Document:

def_comp.htm

    Directors’
Nonqualified Deferred Compensation Program

    Federal
Home Loan Bank of Topeka

     

    (Restated
effective December 31, 2008)

     

    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 to a
subsequent calendar year.  This unfunded Program is primarily intended
to provide deferred compensation for a select group of management and is
intended to comply with all applicable law, including Internal Revenue Code (the
“Code”) Section 409A.

     

    
      	
              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 of directors
      after the beginning the of the calendar year may elect to defer fees in
      that initial calendar year so appointed or elected, provided that an
      election form is filed with the Bank within thirty (30) days after the
      date he or she first becomes eligible to participate in the Program, or
      within such other earlier deadline as may be established by the Bank, in
      its sole discretion, in order to participate for that calendar
      year.

            

    

     

    
      	
              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 pursuant to procedures set forth in this
      Program.  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 of 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).  Interest on the Account will be computed and credited
      quarterly.

            

    

     

    
      	
              4)  

            	
              Distribution of
      Account.

            

    

     

    
      	
              a.  

            	
              In
      conjunction with the filing of an election form, 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 benefit shall be payable under the
      Program to or on account of a director only upon the following
      distribution events (the “Distribution Event”):  the director’s
      cessation of his or her role as a director, death, Disability, or a Change
      of Control of the Bank, except as provided in Sections 7, 8, or
      12.  Payment shall commence ninety (90) days after the
      director’s Distribution Event.  Notwithstanding the preceding
      sentence, if it is administratively impracticable to make the payment by
      the required payment date, and such impracticability is unforeseeable,
      then such payment shall be made as soon as administratively
      practicable.  For purposes of this Program, “Change of Control”
      has the meaning set forth in Code Section 409A and the Treasury
      Regulations promulgated thereunder.

            

    

     

    
      	
              b.  

            	
              A
      director may elect to have the balance of the Account paid in a lump sum
      or in five equal consecutive annual installments.  Such election
      shall be made at the time the director’s deferral election is
      made.  If no election is made, the entire Account balance shall
      be paid in a lump sum, which shall commence ninety (90) days after the
      director’s Distribution Event.  Notwithstanding the preceding
      sentence, if it is administratively impracticable to make the payment by
      the required payment date, and such impracticability is unforeseeable,
      then such payment shall be made as soon as administratively
      practicable.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              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 be 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, which shall commence ninety (90) days after the director’s
      death. Notwithstanding the preceding sentence, if it is administratively
      impracticable to make the payment by the required payment date, and such
      impracticability is unforeseeable, then such payment shall be made as soon
      as administratively practicable.

            

    

     

    
      	
              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)  

            	
              Taxes.

            

    

     

    
      	
              a)  

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

            

    

     

    
      	
              b)  

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

            

    

     

    
      	
              c)  

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

            

    

     

    
      	
              8)  

            	
              Early
      Distribution.  A director may apply for premature
      distribution of the director’s Account in the event of Unforeseeable
      Emergency or Total Disability.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              a)  

            	
              Unforeseeable
      Emergency.  While serving as a director with the Bank, a
      director may, in the event of an Unforeseeable Emergency causing severe
      financial hardship, request a withdrawal from the director’s
      Account.  The request shall be made in a time and manner
      determined by the Committee, shall be for an amount not greater than the
      lesser of (i) the amount required to meet the financial hardship, or (ii)
      the amount of the director’s Account, and shall be subject to approval by
      the Committee.  For purposes of this Section 8, an
      “Unforeseeable Emergency” means a severe financial hardship resulting from
      a sudden or unexpected illness or accident of the director or one of the
      director’s dependents, loss of property due to casualty or other similar
      extraordinary and unforeseen circumstances arising as a result of events
      beyond the director’s control and which hardship the director is unable to
      satisfy with funds reasonably available from other sources.  The
      circumstances that will constitute an Unforeseeable Emergency will depend
      upon the facts of each case as determined by the
      Committee.  Notwithstanding the foregoing, a director may not
      receive a payout from the Program to the extent that the Unforeseeable
      Emergency would be inconsistent with Code Section 409A.  If
      the Committee approves the director’s petition for payout because of an
      Unforeseeable Emergency, the director’s benefit distribution date shall
      occur within ninety (90) days following the date of such approval (or at
      such later time permitted under Code Section
  409A).

