Document:

Directors' Fee Policy

 EXHIBIT 10.5 
  
 Board approved 
 November 18, 2004 
  
 Federal Home Loan Bank of Indianapolis 
 Directors’ Compensation and Travel Expense Reimbursement Policy

 Effective January 1, 2005 
  
 Annual Fees 
  
 The annual fee schedule for 2005 shall be: 
  

												
	 	  	Annual

	  	Quarterly

	  	 Maximum Meeting Fee Reduction
 ($300 for each Board or Committee meeting missed,
 subject to the per day
maximum specified below.)

	 Chair
	  	$	28,364.00	  	$	7,091.00	  	Meeting Day 1	  	$	900
	 Vice Chair
	  	$	22,692.00	  	$	5,673.00	  	Meeting Day 2 & thereafter	  	$	300
	 Director
	  	$	17,019.00	  	$	4,254.75	  	 	  	 	 

  
 Fees shall be paid in four
installments: on or before March 31, 2005; on or before June 30,2005; on or before September 30, 2005; and on or before December 31, 2005, where a director is duly elected or appointed and in the position as of the last day of the quarter. Annual
fees shall be adjusted automatically upon adjustment in the compensation limits set by the Finance Board based upon any increases in the Consumer Price Index for the previous year. 
  
 The quarterly installments for the annual fee shall be $7,091.00, $5,673.00, and $4,254.75 for the chair, vice chair and director,
respectively. Quarterly fees will be subject to a $300 deduction for each daily board meeting missed and a $300 deduction for each committee meeting missed, subject to a first meeting day maximum reduction of $900, and for each meeting day
thereafter, subject to a maximum reduction of $300 per day. (For further discussion, see section on Deduction for Missed Meetings below.) 
  
 In the event of voluntary resignation, removal, death, or disability during a quarter, the director or director’s estate shall be entitled to any unpaid portion of
up to one-quarter of the applicable annual fee. 
  
 Payment shall be made to the
director, the Bank’s director deferred compensation plan upon timely election, or to a director’s employer pursuant to the terms of the employer’s authorized charitable contribution plan. 
  
 Deduction for Missed Meetings 
  
 Preparation and attendance at board and committee meetings is assumed to be an integral part
of each director’s duties and as such, is included in the above fee amounts. However, to ensure 
  

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 Board approved 
 November 18, 2004 
  
 attendance at
the board meetings and committee meetings, a deduction from the quarterly payments will be made for missed meetings1. For each board meeting (as measured per day) missed by a director in any quarter, a fee of $300 will be deducted from the payment of the fee for the quarter in question. For each committee meeting missed by a director, who is a
board designated member of such committee, a fee of $300 will be deducted from the payment of the fee for the quarter in question for each committee meeting missed. For each Board meeting, the reduction will be capped at $900 for meeting day one and
$300 per day maximum for each meeting day thereafter. For example, on day one of a meeting, the unexcused absence from the Board meeting and three committee meetings would result in a $1200 reduction, but is capped at a first day $900 maximum fee
reduction; On Board meeting day 3, absence at the Board meeting and two committee meetings would result in a $300 fee reduction for that day. 
  
 Excessive Absenteeism 
  

	1.	If a director misses all meetings in two consecutive quarters, the fee for that second quarter will not be paid. If after missing two consecutive quarters, a director once again
starts attending, the quarterly fee shall be suspended for the remainder of the director’s term, and the director shall be paid a per meeting fee, for each scheduled board and committee meeting attended by the director thereafter. The daily
meeting fee shall be the regular annual meeting fee divided by the number of board meeting days and committee meetings (for committees of which the director is a member) in a year. However, in no event will the fee paid to such a director for a
quarter exceed the scheduled quarterly installment. 

  

	2.	If a director misses more than 50% but less than all of the scheduled meetings in two consecutive quarters, then thereafter: (a) if the director misses more than 50% of the
scheduled meetings in any quarter, the director’s fee shall be equal to the lesser of (i) the quarterly fee minus any deductions for meetings missed or (ii) the per meeting fee for each board meeting day and committee meeting attended;
or (b) if the director misses 50% or less of the scheduled meetings in each quarter thereafter, the director’s fee shall be equal to the greater of (i) the quarterly fee minus any deductions for meetings missed or (ii) the per meeting
fee for each board meeting day and committee meeting attended, provided that in no event will the fee exceed the originally scheduled quarterly fee. 

