Document:

exv4w1

 

Exhibit 4.1

Capital Plan

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

 

 

			
	
	 	Table of Contents
	 

	 	 	 	 	 
	1 Definitions
	 	 	1	 
	 
	 	 	 	 
	2
Capital Structure
	 	 	3	 
	 
	 	 	 	 
	2.1 Authorized Capital Stock
	 	 	3	 
	 
	 	 	 	 
	2.2 Stock Issuance and Retirement Procedures
	 	 	3	 
	 
	 	 	 	 
	2.3 Minimum Investment Requirements
	 	 	4	 
	 
	 	 	 	 
	2.4 Membership Stock Requirements
	 	 	4	 
	 
	 	 	 	 
	2.5 Activity Based Stock Requirements
	 	 	5	 
	 
	 	 	 	 
	3 Rights and Preferences
	 	 	6	 
	 
	 	 	 	 
	3.1 Par Value
	 	 	6	 
	 
	 	 	 	 
	3.2 Ownership of Retained Earnings
	 	 	6	 
	 
	 	 	 	 
	3.3 Voting Rights
	 	 	6	 
	 
	 	 	 	 
	3.4 Dividends
	 	 	6	 
	 
	 	 	 	 
	3.5 Liquidation
	 	 	7	 
	 
	 	 	 	 
	3.6 Merger or Consolidation
	 	 	7	 
	 
	 	 	 	 
	4 Redemption, Repurchase and Transfer
	 	 	8	 
	 
	 	 	 	 
	4.1 Capital Stock Redemption
	 	 	8	 
	 
	 	 	 	 
	4.2 Capital Stock Repurchases
	 	 	11	 
	 
	 	 	 	 
	4.3 Limitations on Capital Stock Redemption or Repurchase
	 	 	12	 
	 
	 	 	 	 
	4.4 Transfer of Excess Stock
	 	 	13	 
	 
	 	 	 	 
	5 Termination of Membership
	 	 	14	 
	 
	 	 	 	 
	5.1 Voluntary Withdrawal from Membership
	 	 	14	 
	 
	 	 	 	 
	5.2 Involuntary Termination of Membership
	 	 	14	 
	 
	 	 	 	 
	5.3 Liquidation of Claims
	 	 	14	 
	 
	 	 	 	 
	6 Conversion
	 	 	16	 
	 
	 	 	 	 
	6.1 Member Opt-Out
	 	 	16	 
	 
	 	 	 	 
	6.2 Member Transition Period
	 	 	17	 
	 
	 	 	 	 
	6.3 Preliminary Estimate of Minimum Investment
	 	 	17	 
	 
	 	 	 	 
	6.4 Conversion Date
	 	 	17	 
	 
	 	 	 	 
	Appendix I
	 	 	19	 

 

 

			
	
	 	Capital Plan
	 

1 Definitions

For purposes of this Capital Plan, all capitalized terms used but not defined elsewhere have the
following meanings:

Acquired Member Assets means assets sold to the Bank pursuant to 12 C.F.R. Part 955 and held
on the Bank’s balance sheet.

Activity Based Stock means a subclass of Capital Stock that a Member is required to purchase
and hold in order to obtain an advance and to engage in other transactions with the Bank.

Activity Based Stock Requirement means the level of Activity Based Stock that a Member must
purchase and hold in order to obtain advances and engage in other transactions with the Bank.

Bank means the Federal Home Loan Bank of Des Moines.

Board of Directors means the Board of Directors of the Bank.

Calculation Date means the business day immediately preceding the Conversion Date, on which
each Member’s Minimum Investment will be determined.

Cancellation Fee means the fee the Bank will impose upon a Member that cancels or revokes a
Notice of Redemption or Notice of Withdrawal.

Capital Plan means the Bank’s plan for a new capital structure as required by 12 U.S.C. 1426(b),
as approved by the Finance Board.

Capital Stock means the Class B stock authorized under this Capital Plan.

Commitment means any legally binding agreement that requires the Bank to make an advance,
acquire Member assets, or otherwise transact business with a Member.

Conversion Date means the date upon which stock issued by the Bank prior to the
implementation of this Capital Plan is converted into Capital Stock.

Excess Shares or Excess Stock means the amount or shares of each subclass of the Bank’s
Capital Stock held by a Member which exceeds that Member’s Minimum Investment.

Finance Board means the Federal Housing Finance Board, the regulator of the Federal Home
Loan Bank System, or any successor thereto.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

1

 

			
	
	 	Capital Plan
	 

Member means any institution that has been approved for membership in the Bank and has
purchased the required amount of Membership Stock.

Membership Stock means a subclass of Capital Stock that a Member is required to purchase and
hold as a condition of membership in the Bank.

Membership Stock Requirement means the level of Membership Stock that a Member must
purchase and maintain as a condition of membership.

Minimum Investment means the amount of Membership Stock necessary for a Member to satisfy
its Membership Stock Requirement and the amount of Activity Based Stock necessary for a
Member to satisfy its Activity Based Stock Requirement.

Notice of Redemption means any written request by a Member to the Bank to redeem Capital
Stock.

Notice of Withdrawal means the written notice by a Member to the Bank of that Member’s
intention to withdraw from membership in the Bank.

Opt-out Date means the date 30 calendar days prior to the Conversion Date.

Total Assets means a Member’s total assets as reported to the Member’s primary regulator or on
its audited financial statement.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

2

 

			
	
	 	Capital Plan
	 

2 Capital Structure

2.1 Authorized Capital Stock

The Bank issues Capital Stock only in accordance with 12 C.F.R. Section 931.2 and in
accordance with this Capital Plan.

Capital Stock is composed of the following subclasses:

	 	•	 	Membership Stock; and
	 
	 	•	 	Activity Based Stock

2.2 Stock Issuance and Retirement Procedures

The Bank acts as its own transfer agent and issues all stock in book-entry form.

The Bank does not issue fractional shares of Capital Stock. A Member’s Minimum
Investment shall be rounded up to the next $100. Any dividend declared in the form of
Capital Stock shall be rounded down to the next $100 and any fractional shares shall be
distributed in the form of a cash dividend.

Capital Stock may be purchased and held only by Members, former Members that are
required to hold Capital Stock after their membership has terminated in order to support
outstanding advances and other transactions with the Bank, and entities that acquire
Members, such as through mergers or consolidations, but which themselves are not
Members.

The Bank issues Capital Stock in a Member’s name, credits the Member’s Membership
Stock or Activity Based Stock balance, as appropriate, and debits the Member’s demand
deposit account for any payment due.

Upon redemption or repurchase of Capital Stock, the Bank retires the stock, debits the
Member’s Membership Stock or Activity Based Stock balance, as appropriate, and credits
the Member’s demand deposit account with any proceeds.

The Bank shall not permit a Member to convert any Excess Shares of Capital Stock
between sub-classes of Capital Stock.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

3

 

			
	
	 	Capital Plan
	 

2.3 Minimum Investment Requirements

The Board of Directors has a continuing obligation to review and adjust the Minimum
Investment as necessary to ensure that the Bank remains in compliance with its capital
requirements. The Bank shall provide notice to each stockholder of any adjustment to the
Minimum Investment and the effective date of any such adjustment at least 15 days prior
to the effective date of any such adjustment. Upon the effective date of any such
adjustment, the Bank shall, as applicable, issue any Capital Stock in accordance with
section 2.2 or repurchase any Capital Stock in accordance with section 4.

