Document:

EX-10.1

 Exhibit 10.1 

SECOND AMENDMENT OF LEASE 

THIS SECOND AMENDMENT OF LEASE (this “Second Amendment of Lease”), dated as of the 5 day of August, 2015, between SAGE
REALTY CORPORATION, a New York corporation having an office at 767 Third Avenue, New York, New York 10017, as agent for the owner of the building hereinafter mentioned (“Landlord”), and MEDALLION FINANCIAL CORP., a Delaware corporation
qualified to do business in the state of New York, having an office at 437 Madison Avenue, New York, New York 10022 (“Tenant”). 

W I T N E S S E T H 

WHEREAS, Landlord and Tenant entered into an Indenture of Lease, dated as of October 31, 1997 (as such lease was amended by that
certain First Amendment of Lease, dated September 6, 2005, hereinafter collectively, the “Lease”), pursuant to which Landlord leased to Tenant, and Tenant hired from Landlord, the entire thirty eighth (38th) floor (the “Demised Premises”) in the building known as 437 Madison Avenue, New York, New York 10022 (the “Building”) for a term to expire on June 30, 2016, or an
earlier date pursuant to the provisions of the Lease; 
 WHEREAS, Landlord and Tenant desire to amend the Lease to provide,
among other things, for an extension of the Term of the Lease. 
 NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 
 1. All capitalized terms used
herein shall have the same meaning ascribed to them in the Lease, unless otherwise herein indicated. 
 2. The Term is hereby extended for
one (1) period of ten (10) years and ten (10) months commencing July 1, 2016, and expiring on April 30, 2027 (the “Extended Term”). Tenant shall deliver vacant possession of the Demised Premises to Owner on
April 30, 2027, in such condition as required by the Lease as if such date were the date originally set forth in the Lease for the expiration of the Term. 

 3A. As of July 1, 2016, Section 3.01 of the Lease shall be amended to provide that the
annual rate of Fixed Rent payable with respect to the Demised Premises shall be as follows: 
 (i) $1,697,150.00 per annum
($141,429.17 per month) during the period commencing on July 1, 2016 and continuing through June 30, 2021; and 

(ii) $1,790,400.00 per annum ($149,200.00 per month) during the period commencing on July 1, 2021 and continuing through
the Expiration Date, as extended hereby. 
 B. Anything herein to the contrary notwithstanding, provided the Lease and this Second Amendment
of Lease shall be in full force and effect and Tenant shall not be in default thereunder and hereunder beyond any applicable notice and grace periods, the Fixed Rent shall abate at the rate of $141,429.17 per month, for the months of (i) July
through December of 2016, (ii) July and August of 2017 and (iii) July and August of 2018. 
 4A. As of July 1, 2016, for
purposes of determining additional rent attributable to the Demised Premises, subparagraph (a) of Section 3.04 of the Lease shall be amended to read as follows: 

(a) The term “Base Tax Year” as hereinafter set forth for the determination of real estate tax escalation shall mean calendar year
2016 (i.e., Real Estate Taxes, as hereinafter defined, for the Base Tax Year shall be the average of Real Estate Taxes for the period commencing on July 1, 2015 and ending on June 30, 2016 and Real Estate Taxes for the period
commencing on July 1, 2016 and ending on June 30, 2017). 
 B. As of July 1, 2016, for purposes of determining additional
rent attributable to the Demised Premises, subparagraphs (e), (f), (g) and (A) of Section 3.04 of the Lease shall be deleted in their entirety and replaced with the following subparagraphs (e), (f), (g), (h) and (A): 

(e) The term “Base Expense Year” as hereinafter set forth for the determination of the operating expense escalation shall mean the
calendar year 2016. 
 (f) The term “the building project” shall mean the Building and the Land, together with the sidewalks,
curbs, plazas and other areas adjacent to and serving the Building. 

  
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 (g) The term “Comparative Year” shall mean the twelve (12) months following the
Base Expense Year, and each subsequent period of twelve (12) months. 
 (h) The term “Expenses” shall mean the total of all
the costs and expenses (and taxes and surcharges thereon, if any) incurred or borne by or on behalf of Landlord with respect to the operation, cleaning, repair, safety, management, security and maintenance of the building project and the services
provided to tenants therein, including, but not limited to, the costs and expenses incurred for and with respect to: gas, oil, steam and any other fuel and any fees paid in connection with the purchase, calculation and billing of such utilities;
water rates and sewer rents; air-conditioning; mechanical ventilation; heating; cleaning and janitorial service, by contract or otherwise; window washing (interior and exterior); elevators; escalators; Building electric current (i.e., Building
electric current shall be deemed to mean all electricity purchased for the Building except that which is redistributed to tenants in the Building; the parties acknowledge and agree that thirty percent (30%) of the Building’s payment to the
public utility or other provider for the purchase of electricity shall be deemed to be payment for Building electric current); protection and security services and systems; lobby decoration and exhibitions; repairs, replacements and improvements
which are appropriate for the continued operation of the building project as a first-class building project (subject to the limitations set forth herein in respect of those replacements and improvements which constitute capital improvements);
maintenance; painting of non-tenant areas; fire, extended coverage, boiler and machinery, sprinkler, apparatus, public liability and property damage, rental and plate glass insurance and any insurance required by a mortgagee or carried by owners of
buildings of like class and character; management fees; supplies, wages, salaries, medical, surgical, sick day and disability benefits, pensions, hospitalization, retirement plans and group insurance respecting employees of Landlord up to and
including the building manager (including a pro rata share only of such wages and benefits of employees including Landlord’s engineer, who are employed at more than one building, such pro rata share shall be determined by Landlord and shall be
based upon Landlord’s reasonable estimate of the percentage of time spent by such employees at the building project); uniforms and working clothes for such employees and the cleaning thereof and expenses imposed pursuant to law or to any
collective bargaining agreement with respect to such employees; worker’s compensation insurance, payroll, social security, unemployment and other similar taxes with respect to 

  
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such employees; association contributions, levies, charges, fees or dues; and the cost of interior and exterior landscaping, the rental value of Landlord’s Building office (not to exceed
3,000 square feet) and all office expenses, such as telephone, utility, stationery and similar expenses incurred in connection therewith. 

Provided, however, that the foregoing costs and expenses shall exclude or have deducted from them, as the case may be and as shall be
appropriate: 
 (i) leasing commissions; 

(ii) managing agents’ fees or commissions in excess of three (3%) of the gross revenues of the Building; 

(iii) executives’ salaries above the grade of building manager; 

(iv) expenditures for capital improvements, except for those (x) required by any law enacted after the date hereof, (y) resulting in
a reduction in Expenses, or (z) designed to result in energy savings for the Building. With respect to the foregoing, if Landlord shall purchase any item of capital equipment or make any capital expenditure pursuant to (x), (y) or
(z) above, then the amortized costs for same shall be included in Expenses for the Comparative Year in which the costs are incurred and subsequent Comparative Years, amortized on a straight line basis over the useful life of the improvement
determined in accordance with generally acceptable accounting principles, consistently applied, with an interest factor equal to the Interest Rate at the time of Landlord’s having incurred said costs. If Landlord shall lease any such item of
capital equipment with respect to (x), (y) or (z) above, then the rentals and other costs paid pursuant to such leasing shall be included in Expenses for the Comparative Year in which they are incurred; 

(v) amounts received by Landlord through proceeds of insurance to the extent the proceeds are compensation for expenses which were previously
included in Expenses hereunder; 
 (vi) cost of repairs or replacements incurred by reason of fire or other casualty to the extent to which
Landlord is compensated therefor through proceeds of insurance, or caused by the exercise of the right of eminent domain; 

  
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 (vii) advertising and promotional expenditures; 

(viii) legal fees for disputes with tenants and legal and auditing fees, other than legal, bookkeeping and auditing fees and other
professional services reasonably incurred in connection with the maintenance, cleaning, repair, safety, management, security and operation of the building project or in connection with the preparation of statements required pursuant to additional
rent or lease escalation provisions; 
 (ix) the incremental cost of furnishing services such as overtime HVAC to any tenant at such
tenant’s expense; costs incurred in performing work or furnishing services for individual tenants (including Tenant) at such tenant’s expense; and costs of performing work or furnishing services for tenants other than Tenant at
Landlord’s expense to the extent that such work or service is in excess of any work or service Landlord is obligated to furnish to Tenant at Landlord’s expense; 

(x) depreciation on the Building and its components and amortization and interest payments under any mortgage or under any financing; 