  

	1	Meetings considered to be official Bank business for which a board member is responsible for attending will be established as part of the Board’s schedule for
the next year and is limited to pre-scheduled board meetings and pre-scheduled committee meetings for which the director is a member of the committee. Any meetings not scheduled in the prior year (such as additional or rescheduled board and
committee meetings, telephonic conference calls, and System director meetings), will not be included in the definition and therefore no deduction will be made if these meetings are missed. Any meetings missed due to the director attending other
official Bank business meetings (including meetings called by the Federal Housing Finance Board, the Council of Federal Home Loan Banks, industry, or other outreach events representing the Bank which is pre-approved by the President-CEO or Corporate
Secretary), flight delays, or meeting cancellations by the Bank due to inclement weather or for other circumstances beyond a director’s control (not including illness) will not be included in the meetings definition. Where practical, the absent
director will try to attend via conference telephone. Member marketing meetings, regular industry trade meetings not addressing Bank business, Council of FHLBank meetings, and director orientation meetings are not included in this meeting
definition, and these missed meetings will not result in the $300 per missed meeting fee reduction 

  

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 Board approved 
 November 18, 2004 
  

	3.	If a director misses all meetings in a year, all fees paid to the director shall be refunded to the Bank by the director, and no additional fees shall be paid.

  

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 Board approved 
 November 18, 2004 
  

	4.	This policy is not intended to address director eligibility and attendance, but directors having routine, unexcused absences will be referred by the Board of Directors to the
Federal Housing Finance Board for possible resignation, suspension or removal under applicable law. 

  
 Travel Expense Reimbursement 
  
 Travel expense reimbursement will be provided for board meetings, committee meetings, director orientation, other director events scheduled concurrently with board
meetings, Federal Housing Finance Board System meetings, Council of Federal Home Loan Bank meetings, Community Investment Conference meetings, or Bank marketing meetings. Travel expenses include reasonable transportation, food, hotel expenses, and
reasonable long-distance charges. 
  
 Expense Procedures 

 

	1.	No gift or entertainment expenses initiated by a director shall be reimbursed without being prearranged by the Bank. 

  

	2.	To qualify for reimbursement, all eligible expenses incurred must be submitted for payment to the Bank within 12 months of the date that the expenses were incurred. This requirement
may be waived, at the discretion of the Senior Vice President-CFO or by the Senior Vice President-Controller, in the event of an error or omission. 

  
 Air Travel and First Class 
  

	1.	The Bank will pay the direct common carrier expense (as defined in paragraph 3 below) for a director between the director’s residence and the site of a Bank function and the
return. The actual cost of private air travel will not be reimbursed, but the equivalent direct common carrier expense (as defined in paragraph 3 below) may be substituted. 

  

	2.	If a director’s non-Bank activity requires a route to attend a Bank function which originates or terminates in a location other than the place of residence, the Bank will
reimburse the director an amount equal to the direct common carrier expense from the director’s location to the location of the Bank function and then to the director’s next intended destination (without regard to stops named as temporary
layovers), subject to a limit of an amount not to exceed two times the direct common carrier expense to the board meeting location and from the director’s residence and return to his residence. 

  

	3.	The “direct common carrier expense” shall be the regular market-rate coach or first-class fare as applicable, and should be documented by the director submitting an
expense report. Travel scheduling affecting the direct common carrier expense shall be reasonable, given the timing of the meetings. First-class expenses should be pre-approved and are not generally reimbursed, unless required due to scheduling,
business necessity, or where the length of flight is over 1.5 hours in duration, including layovers. 

  

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 Board approved 
 November 18, 2004 
  
 Spouse/caregiver Travel 
  
 Expenses of a director’s
spouse or caregiver may be reimbursed in accordance with the Travel Expense Policy subject to a limit of two travel events per year. Spousal entertainment expenses incidental to the hotel property or event are permitted where prearranged by the
Bank, subject to two travel events per year. Income tax reporting will be made by the Bank as required by law, on spousal/caregiver travel if the spouse or caregiver attends the event without a bona fide Bank business purpose. 
  
 Issues of Interpretation 
  
 Unless expressly provided herein or in 12 CFR Part 918 (as amended), the Bank’s current
Travel Policy as contained in the Employee Manual shall control with respect to the travel expense reimbursement. The Federal Housing Finance Board’s former Director Travel Policy (FHFB Resolution 93-12) is superseded, but may be used as
non-binding precedent should issues of interpretation arise. The Senior Vice President-CFO and Senior Vice President-Controller are authorized, in their respective reasonable discretion, to interpret the provisions of the policy and to address
situations not anticipated by the policy, consistent with the requirements set forth in the statute or the regulations promulgated by the Federal Housing Finance Board. 
  
