regulatory capital stock (B1 weighted at 100% and B2 weighted at 80% to reflect the relative weights of the Bank’s dividend). Assumes no material change in investment authority under the FHFA's regulation, policy, directive, guidance, or law. Attainment of this goal will be computed using the simple average of annual profitability measures over the three-year period. 

		
	(2) 
	Total Retained Earnings divided by mortgage assets, measured at the end of each month. Calculated each month as Total Retained Earnings divided by the sum of the carrying value of the MBS and AMA assets portfolios. The calculation will be the simple average of 36 month-end calculations.    

		
	(3) 
	For Level I Participants other than those in CRM and Internal Audit.

		
	(4) 
	Deferred Awards are subject to additional Performance Goals for the Deferral Performance Period. Depending on the Bank’s performance during the Deferral Performance Period, the Final Award will be worth 75 percent at Threshold, 100 percent at Target or 125 percent at Maximum of the original amount. 

22

APPENDIX III

ANNUAL AWARD TARGETS FOR 2010 AND 2011 LONG TERM INCENTIVE PLANS
Federal Home Loan Bank of Indianapolis

[This Appendix has been deleted because the final awards have been determined and payouts were made on March 7, 2014.] 

23

APPENDIX IV

AWARDS ADDRESSING 2015 GAP YEAR FOR LEVEL I PARTICIPANTS
Federal Home Loan Bank of Indianapolis 

A.    Incentive Opportunities
	
		
	 
	LONG-TERM INCENTIVE % OF ACTUAL 2011 SHORT-TERM YEAR-END INCENTIVE PAID IN 2012

	Position
	Award Factor

	CEO
	60%

	EVP/SVP
	67%

B.    2012-2014 Performance Plan Goals for Gap Calculation

	
						
	MISSION GOALS
	WEIGHTED VALUE
	MINIMUM THRESHOLD (4)
	TARGET (4)
	MAXIMUM (4)

	Bank (3)
	CRM

	1. PROFITABILITY (1)
	35%
	35%
	25 bp
	50 bp
	150 bp

	 
	 
	 
	 
	 
	 

	2. Retained Earnings (2)
	35%
	35%
	3.5%
	3.9%
	4.3%

	 
	 
	 
	 
	 
	 

	3. PRUDENTIAL
	30%
	30%
	Achieve 2 Prudential Standards
	—
	Achieve all 3 Prudential Standards

	Maintain a regulatory capital-to-assets ratio of at least 4.16% as measured on each quarter-end in 2012 through 2014. 
	 
	 
	 
	 
	 

	Without Board pre-approval, do not purchase more than $2.5 billion of conventional AMA assets per plan year.
	 
	 
	 
	 
	 

	Award to FHLBI members the annual AHP funding requirement in each plan year.
	 
	 
	 
	 
	 

		
	(1) 
	For purposes of this goal, profitability is defined as the Bank’s profitability rate in excess of the Bank’s cost of funds rate. Profitability is the Bank’s adjusted net income reduced by the portion of net income to be added to restricted retained earnings under the Joint Capital Enhancement Agreement dated August 5, 2011, as amended, by and among the twelve Federal Home Loan Banks and increased by the Bank’s accruals for incentive compensation. Adjusted net income represents GAAP Net Income adjusted: (i) for the net impact of certain current and prior period Advance prepayments and debt extinguishments, net of the AHP assessment, (ii) to exclude mark-to-market adjustments on derivatives and certain other effects from derivatives and hedging activities, net of the AHP assessment, and (iii) to exclude the effects from interest expense on mandatorily redeemable capital stock. The Bank’s profitability rate is profitability, as defined above, as a percentage of average total regulatory capital stock (B1 weighted at 100% and B2 weighted at 80% to reflect the relative weights of the Bank’s dividend). Assumes no material change in investment authority under FHFA's regulation, policy, directive, guidance, or law. 