(xi) rent and additional rent paid or payable under any ground or underlying lease; 

(xii) any cost representing an amount paid to an entity related to Landlord to the extent the same exceeds the costs which would be rendered
by unaffiliated third parties on a competitive basis in comparable buildings; 
 (xiii) costs incurred by Landlord to the extent resulting
from Landlord’s breach of a lease in the Building to the extent such costs would not otherwise have been incurred by Landlord but for such breach; 

(xiv) the cost of removing, encapsulating or otherwise abating any asbestos in the Building or any other materials in the Building which under
Legal Requirements are deemed hazardous as of date hereof; with respect to the costs of so dealing with materials not so deemed hazardous as of the date hereof, but later deemed hazardous under Legal Requirements, the cost for same shall be included
in Expenses for the Comparative Year in which they are incurred and subsequent Comparative Years, amortized on a straight line basis 

  
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over ten (10) years, with an interest factor equal to the Interest Rate at the time of Landlord’s having incurred said costs; 

(xv) all costs associated with selling or hypothecating any of Landlord’s interests in the Building; 

(xvi) Real Estate Taxes and the specific exclusions to Real Estate Taxes referred to in the definition of Real Estate Taxes; 

(xvii) the amount of any fine, interest or penalty paid by Landlord due to Landlord’s violation of any Legal Requirement and any interest
or penalties resulting from the late payment of any Expenses, provided that any such fine, interest or penalty paid is not incurred by Landlord due to an action or inaction of Tenant required hereunder; and 

(xix) costs for sculpture, paintings or other objects of art including costs of installation, insurance and maintenance thereof. 

If during all or part of any Comparative Year, Landlord shall not furnish any particular item(s) of work or service (which would constitute an
Expense hereunder) to portions of the building project due to the fact that such portions are not occupied or leased, or because such item of work or service is not required or desired by the tenant of such portion, or such tenant is itself
obtaining and providing such item of work or service, or for other reasons, then, for the purposes of computing the additional rent payable hereunder, the amount of the expenses for such items (which vary depending on the occupancy of the Building)
for such period shall be increased by an amount equal to the additional operating and maintenance expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such item of work or services
to such portion of the building project. 
 (A) Operating Expense Escalation. 

(a) If the Expenses for any Comparative Year shall be greater than the Expenses for the Base Expense Year, then Tenant shall pay to Landlord,
as additional rent for such Comparative Year, in the manner hereinafter provided, an amount equal to the Percentage of the excess of the Expenses for such Comparative Year over the Expenses for the Base Expense Year (such amount being hereinafter
called the “Expense Payment”). 

  
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 Following the expiration of each Comparative Year and reasonably promptly but in no event later
than one (1) year after the end of such Comparative Year, Landlord shall submit to Tenant a statement, as hereinafter described, setting forth the Expenses for the preceding Comparative Year, the Expenses for the Base Expense Year, and the
Expense Payment, if any, due to Landlord from Tenant for such Comparative Year. The rendition of such statement to Tenant shall constitute prima facie proof of the accuracy thereof and, if such statement shows an Expense Payment due from Tenant to
Landlord with respect to the preceding Comparative Year then (i) Tenant shall make payment of any unpaid portion thereof within twenty (20) days after receipt of such statement; and (ii) Tenant shall also pay to Landlord, as
additional rent, within twenty (20) days after receipt of such statement, an amount equal to the product obtained by multiplying the total Expense Payment for the preceding Comparative Year by a fraction, the denominator of which shall be 12
and the numerator of which shall be the number of months of the current Comparative Year which shall have elapsed prior to the first day of the month immediately following the rendition of such statement; and (iii) Tenant shall also pay to
Landlord, as additional rent, commencing as of the first day of the month immediately following the rendition of such statement and on the first day of each month thereafter until a new statement is rendered, 1/12th of the total Expense Payment for the preceding Comparative Year. The aforesaid monthly payments based on the total Expense Payment for the preceding Comparative Year shall be adjusted to reflect, if
Landlord can reasonably estimate, known increases in rates or costs, for the current Comparative Year, applicable to the categories involved in computing Expenses, whenever such increases become known prior to or during such current Comparative
Year. The payments required to be made under (ii) and (iii) above shall be credited toward the Expense Payment due from Tenant for the then current Comparative Year, subject to adjustment as and when the statement for such current
Comparative Year is rendered by Landlord. 
 (b) The statements of the Expenses to be furnished by Landlord as provided in the second
paragraph of 3.04(A)(a) above shall be based on information and computations made for the Landlord by a Certified Public Accountant (who may be the Certified Public Accountant now or then employed by Landlord for the audit of its accounts or who may
be an employee of Landlord or Landlord’s then managing agent); said Certified Public Accountant may rely on Landlord’s allocations and estimates wherever operating cost allocations or estimates are needed for

  
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this Article. The statements thus furnished to Tenant shall constitute a final determination as between Landlord and Tenant of the Expenses for the periods represented thereby, unless Tenant
within ninety (90) days after they are furnished shall give a notice to Landlord that it disputes their accuracy or their appropriateness, which notice shall specify the particular respects in which the statement is inaccurate or inappropriate.
Pending the resolution of any such dispute, Tenant shall pay the additional rent to Landlord in accordance with the statements furnished by Landlord. 

Subject to Tenant’s audit rights set forth below, any such dispute shall be resolved by arbitration in New York City by three
(3) arbitrators, each of whom shall have at least ten (10) years’ experience in the supervision of the operation and management of major office buildings in Manhattan and in accordance with the Commercial Arbitration Rules of the
American Arbitration Association for expedited arbitration and the provisions of this Lease, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 

After payment of said additional rent, Tenant and its employees and agents shall have the right, during reasonable business hours mutually
convenient for Landlord and Tenant, upon not less than ten (10) days’ prior written notice to Landlord given within the aforesaid ninety (90) day period, to examine Landlord’s books and records with respect only to the specific
items which Tenant disputes, provided, however, that such examination shall be conducted in a reasonably expeditious manner, and that such examination is commenced within ninety (90) days following rendition of Tenant’s ten (10) day
notice subject to extending said ninety (90) day period day for day for the period of time Landlord desires pursuant to the penultimate sentence of this paragraph to substantiate the accuracy of the statement disputed by Tenant or Landlord
otherwise delays Tenant in examining said books and records. All information made available to Tenant will be kept strictly confidential, and Tenant agrees to indemnify, defend and hold Landlord harmless from all costs, damages, and expenses
sustained or incurred by Landlord resulting from Tenant’s failure to keep such information confidential, including, without limitation, in enforcing the foregoing indemnification, provided, however, that the failure to keep such information
confidential solely because disclosure is required under the terms of a subpoena, order, civil investigative demand or similar process issued by a court of competent jurisdiction or by a governmental body or

  
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regulatory authority, or in the arbitration proceeding or other action or proceeding brought by Tenant to recover payment of Expenses described above will not be deemed a default by Tenant
hereunder and shall not subject Tenant to any of the liabilities or indemnifications provided for herein. In no event shall any person working on a contingency basis or any other fee basis by which such person’s compensation is based on the
amount refunded or credited by Landlord as a result of such audit be entitled to examine Landlord’s books and records. Before exercising its right to audit Landlord’s books and records, Tenant agrees to give to Landlord a reasonable
opportunity (not to exceed ninety (90) days) to substantiate by documentary or other reasonably satisfactory evidence the accuracy of the statement disputed by Tenant. Nothing contained herein shall limit Tenant’s audit rights as
hereinabove set forth, if for any reason, Tenant is not satisfied with Landlord’s substantiation. If, as a result of any such audit, arbitration proceeding, or agreement between the parties, it shall be determined that a refund is due to
Tenant, Landlord shall promptly refund to Tenant the amount of any overpayment. 
 (c) In no event shall the Fixed Rent under this Lease be
reduced by virtue of this Article. 
 (d) If the Commencement Date of the Term of this Lease is not the first day of the first Comparative
Year, then the additional rent due hereunder for such first Comparative Year shall be a proportionate share of said additional rent for the entire Comparative Year, said proportionate share to be based upon the length of time that the Lease Term
will be in existence during such first Comparative Year. Upon the date of any expiration or termination of this Lease (except termination because of Tenant’s default) whether the same be the date hereinabove set forth for the expiration of the
Term or any prior or subsequent date, a proportionate share of said additional rent for the Comparative Year during which such expiration or termination occurs shall upon twenty (20) days’ notice become due and payable by Tenant to
Landlord, if it was not theretofore already billed and paid. The said proportionate share shall be based upon the length of time that this Lease shall have been in existence during such Comparative Year. Landlord shall, as soon as reasonably
practicable, compute the additional rent due from Tenant, as aforesaid, which computations shall either be based on that Comparative Year’s actual figures or be an estimate based upon the most recent statements theretofore prepared by Landlord
and furnished to Tenant under subsections 3.04(A)(a) and (b) above. If an 

  
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estimate is used, then Landlord shall cause statements to be prepared on the basis of the Comparative Year’s actual figures promptly after they are available, and thereupon, Landlord and
Tenant shall make appropriate adjustments of any estimated payments theretofore made. 
 (e) Landlord’s and Tenant’s obligation to
make the adjustments referred to in subsections 3.04(A)(a), (b) and (d) above shall survive any expiration or termination of this Lease. 