 Human Resources Committee Annual Review 
  
 The Human Resources Committee shall annually review this policy and shall submit its recommendation to the board for approval no later than
the last regularly scheduled meeting of the board for the year. 
  

			
	 CC:
	 	Milton Miller
	 	 	Paul Weaver
	 	 	Becky Harter
	 	 	Mike Barker
	 	 	Teresa Butler
	 	 	Carmen Hendrixson
	 	 	Policy Notebook
	 	 	Board Travel Policy file
	 	 	Director / Staff Portal

  

 -5-Severance Agreement of Martin Heger

 Exhibit 10.6 
  
 KEY EMPLOYEE 
 SEVERANCE AGREEMENT 
  
 This Agreement is
entered into as of the 1st day of January, 2001, by and between the FEDERAL HOME LOAN BANK OF INDIANAPOLIS, a
corporation organized under the laws of the United States (the “Bank”) and MARTIN L. HEGER (the “Executive”). 
  
 WHEREAS, the Executive has been effective in his service to the Bank, and the Bank recognizes the valuable services that the Executive has rendered and
desires to be assured that the Executive will continue his active participation in the business of the Bank; and 
  
 WHEREAS, the Executive is willing to continue to serve the Bank but desires assurance that he will continue to have the responsibility and status he has
earned, either with the Bank or with a successor to the Bank as the result of a Reorganization of the Bank; 
  
 NOW, THEREFORE, in consideration of the promises and the mutual agreements herein contained, the Bank and the Executive hereby agree as follows:

  
 1. Definitions. 
  
 “Bank” shall mean the Federal Home Loan Bank of Indianapolis or
any other entity within the definition of “Bank” in Section 7(a) hereof. 
  
 “Bonus Opportunity” shall mean the maximum amount of bonus compensation which the Executive may earn during a calendar year which, along with the base salary for the Executive for such calendar year, shall
be communicated to the Executive no later than the 30th day of December immediately preceding such calendar year.

  
 “Cause” shall mean (i) the continued failure of the
Executive to perform his duties with the Bank (other than any such failure resulting from Disability), after a demand for performance, pursuant to a resolution of the Bank’s Board of Directors, is delivered to the Executive by the Chair of the
Board of Directors of the Bank, which specifically identifies the manner in which the Executive has not performed his duties, (ii) the personal dishonesty, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure
to perform stated duties, or willful violation of any criminal law or statute (other than routine traffic violations or similar offenses); or (iii) the removal of the Executive for cause by the Federal Housing Finance Board pursuant to 12 U.S.C.
1422b(a)(2), or by any successor agency to the Federal Housing Finance Board pursuant to a similar statute. 
  
 “Compensated Termination” shall have the meaning set forth in Section 2(a). 
  
 “Disability” shall mean, as a result of the Executive’s incapacity due to physical or mental illness, the
Executive shall have been absent from his duties with the Bank for an aggregate of twelve (12) out of fifteen (15) consecutive months and, within thirty (30) days after a Notice of Termination is thereafter given by the Bank to the Executive, the
Executive shall not have returned to the full-time performance of the Executive’s duties. 

 “Good Reason” shall mean any of the following: 
  
 (i) a change in the Executive’s status, position or
principal duties and responsibilities as a key employee of the Bank which does not represent a promotion from the Executive’s status and position as in effect as of the date hereof (“Position”), or the assignment to the Executive of
any duties or responsibilities (or removal of any duties or responsibilities), which assignment or removal is inconsistent with such Position, or any removal of the Executive from such Position (including, without limitation, all demotions and
harassing assignments), except in connection with the termination of the Executive’s employment for Cause or Disability, or as a result of the Executive’s death; 
  
 (ii) within twenty-four (24) months after the effective date of a Reorganization of the Bank, (a) a
reduction by the Bank in the Executive’s base salary as in effect immediately prior to such Reorganization, or the Bank’s failure to increase (within 12 months of the Executive’s last increase in base salary) the Executive’s base
salary after a Reorganization of the Bank in an amount which is not less than 50% of the average percentage increase in base salary for all officers of the Bank effected in the preceding twelve (12) months; 
  
