Document:

EX-10.2

 

Exhibit 10.2

Adopted June 20, 2003

Directors’ Nonqualified Deferred Compensation Program

Federal Home Loan Bank of Topeka

This Directors’ Nonqualified Deferred Compensation Program (Program) provides each director of
the Federal Home Loan Bank of Topeka (Bank) the option of deferring all or a portion of the fees
earned by the director in any calendar year.

	1)  	Deferral Election. In order to utilize the deferral option provided by this Program,
a director must file an election form with the Bank electing to defer all or a portion of the
fees the director will earn in a calendar year. Any election to defer director’s fees earned
in a calendar year will become irrevocable on the first day of that calendar year.

	 	a)  	The election form must be filed with the Bank prior to the beginning of the calendar
year for which a deferral election will be in effect.
	 
	 	b)  	Notwithstanding subsection (a), a director appointed or elected to the board after
the beginning of the calendar year may elect to defer fees in that calendar year provided
that an election form is filed with the Bank before the director’s first board of
directors meeting.

	2)  	Account. The Bank will maintain a separate memorandum account (Account) for each
director deferring fees under the Program. All deferred fees will be credited to the Account
and interest will be credited or debited to the Account consistent with the director’s
interest accrual election. The Account constitutes an unsecured claim against the general
assets of the Bank, equal in priority to other unsecured claims against the Bank. A director
has no entitlement or claim to the Account until payments are due under the Program. Deferred
fees and accrued interest are not held in trust for a director.
	 
	3)  	Interest Accrual. The Account will earn interest at a rate equal to the Bank’s
return on equity in the prior calendar year calculated in accordance with generally accepted
accounting principles, excluding any impact or adjustment required because of Financial
Accounting Standards No. 133 (referred to as the Bank’s pre-FAS 133 return on equity). A
director may elect to have interest accrued on all or part of the Account using a rate derived
from the change in value over the course of the calendar year of any general fund or funds in
which the Bank’s employees are permitted to invest under the Bank’s qualified thrift plan. In
the event of such an election, the change in value will be computed quarterly for purposes of
accruing interest on the Account.

	 	a)  	Interest on the Account will be computed and credited quarterly.
	 
	 	b)  	A director, or the director’s beneficiaries in the event the director dies prior to
distribution of the Account, may change the interest accrual method by filing an election
with the Bank prior to the beginning of the calendar year and regardless of whether the
director is then serving as a director.
	 
	 	c)  	If a director does not make an interest accrual election for a calendar year, the
same interest accrual method utilized for the prior calendar year will be deemed to have
been elected.

 

 

Directors’ Nonqualified Deferred Compensation Program

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	 	d)  	A director may not change the interest accrual method during the calendar year.
	 
	 	e)  	In the event that the interest accrual computed is negative, the Account will be
reduced accordingly.
	 
	 	f)  	Designation of an interest accrual method is solely for purposes of determining
amounts owed to a director under the Program and no funds of the Bank are invested for the
benefit of or at the direction of a director.

	4)  	Distribution of Account. In conjunction with the filing of an election form prior to
the beginning of each calendar year in which the director will serve as a director, a director
may make an election as to when and in what manner the director is to be paid the balance of
the Account. A director may not be paid all or any portion of the Account while still serving
as a director and may not change the election regarding the distribution of the Account after
the beginning of the last calendar year in which the director serves as a director.

	 	a)  	A director may elect to have the balance of the Account paid in a lump sum or in five
equal consecutive annual installments.
	 
	 	b)  	A director may elect to begin receiving the balance of the Account in the calendar
year following the calendar year the director ceases to be a director or in such later
calendar year as may be specified.
	 
	 	c)  	If a director does not make a distribution election for a calendar year, the most
recent distribution election will be deemed to have been elected.

	5)  	Beneficiaries. A director may designate one or more beneficiaries to receive the
balance of the director’s Account, including the relative portion of the Account to go to each
beneficiary if more than one beneficiary is designated, in the event the director dies before
the Account is fully distributed to the director. A director may make an election as to when
and in what manner the beneficiaries are to be paid the balance of the Account. Such
designation may by changed by a director at any time by delivering to the Bank in writing a
new beneficiary designation.

	 	a)  	A director may elect to have the balance of the Account paid to the beneficiaries in
a lump sum or in five equal consecutive annual installments.
	 
	 	b)  	A director may elect to have the beneficiaries begin receiving the balance of the
Account in the calendar year of the director’s death or in such later calendar year as the
director may specify.

	6)  	Prohibition on Assignment. No right or claim of any director or any designated
beneficiary under the Program may be assigned, transferred, pledged or encumbered.
	 
	7)  	Withholding. Distribution of any amounts from a director’s Account will be reduced
by any amount required to be withheld pursuant to any law or regulation with respect to income
taxes, social security or other tax.
	 
	8)  	Early Distribution. A director may apply for premature distribution of the
director’s Account in the event of: (a) serious financial hardship; or (b) total disability
which is expected to last longer than six months. An application for premature distribution
must be made in writing to a committee composed of the Bank’s chairman of the board of
directors, president and general counsel. Sufficient documentation shall accompany the
application evidencing the director’s serious financial hardship or disability. The decision
of the committee will be final and no action by the board of directors will be required.

 

 

Directors’ Nonqualified Deferred Compensation Program

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	9)  	Governing Law. This program will be governed by and construed in accordance with the
laws of the State of Kansas.
	 
	10)  	Amendment; Termination. The Bank may amend or modify this Program at any time but no
amendment or modification will affect a director’s claim to the director’s Account balance at
the time such amendment or modification takes affect. The Bank may in its discretion
terminate this Program at any time by giving written notice of termination to any
participating director. In the event of termination, the Bank will maintain the director’s
Account but no future deferral of director’s fees will be honored. The Bank will continue to
accrue interest on the Account at either the Bank’s return on equity as specified in section
(2) or at some other rate which the Bank chooses to offer and the director elects to accept.
	 
	11)  	Replacement of Prior Programs. This Program replaces all prior deferred compensation
plans for directors. All deferred fees and accrued interest under any prior plans or programs
will be credited to a director’s Account on the effective date of the Program.EX-10.3

 

EXHIBIT 10.3

Revised December 16, 2005

Adopted January 21, 2005

Federal Home Loan Bank of Topeka

Performance Pay Plan

(As Adopted on January 21, 2005)

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

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

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

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

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

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

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

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Security Administration, awards may be prorated through the date of termination at the discretion of the
CEO. If the CEO, executives, the Internal Audit Director or other Internal Audit department
employees terminate from the employ of the Bank for one of the above-described reasons, awards may
be prorated through the date of termination at the discretion of the Human Resources Committee to
the board, in the case of the CEO or executives, or the Audit Committee to the board, in the case
of the Internal Audit Director or the Internal Audit department employees.

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

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

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

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