(f) Any delay or failure of Landlord in billing any operating expense escalation hereinabove provided shall not constitute a waiver of or in
any way impair the continuing obligation of Tenant to pay such operating expense escalation hereunder, except that failure of Landlord to render a final statement prior to the date that is twenty four (24) months immediately following the end
of the Comparative Year shall preclude Landlord from collecting any further Expenses with respect to such Comparative Year. 
 5A. Tenant
has informed Landlord that certain alterations and improvements need to be made to the Demised Premises (the “Second Amendment Alterations”). The Second Amendment Alterations shall be more particularly set forth on those final and complete
plans, specifications and drawings to be submitted by Tenant to Landlord for approval promptly after the execution of this Second Amendment of Lease. (Such plans, specifications and drawings as approved by Landlord in accordance with the terms of
Section 6.05 of the Lease are collectively referred to as “Tenant’s Plans”). 
 B. Tenant shall perform the Second
Amendment Alterations subject to the terms and conditions of the Lease (including, without limitation, Article 6 thereof), and Landlord shall contribute toward the cost of the Second Amendment Alterations performed by or on behalf of Tenant, an
amount not to exceed $559,500.00 (“Landlord’s Contribution”), which contribution shall be payable only on account of labor, materials, fees and permit costs, and architectural and engineering services, and the fees of any expediter,
directly related to the Second Amendment Alterations. Payment by Landlord to Tenant or Tenant’s designee of such Landlord’s Contribution shall be in accordance with the provisions set forth in subsection C below. Notwithstanding the
foregoing, Tenant shall have the option, to be exercised by delivering written notice to Landlord on or prior to the date that is ninety (90) days from the date hereof, to reduce Landlord’s

  
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Contribution to an amount not to exceed $373,000, in which event Tenant shall be entitled to one (1) additional abatement of Fixed Rent in the amount of $141,429.17 to be applied in the
month of January of 2017. 
 C. The Second Amendment Alterations are to be performed only (a) in accordance with Tenant’s Plans,
(b) at such times and in such manner as is set forth in the Lease and as is set forth in the Building work rules applicable to all tenants of the Building, (c) in full compliance with all rules and regulations of all governmental bodies
having jurisdiction thereover, and (d) in full compliance with the provisions of the Lease, including, without limitation, Article 6. Tenant agrees that it will promptly commence and thereafter diligently proceed with and complete the Second
Amendment Alterations on or prior to the date that is fifteen (15) months from the date hereof (the “Outside Completion Date”). Tenant shall have no right to request any portion of Landlord’s Contribution for any of the Second
Amendment Alterations requested after the Outside Completion Date and any amounts of the Landlord’s Contribution not requested by the Outside Completion Date shall be forfeited by Tenant. 

Provided Landlord shall have received the materials described below, on or before the twentieth (20th) day of the applicable calendar
month, Landlord shall disburse portions of Landlord’s Contribution to Tenant or Tenant’s designee (or upon Tenant’s request directly to Tenant’s contractors) on or prior to the twentieth (20th) day of the next succeeding
calendar month. Disbursements from Landlord’s Contribution shall not be made more frequently than monthly and shall not exceed the amounts then payable (as certified by Tenant and Tenant’s architect) to contractors, subcontractors,
materialmen, architects, engineers and other professionals with respect to the portion of the Second Amendment Alterations theretofore completed and for which the disbursement was requested. Landlord’s obligation to make disbursements of
Landlord’s Contribution shall be subject to Landlord’s receipt of: (a) a request for such disbursement from Tenant, signed by an authorized officer of Tenant, accompanied by a certificate of such authorized officer of Tenant
certifying that all amounts set forth in such request are validly due to contractors, Tenant’s architect, engineer or other professionals, subcontractors and materialmen in connection with the furnishing of material for, or in the performance
of, the Second Amendment Alterations, (b) copies of all receipts, invoices and bills for the work and materials to be paid for, or to reimburse Tenant 

  
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for the payment of, the requested disbursement, (c) a list of all contractors, subcontractors and suppliers performing work or supplying materials in connection with the Second Amendment
Alterations for which reimbursement is sought whether directly to Tenant or through or on behalf of any agent of Tenant, (d) effective waivers of liens by Tenant’s general contractor and subcontractors with respect to the work covered by
any prior requisition, either partial (with respect to any contract or subcontract which has not then been fully performed) or final, and all statements and forms required for compliance with the lien law of the State of New York, and (e) a
certificate (on AIA Form G702 with a G703 continuation sheet and supporting documentation) of Tenant’s independent licensed architect, certifying the percentage of completion then attained with respect to each item of work theretofore completed
and for which the disbursement is requested and that such work was performed in a good and workmanlike manner and in accordance with all laws, orders and regulations of governmental authorities having jurisdiction over the performance of the work
(“Requirements”) and Tenant’s Plans. Upon request of Landlord, Tenant agrees to make available to Landlord copies of any contracts, subcontracts, purchase orders, work orders, change orders and other materials relating to the Second
Amendment Alterations. Upon the completion of the Second Amendment Alterations and satisfaction of the conditions set forth below, subject to the proviso in this sentence, any amount of Landlord’s Contribution which has not previously been
disbursed shall be retained by Landlord provided, however, that, subject to Tenant’s obligation under Section 6.10 of the Lease, if Tenant delivers a notice to Landlord prior to satisfaction of the conditions set forth below
that it is in dispute with any contractors, subcontractors or materialmen, and refuses to make payments at such time or if any contracts provide for retainage which has not then been finally paid such amounts shall continue to be held for the
benefit of Tenant by Landlord under this subsection C. It is expressly understood and agreed that Tenant shall complete, at its expense, the Second Amendment Alterations whether or not Landlord’s Contribution is sufficient to fund such
completion. Within thirty (30) days after completion of any portion of the Second Amendment Alterations, Tenant shall deliver to Landlord (i) general releases and waivers of lien, from all contractors, subcontractors and materialmen
involved in the performance of the Second Amendment Alterations and the materials furnished in connection therewith (it being understood that general releases and complete waivers of lien cannot be delivered in advance of completion of a particular
trade or contract), (ii) a certificate (on AIA Form G702 with a G703 continuation sheet and 

  
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supporting documentation) from Tenant’s independent architect certifying that the Second Amendment Alterations have been completed in accordance with this Lease, all Requirements and in
accordance with the Tenant’s Plans and (iii) a certificate signed by an authorized officer of Tenant and by Tenant’s general contractor stating that all contractors, subcontractors and materialmen have been paid for all work with
respect to such Second Amendment Alterations and materials furnished through such date. 
 6. As of the date hereof, the Lease shall be
amended as follows: 
 A. Section 1.01 is hereby amended by adding the following defined term thereto: 

“default” as used in this Lease shall mean and refer to a failure by Tenant to pay (including for this purpose any late payment of)
any Fixed Rent and/or any additional rent payable under Section 3.04 or otherwise of the Lease and/or to perform any obligation on Tenant’s part to be performed under this Lease as and within the time expressly required by this Lease (no
matter how consequential or inconsequential or frequent or infrequent), and without regard to any action or inaction on the part of Landlord, including, without limitation, if Landlord’s conduct shall be deemed to be a waiver of or acquiescence
in Tenant’s act or omission or any other matter or thing which would act as a bar, in law or at equity, to Landlord’s enforcing its rights and remedies following a default by Tenant and/or Landlord’s failure (timely or otherwise) to
pursue any rights or remedies available to Landlord arising therefrom.” 
 B. Section 3.01 of the Lease by deleting the
introductory paragraph thereof and replacing it with the following: 
 “During the Term of this Lease, Tenant shall pay a Fixed Rent
payable in lawful money of the United States of America (by wire transfer pursuant to the wire instructions set forth on Schedule G attached hereto, provided that Landlord shall be permitted to change the aforementioned wire instructions by
delivering notice of such change to Tenant) in equal monthly installments in advance on the first day of each calendar month, without notice or demand, and without setoff or deduction whatsoever at an annual rate as follows (subject to adjustment
pursuant to Article 4 hereof):” 