A Member must comply promptly with any adjustments the Board of Directors makes to
the Minimum Investment.

2.4 Membership Stock Requirements

The Board of Directors has established a Membership Stock Requirement identified in
Appendix I. The Board of Directors may adjust the Membership Stock Requirement
within the ranges specified in Appendix I. Each Member is required to purchase and
maintain Membership Stock in an amount equal to its Membership Stock Requirement,
as calculated by the Bank.

At least annually, the Bank calculates each Member’s Membership Stock Requirement as
a percentage of Total Assets as of the preceding December 31st. The Bank will notify
each Member of its Membership Stock Requirement at least 15 days prior to the effective
date of any adjustments that the Bank shall make to the Member’s Membership Stock
balance as a result of such annual calculation. If a Member’s Membership Stock
Requirement has increased since the last time the Bank calculated the Member’s
Membership Stock Requirement, the Bank shall issue Membership Stock in accordance
with section 2.2.

The Bank, in its discretion, may recalculate any member’s Membership Stock
Requirements more often than annually if the Bank deems it appropriate. The Bank may
recalculate a Member’s Membership Stock Requirement if requested by the Member, or
in the Bank’s discretion. In each of these cases, the Bank will calculate the Membership
Stock Requirement based on the Member’s Total Assets as of the end of the most recent
calendar quarter for which financial information is available.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

4

 

			
	
	 	Capital Plan
	 

2.5 Activity Based Stock Requirements

The Board of Directors has established an Activity Based Stock Requirement identified in
Appendix I. The Board of Directors may adjust the Activity Based Stock Requirement
within the ranges specified in Appendix I. The Board of Directors may apply changes in
the Activity Based Stock Requirement only to new advances and other transactions, or to
new and existing advances and other transactions.

Each Member is required to purchase and maintain Activity Based Stock in an amount
equal to its Activity Based Stock Requirement, as calculated by the Bank, as long as the
advance or other transaction remains recorded on the Bank’s books and records.
Acquired Member Assets held by the Bank on the Conversion Date shall be subject only
to capital requirements specified in contracts in effect at the time the assets were acquired
by the Bank prior to the Conversion Date.

The Bank calculates each Member’s Activity Based Stock Requirement daily. The Bank
shall notify each Member of any increase in its Activity Based Stock Requirement and
issue Activity Based Stock to the Member in accordance with section 2.2.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

5

 

			
	
	 	Capital Plan
	 

3 Rights and Preferences

3.1 Par Value

Capital Stock shall be issued, transferred, redeemed, and repurchased at a par value of
$100.

3.2 Ownership of Retained Earnings

The retained earnings, paid-in surplus, undivided profits and equity reserves, if any, of the
Bank are owned by the stockholders of Capital Stock in an amount proportional to the
stockholder’s share of the total shares of issued and outstanding Capital Stock.
Stockholders have no right to receive any portion of these items except through the
declaration of a dividend or capital distribution approved by the
Board of Directors or upon liquidation of the Bank.

3.3 Voting Rights

The voting rights associated with Capital Stock are defined in and governed by the
Finance Board’s regulations. No share of Capital Stock shall have any voting preference.

3.4 Dividends

Except as otherwise provided herein or by regulation or statute, the Board of Directors
has sole discretion to determine the amount, form, frequency and timing of dividend
payments for each subclass of Capital Stock. The Board of Directors may declare
different dividends for each subclass of Capital Stock. Dividend payments may be made
in the form of cash, additional shares of Capital Stock, or a combination thereof as
determined by the Board of Directors. Unless the Board of Directors declares otherwise,
dividends are non-cumulative.

Dividends may only be paid from current earnings or previously retained earnings. The
Board of Directors may not declare or pay any dividends if the Bank is not in compliance
with its capital requirements or, if after paying the dividend, the Bank would not be in
compliance with its capital requirements.

Each Member will be entitled to receive dividends on Capital Stock held during the
applicable dividend period for the period of time the Member owned the Capital Stock.
The Bank pays dividends on Capital Stock as long as it is issued and outstanding,
regardless of whether a Member has provided a Notice of Redemption or Notice of
Withdrawal or a stockholder has terminated membership for any reason.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

6

 

			
	
	 	Capital Plan
	 

3.5 Liquidation

If the Bank is liquidated, after payment in full to the Bank’s creditors, the Bank’s
stockholders shall be entitled to receive the par value of their Capital Stock, as well as
any retained earnings, in an amount proportional to the stockholder’s share of the total
shares of Capital Stock.

3.6 Merger or Consolidation

The Board of Directors shall determine the rights and preferences of the Bank’s
stockholders in connection with any merger or consolidation, subject to any terms and
conditions imposed by the Finance Board.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

7

 

			
	
	 	Capital Plan
	 

4 Redemption, Repurchase and Transfer

4.1 Capital Stock Redemption

Capital Stock is redeemable on five years written notice to the Bank. The Bank shall not
be obligated to redeem a Member’s Capital Stock other than in accordance with the
Capital Plan, and is not permitted to redeem Capital Stock if such redemption would
cause the Member to fail to meet its Minimum Investment.

4.1.1 Notice of Redemption

A Member may redeem Capital Stock by providing a Notice of Redemption to the
Bank specifying the sub-class and the number of shares of Capital Stock to be
redeemed. A Member shall not have more than one Notice of Redemption
outstanding at any one time for the same shares of Capital Stock.

The redemption period commences upon the Bank’s receipt of the Notice of
Redemption. The Bank honors Notices of Redemption in the order in which the
Bank receives them.

The Bank shall redeem the Capital Stock identified in a Notice of Redemption
following the expiration of the redemption period and pay the stated par value of
that Capital Stock to the Member in cash in accordance with section 2.2 and
subject to the limitations set forth in section 4.3, unless the Bank exercises its
discretionary authority to repurchase Excess Stock in accordance with section 4.2
prior to that time.

4.1.2 Cancellation of Notice of Redemption

A Member may cancel a Notice of Redemption prior to the end of the redemption
period by providing written notice to the Bank of its intent to cancel its Notice of
Redemption. The Bank will charge the Member a Cancellation Fee equal to the
following:

	 	s	 	one percent of the par value of the shares of Capital Stock subject to the
Notice of Redemption if the Bank receives the cancellation of Notice of
Redemption within one year of the day the Bank received the Notice of
Redemption;
	 
	 	s	 	two percent of the par value of the shares of Capital Stock subject to the
Notice of Redemption if the Bank receives the cancellation of Notice of

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

8

 

			
	
	 	Capital Plan
	 

	 	 	 	Redemption within two years of the day the Bank received the Notice of
Redemption;
	 
	 	s	 	three percent of the par value of the shares of Capital Stock subject to the
Notice of Redemption if the Bank receives the cancellation of Notice of
Redemption within three years of the day the Bank received the Notice of

Redemption;
	 
	 	s	 	four percent of the par value of the shares of Capital Stock subject to the
Notice of Redemption if the Bank receives the cancellation of Notice of
Redemption within four years of the day the Bank received the Notice of
Redemption;
	 
	 	s	 	five percent of the par value of the shares of Capital Stock subject to the
Notice of Redemption if the Bank receives the cancellation of Notice of
Redemption within five years of the day the Bank received the Notice of
Redemption.