 (iii) within twenty-four (24) months after the effective
date of a Reorganization of the Bank, any failure by the Bank to continue in effect any plan or arrangement, including, without limitation, benefit and incentive plans, in which the Executive is participating immediately prior to such Reorganization
(hereinafter referred to as “Plans”), unless such Plans have been replaced with similar benefits that are not materially less than the Executive’s benefits under such Plans, or the taking of any action by the Bank which would
adversely affect the Executive’s participation in or materially reduce the Executive’s benefits under any such Plan or in or under fringe benefits enjoyed by the Executive immediately prior to the time of such Reorganization of the Bank;

  
 (iv) The occurrence of any of the following:
(a) the notification by the Bank to the Executive of the reduction of the Executive’s annual rate of base salary for the next succeeding calendar year from the average of the Executive’s annual rate of base salary for the then current
calendar year and the two (2) immediately preceding calendar years; or (b) the notification by the Bank to the Executive of the reduction of the aggregate of the Executive’s annual rate of base salary and Bonus Opportunity for the next
succeeding calendar year by more than ten percent (10%) from the aggregate of the Executive’s annual rate of base salary and Bonus Opportunity for the then current calendar year; or (c) the failure of the 
  
  

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 Bank to notify the Executive of the rate of his annual base salary and the amount of his Bonus
Opportunity for the next succeeding calendar year by the 30th day of December of the then current calendar year, which failure remains uncured for seven (7) days after notice thereof from the Executive to the Bank; 
  
 (v) the notification by the Bank to the Executive of the
Executive’s relocation to any place more than seventy-five (75) miles from the location at which the Executive performed his duties immediately prior to the date hereof, except for required travel by the Executive on the Bank’s business to
an extent substantially consistent with the Executive’s business travel obligations as of the date hereof; 
  
 (vi) a material reduction in the benefits and perquisites to the Executive from those being provided the Executive as of the effective
date of this Agreement; provided, however, that this subsection (vi) applies only to benefits and perquisites which are over and above those provided to employees of the Bank generally; 
  
 (vii) any material breach by the Bank of any provisions of this Agreement or any other agreement with the
Executive; or 
  
 (viii) any failure by the Bank
or its successors and assigns to obtain the assumption of this Agreement by any successor or assign of the Bank. 
  
 “Notice of Termination” shall mean a written notice which shall indicate those specific termination provisions in this Agreement upon which the
Bank or the Executive, as the case may be, has relied for such termination and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so
indicated. 
  
 “Payment Determination Date” shall have
the meaning set forth in Section 2(b). 
  
 “Reorganization” of the Bank shall 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; or 
  
 (iii) The liquidation or dissolution of the Bank. 
  

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 “Retirement” shall mean the planned and voluntary termination by the Executive of his
employment on or after reaching the earliest retirement age permitted by the Bank’s qualified retirement plans. 
  
 2. Compensated Termination. 
  
 (a) Compensated Termination. If the Executive incurs a Compensated Termination while the Executive is employed by the Bank or
within twenty-four (24) months after the effective date of a Reorganization of the Bank (whether the Executive is then employed by the Bank or a successor to the Bank as a result of such Reorganization), the Executive shall be entitled to the
benefits provided in Section 4(a). For purposes of this Agreement, a “Compensated Termination” means termination of the Executive’s employment under either of the following circumstances: 
  
 (i) By the Executive for Good Reason; or 
  
 (ii) By the Bank without Cause; 
  
 (b) Payment Determination Date. “Payment
Determination Date,” for purposes of determining when a payment resulting from a Compensated Termination must be made pursuant to Section 4(a), shall mean the effective date of the termination of the Executive’s employment with the Bank if
such termination is a “Compensated Termination.” 
  
 (c) Non-Compensated Termination. For the avoidance of doubt, none of the following events shall result in any payment to the Executive for a Compensated Termination under Section 4(a): 
  
 (i) The termination of employment by the Executive without
Good Reason; 
  
 (ii) The termination of the
Executive’s employment by the Bank for Cause; 
  
 (iii) The termination of the Executive’s employment by the Bank for Disability; 
  
 (iv) The death of the Executive; or 
  
 (v) The Retirement of the Executive. 
  

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 3. Termination of Employment. 
  