		
	(2) 
	Total Retained Earnings divided by mortgage assets, measured at the end of each month. Calculated each month as Total Retained Earnings divided by the sum of the carrying value of the MBS and AMA asset portfolios. The calculation will be the simple average of 36 month-end calculations.

		
	(3) 
	For Level I Participants other than those in CRM and Internal Audit.

24

		
	(4) 
	Gap Year Awards are subject to additional Performance Goals for the Gap Year Performance Period. Depending on the Bank’s performance during the Gap Year Performance Period, the Final Award will be worth 75 percent at Threshold, 100 percent at Target or 125 percent at Maximum of the original amount.

25

APPENDIX V

FORM OF NON-SOLICITATION AND NON-DISCLOSURE AGREEMENT

This Agreement is entered into as of the ____ day of _____________, 201_, by and between the FEDERAL HOME LOAN BANK OF INDIANAPOLIS, a corporation organized under the laws of the United States (the "Bank") and ____________________ (the "Executive").
WHEREAS, the Bank sponsors the Federal Home Loan Bank of Indianapolis Incentive Plan (the "Plan"); and
WHEREAS, as a condition of participation in the Plan, the Bank requires that the Executive agree to the terms and conditions found within this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual promises and agreements contained herein and other good and valuable consideration, the receipt, legal adequacy and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.    Non-Disclosure; Return of Confidential Information and Other Property.

		
	(a)
	Access to Confidential Information. The Executive understands, acknowledges and agrees that during the course of his or her employment with the Bank he or she has gained or will gain information regarding, knowledge of, and familiarity with, the Confidential Information of the Bank (as defined in subsection (c)) that would cause irreparable damage and harm to the Bank if it was disclosed. The Executive understands, acknowledges and agrees that the Confidential Information has substantial economic value because it is not known or readily ascertainable by proper means by others who could obtain economic value from it. The Executive also acknowledges and agrees that the Bank uses reasonable means to maintain the secrecy and confidentiality of the Confidential Information.

		
	(b)
	Non-Disclosure. At all times while the Executive is employed by the Bank, and at all times thereafter, the Executive will not (i) directly or indirectly disclose, provide or discuss any Confidential Information with or to any Person (as defined in subsection (d)) other than those directors, officers, employees, representatives and agents of the Bank who need to know such Confidential Information for a proper corporate purpose, and (ii) directly or indirectly use any Confidential Information (A) to compete against the Bank, or (B) for the Executive's own benefit, or for the benefit of any Person other than the Bank.

		
	(c)
	Confidential Information Defined. For purposes of this Agreement, the term "Confidential Information" means any and all:

		
	(i)
	materials, records, data, documents, lists, writings and information (in each case, whether in writing, printed, verbal, electronic, computerized or otherwise) (A) relating or referring in any manner to the business, operations, affairs, financial condition, results of operation, cash flow, assets, liabilities, sales, revenues, income, estimates, projections, policies, strategies, techniques, methods, products, developments, suppliers, regulators, members, relationships and/or customers of the Bank that are confidential, proprietary or not otherwise publicly available, in any event not without a breach of this Agreement, or (B) that the Bank has deemed 

26

confidential, proprietary, nonpublic or not otherwise publicly available without breaching this Agreement;

		
	(ii)
	trade secrets of the Bank, as defined in Indiana Code Section 24-2-3-2, as amended, or any successor statute; and

		
	(iii)
	any and all copies, summaries, analyses and extracts which relate or refer to or reflect any of the items set forth in (i) or (ii) above. The Executive agrees that all Confidential Information is confidential and is and at all times will remain the property of the Bank.

		
	(d)
	Person Defined. For purposes of this Agreement, the term "Person" will mean any natural person, proprietorship, partnership, corporation, limited liability company, bank, organization, firm, business, joint venture, association, trust or other entity and any government agency, body or authority.