The Board of Directors may change the Cancellation Fee to any percentage of the
par value of the shares of Capital Stock subject to the cancelled Notice of
Redemption that is not less than 0.0 percent and not more than the percentages
specified in the preceding paragraph. If the Board of Directors changes the
Cancellation Fee, the Board of Directors will also determine whether the changed
Cancellation Fee will apply to the cancellation of any previously submitted Notice
of Redemption as well as those submitted in the future. Otherwise, the
Cancellation Fee in effect at the time the Bank received the Notice of Redemption
will apply to the cancellation of that Notice of Redemption. The Bank will notify
Members in writing at least 15 days in advance of any changes in the Cancellation
Fee.

A Notice of Redemption by a Member (whose membership has not been
terminated) shall be automatically cancelled if, within five business days after the
end of the applicable redemption notice period, the Bank is prevented from
redeeming the Member’s Capital Stock because the Member would fail to
maintain its Minimum Investment after such redemption. The automatic
cancellation shall have the same effect as a voluntary cancellation and the Bank
shall impose the Cancellation Fee described in the preceding paragraph.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

9

 

			
	
	 	Capital Plan
	 

4.1.3 Notice of Withdrawal

The Bank’s receipt of a Notice of Withdrawal commences the five-year
redemption period for all Capital Stock held by that Member that is not already
subject to a pending Notice of Redemption. The redemption period for
Membership Stock purchased subsequent to the Bank’s receipt of a Member’s
Notice of Withdrawal shall be deemed to have commenced when the Bank issued
such Membership Stock. Following the expiration of the redemption period, the
Bank shall pay the stated par value of the Capital Stock to the Member in cash, in
accordance with section 2.2 and subject to the limitations set forth in sections 4.3
and 5.3.

4.1.4 Cancellation of Notice of Withdrawal

A Member may cancel a Notice of Withdrawal prior to the end of the redemption
period by providing written notice to the Bank of its intent to cancel its Notice of
Withdrawal. The Bank will charge the Member a Cancellation Fee on the par
value of the Member’s Capital Stock balance as described in section 4.1.2.

4.1.5 Termination of Membership

If an institution’s membership has been terminated as a result of a merger or
consolidation into a nonmember or into a member of another Federal Home Loan
Bank, the redemption period for any Capital Stock that is not subject to a pending
Notice of Redemption shall be deemed to commence on the date on which the
charter of the former member is terminated.

If an institution’s membership is involuntarily terminated, the redemption period
for all Capital Stock owned by the former member and not already subject to a
pending Notice of Redemption shall commence on the date that the Board of
Directors terminates the institution’s membership.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

10

 

			
	
	 	Capital Plan
	 

4.2 Capital Stock Repurchases

The Bank, in its discretion, may repurchase any Excess Shares without regard to any
redemption period.

4.2.1 Membership Stock

Upon 15 days written notice to Members, the Bank may, in its sole discretion,
repurchase Membership Stock which the Bank determines is Excess Stock
without regard to the five-year redemption notice period. The Bank shall
repurchase any such Excess Stock in accordance with section 2.2 and subject to
the limitations set forth in section 4.3.

Any repurchase of Membership Stock automatically reduces the amount of
Membership Stock that is the subject of any outstanding Notice of Redemption by
the amount of Membership Stock repurchased. If a Member has Membership
Stock that is subject to more than one Notice of Redemption, the Bank will
automatically reduce the amount of Membership Stock that is subject to such
outstanding Notices of Redemption in the same order in which the Bank received
such Notices of Redemption.

A Member’s submission of a Notice of Withdrawal in accordance with section
5.1, or its termination of membership in any other manner, will not, in and of
itself, cause any Membership Stock to be deemed Excess Stock for purposes of
this section.

4.2.2 Activity Based Stock

Each Member may hold Excess Shares of Activity Based Stock up to the
operational threshold established in Appendix I. The Board of Directors may,
from time to time, increase or decrease the operational threshold within ranges
specified in Appendix I. The Bank will notify each Member of a change in the
operational threshold at least 15 days prior to implementing the change.

The Bank will repurchase any Excess Shares of Activity Based Stock that exceed
the operational threshold established in Appendix I, on at least a scheduled,
monthly basis in accordance with section 2.2 and subject to the limitations set
forth in section 4.3. The Bank will notify Members at least 15 days in advance of
the scheduled date(s) for repurchasing Activity Based Stock and prior to
implementing any changes in the scheduled date(s) for repurchasing Activity
Based Stock.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

11

 

			
	
	 	Capital Plan
	 

4.3 Limitations on Capital Stock Redemption or Repurchase

The Bank will not redeem or repurchase Capital Stock:

	 	s	 	without the prior written approval of the Finance Board, if the Finance Board or the
Board of Directors has determined that the Bank has incurred, or is likely to incur,
losses that result in or are likely to result in charges against the capital of the Bank.
This prohibition shall apply even if the Bank is in compliance with its capital
requirements, and shall remain in effect for however long the Bank continues to incur
such charges or until the Finance Board determines that such charges are not
expected to continue; or
	 
	 	s	 	if the redemption or repurchase would cause the Bank to be out of compliance with
its capital requirements; or
	 
	 	s	 	if the redemption or repurchase would cause a Member to be out of compliance with
its Minimum Investment; or
	 
	 	s	 	if the sum of all requested Capital Stock redemptions that the Bank is scheduled to
make on any date equals or exceeds the amount that would cause the Bank to fall
below its capital requirements, in which case the Bank will process redemptions in
the order in which notification was received, but in no case will the Bank redeem
Capital Stock to the point that it would fail to meet its capital requirements.

The Bank, upon the approval of its Board of Directors, or of a subcommittee thereof, may
suspend redemption of Capital Stock if the Bank reasonably believes that continued
redemption of Capital Stock would cause the Bank to fail to meet its capital requirements,
would prevent the Bank from maintaining adequate capital against a potential risk that
may not be adequately reflected in its capital requirements, or would otherwise prevent
the Bank from operating in a safe and sound manner. The Bank will notify the Finance
Board in writing within two business days of the date of the decision to suspend the
redemption of Capital Stock, informing the Finance Board of the reasons for the
suspension and of the Bank’s strategies and time frames for addressing the conditions that
led to the suspension. The Finance Board may require the Bank to re-institute the
redemption of Capital Stock. The Bank will not repurchase any Capital Stock without the
written permission of the Finance Board during any period in which the Bank has
suspended redemption of Capital Stock under this paragraph.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

12

 

			
	
	 	Capital Plan
	 

4.4 Transfer of Excess Stock

With the prior approval of the Bank, a Member may transfer Excess Stock to another
Member that controls, is controlled by, or is under common control with the Member.