 (a) Termination by the Bank. The Bank may terminate the employment of the Executive as follows:

  
 (i) For Cause upon the adoption of a
resolution by the affirmative vote of not less than a majority of the entire membership of the Bank’s Board of Directors at a meeting of the Board (after reasonable notice to the Executive and an opportunity for the Executive, together with
counsel, to be heard by the Board), finding that in the good faith opinion of the Board the Executive was guilty of conduct set forth in the definition of “Cause” in Section 1 hereof and specifying the particulars thereof in detail. A vote
of the Board is not required if the Executive is removed for cause by the Federal Housing Finance Board pursuant to 12 U.S.C. 1422b(a)(2); 
  
 (ii) Without Cause; 
  
 (iii) Upon the Disability of the Executive; and 
  

(iv) Upon the death of the Executive. 
  
 (b) Termination by Executive. The Executive may terminate his employment with the Bank as follows: 
  
 (i) For Good Reason; 
  
 (ii) Without Good Reason; or 
  
 (iii) Upon the Executive’s Retirement, in which case
the Executive shall be entitled to all benefits under any retirement plan of the Bank and other plans to which the Executive is a party. 
  
 (c) Preservation of Compensated Termination. The provisions of Sections 3(a) and 3(b) are included in this Agreement for
clarification of the rights of termination of the employment relationship between the Bank and the Executive, but such provisions shall not prejudice the Executive’s right to receive payments or benefits required to be provided to the Executive
if any such termination is a “Compensated Termination.” 
  

 -5- 

 (d) Notice of Termination. 
  
 (i) Any termination by the Bank for Disability or Cause
shall be communicated by a Notice of Termination; provided, however, that the failure by the Bank to give notice in such circumstances shall not constitute a Compensated Termination. 
  
 (ii) Any termination of employment by the Executive for Good Reason will be a Compensated Termination only
if the Executive gives Notice of Termination to the Bank therefor within ninety (90) days of the event or occurrence which constitutes “Good Reason”; provided, further, that, if the Executive gives such notice of termination to the Bank in
a timely manner, the Executive shall not be deemed to have waived any of his rights hereunder in the event he remains in the employment of the Bank while he and the Bank engage in good faith discussions to resolve any event or occurrence which
constitutes “Good Reason.” 
  
 (iii)
Any termination by the Bank without Cause or by the Executive without Good Reason shall be communicated to the other party in accordance with the general notice provisions of this Agreement. 
  
 4. Payment for Compensated Termination. 
  
 (a) In the event of a Compensated Termination, the Bank
shall pay or provide the Executive the following: 
  
 (i) an amount equal to 2.99 times the average of the three (3) preceding calendar years’ base salary, bonuses, and any other cash compensation (taxable or non-taxable) paid to the Executive during such years; plus 
  
 (ii) an amount equal to 2.99 times the average of the
Executive’s salary deferrals and employer matching contributions under the Bank’s Supplemental Executive Thrift Plan and the Financial Institutions Thrift Plan for the three (3) preceding calendar years; plus 
  
 (iii) an amount equal to 2.99 times the average of the three
(3) preceding calendar years’ taxable portion of the Executive’s automobile allowance provided by the Bank; plus 
  
 (iv) an additional amount under the Bank’s non-qualified Supplemental Executive Retirement Plan (“SERP”), equal to the
additional annual benefit under Section 3.1 of the SERP with the benefit under Section 3.1 (i) being calculated as if: 
  

	 	(w)	the Executive is three (3) years older than his actual age; 

  

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	 	(x)	the Executive had three (3) additional years of service at the same annual rate of compensation (as defined in the Regulations Governing the Comprehensive Retirement Program of the
Financial Institutions Retirement Fund as from time to time amended, and as adopted by the Bank) in effect for the 12 month period ending on the December 31 date which immediately precedes the Compensated Termination (including any compensation
deferred by the Executive); 

  

	 	(y)	the Executive maintained the same deferral election as in effect on the date immediately preceding his Compensated Termination; and 

  

	 	(z)	the SERP continued in effect without change in accordance with its terms as in effect on the date immediately preceding the Compensated Termination. 

  
 The Bank shall distribute such amount (except the amount provided under
Section 4(a)(iv)) in a lump sum in cash within twenty (20) days of the Payment Determination Date. The amount provided under Section 4(a)(iv) above shall be distributed at the same time as the Executive’s benefit under the SERP is distributed.