  
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 C. Section 6.05 of the Lease is hereby amended by adding the following at the end of
the first paragraph thereof: “Landlord hereby agrees that it shall respond to all requests for consent to the performance of alterations, decorations or installations within the Demised Premises (including the Second Amendment Alteration Work
performed pursuant to the Second Amendment of Lease) within ten (10) Business Days of submission of all of the documentation reasonably necessary for Landlord to make such determination. If Landlord shall fail to respond within such 10-Business
Day period, Tenant shall have the right to give a second notice to Landlord, which notice shall contain a legend in not less than 14 point font bold upper case letters as follows: “PLEASE BE ADVISED THAT LANDLORD HAS FAILED TO RESPOND TO
TENANT’S SUBMISSION OF DOCUMENTATION IN CONNECTION WITH THE APPROVAL OF CERTAIN REQUESTED ALTERATIONS IN THE DEMISED PREMISES. IN THE EVENT THAT LANDLORD FAILS TO RESPOND TO TENANT’S REQUEST FOR SUCH ALTERATIONS WITHIN FIVE
(5) BUSINESS DAYS OF THE DATE HEREOF, THEN TENANT’S REQUEST FOR APPROVAL OF SUCH PLANS SHALL BE DEEMED APPROVED.” Such second notice must also include all of the documentation that was submitted with the initial request. If
Landlord shall fail to respond within such 5-Business Day period following the delivery of the second notice, such failure to respond shall be deemed to be Landlord’s approval of the requested alteration.” 

D. The following new Section 8.06 is hereby added to the Lease: 

“Section 8.06 Tenant shall not cause or knowingly permit, as a result of any intentional or unintentional act or omission on the part of
Tenant or any of its subtenants, occupants or licensees, the installation or placement of any Hazardous Materials (hereinafter defined) in or on the Demised Premises or the Building or suffer or knowingly permit the presence of Hazardous Materials
in the Demised Premises or the Building (provided, however, that the foregoing covenant shall not be deemed to prohibit the presence of Hazardous Materials used in connection with the maintenance and operation of the Demised Premises by Tenant and
the conduct by Tenant of its ordinary business (which includes the use of standard office cleaning supplies in amounts that comply with applicable Regulations) in each instance in customary quantities and in full compliance with all applicable
laws). For purposes of this Section 8.05, “Hazardous Materials” shall mean, without limitation, gasoline, petroleum products, explosives, radioactive materials, polychlorinated biphenyls, lead and lead containing materials, or related
or similar materials, or any other substance or material defined as a hazardous or toxic substance or material by any Regulation.” 

  
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 E. Section 21.01(b) is hereby amended by deleting the second sentence thereof and replacing
it with the following: “The aforesaid systems will be operated by Landlord when seasonably required on Business Days, and shall be effective from 8:00 A.M. to 8:00 P.M.” 

F. The following new Section 21.01(f) is hereby added to the Lease: 

“Tenant has installed certain supplemental air-conditioning and ventilation system providing up to fifteen (15) tons of supplemental
air-conditioning capacity in the Demised Premises (the “Supplemental HVAC System”), which is controlled by and is to be maintained, repaired and replaced by Tenant, at Tenant’s sole cost and expense. In connection with the
Supplemental HVAC System, Landlord agrees that it will make available to Tenant up to fifteen (15) tons of condenser water (the “Additional Condenser Water”) for the operation of the Supplemental HVAC System. Tenant shall pay
Landlord’s then Building standard charges for the condenser water necessary to operate the Supplemental HVAC System which, as of the date hereof, are as follows: (i) $1,500.00 for the initial tap-in to Landlord’s condenser water and
(ii) $1,000.00 per ton per annum for condenser water thereafter, which charges are subject to change during the Term as hereinafter provided. The amount of such annual condenser water charge shall be adjusted by Landlord annually in accordance
with the percentage increase of the “Consumer Price Index for Urban Wage Items”, published by the Bureau of Labor Statistics of the United States Department of Labor, relating to New York, New York and Northeastern New Jersey, for urban
wage earners and clerical workers, between the date of such adjustment and the date such annual condenser water charge was last adjusted (or the date the annual condense water charge commenced, as the case may be).” 

G. Section 30.01 of the Lease is hereby amended so that Landlord’s address set forth in the second last sentence thereof shall
hereinafter be “767 Third Avenue, New York, New York 10017.” 
 H. Article 41 of the Lease is hereby deleted in its entirety and
replaced with “Intentionally omitted”. 

  
 15 

 I. Article 42 of the Lease is hereby amended by deleting Section 42.01 and the first
sentence of Section 42.02 thereof in their entirety and replacing it with the following: 
 “Section 42.01 Provided this Lease
shall then be in full force and effect and Tenant shall not be in default hereunder beyond any applicable notice or grace period either as of the date of Tenant’s exercise of the extension option described herein or as of the day which would
otherwise be the first day of the Extension Term, as defined herein (which conditions regarding default may be waived by Landlord in its sole discretion), Tenant shall have the right, at its option, to extend the Term for a single five (5) year
period (the “Extension Term”). The Extension Term shall commence on May 1 2027, and shall expire on April 30, 2032 unless the Extension Term shall sooner end pursuant to any of the terms, covenants or conditions of this Lease or
pursuant to law. Tenant shall give Landlord written notice of Tenant’s intention to exercise such option on or before April 30, 2026, the time of exercise being of the essence, and upon the giving of such notice, this Lease and the Term
shall be extended without execution or delivery of any other or further documents, with the same force and effect as if the Extension Term had originally been included in the Term and the Expiration Date shall thereupon be deemed to be the last day
of the Extension Term. All of the terms, covenants and conditions of this Lease shall continue in full force and effect during the Extension Term, including items of additional rent and escalation which shall remain payable on the terms herein set
forth, except that the Fixed Rent shall be as determined in accordance with Section 42.02 of this Article and Tenant shall have no further right to extend the Term pursuant to this Article. 

Section 42.02 The Fixed Rent payable by Tenant for the Demised Premises during the Extension Term shall be the fair market rental value
of the Demised Premises taking into consideration all relevant factors (fair market rental value taking into account the foregoing is hereinafter referred to as the “FMRV”).” 

J. The following new Article 44 is hereby added to the Lease after the end of Article 43: 

  
 16 

 “ARTICLE 44 

BACK-UP GENERATOR 

Section 44.01. Landlord has installed and agrees for so long as this Lease is in effect, to provide a back-up generator to furnish
electricity to the Tenant in the Premises in emergency situations (the “Back-Up Generator”), along with adequate space and fuel, and to test, maintain, repair and replace the Back-Up Generator as necessary in Landlord’s reasonable
judgment. 
 Section 44.02. It is understood and agreed that the Back-Up Generator is a diesel powered engine that relies upon a supply
of diesel fuel for its operation. While it is intended to provide electricity in the immediate aftermath of an emergency that causes an interruption in the supply of electrical power to the Building, the availability of fuel can be impaired during
certain emergency situations, which can affect the longevity of its use as a source of alternative electrical power. Landlord maintains a 2,500 gallon diesel fuel tank in the Building, which is dedicated to furnishing the Back-Up Generator with
sufficient fuel for a period not to exceed 24–36 hours. Landlord will use its commercially reasonable efforts to refuel its diesel fuel tank as and when needed during an emergency situation. However, Landlord specifically cautions that in the
event of a prolonged emergency, refueling of the diesel powered Back-Up Generator may not be available due to conditions in the area where the Building is located, the City of New York, or conditions elsewhere that adversely affect the delivery of
fuel, all beyond the control of Landlord. The term “conditions” as used in the foregoing sentence includes, by way of example and not by way of limitation, governmental restrictions and prohibitions, matters affecting the fuel supply and
matters affecting access to the Building by fuel delivery trucks. Tenant is therefore advised that, while the Back-Up Generator will supply electricity for a period of time following an emergency, because of the limitations imposed by the fuel
supply for the Back-Up Generator, no guarantee can be provided by Landlord for the length of time the Back-Up Generator will supply electricity, and therefore Tenant should have and follow a business continuity plan that enables it to set up
business systems following the emergency in a location unaffected by the emergency impacting the Building. 
 Section 44.03. For so
long as this Lease shall be in full force and effect, and for so long as Tenant has not defaulted and not cured such default or defaults within all applicable notice and cure periods in its obligations hereunder, Landlord agrees to: (i) upon
the execution of this Lease, reserve twelve (12) kilowatts of electricity produced by said 