If a Member that has filed a Notice of Redemption transfers Excess Stock that is subject
to that notice to another Member, the transfer shall be deemed to be a cancellation of the
Notice of Redemption on the Excess Stock transferred upon the effective date of the
transfer. The transferring Member shall be responsible for paying any applicable
Cancellation Fees in accordance with section 4.1.2.

If a Member that has filed a Notice of Withdrawal transfers Excess Stock to another
Member, the transfer shall be deemed to be a cancellation of the five-year redemption
period on the Excess Stock transferred. The transferring Member shall be responsible for
paying any applicable Cancellation Fees in accordance with section 4.1.2.

The Bank shall transfer Capital Stock only in accordance with 12 C.F.R. Section 931.6.
The Bank will not approve a Capital Stock transfer if the transfer would result in the
transferring Member being out of compliance with its Minimum Investment. Capital
Stock may be traded only between the Bank and its members. All Capital Stock transfers
are to be at par value and are effective upon being recorded on the appropriate books and
records of the Bank.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

13

 

			
	
	 	Capital Plan
	 

5
    Termination of Membership

A Member’s submission of a Notice of Withdrawal, or its termination of membership in any
other manner, shall not, in and of itself, cause any Capital Stock to be deemed Excess Stock.

If a former member’s membership has been withdrawn, terminated involuntarily, or terminated
as a result of a merger or consolidation, the Bank shall redeem such former member’s Capital
Stock in accordance with section 4.1 and subject to the limitations in sections 4.3 and 5.3.

5.1 Voluntary Withdrawal from Membership

Any institution may withdraw from membership by providing a Notice of Withdrawal.

A Member that has submitted its Notice of Withdrawal continues to have access to the
benefits of membership until the effective date of its withdrawal, but the Bank does not
have to provide any further services, including advances, that would mature or otherwise
terminate subsequent to the effective date of the withdrawal.

The membership of an institution that has submitted a Notice of Withdrawal shall
terminate five years from the date of the Bank’s receipt of the Member’s Notice of
Withdrawal, unless the institution has cancelled its Notice of Withdrawal prior to that
date.

5.2 Involuntary Termination of Membership

The Board of Directors may terminate a Member’s membership pursuant to the Finance
Board’s regulations. A Member whose membership is terminated involuntarily shall
cease being a Member as of the date on which the Board of Directors acts to terminate the
membership, and the institution shall have no right to obtain any of the benefits of
membership after that date, but shall be entitled to receive any dividends declared on its
Capital Stock until the Capital Stock is redeemed or repurchased by the Bank.

5.3 Liquidation of Claims

If an institution withdraws from membership or has its membership terminated, the Bank
will determine an orderly manner for:

	 	s	 	liquidating all outstanding indebtedness (including prepayment fees) owed by that
Member to the Bank, and
	 
	 	s	 	settling all other claims against the Member.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

14

 

			
	
	 	Capital Plan
	 

If an institution that withdraws from membership or has its membership terminated
remains indebted to the Bank or has outstanding any transactions with the Bank after the
effective date of its termination of membership, the Bank shall not redeem or repurchase
any Activity Based Stock if such redemption or repurchase is subject to any of the
limitations in section 4.3. The Bank shall redeem or repurchase any Activity Based Stock
in accordance with section 2.2.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

15

 

			
	
	 	Capital Plan
	 

6
    Conversion

The Bank will convert to the capital structure established by this Capital Plan within 18 months
following Finance Board approval of the Capital Plan.

The Bank will notify each Member of the Conversion Date within 180 days after the Finance
Board’s approval of the Capital Plan.

The Bank will provide each Member with a disclosure document that complies with 12 C.F.R
Section 933.5 at least 45 days, but not more than 60 days prior to, the Opt-out Date.

The Bank intends to be in full compliance with its capital requirements at the close of business
on the Conversion Date.

6.1 Member Opt-Out

A Member that does not wish to continue membership under the Capital Plan must
provide the Finance Board and the Bank with a Notice of Withdrawal no later than the
Opt-out Date. The membership of an institution that files a Notice of Withdrawal with
the Finance Board on or before the Opt-out Date shall terminate on the earlier of the
Conversion Date or the date six months from the date the Notice of Withdrawal was filed
with the Finance Board. The Member shall not be subject to a Membership Stock
Requirement on the Conversion Date but shall be subject to the Activity Based Stock
Requirement so long as any advance or other transaction remains recorded on the Bank’s
books and records, provided, however, that the Activity Based Stock Requirement for a
Member that has submitted a Notice of Withdrawal on or before the Opt-Out Date shall
be the lesser of the requirement in effect prior to the Conversion Date or the requirement
under this Capital Plan. The Bank’s receipt of the Notice of Withdrawal commences the
five-year redemption period for all Activity Based Stock held by that Member.

Any Member filing a Notice of Withdrawal with the Finance Board after the Opt-out Date
and before the Conversion Date shall have its existing stock converted into Capital Stock
on the Conversion Date as required by the Capital Plan. The effective date of withdrawal
for such Member shall be five years from the receipt of the Notice of Withdrawal and the
five-year redemption period shall commence on receipt of the Notice of Withdrawal.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

16

 

			
	
	 	Capital Plan
	 

6.2 Member Transition Period

Members must comply with the terms of the Capital Plan on the Conversion Date.

Any institution that becomes a Member after the Conversion Date must comply with the
Minimum Investment upon becoming a Member.

6.3 Preliminary Estimate of Minimum Investment

At least 30 days prior to the Conversion Date, the Bank will calculate each Member’s
Minimum Investment as the sum of:

	 	s	 	the Membership Stock Requirement based on the Total Assets as of the immediately
preceding December 31st; and
	 
	 	s	 	the Activity Based Stock Requirement based on the Member’s outstanding advances
and other transactions at the close of business on that date, provided, however, that
any Acquired Member Assets held by the Bank on the Conversion Date shall be
subject to capital requirements specified in contracts in effect at the time the assets
were purchased in lieu of the Activity Based Stock Requirement.

The Bank will notify each Member of the preliminary estimate of the Member’s
Minimum Investment and Excess Stock, if any.

A Member must notify the Bank at least 15 days prior to the Conversion Date that the
Member wants the Bank to repurchase any shares of stock that exceed that Member’s
Minimum Investment on the Conversion Date. If the Bank receives such notice at least
15 days prior to the Conversion Date, the Bank shall repurchase all such shares on the
Conversion Date in accordance with section 2.2 and subject to the limitations set forth in
section 4.3. If the Bank does not receive such a notice from a Member at least 15 days
prior to the Conversion Date, the Bank shall convert all shares of stock that exceed that
Member’s Minimum Investment on the Conversion Date into Excess Shares of
Membership Stock.