  
 (b) If the aggregate payments received or to
be received by the Executive pursuant to this Agreement exceed the highest amount permissible without triggering payment of an excise tax under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, including without limitation,
any successor excise tax, tax penalties or alternative federal tax which is not ordinary federal income tax (“Code”), the Executive will receive from the Bank an additional gross-up payment sufficient to provide him with the same after-tax
benefits as he would have received had the excise tax under the Code not been imposed. 
  
 (c) Notwithstanding Section 4(a), if the Bank is not in compliance with any applicable regulatory capital or regulatory leverage
requirement or if the payment would cause the Bank to fall below applicable regulatory requirements, such payment shall be deferred until such time as the Bank achieves compliance with its regulatory requirement. 
  
 (d) To the extent the Executive is eligible, he shall
continue after a Compensated Termination to be covered by the Bank’s medical and dental insurance plans in effect immediately prior to the Compensated Termination, for thirty-six (36) months, subject to the Executive’s payment of the
Employee’s portion of the cost of such coverage. In the event the Executive is ineligible under the terms of such plans to 
  

 -7- 

 continue to be so covered or such plans shall have been modified, the Bank shall provide through other
sources coverage which is substantially equivalent to the coverage provided immediately prior to the Compensated Termination, subject to the Executive’s payment of a comparable portion of the cost of such coverage as under the Bank’s
medical and dental insurance plans. If during this time period the Executive should enter into employment providing for comparable medical and dental insurance coverage, his participation in the medical and dental plans provided by the Bank shall
cease. 
  
 (e) The Bank shall reimburse the
Executive for all reasonable legal, accounting, financial advisory and actuarial expenses incurred by the Executive before or at the time of the execution of this Agreement and at the time any payments are made upon the occurrence of a Compensated
Termination. 
  
 (f) The Executive shall be
responsible for the payment of all federal, state and local income taxes which may be due with respect to any payments made to the Executive pursuant to this Agreement, except for the ordinary federal and state income tax owed by the Executive due
to the gross-up payment made to the Executive under subsection 4(b) of this Agreement. 
  
 5. Termination Upon Disability. 
  
 (a) In the event that the Bank terminates the Executive’s Employment based upon “Disability,” the Executive shall be entitled to receive an annual disability benefit equal to the greater of (i) the
amount of disability benefit payable under the Bank’s disability plan(s), and (ii) an amount equal to sixty-five percent (65%) of the Executive’s annual rate of base salary immediately preceding his Disability, less any benefit payable to
the Executive under the Bank’s disability plan(s). These disability payments shall commence on the effective date of Executive’s termination and will end on the earliest to occur of (A) the date the Executive returns to the full-time
employment of the Bank in the same capacity as he was employed prior to his termination for Disability; (B) the Executive’s full-time employment in the position of Chief Executive Officer by another financial institution or entity in the
financial services business; (C) the date the Executive attains the age of sixty-five (65); or (D) the date of the Executive’s death. Additionally, the Executive shall be entitled to receive any bonus to which he would be entitled for the year
in which he becomes disabled, but only for such year and not any future year(s). 
  
 (b) Upon termination of the Executive’s employment with the Bank for Disability, the Bank will cause to be continued life, medical
and dental insurance plans substantially identical to the coverage maintained by the Bank for the Executive prior to his termination for Disability, except to the extent such coverage may be changed in its application to all employees of the Bank.
This coverage shall cease upon the earliest to occur of the following: (A) the date the Executive returns to the full-time employment of the Bank in the same capacity as he was employed prior to his termination for Disability; (B) the
Executive’s full-time employment in the position of Chief Executive Officer by another financial institution or entity in the financial services business; (C) the date the Executive attains the age of sixty-five (65); or (D) the date of the
Executive’s death. 
  

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 6. No Obligation to Seek Further Employment; No Effect on Other Contractual Rights. 
  
 (a) The Executive shall not be required to seek other
employment, nor shall any payment made under this Agreement be reduced by any compensation received from other employment, except as set forth in the last sentence of Section 4(d), or as set forth in Section 5. 
  
 (b) The provisions of this Agreement, and any payment
provided for hereunder, shall not reduce any amounts otherwise payable, or in any way diminish the Executive’s existing rights, or rights which would accrue solely as a result of the passage of time, under any Plan. 
  