  
 17 

 
existing Back-Up Generator available to the Premises for Tenant’s exclusive use on a connected load basis; and (ii) allow Tenant, at its own cost and expense, to connect certain systems
servicing its Premises to said Back-Up Generator by licensed professionals, in full compliance with all applicable laws, codes and regulations, and in such manner as Landlord shall reasonably approve; provided, however, that: (w) upon execution
of this Lease, Tenant shall pay to Landlord a non-refundable (in whole or part) connection fee in the amount of Six Thousand Dollars ($6,000.00) (the “Connection Fee”); (x) Tenant shall not make said connection to the Back-Up
Generator until Landlord shall have been paid the Connection Fee and approved Tenant’s plans and specifications therefor and it is agreed that, should Landlord at any time discover that the connection was made in a manner different from the
approved plans and specifications, Landlord shall have the right to (A) suspend Tenant’s right to use the Back-Up Generator until Landlord has been reasonably satisfied that the connection has been made in an acceptable manner or
(B) terminate Tenant’s right to use the Back-Up Generator without liability and retain all sums paid to it prior to such termination; (y) Tenant’s connected load to the Back-Up Generator shall not at any time exceed twelve
(12) kilowatts of electricity; and (z) from and after the date hereof, Tenant shall, within twenty (20) days after being billed therefor, pay Landlord an annual fee (the “Subscription Rate”), currently at the rate of Five
Hundred Dollars ($500.00) per kilowatt of Tenant’s then-current total reservation of electricity produced by the Back-Up Generator for Tenant’s exclusive use (i.e., $6,000.00 annual fee), on a connected load basis. The Subscription Rate is
subject to annual increases of three (3%) percent on each anniversary of the date that the aforesaid connection is made, and shall be billed and payable in advance on a recurring annual basis on the date the connection is made and on each
anniversary thereof, and, except as expressly set forth herein, continuing for such period of time as the Lease shall be in full force and effect. The Subscription Rate shall be prorated for partial years, and shall be due and payable within ten
(10) Business Days of such billing. In the event that Tenant fails to fully and timely make all payments to Landlord set forth herein and/or does not satisfy its other agreements and obligations hereunder, Landlord shall have the right (in
addition to all other remedies available to it) to terminate Tenant’s right to use the Back-Up Generator and retain all payments related thereto made prior to such termination. 

Section 44.04. Tenant understands and agrees that it shall be entitled to the use of the reserved electricity from

  
 18 

 
the Back-Up Generator only during times when Landlord has determined that the Back-Up Generator is needed to supply power to the Premises. Landlord is not obligated to run the Back-Up Generator
in the absence of an interruption of power to the Building and the Premises. Tenant shall not, whether by act or omission, cause any damage to said generator or, at any time, consume or maintain a connected load in excess of twelve
(12) kilowatts of electricity from the Back-Up Generator. 
 Section 44.05. Tenant acknowledges that the Back-Up Generator
includes a diesel powered engine with ancillary equipment and systems to generate and transmit electricity, and engines and equipment are capable of breaking down, malfunctioning or developing mechanical problems without warning. Tenant agrees that
Landlord shall have no liability to Tenant or any party claiming by, through or under Tenant if, for any reason whatsoever (other than Landlord’s gross negligence or willful misconduct), said generator shall not operate, provide or continue to
provide electricity in sufficient quantity or quality, and in no event shall Landlord have any liability for consequential damages. Tenant expressly agrees that, except if and to the extent that such liability shall have been caused by the gross
negligence or willful misconduct of Landlord, the liability of Landlord with respect to any of Landlord’s obligations under this agreement shall not exceed the then unamortized portion of the aforesaid connection fee based on the then remaining
term of the Lease at the time the connection is made (but, in any case, Landlord shall have no liability for any consequential damages). Tenant expressly agrees as an inducement for Landlord to permit Tenant to connect to the Back-Up Generator, to
waive for itself and for any party claiming by, through or under Tenant, any claims by Tenant or any such party for all claims, suits and liability for loss and/or damages, including, without limitation, claims made by Tenant or any such party
arising from Tenant or such party’s not having obtained the amount or quality of electricity, or no electricity at all, that Tenant or such party may have anticipated being able to obtain. Tenant expressly agrees to indemnify, hold and save
Landlord harmless from and against all third-party claims, suits, liabilities, losses, damages (including, without limitation, incidental and consequential damages) and expenses (including, without limitation, reasonable attorney fees, court costs
and other disbursements) arising in whole or in part from any acts or omissions of Tenant or any party claiming by, through or under Tenant. Tenant acknowledges and agrees, due to the paramount need to preserve life and property within the Building,
that the amount of electricity reserved hereunder may 

  
 19 

 
be reduced or eliminated in the unlikely event that the emergency and fire safety systems in the Building require power from the Back-Up Generator during a power outage or other emergency. 

Section 44.06. Landlord will not be liable, wholly or in part, for non-performance or a delay in performance of its obligations under
this Article 44, if such non-performance or delay is due to force majeure or contingencies or causes beyond the reasonable control of Landlord, including but not limited to flood, wind, hurricane, tornado, earthquake, explosion, or other similar
catastrophe, hostilities, government order, civil commotion, act of terrorism, strike, labor dispute, blockage or embargo or any act of nature, fires, accident, epidemic or quarantine restrictions.” 

7A. Tenant acknowledges and agrees that it is currently in possession of the Demised Premises and agrees that, other than as set forth in
Sections 3B, 5B and 7B hereof, Landlord shall have no obligation to perform any work, furnish any materials, or give Tenant any rent credit or work allowance or any sum of money in connection with extending the Term. The foregoing shall not be
deemed or construed to modify, amend or limit any ongoing maintenance, repair, restoration or other obligations which Landlord has pursuant to the terms of the Lease. 

B. During the performance of Tenant’s Second Amendment Alterations, Landlord, at Landlord’s expense, shall install sprinklers in
compliance with applicable code requirements and in the locations set forth on Tenant’s Plans (the “Landlord’s Second Amendment Work”); provided, however, that all “Class-E” required equipment shall be furnished and
installed thereafter by Tenant at Tenant’s sole cost and expense. Tenant acknowledges that Landlord will be performing Landlord’s Second Amendment Work simultaneously with Tenant’s performance of the Second Amendment Alterations.
Landlord and Tenant, upon request of the other party, shall apprise such other party of such respective party’s general construction schedule so the parties may coordinate the performance of those items of Landlord’s Second Amendment Work
and the performance of Tenant’s Second Amendment Alterations in accordance with good construction practice. The parties shall reasonably cooperate such that both parties’ work may be completed efficiently and economically. Landlord’s
Secondary Amendment Work shall be performed with reasonable diligence, so that such work shall be completed in a manner as not to delay Tenant’s performance of 

  
 20 

 
Tenant’s Amendment Alterations, subject to good construction practice, and Tenant’s Second Amendment Alterations shall be performed with reasonable diligence, so that such work shall be
completed in a manner as not to delay Landlord’s performance of Landlord’s Second Amendment Work, subject to good construction practice. 

8. Landlord hereby agrees that there shall be no charge to Tenant for up to 50 hours of freight elevator service and loading dock usage during
the performance of Tenant’s Second Amendment Alterations, regardless as to whether such usage occurs during business hours or after. 

9. The parties hereto agree that Newmark Grubb Knight Frank and Sage Realty Corporation (the “Brokers”) were the only broker who
negotiated and brought about the transactions contemplated by this Second Amendment of Lease, and Landlord agrees to pay the Brokers a commission therefor as per separate agreements. Tenant represents and warrants that it has not dealt with any
broker other than the Broker, and Tenant agrees to indemnify and save Landlord harmless from and against any claims made by any other broker claiming to have dealt with Tenant. Landlord represents and warrants that it has not dealt with any broker
other than the Broker, and Landlord agrees to indemnify and save Tenant harmless from and against any claims made by any other broker claiming to have dealt with Landlord. 