6.4 Conversion Date

At the opening of business on the Conversion Date, the Bank will take the following
actions in the order specified for each Member:

a) Calculate a Member’s Minimum Investment at the opening of business on the
Conversion Date as the sum of:

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

17

 

			
	
	 	Capital Plan
	 

	 	s	 	the Membership Stock Requirement based on the Total Assets as of the
immediately preceding December 31st; and
	 
	 	s	 	the Activity Based Stock Requirement based on the Member’s outstanding
advances and other transactions at the close of business on the Calculation Date,
provided, however, that any Acquired Member Assets held by the Bank on the
Conversion Date shall be subject to capital requirements specified in contracts in
effect at the time the assets were purchased in lieu of the Activity Based Stock
Requirement.

b)
  Convert the Member’s existing shares of stock into an identical number of shares of
Capital Stock by:

	 	s	 	Crediting the Member’s Membership Stock balance with the lesser of the total
number of shares converted or the number of shares required to meet the
Member’s Membership Stock Requirement;
	 
	 	s	 	Crediting the Member’s Activity Based Stock balance with the lesser of the
remaining number of shares converted or the number of shares required to meet
the Member’s Activity Based Stock Requirement; and
	 
	 	s	 	Crediting any remaining existing stock to the Member’s Membership Stock
balance unless the Member has elected to have the Bank repurchase any
remaining existing shares on the Conversion Date.

c)
  If the Member does not own sufficient Capital Stock to satisfy its Minimum
Investment following the conversion, issue Capital Stock and credit the Member’s
Capital Stock accounts with the number and sub-class of shares that the Member is
required to own on the Conversion Date to meet its Minimum Investment and make a
corresponding debit to the Member’s demand deposit account at the Bank;

d)
  If the Member has elected to have the Bank repurchase existing stock in excess of the
amount needed to satisfy the Minimum Investment, the Bank will repurchase such
existing shares and make a corresponding credit to the Members’ demand deposit
account at the Bank; and

e)
  Advise the Member of its Minimum Investment, its Membership Stock balance, its
Activity Based Stock balance, and the amount of any funds credited or debited to the
Member’s demand deposit account at the Bank.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

18

 

			
	
	 	Capital Plan
	 

Appendix I

Membership Stock Requirement

Each Member is required to purchase and maintain Membership Stock equal to the following:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Membership Stock	 	Minimum Investment Range1
	 	 	Requirement2	 	Minimum	 	Maximum
	 	 	 	 	 	 	 	 	 	 	 	 	 
	% of Total Assets
	 	 	0.12	%	 	 	0.10	%	 	 	0.25	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Membership Stock Cap
	 	$	10	 million	 	$	10 	 million	 	$	30	 million
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Membership Stock Floor
	 	$	10,000	 	 	$	10,000	 	 	$	30,000	 

Activity Based Stock Requirement

Each Member is required to purchase and maintain Activity Based Stock equal to the
percentage of the book value on the Bank’s books and records of the following
transactions as shown in the table below.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Activity Based	 	Minimum Investment Range1
	Transaction	 	Stock Requirement2	 	Minimum	 	Maximum
	Outstanding Advances
	 	 	4.45	%	 	 	3.0	%	 	 	5.00	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Outstanding
Acquired Member Assets3
	 	 	4.45	%	 	 	3.0	%	 	 	5.00	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Standby Letters of Credit
	 	 	0.15	%	 	 	0.0	%	 	 	0.175	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Advance Commitments
	 	 	0.00	%	 	 	0.0	%	 	 	0.35	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Acquired
Member Asset Commitments
	 	 	0.00	%	 	 	0.0	%	 	 	0.60	%

Operational Threshold

Each Member is permitted to retain Excess Shares of Activity Based Stock in an
amount not to exceed the following operational threshold, designed to minimize the
number of repurchase transactions for the Bank and its Members.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Current Operational	 	Operational Threshold Range1
	 	 	Threshold	 	Minimum	 	Maximum
	Operational Threshold
	 	$	50,000	 	 	$	0	 	 	$	250,000	 

 

			
	1	 	Changes to the Minimum Investment and operational threshold ranges constitute
amendments to the Capital Plan and requires approval by the Finance Board.
	 
	2	 	The Board of Directors reviews and adjusts the Membership Stock Requirement,
Activity Based Stock Requirement and the
	 
	 	 	Current Operational Threshold within the established ranges, subject to the Member
notification requirements in section 2.3.
	 
	 	 	Initial requirements and thresholds that will be applied on the Conversion Date will
be disclosed to Members consistent with 12 C.F.R. Section 933.5.
	 
	3	 	Any Acquired Member Assets held by the Bank on the Conversion Date shall be
subject to capital requirements specified in
contracts in effect at the time the assets were purchased in lieu of the initial
Activity Based Stock Requirement.

July 8, 2002

Approved Federal Housing Finance Board July 10, 2002

19exv10w1

 

EXHIBIT 10.1

FEDERAL HOME LOAN BANK OF DES MOINES

SECOND AMENDED AND RESTATED

BENEFIT EQUALIZATION PLAN

Effective December 11, 2003

 

 

FEDERAL HOME LOAN BANK OF DES MOINES

BENEFIT EQUALIZATION PLAN

TABLE OF CONTENTS

	 	 	 	 	 
	INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	ARTICLE 1. DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II. MEMBERSHIP
	 	 	5	 
	 
	 	 	 	 
	ARTICLE III. AMOUNT AND PAYMENT OF PENSION BENEFITS
	 	 	6	 
	 
	 	 	 	 
	ARTICLE IV. AMOUNT AND PAYMENT OF THRIFT BENEFITS
	 	 	11	 
	 
	 	 	 	 
	ARTICLE V. SOURCE OF PAYMENT
	 	 	17	 
	 
	 	 	 	 
	ARTICLE VI. DESIGNATION OF BENEFICIARIES
	 	 	19	 
	 
	 	 	 	 
	ARTICLE VII. ADMINISTRATION OF THE PLAN
	 	 	21	 
	 
	 	 	 	 
	ARTICLE VIII. AMENDMENT AND TERMINATION
	 	 	23	 
	 
	 	 	 	 
	ARTICLE IX. GENERAL PROVISIONS
	 	 	24	 

 

 

FEDERAL HOME LOAN BANK OF DES MOINES

BENEFIT EQUALIZATION PLAN

Effective January 1, 1994, the FEDERAL HOME LOAN BANK OF DES MOINES (the “Bank”) established a
Benefit Equalization Plan (the “Plan”) for its eligible employees. The Plan was restated on May
23, 2002. The Bank now wishes to amend and restate that Plan for a second time as set forth in
this document. On and after the Effective Date set forth herein, this document shall supersede all
previous Benefit Equalization Plan documents, and all questions regarding Plan eligibility,
administration and benefits shall be decided pursuant to the provisions of this document.

INTRODUCTION

The purpose of this Benefit Equalization Plan is to provide to certain employees of the Bank the
benefits which would have been payable under the Comprehensive Retirement Program of the Financial
Institutions Retirement Fund (the “Retirement Fund”), and benefits equivalent to the matching
contributions and 401(k) contributions which would have been available under the Financial
Institutions Thrift Plan (the “Thrift Plan”), but for (i) the limitations placed on benefits and
matching contributions for such employees by Sections 401(a)(17), 401(k)(3)(A)(ii), 401(m), 402(g)
and 415 of the Internal Revenue Code of 1986, as amended and (ii) where applicable, the exclusion
of bonuses and other amounts paid under a Bank incentive compensation plan from the definitions of
“salary”, “base salary” and “compensation” under the Retirement Fund and the Thrift Plan.