		
	(e)
	Return of Confidential Information and Other Property. The Executive covenants and agrees:

		
	(i)
	to keep all Confidential Information subject to the Bank's custody and control and to promptly return to the Bank all Confidential Information that is still in the Executive's possession or control at the termination of the Executive's employment with the Bank; and

		
	(ii)
	promptly upon termination of the Executive's employment with the Bank, to return to the Bank, at the Bank's principal office, all vehicles, equipment, computers, credit cards and other property of the Bank and to cease using any of the foregoing.

		
	(f)
	Exceptions from Confidentiality Obligations. Section 1 shall not be deemed to prevent the Executive from making disclosures required by applicable regulation, law, agency order, or court order, to the extent the Executive provides reasonable written notice of such disclosure requirement to the Bank prior to such disclosure, to the extent such prior notice is not prohibited, to permit the Bank to contest the disclosure of such information.

    
2.    Non-Disparagement. The Executive agrees to not communicate disparaging remarks to third parties about the Bank, its directors, officers or employees. Likewise, the Bank agrees not to disparage the Executive or his or her skills or job performance to third parties. However, nothing in this paragraph shall prohibit the Bank or the Executive from testifying truthfully under oath.

3.    Non-Solicitation and No-Hire. The Executive hereby understands, acknowledges and agrees that, by virtue of his or her position with the Bank, the Executive has and will have advantageous familiarity and personal contacts with the employees of the Bank and has and will have advantageous familiarity with the business, operations and affairs of the Bank. In addition, the Executive understands, acknowledges and agrees that the business of the Bank is highly competitive. Accordingly, at all times while the Executive is employed by the Bank and for a twelve-month period following Termination of Service, the Executive will not, directly or indirectly, or individually or together with any other Person, as owner, shareholder, investor, member, partner, proprietor, principal, director, officer, Executive, manager, agent, representative, independent contractor, consultant or otherwise induce, request or attempt to influence any Bank employee who was employed by the Bank during the twelve-month period prior to 

27

Termination of Service, to terminate his or her employment with the Bank. In addition, the Executive agrees that for a period of twelve months following the Executive's Termination of Service, Executive will not hire any Bank employee who was employed by the Bank during the twelve-month period prior to the Executive's Termination of Service.

4.    Periods of Noncompliance and Reasonableness of Periods. The restrictions and covenants contained in Section 3 will not run during all periods of noncompliance and will apply during the Term of this Agreement and for the full periods specified in Section 3. The Bank and the Executive understand, acknowledge and agree that the restrictions and covenants contained in Section 3 are reasonable in view of the nature of the business in which the Bank is engaged, the Executive's position with the Bank and the Executive's advantageous knowledge and familiarity with, the Bank's employees, business, operations, affairs and customers.
The Bank's obligation to pay an award to the Executive pursuant to the Federal Home Loan Bank of Indianapolis Incentive Plan will immediately terminate in the event the Executive breaches any of the provisions of Section 1 or 3 and all outstanding awards will be forfeited. Notwithstanding the foregoing:
		
	(a)
	the Executive's covenants set forth in Sections 1 or 3 will continue in full force and effect and be binding upon the Executive;

		
	(b)
	the Bank will be entitled to the remedies specified in Section 6; and

		
	(c)
	the Bank will be entitled to its damages, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) resulting from or relating to the successful prosecution of the Executive's breach of any of the provisions of Section 1 or 3.

5.    Survival of Certain Provisions. Upon any termination of the Executive's employment with the Bank, the Executive and the Bank hereby expressly agree that the provisions of Sections 1, 3, 4 and 6 will continue to be in full force and effect and binding upon the Executive and the Bank in accordance with the applicable respective provisions of such Sections.
    