10. It is expressly understood and agreed that, pursuant to this Second Amendment of Lease, the Term of the Lease is extended for a ten
(10) year and ten (10) month period only. Except for Tenant’s option to extend the Lease pursuant to Section 6I hereof, any further extension of the Term of the Lease if the parties hereafter shall agree to same shall require a
written agreement between the parties hereto and any such agreement shall not be binding upon Landlord unless same is fully executed and unconditionally delivered by Landlord and Tenant. 

11. Tenant warrants and represents that, to the best of its knowledge, as of the date hereof, Landlord has performed all of its obligations
under the Lease accruing through the date hereof. 
 12. Except as modified by this Second Amendment of Lease, the Lease and each of the
covenants, terms and conditions set forth therein are and shall remain in full force and effect and are hereby ratified, confirmed and approved. 

  
 21 

 13. In consideration for entering into this Second Amendment of Lease, Tenant agrees (a) not
to disclose any Confidential Information (hereinafter defined) or any information derived therefrom to any third party, and (b) to hold the Confidential Information in confidence and to take such precautions to protect the confidentiality of
such Confidential Information as Tenant uses with respect to its own confidential information, but in no case shall Tenant take less than reasonable precautions. Any breach of the foregoing shall be a default under the Lease. For purposes hereof,
the term “Confidential Information” shall include all of the terms and conditions set forth in this Second Amendment of Lease, including, without limitation, the term of the extension, the Fixed Rent and Additional Rent set forth therein,
the Second Amendment Alterations, Landlord’s Second Amendment Work and any other Fixed Rent abatements set forth herein. The term “Confidential Information” shall not include information that is already in the public domain through no
breach by Tenant (or its representatives)of this Paragraph 13. For avoidance of doubt, any disclosures made, or required to be made, as a result of Tenant’s status as a public corporation, shall not be considered a violation of this Paragraph
13. The term “representative” as used in this Second Amendment of Lease shall mean any affiliates, agents, contractors, officers, directors, employees or other representatives of the party in question, including, without limitation,
attorneys, consultants, and financial or other advisors. Tenant shall inform each representative of the confidential nature of the Confidential Information. Each representative shall be subject to the same confidentiality requirements as Tenant and
Tenant shall be responsible for any breach of this Paragraph 13 by any of its representatives. 
 [Remainder of page left intentionally
blank.] 

  
 22 

 IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this Second Amendment
of Lease as of the day and year first above written. 
  

			
	LANDLORD:
	
	 SAGE REALTY CORPORATION,

as Agent

		
	By:	 	 /s/ C.F. McClafferty        

		 	C.F. McClafferty
		 	COO
	
	TENANT:
	
	MEDALLION FINANCIAL CORP.
		
	By:	 	/s/ Alvin Murstein        
		 	Name: Alvin Murstein
		 	Title:     CEO

  
 23EX 10.7 Incentive Plan - 2015 Midyear Proposed Amendment

                                                                                        
	
		
	 
	Board Approved 12/1/11

	 
	(Technical Amendments

	 
	Adopted 3/19/12;

	 
	Additional Amendments Adopted

	 
	5/18/2012

	 
	Updated 11/15/12;

	 
	Amended 5/29/13;

	 
	Amended 9/13/13;

	 
	Effective as of 12/1/11;

	 
	Updated 11/22/13;

	 
	Amended and Updated 11/20/14;

	 
	Amended 1/29/15;

	 
	Amended 7/17/15)

                                        

Federal Home Loan Bank of Indianapolis
Incentive Plan

(Effective as of January 1, 2012)
(As Amended March 19, 2012)
(As Further Amended May 18, 2012)
(As Updated November 15, 2012 to Reflect 2013 Performance Goals)
(Amended May 29, 2013)
(Amended September 13, 2013, Effective as of December 1, 2011)
(As Updated November 22, 2013, to Reflect 2014 Performance Goals)
(As Amended and Updated November 20, 2014, to Reflect 2015 Performance Goals)
(Amended January 29, 2015)
(Amended July 17, 2015)

1

ESTABLISHMENT OF ANNUAL AND LONG-TERM 2015-2018
INCENTIVE PLAN GOALS FOR THE 
FEDERAL HOME LOAN BANK OF INDIANAPOLIS
INCENTIVE PLAN
Pursuant to resolutions adopted by the Board of Directors of the Federal Home Loan Bank of Indianapolis (the "Bank"), the undersigned hereby execute the Federal Home Loan Bank of Indianapolis Incentive Plan, effective as of January 1, 2012, and setting forth goals effective as of January 1, 2015, as amended on the date set forth below, on behalf of the Bank, in the form attached hereto.
Dated this 17th day of July, 2015.
FEDERAL HOME LOAN BANK OF INDIANAPOLIS
By: /s/ James D. MacPhee                                          
James D. MacPhee, Chairman
By: /s/ Michael J. Hannigan, Jr.                                 
Michael J. Hannigan, Jr., Vice Chairman
ATTEST:
By: /s/ Kania D. Warbington                             
Kania D. Warbington, Corporate Secretary

2

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

	Article I
	INTRODUCTION
	1
	

	 
	 
	 

	Section 1.1
	Purpose
	1
	

	Section 1.2
	Effective Date
	1
	

	Section 1.3
	Administration
	1
	

	Section 1.4
	Supplements
	1
	

	Section 1.5
	Definitions
	1
	

	 
	 
	 

	Article II
	ELIGIBILITY AND PARTICIPATION
	2
	

	 
	 
	 

	Section 2.1
	Eligibility
	2
	

	Section 2.2
	Participation
	2
	

	 
	 
	 

	Article III
	AWARDS AND EXTRAORDINARY OCCURENCE
ADDITIONS/REDUCTIONS
	2
	

	 
	 
	 

	Section 3.1
	Awards
	2
	

	Section 3.2
	Performance Goals
	4
	

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

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

	Section 3.5
	Reserved
	6
	

	Section 3.6
	Effect of Termination of Service
	6
	

	Section 3.7
	Effect of Reorganization
	9
	

	Section 3.8
	Payment of Awards
	9
	

	Section 3.9
	Reduction or Forfeiture of Awards
	10
	

	 
	 
	 

	Article IV
	ADMINISTRATION
	11
	

	 
	 
	 

	Section 4.1
	Appointment of the Committee
	11
	

	Section 4.2
	Powers and Responsibilities of the Committee
	11
	

	Section 4.3
	Income and Employment Tax Withholding
	12
	

	Section 4.4
	Plan Expenses
	12
	

	 
	 
	 

	Article V
	BENEFIT CLAIMS
	12
	

	 
	 
	 

	Article VI
	AMENDMENT AND TERMINATION OF THE PLAN
	12
	

	 
	 
	 

	Section 6.1
	Amendment of the Plan
	12
	

	Section 6.2
	Termination of the Plan
	12
	

	 
	 
	 

	 
	 
	 

3

	
				
	 
	 
	PAGE

	Article VII
	MISCELLANEOUS
	12
	

	 
	 
	 

	Section 7.1
	Governing Law
	12
	

	Section 7.2
	Headings and Gender
	12
	

	Section 7.3
	Spendthrift Clause
	13
	

	Section 7.4
	Counterparts
	14
	

	Section 7.5
	No Enlargement of Employment Rights
	14
	

	Section 7.6
	Limitations on Liability
	14
	

	Section 7.7
	Incapacity of Participant
	15
	

	Section 7.8
	Evidence
	15
	

	Section 7.9
	Action by Bank
	15
	

	Section 7.10
	Severability
	15
	

	Section 7.11
	Information to be Furnished by a Participant
	15
	

	Section 7.12
	Attorneys' Fees
	15
	

	Section 7.13
	Binding on Successors
	15
	

	 
	 
	 

	APPENDIX I - 2015 PERFORMANCE PERIOD AWARDS FOR 
LEVEL II PARTICIPANTS
	17
	

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

	APPENDIX III - FORM OF NON-SOLICITATION AND
NON-DISCLOSURE AGREEMENT
	23
	

4

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

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

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

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

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

	Annual Award
	3.3(a), 3.4(a)

	Award
	3.1

	Bank
	1.1

	Board
	1.3

	Cause
	3.6(d)(i)

	Committee
	1.3

	Compensation
	3.1

	Deferral Performance Period
	3.1(a)

	Deferred Award
	3.3(b)

	Disability
	3.6(d)(ii)

	Discretionary Award
	3.1(d)

	Effective Date
	1.2

	Extraordinary Occurrences
	3.1(e)

	FHFA
	3.6(d)(i)

	Final Award
	3.1(e)