This Plan is intended to constitute a nonqualified unfunded deferred compensation plan for a select
group of management or highly compensated employees (a “Top Hat” plan) under Title I of the
Employee Retirement Income Security Act of 1974, as amended. All benefits payable under this Plan
shall be paid from the general assets of the Bank. Benefits payable under this Plan shall not be
payable by the Retirement Fund or its assets or by the Thrift Plan or its assets.

Revised 2003

1

 

ARTICLE 1. DEFINITIONS

	1.01	 	“Account” means the trust or other account established and maintained under Article IV
hereunder to record the contributions deemed to be made by the Member and the Bank, as well as
the increase (or decrease) in va1ue attributable to the investment of such contributions, all
as described hereafter. A Member may also have a separate Account for the installment payment
of his Article III benefits as further provided in Section 3.02 (c) below.
	 
	1.02	 	“Actuary” means the independent consulting actuary retained by the Bank to assist the
Committee in its administration of the Plan. The Actuary may also provide actuarial services
to the Retirement Fund.
	 
	1.03	 	“Bank” means the Federal Home Loan Bank of Des Moines.
	 
	1.04	 	“Base Salary” means the annual gross salary which is payable without regard to attainment of
any corporate or individual performance goals and which is paid in regular installments
through the Bank’s payroll system.
	 
	1.05	 	“Beneficiary” means the beneficiary or beneficiaries designated in accordance with Article VI
of the Plan to receive the benefit, if any, payable upon the death of a Member of the plan.
	 
	1.06	 	“Board of Directors” means the Board of Directors of the Bank.
	 
	1.07	 	“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any
successor thereto.
	 
	1.08	 	“Code Limitations” means the cap on compensation taken into account by a tax-qualified plan
under Code Section 401(a)(17), the limitations on 401(k) contributions necessary to meet the
average deferral percentage (“ADP”) test under Code Section 401(k)(3)(A)(ii), the limitations
on employee and matching contributions necessary to meet the average contribution percentage
(“ACP”) test under Code Section 401(m), the dollar limitations on elective deferrals under
Code Section 402(g) and the overall limitations on contributions

2

 

	 	 	and benefits imposed on qualified plans by Code Section 415, as such provisions may be
amended from time to time, or replaced by similar successor provisions of federal tax law.
	 
	1.09	 	“Committee” means the committee or other entity charged with the administration of the Plan.
The committee shall consist of the Bank’s General Counsel, a financial officer of the Bank and
a Member of the Bank’s human resources staff. The Board of Directors may change the
composition of the Committee or limit the scope of the Committee’s authority or name a
different entity to administer the Plan.
	 
	1.10	 	“Deferral Agreement” means the agreement under which a Member elects to defer compensation
under the Plan in accordance with the provisions of Section 4.03.
	 
	1.11	 	“Effective Date” means December 11, 2003 for all purposes of this Second Amended and Restated
Plan.
	 
	1.12	 	“Eligible Executive” means the President of the Bank and certain key Bank officers reporting
to him who are listed below. Although listing specific officer titles in this Plan, the Bank
recognizes that such titles may change over the life of the Plan. The Bank therefore directs
the committee to interpret the listed officer titles in light of such changes so that the Plan
covers all such successor Bank Officers who occupy identical or analogous positions. The
Board of Directors shall be entitled to add additional officer positions to the definition of
Eligible Executive.

Senior Vice President/General Counsel

Senior Vice President/ Credit and Sale

Senior Vice President/ Operations            Senior Vice President/ Finance

	1.13	 	“Incentive Compensation” means bonuses, gain sharing and other incentive compensation
payments which are dependent on the attainment of certain individual and/or corporate goals
and which are typically paid in a single payment.

	1.14	 	“Member” means any person included in the membership of the Plan as provided in Article II.

3

 

	1.15	 	“Retirement Fund” means the Comprehensive Retirement Program of the Financial Institutions
Retirement Fund, a qualified and tax-exempt defined benefit pension plan and trust under
Sections 401(a) and 501(a) of the Code, as adopted by the Bank.

	1.16	 	“Plan” means the Federal Home Loan Bank of Des Moines Benefit Equalization Plan, as set forth
herein or as it may be amended or restated from time to time.

	1.17	 	“Thrift Plan” means the Financial Institutions Thrift Plan, a qualified and tax-exempt
defined contribution plan and trust under Sections 401(a) and 501(a) of the Code, as adopted
by the Bank.

4

 

ARTICLE II. MEMBERSHIP

	2.01	 	Each Eligible Executive of the Bank shall become a Member of the Plan for purposes of Article
III on the date of his appointment to one of the officer positions set out in Section 1.12 of
this Plan. Once an Eligible Executive becomes a Member of this Plan for purposes of Article
III, he shall continue as a Member for Article III purposes until such time as his Article III
benefits, if any, have been fully paid.

	2.02	 	Each Eligible Executive of the Bank shall become a Member of the Plan for purposes of Article
IV on the date of his appointment to one of the officer positions set out in Section 1.12 of
the Plan. Once an Eligible Executive becomes a Member of this Plan for purposes of Article
IV, he shall continue as a Member for Article IV purposes (whether or not he continues to make
deferrals pursuant to Article IV) until such time as his Article IV benefits have been fully
paid.

	2.03	 	A benefit shall be payable under the Plan to or on account of a Member only upon the Member’s
retirement, death, or other termination of employment with the Bank, except as provided in
Section 4.08.

5

 

ARTICLE III. AMOUNT AND PAYMENT OF PENSION BENEFITS

	3.01	 	The amount, if any of the annual pension benefit payable to or on account of a Member
pursuant to the Plan shall equal the excess of (a) over (b) as determined by the Actuary,
where:

	 	(a)	 	is the annual pension benefit (as calculated by the Retirement Fund or the
Actuary on the basis of the Regular Form of payment as defined by the Retirement Fund)
that would otherwise be payable to or on account of the Member by the Retirement Fund
if its provisions were administered

	 	(i)	 	by ignoring the Code Limitations of Sections 401(a)(17) and 415;
	 
	 	(ii)	 	by defining “Base Salary” or “Salary” for each year of the
Member’s participation in this Plan to include both the Member’s Base Salary
and the Member’s Incentive Compensation (without reducing either for any
deferrals made pursuant to this plan or the Thrift Plan and without increasing
either by counting any portion of the Member’s Base Salary or Incentive
Compensation more than once);

	 	(b)	 	is the annual pension benefit (as calculated by the Retirement Fund on the
basis of the Regular Form of payment) that is payable to or on account of the Member
under the Retirement Fund.

For purposes of this Section 3.01, “annual pension benefit” includes any applicable “Active
Service Death Benefit”, “Retirement Adjustment Payment”, and “Post Retirement Increment” if
the Bank provides such benefits for its employees at the time the Member’s pension benefit
first becomes payable.

Although the formulation described above shall govern the computation of Article III
benefits in most cases, the Board of Directors may deviate from such formulation in order
to increase or decrease a Member’s Article III benefits. If the
Board of Directors

6

 

approves a deviation which decreases a Member’s Article III benefits,
such deviation shall only apply prospectively. If the Board of Directors approves a
deviation which increases a Member’s Article III benefits, the Board shall decide whether
such deviation shall operate retroactively or prospectively and whether there are any
preconditions to the implementation of such deviation.