            

    

     

    
      	
              b)  

            	
              Total
      Disability.  While still serving as a director with the Bank, a
      director may, in the event of Total Disability, request a total
      distribution from the director’s Account.  Unless otherwise
      specified in existing board policy, or as otherwise mandated under Code
      Section 409A, a director is Totally Disabled
  if:

            

    

     

    
      	
              i.  

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

            

    

     

    
      	
              ii.  

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

            

    

     

    
      	
              iii.  

            	
              The
      director will be deemed Totally Disabled under this Section 8 if
      determined to be disabled by the Social Security
      Administration.  Furthermore, director will be deemed Totally
      Disabled under this Section 8 if determined to be disabled in
      accordance with a disability insurance program, provided that the
      definition under such program complies with Subsection i or
      ii.

            

    

     

    An
application for premature distribution must be made in writing to the
Committee.  No director who is subject to the claim under
consideration shall possess or exercise any control, influence, or authority
over the administration or processing of the claim, and shall not take part in
any decision-making process involving the claim, to the extent that the
involvement would violate Code Section 409A or the regulations promulgated
thereunder.  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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              9)  

            	
              Automatic Distribution
      of Account Balances Less Than Code Section 402(g)
      Limitation.  Notwithstanding any other provision of this
      Program, in the event that a director has experienced a Distribution Event
      described in Section 4 and has not directed otherwise as part of a
      prior election, if the director’s Account Balance is less than the
      allowable limit under Code Section 402(g) for that year, the
      director’s entire benefit shall automatically be paid in the form of a
      lump sum payment, which shall commence ninety (90) days after the
      Distribution Event.  Notwithstanding the preceding sentence, if
      it is administratively impracticable to make the payment by the required
      payment date, and such impracticability is unforeseeable, then such
      payment shall be made as soon as administratively
    practicable.

            

    

     

    
      	
              10)  

            	
              Administrative
      Committee.  The board of directors may appoint an
      administrative committee (“Committee”) to administer the plan and process
      claims.  No director who is subject to the claim under
      consideration shall possess or exercise any control, influence, or
      authority over the administration or processing of the claim, and shall
      not take part in any decision-making process involving the claim, to the
      extent that the involvement would violate Code Section 409A or the
      regulations promulgated thereunder.

            

    

     

    
      	
              11)  

            	
              Governing
      Law.  This program will be governed by and construed in
      accordance with the laws of the State of
Kansas.

            

    

     

    
      	
              12)  

            	
              Amendment;
      Termination.

            

    

     

    Although
the Bank anticipates that it will continue the Program for an indefinite period
of time, there is no guarantee that the Bank will not terminate the
Program.  Accordingly, the board of directors reserves the right in
its sole and absolute discretion to amend, suspend or terminate, in whole or in
part, the Program, including but not limited to the termination of any
employee’s participation in the Program, without the consent of the Committee,
any director, beneficiary or other person, except that no amendment, suspension
or termination shall retroactively impair or otherwise adversely affect the
rights of any director, beneficiary or other person to benefits under the
Program which have accrued prior to the date of such action, as determined by
the Committee in its sole discretion.  The Committee may adopt any
amendment or take any other action which may be necessary or appropriate to
facilitate the administration, management and interpretation of the Program or
to conform the Program thereto, provided any such amendment or action does not
have a material effect on the then currently estimated cost to the Bank of
maintaining the Program.  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 the Bank’s return on equity as specified in section (3).

     

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

     

    
      	
              13)  

            	
              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.indemn_doc.htm

    INDEMNIFICATION
AGREEMENT

     

    THIS INDEMNIFICATION
AGREEMENT, (this “Agreement”) is made and entered into effective as of
December 18, 2008 by and between Federal Home Loan Bank of Topeka, (the “Bank”),
and ____________, a[n officer] [director] of the Bank (the
“[Officer][Director]”).

     

    RECITALS

     

    WHEREAS, Section 8.3 of the
Bank’s Amended and Restated Bylaws (“Bylaws”) provides the Bank’s
[officers][directors] with certain rights to indemnification; and

     

    WHEREAS, the Bank desires to
supplement its contractual duty and obligation to indemnify its
[officers][directors] in accordance with Section 8.3 of the Bank’s Bylaws by
entering into indemnification agreements with its [officers][directors] that
provide materially similar indemnification rights and duties as that provided in
the Bylaws; and

     

    WHEREAS, this Agreement is
being entered into as part of the [Officer’s][Director’s] total consideration
for serving as a[n officer][director] of the Bank; and

     

    WHEREAS, the
[Officer][Director] desires to serve and continue to serve as a[n
officer][director] of the Bank and to enter into such an agreement to supplement
the indemnification rights provided in the Bylaws.