	Fully Meets Expectations
	3.3(a)(ii)

	Good Reason
	3.6(d)(iii)

1

	
		
	Level I Participant
	3.1(c)

	Level II Participant
	3.1(c)

	Maximum
	3.2(b)(iii)

	Non-Solicitation Agreement
	2.1

	Participant
	2.1

	Performance Goals
	3.2

	Performance Period
	3.1(a)

	Plan
	1.1

	Position
	3.6(d)(iii)(A)

	Reduction in Force
	3.6(d)(iv)

	Reorganization
	3.7(b)

	Retirement
	3.6(d)(v)

	Satisfactory
	3.3(a)(ii)

	Termination of Service
	3.6(d)(vi)

	Target
	3.2(b)(ii)

	Threshold
	3.2(b)(i)

ARTICLE II

ELIGIBILITY AND PARTICIPATION

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

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

ARTICLE III

AWARDS AND EXTRAORDINARY OCCURRENCE ADDITIONS/REDUCTIONS

Section 3.1    Awards. At the beginning of each Performance Period (and at such other times as it may designate as to Discretionary Awards), the Board will make an "Award" to eligible Participants. As described in this Article, Awards may be Annual Awards (as defined in subsection 3.3(a)), Deferred Awards (as defined in subsection 3.3(b)), or Discretionary Awards (as defined in subsection 3.1(d)). Each Award (other than Discretionary Awards) will be equal to a percentage of the Participant's annual Compensation, as described in the applicable Appendices for Level I Participants and Level II Participants. "Compensation" means the Participant's annual earned base salary or wages for hours worked, including overtime and hours paid under the Bank's paid-time-off policies, as applicable, but in any case excluding any bonus, incentive compensation, or long-term disability insurance payments paid for the current or a prior year. In the event a Participant receives a raise during a calendar year, the Participant's Compensation for the year will reflect the actual wages paid to the Participant for the year.

2

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

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

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

		
	(d)
	Discretionary Award. The President may recommend to the Board that additional discretionary Awards (each, a "Discretionary Award") be made to one or more Level II Participants to address external market considerations, recruiting needs, special projects and extraordinary individual or team efforts. The aggregate pool of funds available for all Discretionary Awards to Level II Participants in a calendar year will be determined by the Board and will not exceed 20 percent of the sum of all Final Awards of any kind paid to Level I Participants during such year. 

The following hypothetical example illustrates how the aggregate pool of funds for Discretionary Awards in a year is determined and awarded:

In year 5, all of the Level I Participants receive: (i) total Annual Awards attributable to year 4 of $700,000, and (ii) total Deferred Awards attributable to year 1 of $600,000.  In year 5, the sum of all Final Awards paid to Level I Participants is $1,300,000.  Therefore, at any time during year 5, the President may recommend payment of Discretionary Awards to Level II Participants, the sum of which cannot exceed $260,000.  The Board may authorize the payment of up to $260,000 for Discretionary Awards.  The President may allocate the Discretionary Awards to one or more Level II Participants in her or his discretion, up to the maximum amount authorized by the Board (and in any event less than $260,000 in total).  Payment must be made during year 5.

		
	(e)
	Final Award and Extraordinary Occurrences. The "Final Award" is the amount of an earned and vested Annual Award, Deferred Award, or Discretionary Award, as adjusted based upon the level at which the Performance Goals have been achieved, that is ultimately paid to a Participant under the Plan. The amount of a Final Award may be increased or decreased at the Board's discretion to account for performance that is not captured in the Performance 

3

Goals. The Board, in its discretion, may also consider Extraordinary Occurrences when assessing performance results and determining Final Awards. "Extraordinary Occurrences" mean those events that, in the opinion and discretion of the Board, are outside the significant influence of the Participant or the Bank and are likely to have a significant unanticipated effect, whether positive or negative, on the Bank's operating and/or financial results. Examples of Extraordinary Occurrences include, but are not limited to, change in law, regulation, or regulatory policy, or systemic macroeconomic events outside of management's control.

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

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

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

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

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

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

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

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

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

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

4

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

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

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

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

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

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

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

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

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

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

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

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

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

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

5

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

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

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

Section 3.5    Reserved.
    
Section 3.6    Effect of Termination of Service.

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

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

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

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

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

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

6

		
	(c)
	Termination Due to Other Events.

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

		
	ii.
	Termination of Service due to Retirement.

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

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

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

		
	(d)
	Definitions.

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

		
	ii.
	"Disability" means, as a result of the Participant's incapacity due to physical or mental illness, the Participant has been absent from his or her duties with the Bank for an aggregate of 12 out of 15 consecutive months and, within 30 days after a 

7

written notice of termination is thereafter given by the Bank to the Participant, the Participant does not return to the full-time performance of the Participant's duties.

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

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

		
	(B)
	the assignment to the Participant of any duties or responsibilities (or removal of any duties or responsibilities), which assignment or removal is materially inconsistent with such Position;

		
	(C)
	any removal of the Participant from such Position (including, without limitation, all demotions and harassing assignments), except in connection with the termination of the Participant's employment for Cause or Disability, or as a result of the Participant's death;

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

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

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

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

		
	vi.
	"Termination of Service" means the occurrence of any act or event or any failure to act, that actually or effectively causes or results in a Participant ceasing, for whatever reason, to be an employee of the Bank, including, but not limited to, death, Disability, Retirement, termination of the Participant's employment by the Bank (whether for Cause or otherwise), termination by the Participant of his or her 

8

employment with the Bank for Good Reason and voluntary resignation or termination by the Participant of his or her employment.

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

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

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

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

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

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

		
	iv.
	The liquidation or dissolution of the Bank.

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

9

		
	i.
	In the event of a Termination of Service due to (a) a termination by the Bank without Cause due to a Reduction in Force, (b) death, or (c) Disability, 100 percent of a Final Award will be paid in a single sum within 75 days of the date of Termination of Service. Notwithstanding the foregoing, in the event of a Reduction in Force, a Participant must execute the severance agreement offered by the Bank in order to be eligible to receive payment.

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

		
	(b)
	Payments Not Related to a Termination of Service. Final Awards which become vested for reasons other than a Termination of Service will be paid in a single sum within 75 days following the end of the Performance Period or Deferral Performance Period, as applicable.  Notwithstanding the foregoing, Discretionary Awards granted pursuant to Section 3.1(d) may be awarded and paid at any time during the year that funds are available for such Discretionary Awards.

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

Section 3.9    Reduction or Forfeiture of Awards.

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

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

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

10

		
	(d)
	By resolution, the Board may reduce or eliminate an Award that is otherwise earned under this Plan but not yet paid, if the Board finds that a serious, material safety-soundness problem, or a serious, material risk-management deficiency exists at the Bank, or if: (i) operational errors or omissions result in material revisions to: (A) the financial results, (B) information submitted to the FHFA, or (C) data used to determine incentive payouts; (ii) submission of material information to the SEC, Office of Finance, and/or FHFA is significantly past due, or (iii) the Bank fails to make sufficient progress, as determined by the Board, in the timely remediation of significant examination, monitoring and other supervisory findings.

ARTICLE IV

ADMINISTRATION

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

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

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

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

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

		
	(d)
	Delegation. The Committee hereby delegates, authorizes, and directs the President-CEO to perform administrative responsibilities on its behalf under the Plan.  The Committee may also authorize one or more additional officers or employees of the Bank to perform administrative responsibilities on its behalf under the Plan. All duly authorized officers and employees of the Bank will have all powers necessary to carry out the administrative duties delegated to such persons by the Committee.

11

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

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

ARTICLE V

BENEFIT CLAIMS

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

AMENDMENT AND TERMINATION OF THE PLAN

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

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

ARTICLE VII

MISCELLANEOUS

Section 7.1    Governing Law. Except to the extent superseded by laws of the United States, the laws of Indiana will be controlling in all matters relating to the Plan without regard to the choice of law principles therein. The Plan and all Awards are intended to comply, and will be construed by the Bank in a manner in which they are exempt from or comply with the applicable provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"). To the extent there is any conflict between a provision of the Plan or an Award and a provision of Code Section 409A, the applicable provision of Code Section 409A will control.

Section 7.2    Headings and Gender. The headings and subheadings in the Plan have been inserted for convenience of reference only and will not affect the construction of the Plan provisions. In any necessary construction, the masculine will include the feminine and the singular the plural, and vice versa. All calculations of events that last a portion of a calendar year or are to be determined pro rata as to a 

12

calendar year will be determined by the actual number of days the condition or event existed and assuming a 365-day year.