	3.02 	(a)	 	The Member’s Article III pension benefit shall be calculated pursuant to Section 3.01
above at the time the Member’s Retirement Fund benefits become payable or, if earlier, at the
time the Plan commences payment of the Member’s Article III benefits. However, no Member
shall be entitled to select the exact date on which his Article III benefit shall be
calculated. The Member’s Article III benefits may be paid in any of the optional forms
offered by the Retirement Fund or in any other form acceptable to the Committee. The form of
benefit chosen shall provide benefits of equivalent actuarial value to the benefits calculated
using the Regular Form pursuant to Section 3.01 above. Equivalent actuarial value shall be
determined by the Actuary using the actuarial factors and assumptions used by the Retirement
Fund in calculating the Member’s payments under the Retirement Fund’s optional forms of
benefit. If the Actuary cannot calculate the actuarial equivalence of a proposed form of
benefit, that form shall not be an acceptable form for payment of the Member’s benefit.

	 	(b)	 	Each Member shall elect the form for payment of his Article III benefits
within thirty days of the date on which he first becomes an Eligible Executive. For
those employees who were Members for Article III purposes on the Effective Date of the
Plan, such election shall be made by December 31, 2003.
	 
	 	 	 	Such election shall set out (i) the starting date for payment of the Member’s
Article III benefits, (ii) the form in which the benefits are to be paid and (iii)
if applicable, the frequency and/or duration of the benefit payments. The starting
date may be defined with reference to the Member’s separation from service with the
Bank or the Member’s attainment of a certain age. The starting date may not be
defined with reference to any event whose timing is uncertain other than the
Member’s death, disability or separation from service. Benefit payments may not
begin prior to the later of (i) the Member’s termination of employment with the
Bank or (ii) the Member’s 45th birthday, and benefit payments

7

 

	 	 	 	must begin
by the later of (i) the termination of the Member’s employment with the Bank or
(ii) the Member’s 70th birthday. Periodic benefit payments shall not be
made more frequently than monthly or less frequently than annually, and no Member
shall elect a payment period extending beyond the Member’s anticipated life
expectancy (or if applicable the joint life expectancy of the Member and the
Member’s contingent annuitant under the Retirement Fund).
	 
	 	 	 	Except as further provided in this paragraph, the Member’s Article III benefit
payment election may be changed at any time, and the election in effect at the time
of the Member’s separation from service shall govern the payment of the Member’s
Article III benefits. Notwithstanding the foregoing, a Member’s benefit payments
shall not commence within twelve months of any change to the Member’s election
unless the commencement of the Member’s benefit payments is due to hardship as
defined in Section 4.08 below or to the Member’s death or disability. Nor may a
Member change an election within twelve months of the Member’s then-effective
distribution commencement date. In addition, any election change which extends the
time for commencement of a Member’s benefit payments must extend the Member’s
benefit commencement date for at least five years, measured from the benefit
commencement date in the election being superseded to the benefit commencement date
in the new election. Thus, a Member who had elected to commence benefit payments
at age 65 could revoke that election and instead elect to commence benefits at age
70 but not at any earlier age. Finally, no election change can accelerate a
Member’s receipt of his benefits unless the accelerated distribution is requested
on account of and is consistent with an event beyond the Member’s control. Any
request for an acceleration of benefits shall be accompanied by an explanation of
the Member’s need for the acceleration and shall be granted or denied in the sole
discretion of the Committee.
	 
	 	 	 	If the Actuary is unable to calculate the Member’s benefit payments or if the
calculation of the Member’s benefit payment depends upon the life
expectancy of a contingent annuitant who dies or otherwise ceases to be an
appropriate contingent annuitant, the Member may make a new election,

8

 

	 	 	 	subject to
the rules set forth earlier in this section. If a Member has not made an election
regarding the form for payment of his Article III benefits or if the Member’s
request is ineffective for any reason, the Member’s Article III benefits shall be
payable in the “Regular Form” of payment as defined in the Retirement Fund.

	 	(c)	 	If a Member elects an installment payment of his Article III benefits, the
installment payments shall be calculated as follows. First, the Committee shall
direct the Actuary to calculate the Member’s lump sum payment amount pursuant to
Section 3.02 (a) above. Then the Plan shall deposit the lump sum amount thus
calculated into a separate Article III Account for the Member. The Plan shall then
calculate and make the first Article III installment payment by dividing the Member’s
lump sum amount by the number of monthly, quarterly, annual or semiannual installment
payments elected by the Member. At the first month (for a Member electing monthly
installment payments), third month (for a Member electing quarterly installment
payments), six month (for a Member electing semi-annual installment payments) or one
year (for a Member electing annual payments) anniversary of that first payment, the
Plan shall credit the Account with the interest earned since the immediately preceding
payment date (as further set out in Section 5.03 (c) below) and then calculate and
make the second installment payment by dividing the amount then comprising the
Member’s Article III Account by the number of installment payments then remaining.
This process shall continue until all installments have been paid. If any
installments remain unpaid at the Member’s death, such installments shall be paid to
the Member’s Beneficiary using the installment payment schedule originally chosen by
the Member.

	3.03	 	If a Member dies after having elected a form for payment of his plan benefits, the only death
benefit payable in respect of said Member shall be the amount, if any, payable under the form
of payment which the Member had elected prior to the commencement of his benefits. If a
Member dies prior to electing a form for payment of his benefits, (or prior to receipt of a
lump sum benefit elected
pursuant to Section 3.02 above) the Member’s Beneficiary shall receive a death benefit
equal to the greatest of (a) the lump sum benefit which would have been 

9

 

	 	 	payable had the
Member so elected, (b) the excess of (i) the Active Service Death Benefit which would be
payable under the Retirement Fund if the Retirement fund were administered as provided in
subsection 3.01 (a) (i) and 3.01 (a) (ii) above over (ii) the Active Service Death Benefit
payable under the Retirement Fund or (c) the excess of (i) the lump sum Retirement Death
Benefit which would be payable under the Retirement Fund if the deceased Member was
eligible for such benefit and if the Retirement fund were administered as provided in
subsections 3.01 (a) (i) and 3.01 (a) (ii) above over (ii) the lump sum Retirement Death
Benefit payable under the Retirement Fund.

	3.04	 	If a retired or terminated Member is restored to employment with the Bank, payment of any
Article III benefits shall cease. Upon the Member’s subsequent retirement or termination of
employment with the Bank, his benefits under the Plan shall be recomputed in accordance with
Section 3.01, but shall be reduced by the equivalent actuarial value of the total benefit
previously paid by the Plan. For purposes of this Section 3.04, the equivalent actuarial
value of the benefit previously paid by the Plan shall be determined by the Actuary utilizing
for that purpose the same actuarial factors and assumptions then used by the Retirement Fund
to determine actuarial equivalence under the Retirement Fund.

	3.05	 	Notwithstanding any other provision of this Plan, if, on the date payment under the Plan
would otherwise commence, the form of payment selected by the Member would result in benefit
payments less than or equal to $1,000 per month, the Plan may pay the Member’s entire benefit
in the form of a lump sum settlement.