     

    NOW THEREFORE, in
consideration of the mutual premises and covenants contained herein, the Bank
and the [Officer][Director] do hereby covenant and agree as
follows:

     

    AGREEMENT

     

    1.  Actions Not By or in
the Right of the Bank. The Bank shall indemnify the [Officer][Director]
who was or is a Party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, other than an action, suit or proceeding by or
in the right of the Bank, by reason of the fact that the
[Officer][Director]:

    

    (i)
is or was a[n officer][director] of the Bank, or

    

    (ii)
is or was serving at the request of the Bank as a director, of another
corporation, partnership, joint venture, trust or other enterprise,
or

    

    (iii)
rendered or attempted to render emergency aid including, without limitation,
first

    aid,
rescue breathing, cardiopulmonary resuscitation, or use of an
automated

    external
defibrillator, on Bank premises or at any Bank-sponsored event,
function

    or
activity, if the [Officer][Director] is or was a director of the Bank at the
time of such action or actions,

    

    against
expenses, judgments, fines and amounts paid in settlement, actually and
reasonably by the [Officer][Director] in connection with such action, suit or
proceeding, including attorney fees, if the [Officer][Director] acted in good
faith and in a manner the [Officer][Director] reasonably believed to be in, or
not opposed to, the best interests of the Bank; and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the
[Officer’s][Director’s] conduct was unlawful. The termination of any action,
suit, or proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a presumption
that the [Officer][Director] did not act in good faith and in a manner which the
[Officer][Director] reasonably believed to be in, or not opposed to, the best
interests of the Bank, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that the [Officer’s][Director’s] conduct was
unlawful.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.  Actions By or in the
Right of the Bank. The Bank shall indemnify the [Officer][Director] who
was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, by or in the right of the Bank
to procure a judgment in its favor by reason of the fact that the
[Officer][Director] is or was a[n officer][director], of the Bank, or is or was
serving at the request of the Bank as a director of another corporation,
partnership, joint venture, trust or other enterprise, against expenses actually
and reasonably incurred by the [Officer][Director] in connection with the
defense or settlement of such action or suit, including attorney fees, if the
[Officer][Director] acted in good faith and in a manner the [Officer][Director]
reasonably believed to be in, or not opposed to, the best interests of the Bank
and except that no indemnification shall be made in respect to any claim, issue
or matter as to which the [Officer][Director] shall have been adjudged to be
liable to the Bank unless and only to the extent that the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, the
[Officer][Director] is reasonably and fairly entitled to indemnity for such
expenses which the court shall deem proper.

    

    3. Success on the Merits or
Otherwise. To the extent that the [Officer][Director] has been successful
on the merits or otherwise in defense of any action, suit or proceeding referred
to in Section 1 or 2, or in defense of any claim, issue or matter therein, the
[Officer][Director] shall be indemnified against expenses actually and
reasonably incurred in connection therewith, including attorney fees. To the
extent that the [Officer][Director] has been successful on the merits of any
action, suit or proceeding to enforce his or her rights under this Agreement,
the [Officer][Director] shall be indemnified against expenses actually and
reasonably incurred in connection therewith, including attorney
fees.

    

    4. Determination to Indemnify.
Any indemnification under Section 1 or 2, unless ordered by a court, shall be
made by the Bank only as authorized in the specific case upon a determination
that indemnification of the [Officer][Director] is proper in the circumstances
because the [Officer][Director] has met the applicable standard of conduct set
forth in Section 1 or 2. Such determination shall be made (1) by the Board by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding (hereinafter referred to as “disinterested
directors”), or (2) if such a quorum is not obtainable, or even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion.