Section 7.3    Spendthrift Clause. No benefit or interest available under the Plan will be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or attachment by creditors of a Participant, either voluntarily or involuntarily.  Notwithstanding the foregoing, a Participant may, by completing and signing a written beneficiary designation form which is delivered to and accepted by the Bank, designate a beneficiary to receive any payment and/or exercise any rights with respect to outstanding Awards upon the Participant’s death.  If at the time of the Participant’s death there is not on file a fully effective beneficiary designation form, or if the designated beneficiary did not survive the Participant, the person or persons surviving at the time of the Participant’s death in the first of the following classes of beneficiaries in which there is a survivor, shall have the right to receive any payment and/or exercise any rights with respect to outstanding Awards:

(a)Participant’s surviving spouse.

(b)Participant’s surviving domestic partner.

(c)Equally to the Participant’s children, except that if any of the Participant’s children predecease the Participant but leave descendants surviving, such descendants shall take by right of representation the share their parent would have taken if living. 

(d)Participant’s estate. 

If a person in the class surviving dies before receiving any payment and/or exercising any rights with respect to outstanding Awards (or the person’s share of any payment and/or rights in case of more than one person in the class), that person’s right to receive any payment and/or exercise any rights with respect to outstanding Awards will lapse and the determination of who will be entitled to receive any payment and/or exercise any rights with respect to outstanding Awards will be determined as if that person predeceased the Participant. 

For purposes of this Section 7.3, the following terms have the meanings assigned to them below: 

(e)The term “spouse” means:  (i) a person of the opposite gender from the Participant who is legally married to the Participant at the relevant time under the laws of the state in which they reside and who meets applicable requirements for being treated as a spouse for purposes of federal law; or (ii) a person of the same gender as the Participant who at the relevant time either (1) is recognized as being legally married to the Participant under federal law or the laws of the state or country in which the relationship was created, or (2) is a person who has joined with the Participant in a civil union that is recognized as creating some or all of the rights of marriage under the laws of the state or country in which the relationship was created.

(f)The term “domestic partner” means a person who is not the spouse of the Participant as defined in subsection (a) above, but who at the relevant time is the Participant’s significant other (together referred to as “partners”) with whom the Participant lives and shares financial responsibility.  A domestic partner may be the same gender or opposite gender.  A person will not be considered a domestic partner unless the Participant and/or domestic partner provides sufficient evidence to the Bank that all of the following requirements are satisfied: 

		
	i.
	Both partners are at least 18 years of age.  

13

		
	ii.
	Neither partner is married to another person under either statutory or common law, neither has another spouse, and neither is a member of another domestic partnership or has been a member of another domestic partnership within the prior 6 months. 

 
		
	iii.
	The partners have shared the same residence for at least 6 months, and continue to do so.  

		
	iv.
	The partners are not blood relatives.  

		
	v.
	Each of the partners is the other's sole life partner, and intend to remain so indefinitely.  

		
	vi.
	The partners are jointly responsible for each other's financial welfare and are able to prove at least three of the following situations to demonstrate such financial interdependence: 

		
	(A)
	Common ownership of real property or a common leasehold interest in property; 

		
	(B)
	Joint checking account;

		
	(C)
	Joint credit cards; 

		
	(D)
	Designation of one another as primary beneficiary for life insurance or retirement benefits, or primary beneficiary designation under partner's will;

		
	(E)
	Joint ownership of a motor vehicle; or 

		
	(F)
	Designation of partner under power of attorney.

Section 7.4    Counterparts. This Plan may be executed in any number of counterparts, each one constituting but one and the same instrument, and may be sufficiently evidenced by any one counterpart.

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

Section 7.6    Limitations on Liability. The individual members of the Board will, in accordance with the Bank's by-laws, be indemnified and held harmless by the Bank with respect to any alleged breach of responsibilities performed or to be performed hereunder. In addition, notwithstanding any other provision of the Plan, neither the Bank nor any individual acting as an employee or agent of the Bank will be liable to a Participant for any claim, loss, liability or expense incurred in connection with the Plan, except when the same has been affirmatively determined by a court order or by the affirmative and binding determination of an arbitrator, to be due to the gross negligence or willful misconduct of that person.

14

Section 7.7    Incapacity of Participant. If any person entitled to receive a distribution under the Plan is physically or mentally incapable of personally receiving and giving a valid receipt for any payment due (unless a prior claim for the distribution has been made by a duly qualified guardian or other legal representative), then, unless and until a claim for the distribution has been made by a duly appointed guardian or other legal representative of the person, the Committee may provide for the distribution to be made to any other individual or institution then contributing toward or providing for the care and maintenance of the person. Any payment made for the benefit of the person under this Section will be a payment for the account of such person and a complete discharge of any liability of the Bank and the Plan.

Section 7.8    Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person relying on the evidence considers pertinent and reliable, and signed, made or presented by the proper party or parties.

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

Section 7.10    Severability. In the event any provisions of the Plan are held to be illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and endorsed as if the illegal or invalid provisions had never been contained in the Plan.

Section 7.11    Information to be Furnished by a Participant. A Participant, or any other person entitled to benefits under the Plan, must furnish the Committee with any and all documents, evidence, data or other information the Committee considers necessary or desirable for the purpose of administering the Plan. Benefit payments under the Plan are conditioned on a Participant (or other person who is entitled to benefits) furnishing full, true and complete data, evidence or other information to the Committee, and on the prompt execution of any document reasonably related to the administration of the Plan requested by the Committee.

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

Section 7.13    Binding on Successors. The Plan will be binding upon and inure to the benefit of the Bank and its successors and assigns, and the successors, assigns, designees and estates of a Participant. The Plan will also be binding upon and inure to the benefit of any successor organization succeeding to substantially all of the assets and business of the Bank, but nothing in the Plan will preclude the Bank from merging or consolidating into or with, or transferring all or substantially all of its assets to, another organization which assumes the Plan and all obligations of the Bank hereunder. The Bank agrees that it will make appropriate provision for the preservation of a Participant's rights under the Plan in any agreement or plan which it may enter into to effect any merger, consolidation, reorganization or transfer of assets. Upon such a merger, consolidation, reorganization or transfer of assets and assumption of Plan obligations of the Bank, the term "Bank" will refer to such other organization and the Plan will continue in full force and effect.

    

15

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

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

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APPENDIX I

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

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

	Position
	Threshold
	Target
	Maximum

	1ST VP
	20%
	25%
	30%

	Calling Officers
	20%
	30%
	40%

	VP
	15%
	20%
	25%

	AVP
	5%
	10%
	15%

	OTHER Employees
	2.5%
	7.5%
	10%

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

17

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

	Bank (1)
	CRM
	Sales (2)

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

	 
	 
	 
	 
	 
	 
	 

	2. MEMBER PRODUCTS
	 
	 
	 
	 
	 
	 

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

	 
	 
	 
	 
	 
	 
	 

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

	 
	 
	 
	 
	 
	 
	 

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

	 
	 
	 
	 
	 
	 
	 

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

	 
	 
	 
	 
	 
	 
	 

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

	 
	 
	 
	 
	 
	 
	 

	3. INFORMATION TECHNOLOGY (9)
	 
	 
	 
	 
	 
	 

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

	 
	 
	 
	 
	 
	 
	 

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

	 
	 
	 
	 
	 
	 
	 

	4. RISK MANAGEMENT AND REPORTING
	 
	 
	 
	 
	 
	 

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

	 
	 
	 
	 
	 
	 
	 

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

18

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

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

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

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

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

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

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

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

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

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

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

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

19

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

 

 

20

APPENDIX II

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

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

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

	Position
	Threshold
	Target
	Maximum
	Threshold
	Target
	Maximum
	Threshold
	Target
	Maximum

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

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

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

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

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

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

	Bank (3)
	CRM

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

	 
	 
	 
	 
	 
	 

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

	 
	 
	 
	 
	 
	 

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

	 
	 
	 
	 
	 
	 

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

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

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

	 
	 
	 
	 
	 
	 

21

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

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

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

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

22

APPENDIX III

FORM OF NON-SOLICITATION AND NON-DISCLOSURE AGREEMENT

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

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

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

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

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

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

23

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

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

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

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

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

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

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

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

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

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

24

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

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

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

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

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

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

25

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

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

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

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

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

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

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

26

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

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

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

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

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

By:  __________________________        
Its:  __________________________        

27

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