6.    Remedies. The Executive agrees that the Bank 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 Executive of any provision of Section 1 or 3. Accordingly, in the event of a threatened, attempted or actual breach by the Executive of any provision of Section 1 or 3, in addition to all other remedies to which the Bank is entitled at law, in equity or otherwise, the Bank may be entitled to a temporary restraining order and a permanent injunction or a decree of specific performance of any provision of Section 1 or 3. The foregoing remedies will not be deemed to be the exclusive rights or remedies of the Bank for any breach of or noncompliance with this Agreement by the Executive but will be in addition to all other rights and remedies available to the Bank at law, in equity or otherwise.

7.    Severability. In case any one or more of the provisions (or any portion thereof) contained herein will, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision of this Agreement, but this Agreement will be construed as if such invalid, illegal or unenforceable provision or provisions (or portion thereof) had never been contained herein. If any provision of this Agreement will be determined by a court of competent jurisdiction to be unenforceable because of the provision's scope, duration or other factor, then such provision will be considered divisible and the court making such determination will have the power to reduce or limit (but not increase or make greater) such scope, duration or other factor or to reform (but not increase or make greater) such provision to make it enforceable to the maximum extent permitted by law, and such provision will then be enforceable against the appropriate party hereto in its reformed, reduced or limited form; provided, however, that a provision will be enforceable in its reformed, reduced 

28

or limited form only in the particular jurisdiction in which a court of competent jurisdiction makes such determination.

8.    Entire Agreement. This Agreement sets forth the entire understanding of the parties hereto with respect to its subject matter, merges and supersedes all prior and contemporaneous understandings with respect to its subject matter, and may not be waived or modified, in whole or in part, except in writing signed by each of the parties hereto. No waiver of any provision of this Agreement in any instance will be deemed to be a waiver of the same or any other provision in any other instance. The recitals set forth above are incorporated herein by this reference.

9.    Effect and Modification. No statement or promise, except as set forth herein, has been made with respect to the subject matter of this Agreement. No modification or amendment will be effective unless in writing and signed by the Executive and an officer of the Bank (other than the Executive).

10.    Non-Waiver. The Bank's or the Executive's failure or refusal to enforce all or any part of, or the Bank's or the Executive's waiver of any breach of this Agreement, will not be a waiver of the Bank's or the Executive's continuing or subsequent rights under this Agreement, nor will such failure or refusal or waiver have any effect on the subsequent enforceability of this Agreement.

11.    Non-Assignability. This Agreement contemplates that the Executive will personally provide the services described herein, and accordingly, the Executive may not assign the Executive's rights or obligations hereunder, whether by operation of law or otherwise, in whole or in part, without the prior written consent of the Bank.
    
12.    Notice. Any notice, request, instruction or other document to be given hereunder to any party will be in writing and delivered by hand, telegram, registered or certified United States mail return receipt requested, or other form of receipted delivery, with all expenses of delivery prepaid, as follows:

If to the Executive:        _________________________
_________________________
_________________________
_________________________
If to the Bank:         Federal Home Loan Bank of Indianapolis
c/o General Counsel
8250 Woodfield Crossing Blvd.
Suite 400
Indianapolis, IN 46240
13.    Governing Law. This Agreement is being delivered in and will be governed by the laws of the State of Indiana without regard to the choice of law principles thereof. Any dispute regarding this Agreement will be brought in any Indiana state or federal court having jurisdiction in the matter and located in Marion County, Indiana, and the Executive expressly consents to the jurisdiction of such courts.

14.    Prior Agreements. The Executive represents and warrants to the Bank that the Executive is not a party to or otherwise bound by any agreement that would restrict in any way the performance by the Executive of the Executive's duties, services and obligations under this Agreement, that the Executive has disclosed to the Bank all employment type agreements to which the Executive has been bound, 

29

including without limitation employment agreements, consulting agreements, non-compete agreements or covenants, confidentiality or non-disclosure agreements or covenants, and intellectual property assignment agreements, and that the Bank will not have any liability to any third party arising out of the Executive entering into this Agreement or performing hereunder.