 7. Successor to the Bank. 
  
 (a) This Agreement is binding upon the successors and
assigns of the Bank. The Bank and its successors and assigns will require any successor or assign (whether direct or indirect, in a Reorganization, by operation of law, or otherwise) to all or substantially all of the business and/or assets of the
Bank, to enter into a written agreement in form and substance satisfactory to the Executive, expressly, absolutely and unconditionally to assume and agree to perform this Agreement in the same manner and to the same extent that the Bank would be
required to perform it if no such succession or assignment had taken place. In such event, the Bank agrees that it shall pay or shall cause such employer to pay any amounts owed to the Executive pursuant to Section 4 hereof. As used in this
Agreement, “Bank” shall mean the Bank as hereinbefore defined and any successor or assign to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 7 or which otherwise becomes bound
by all the terms and provisions of this Agreement by operation of law. If at any time during the term of this Agreement the Executive is employed by any corporation a majority of the voting securities of which is then owned by the Bank, the term
“Bank” shall include such employer. Whether or not another entity becomes the successor or assign of the Bank under this Agreement, the maximum amount which the Executive may receive from all sources under this Agreement in a Compensated
Termination or in connection with a termination upon Disability shall be the amounts set forth in Sections 4 and 5 hereof, respectively. 
  
 (b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal and legal representatives, executors,
administrators, successors, heirs, distributees, and legatees. If the Executive should die while any amounts are still payable to him hereunder, all such amounts, unless otherwise provided herein, shall be 
  

 -9- 

 paid in accordance with the terms of this Agreement to the beneficiary designated by notice in writing
executed by the Executive and filed with the Bank, or failing such designation, to the Executive’s estate. 
  
 8. Late Payment of Benefits. Any payment made later than the time provided for in Section 4(a) of this Agreement for whatever reason, including,
without limitation, the reasons set forth in Section 4(c), shall include interest at the Bank’s cost of funds plus five percent (5%), which shall begin to accrue on the tenth (10th) day following the Executive’s Payment Determination Date.

  
 9. Employment Rights. This Agreement shall not confer
upon the Executive any right to continue in the employ of the Bank and shall not in any way affect the right of the Bank to dismiss or otherwise terminate the Executive’s employment at any time and for any reason with or without cause. This
Agreement is not intended (i) to be an employment agreement or (ii) to define all aspects of the employment relationship between the Bank and the Executive including, but not limited to applicable employment or benefit policies of the Bank. To the
extent there is any conflict between the terms hereof and the terms of any employment or benefit policies of the Bank, the terms of this Agreement shall control. Any payments or benefits to which the Executive may be entitled under Sections 4 and 5
hereof will not constitute wages for work performed by the Executive. 
  
 10. Tax Withholding. The Bank will withhold from any amounts payable to Executive under this Agreement to satisfy all applicable federal, state, local or other withholding taxes. All amounts payable under Section 4(a) are considered
“wages” to be reported on Form W-2. The normal withholding rules for wages apply. The Bank will also withhold any excise taxes owed under Code Section 4999. 
  
 11. Notice. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall
be in writing and shall be deemed to have been duly given when delivered by hand, delivered by a nationally-recognized, overnight courier service, or mailed by United States registered mail, return receipt requested, postage prepaid, as follows:

  

			
	 If to the Bank:
	    	 Federal Home Loan Bank of Indianapolis

	 	    	 8250 Woodfield Crossing Boulevard
 P.O. Box 60

	 	    	 Indianapolis, Indiana 46206
 Attention: Chair of the Board of Directors

		
	 	    	 With a copy to the General Counsel

		
	 If to the Executive:
	    	 Martin L. Heger

	 	    	 8250 Woodfield Crossing Boulevard

	 	    	 P.O. Box 60

	 	    	 Indianapolis, Indiana 46206

  
 or to such other
address as either party may have furnished to the other in writing in accordance herewith. Any notice shall be effective upon receipt. 
  

 -10- 

 12. Legal Fees and Expenses. The Bank shall pay all reasonable legal fees and expenses which the
Executive may incur as a result of the Bank’s contesting the validity or enforceability of this Agreement or the calculation of amounts payable hereunder so long as the Executive is wholly or partially successful on the merits or the parties
agree to a settlement of the dispute. 
  
 13. Term. This
Agreement shall remain in effect during the employment of the Executive by the Bank, its successors or assigns, and shall survive termination of such employment until all payments and benefits, if any, under this Agreement have been paid or
satisfied. 
  