    

    5.  Advance Payment of
Expenses. Payments of reasonable expenses, including attorney fees,
incurred by the [Officer][Director] in connection with a civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by the
Bank as they are incurred, and in advance of the final disposition of such
action, suit or proceeding, beginning thirty (30) days from the date of receipt
by the Bank of the [Officer’s][Director’s] written application for
indemnification, including (a) a certification and supporting statement of the
[Officer’s][Director’s] belief that he or she ultimately will become entitled to
indemnification under this Agreement; and (b) a written statement by the
[Officer][Director] agreeing to reimburse the Bank for any advance payments made
by the Bank that subsequently become prohibited by law or regulation. No such
advance payment shall be made, or continued to be made, if at any time a
disinterested majority of a quorum of the Bank’s directors reasonably concludes
that the [Officer][Director] would not likely become entitled to indemnification
under this Agreement. In the case of such a finding, advanced payments to which
the [Officer][Director] is not entitled under this paragraph shall be reimbursed
to the Bank. Nothing in this Section 5 shall prevent the Bank from imposing such
contractual conditions on the advance payment of costs and expenses as the Bank
deems warranted to protect its interests.

    

    6.  Indemnification not
Exclusive. The indemnification and advancement of expenses provided by,
or granted pursuant to, the other sections of this Agreement shall not be deemed
exclusive of any other rights to which the [Officer][Director] may be entitled
under any bylaw, agreement, vote of disinterested directors or otherwise, both
as to action in the [Officer’s][Director’s] official capacity and as to action
in another capacity while holding such office.

    

    7.  Limited Application to
Persons Serving as Agents. Notwithstanding anything in this Agreement to
the contrary, the Bank shall not be required to indemnify the
[Officer][Director] if the [Officer][Director] was or is a party, or is
threatened to be made a party, to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that the [Officer][Director] is or was an officer or employee
of the Bank, if such action, suit or proceeding is based upon or arises out of
actions taken by the [Officer][Director] in his or her capacity as an agent of
the Federal Home Loan Bank Board and/or the Federal Savings and Loan Insurance
Corporation.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    8. Right to Indemnification Not to be
Terminated or Diminished. In consideration of the continued service to
the Bank by the [Officer][Director], the right of the [Officer][Director] to
indemnification under this Agreement shall not be terminated or diminished by
the Bank, and the [Officer][Director] shall continue to be entitled to
indemnification under this Agreement notwithstanding any termination or
amendment of this Agreement, with respect to actions, suits or proceedings based
on or arising from the [Officer’s][Director’s] service to the Bank prior to the
termination or amendment of this Agreement.

    

    9.  Continuation of Right
to Indemnification. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Agreement shall continue if the
[Officer][Director] has ceased to be a[n officer][director] and shall inure to
the benefit of the heirs, executors and administrators of
the[Officer][Director].

    

    10. Contractual Right to
Indemnification. The right to indemnification and advancement of expenses
provided by, or granted pursuant to, this Agreement (1) shall be retroactive and
shall be available with respect to events occurring prior to the adoption
hereof, (2) shall continue to exist after the termination or amendment of this
Agreement, with respect to actions, suits or proceedings based on or arising
from such person’s service to the Bank prior to the termination or amendment of
this Agreement and (3) consistent with Section 9 above shall inure to the
benefit of the heirs, executors and administrators of the
[Officer][Director].

    

    11. Definitions. For purposes
of this Agreement, references to “other enterprises” shall include employee
benefit plans; references to “fines” shall include any excise taxes assessed on
the [Officer][Director] with respect to any employee benefit plan; and
references to “serving at the request of the Bank” shall include any service as
a[n officer][director] of the Bank which imposes duties on, or involves services
by, the [Officer][Director] with respect to an employee benefit plan, its
participants and beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner “not opposed to the best interests of the Bank” as referred to in this
Agreement.

    

    12.  Miscellaneous.

     

    This
Agreement may be executed in one or more counterparts, each of which shall for
all purposes be deemed to be an original, but all of which together shall
constitute one and the same Agreement.  Only one such counterpart
signed by the party against whom enforceability is sought needs to be produced
to evidence the existence of this Agreement.  The headings of the
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.  No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by each of the parties
hereto.  No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing
waiver.  The parties agree that this Agreement shall be governed by,
and construed and enforced in accordance with the laws of the State of
Kansas.

     

    

    [The
remainder of this page is left intentionally blank.]

     

    
      
        
        

         

      

      
         

        
          

        

      

      
         

      

    

    

    IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on the day and year first above
written.

    

    

    FEDERAL
HOME LOAN BANK OF TOPEKA

    

    

    By:_________________________________

    Andrew
J. Jetter

    President
and CEO

    

    

    [OFFICER][DIRECTOR]:

    

    

    

    Name:

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