15.    Effect of Headings. The descriptive headings of the Sections and, where applicable, subsections, of this Agreement are inserted for convenience and identification only and do not constitute a part of this Agreement for purposes of interpretation.

16.    Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which collectively will constitute one and the same instrument.

17.    Miscellaneous. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Plan.

IN WITNESS WHEREOF, the Bank, by its officer thereunder duly authorized, and the Executive, have caused this Non-Competition, Non-Solicitation and Non-Disclosure Agreement to be executed as of the day and year first above written.
FEDERAL HOME LOAN BANK
OF INDIANAPOLIS                EXECUTIVE
By: __________________________        _____________________________________            
Its:  __________________________    

By:  __________________________        
Its:  __________________________        

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  Exhibit 4.8    
    

Baytex Energy Corp.  

Treasury Offering of Common Shares  

 

			
	Term Sheet
	 	March 12, 2015

	 
	An amended and restated preliminary short form prospectus containing important information relating to the securities described in this document has not yet been filed with the securities regulatory
authorities in each of the provinces of Canada. A copy of the amended and restated preliminary short form prospectus is required to be delivered to any investor that received this document and expressed an interest in acquiring the
securities.
	
There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final short form prospectus has been issued.
	
This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the amended and restated preliminary short form prospectus, final short form
prospectus and any amendment, for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.
	 Issuer:
	 	 Baytex Energy Corp. (the "Corporation").

	 Issue:
	 	 31,700,000 common shares (the "Common Shares").

	 Amount:
	 	 $549,995,000.

	 Price:
	 	 $17.35 per Common Share.

	 Over-Allotment Option:
	 	 The underwriters shall have the option, exercisable in whole or in part for a period of 30 days after Closing, to purchase
up to an additional 4,755,000 Common Shares at the offering price and on the same terms and conditions as set forth herein to cover over-allotments, if any.

	 Use of Proceeds:
	 	 The net proceeds of the Offering will be used to repay indebtedness under the credit facilities, increase working capital and
fund ongoing capital expenditures.

	 Dividends:
	 	 The Company currently pays monthly dividends at an annual rate of $1.20 per Common Share. The first dividend in which the Common
Shares offered hereunder will be entitled to participate in will be for the month ending April 30, 2015 and will be payable on or about May 15, 2015.

	 Issue Type:
	 	 Bought underwritten public issue, eligible for sale in all Provinces of Canada pursuant to a short form prospectus, and in the
United States pursuant to registration under the Multi-Jurisdictional Disclosure System, and internationally as permitted.

	 Conditions:
	 	 Subject to standard bought deal terms and conditions for transactions of this type.

	 Listing:
	 	 The Common Shares are listed on the TSX and NYSE under the symbol BTE.

	 Eligibility:
	 	 The Common Shares are eligible under the usual statutes for RRSPs, RRIFs, RESPs, DPSPs, RDSPs, and TFSAs.

	 Bookrunners:
	 	 Scotia Capital Inc. and RBC Capital Markets

	 Commission:
	 	 4.00%, payable upon Closing.

	 Closing:
	 	 On or about April 2, 2015.

 

 The offering will be made in the United States pursuant to the Multi-Jurisdictional Disclosure System. A registration statement
(including a prospectus) relating to these securities has been filed with the U.S. Securities and Exchange Commission (the "SEC") but has not yet become effective. These securities may
not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. Before you invest, you should read the prospectus in that registration statement and other
documents Baytex has filed with the SEC for more complete information about Baytex and the offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus or you may request it from Scotia Capital Inc. in Canada,
Attention: Equity Capital Markets (tel:416-862-5837), Scotia Plaza, 66th Floor, 40 King Street West, M5W 2X6, Toronto, Ontario; or in the U.S., Attention: Equity Capital Markets
(tel:212-225-6853), 250 Vesey Street, 24th Floor, New York, New York, 10281.

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Exhibit 4.8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00242-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00242-of-00352.parquet"}]]