 14. Arbitration. 
  
 (a) Disputes regarding this Agreement are subject to the
Federal Home Loan Bank of Indianapolis Agreement to Arbitrate by and between the Bank and the Executive dated April 25, 2000 (“Arbitration Agreement”). No cancellation, replacement or modification to the arbitration procedures under the
Arbitration Agreement shall be effective unless agreed to in writing by both the Bank and the Executive. In the event of any conflict between the provisions of this Agreement and the Arbitration Agreement, the provisions of this Agreement shall
control. 
  
 (b) If within thirty (30) days after
any Notice of Termination is given, the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the Termination, the parties shall promptly proceed to arbitration as provided in (a) above. Notwithstanding
the pendency of any such dispute, the Bank; shall continue to pay the Executive his base salary and provide such other compensation and benefits, all as in effect immediately prior to the Notice of Termination. If it is determined that the Executive
is not entitled to any compensation under Section 4 or 5 of this Agreement, the Executive shall return all cash amounts to the Bank promptly following the date of resolution by arbitration, with interest thereon commencing as of the date of the
resolution of the dispute by arbitration at the prime rate of interest as published by the Wall Street Journal from time to time. Any cash amounts paid to the Executive pending the resolution of the dispute by arbitration shall offset any
amounts determined to be due to the Executive under Sections 4 or 5. 
  
 15. Miscellaneous. 
  
 (a) No
Modification. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the party or parties hereto to be bound. 
  

 -11- 

 (b) No Waiver. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

  
 (c) Entire Agreement. No agreements or
representations, oral or otherwise, express or implied, with respect to possible payments or benefits to the Executive upon termination of his employment hereof have been made by either party which are not set forth expressly in this Agreement.

  
 (d) Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of Indiana (excluding conflicts of laws principles), except to the extent such law is preempted by the laws of the United States. 
  
 (e) Headings. Section or paragraph headings contained
herein are for convenience of reference only and are not to be considered a part of this Agreement. 
  
 (f) Validity. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in full force and effect. 
  
 (g) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument. 
  
 IN WITNESS WHEREOF, this Agreement is executed as of the date first above written and is effective as of January 1, 2001. 
  

					
	 THE EXECUTIVE:
	 	 FEDERAL HOME LOAN BANK OF INDIANAPOLIS:

			
	 /s/ Martin L. Heger

	 	 By:
	 	 /s/ Carolyn S. Hutting

	 Martin L. Heger
	 	 	 	 Chair, Board of Directors

			
	 	 	 By:
	 	 /s/ William R. White

	 	 	 	 	 Vice Chair, Board of Directors

  

 -12- 

 FIRST AMENDMENT OF KEY EMPLOYEE 
 SEVERANCE AGREEMENT 
  
 WHEREAS, the FEDERAL HOME LOAN BANK OF INDIANAPOLIS, a corporation organized under the laws of the United States (the “Bank”) and MARTIN L. HEGER (the “Executive”), entered into a Key Employee
Severance Agreement (the “Agreement”) on January 1, 2001; and 
  
 WHEREAS, the Board of Directors of the Bank has determined, in its best business judgment, that the Agreement should be amended to replace the Agreement’s definition of “Disability” with a definition
that is provided in Section 409A of the Internal Revenue Code of 1986, as amended; and 
  
 WHEREAS, the Executive also desires to amend the definition of “Disability” provided in the Agreement; and 
  
 WHEREAS, pursuant to the authority contained in Section 14(a) of the Agreement, the Bank and the Executive may amend the Agreement by a writing
executed by both the Bank and the Executive; 
  
 NOW, THEREFORE,
pursuant to the amending authority under Section 14(a) of the Plan, the Agreement is hereby amended by replacing the definition of “Disability” in Section 1 of the Agreement with the following definition, effective as of the
earlier of January 1, 2005 or the effective date of the Agreement: 
  
 “Disability shall mean the Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death
or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering the Bank’s employees.” 
  
 The Agreement shall remain the same in all other respects. 
  
 IN WITNESS WHEREOF, the Bank, by its duly authorized officers, and the
Executive, have executed this First Amendment this 23rd day of November, 2005, but effective as stated herein.

  

					
	THE EXECUTIVE:	 	 FEDERAL HOME LOAN BANK OF
 INDIANAPOLIS:

			
	 Signature on file

	 	By:	 	 Signature on file

	Martin L. Heger	 	 	 	Chairman, Board of Directors
			
	 	 	By:	 	 Signature on file

	 	 	 	 	Vice Chairman, Board of Directors

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