10

 

ARTICLE IV. AMOUNT AND PAYMENT OF THRIFT BENEFITS

	4.01	 	At the end of each calendar year (referred to herein as Year 1), each Member may elect to
defer a percentage of his Base Salary for the next calendar year (referred to herein as Year
2) pursuant to the procedure set forth in Section 4.03 below. If a Member so elects, his Base
Salary earned during Year 2 shall be reduced in accordance with his deferral election. The
Bank shall effectuate the Member’s deferral ratably throughout Year 2 in accordance with its
usual payroll practices. The Bank shall contribute the deferral amounts to the Thrift Plan
until the Member’s Year 2 Thrift Plan contributions reach the maximum amount permitted under
Code Section 402 (g). If the Member has attained the age of fifty (50) or will attain the age
of fifty (50) during Year 2, the Bank shall also make the maximum Thrift Plan deferral
permissible for the Member under Code Section 414 (v). These deferrals shall be made to the
Thrift Plan in accordance with the Thrift Plan’s procedures for receiving, accepting and
crediting employee deferrals. Once the Bank has made the maximum Thrift Plan deferral
permitted by Code Section 402 (g) and if applicable by Code Section 414 (v), the Bank shall
effectuate the rest of the Member’s deferral by contributing the deferral amounts to the
Member’s Account under this Plan, again using the Bank’s usual payroll practices.
	 
	 	 	No Thrift Plan contribution or matching contribution will be transferred from the Thrift
Plan to this Plan or from this Plan to the Thrift Plan. Nor will any Base Salary deferral
amounts be contributed to this Plan until the Bank has made the maximum Thrift Plan
contribution available for the Member under Code Sections 402 (g) and 414 (v), if
applicable.
	 
	4.02	 	At the end of Year 1, each Member may elect to defer a percentage of his Incentive
Compensation earned during Year 2 and payable during Year 3 pursuant to the procedure set
forth in Section 4.03 below. If a Member so elects, his Incentive Compensation earned during
Year 2 shall be reduced in accordance with his deferral election. The percentage deferred
pursuant to this section need not be identical to the deferral percentage chosen by the Member
pursuant to
Section 4.01 above. The Member must make the Incentive Compensation deferral election on
or before December 31st of Year 1 for Incentive 

11

 

	 	 	Compensation earned during Year
2 and payable in Year 3. The Incentive Compensation thus deferred shall remain in this
Plan until it is distributed to the Member or his beneficiary.
	 
	4.03	 	A Member’s election under Sections 4.01 and 4.02 shall be made in accordance with the
following provisions:

	 	(a)	 	The Plan shall provide each Member with a Deferral Agreement at least 30 days
prior to the commencement of each year. The Deferral Agreement may be composed of
separate documents showing the Member’s elective deferrals to the Thrift Plan and to
this Plan. No Member shall be permitted to elect any Base Salary deferral into this
plan unless he has elected the maximum Thrift Plan deferral permissible under Code
Section 402 (g) and for those Members who will attain age fifty (50) during Year 2,
the maximum deferral permissible under Code Section 414 (v). Each Member shall
execute and deliver the Deferral Agreement no later than the last business day of Year
1. An election with respect to Incentive Compensation under Section 4.02 must be made
on or before the last business day of Year 1 in order to defer a percentage of the
Incentive Compensation earned in Year 2 and paid to the Member and/or to this Plan in
Year 3. All year-end Deferral Agreements shall provide for separate elections with
respect to Base Salary deferrals and Incentive Compensation deferrals under Section
4.02.
	 
	 	(b)	 	Notwithstanding the above, if an Eligible Executive first becomes eligible to
participate in this Plan in a month other than December, he shall be entitled to
execute a mid-year Deferral Agreement within 30 days of the date he becomes eligible
to participate. That mid-year Deferral Agreement shall apply only to Base Salary
earned by the Member on or after the date such Deferral Agreement is submitted. It
shall not affect or defer the Member’s Incentive Compensation earned during the year
in which the Member first becomes eligible to participate in this Plan.
Notwithstanding the foregoing, if the member is a new employee of the Bank who has not
yet performed any services for which Incentive
Compensation may be payable, the Member may also make a deferral 

12

 

	 	 	 	election for his
Incentive Compensation within 30 days of the date on which he becomes eligible to
participate pursuant to Section 1.12 above.

	 	(c)	 	An Eligible Executive’s elections in his Deferral Agreement shall be
irrevocable for the calendar year for which the deferral is elected.
	 
	 	(d)	 	All deferral elections shall be expressed as whole percentages. No Member
may elect to defer less than two percent (or such other minimum deferral percentage as
may then be in effect under the Thrift Plan) of his Base Salary or Incentive
Compensation, and no Member may elect to defer more than fifteen percent (or such
other maximum deferral percentage as may then be in effect under the Thrift Plan) of
his Base Salary or Incentive Compensation.
	 
	 	(e)	 	The Deferral Agreement shall also allow the Member to elect the form of
payment for his Article IV benefits. The Member must elect the same payment form for
Base Salary deferrals and Incentive Compensation deferrals. The Member’s election
shall set out (i) the starting date for payment of the Member’s Article IV benefits,
(ii) whether benefits are to be paid in a lump sum or in installments and (iii) the
frequency or duration of any installment payments. The starting date may be defined
with reference to the Member’s separation from service with the Bank or the Member’s
attainment of a certain age. The starting date may not be defined with reference to
any event whose timing is uncertain other than the Member’s death, disability or
separation from service. Benefit payments shall not begin prior to the Member’s
separation from service with the Bank and must commence by the time the Member attains
the age of 70. No Member shall elect an installment payment period extending beyond
the Member’s anticipated life expectancy. Once begun, installment payments shall not
be made more frequently than monthly or less frequently than annually.
	 
	 	 	 	The first Deferral Agreement executed following the Effective Date of this Plan
shall govern the payment of all amounts then comprising the Member’s Article IV
Account. Once a Member has elected a form for
payment of his Article IV benefits, such election shall be irrevocable and

13

 

	 	 	 	shall
govern the payment of all Article IV deferrals made through the date of that
election.
	 
	 	 	 	Such election shall also apply to the Member’s subsequent Article IV deferrals
unless the election is changed by the Member in a subsequent Deferral Agreement.
Any change made in a subsequent Deferral Agreement shall operate prospectively
only, and shall not affect the form of payment of any amounts already contributed
to the Member’s Article IV Account or the form of payment of any earnings on those
previously contributed amounts.
	 
	 	 	 	Notwithstanding the foregoing, a Member’s benefit payments shall not commence
within twelve months of any change to the Member’s election unless the commencement
of the Member’s benefit payments is due to hardship as defined in Section 4.08
below or to the Member’s death or disability. Nor may a Member change an election
within twelve months of the Member’s then-effective distribution commencement date.
In addition, any election change which extends the time for commencement of a
Member’s benefit payments must extend the Member’s benefit commencement date for at
least five years, measured from the benefit commencement date in the election being
superseded to the benefit commencement date in the new election. Thus, a Member
who had elected to commence benefit payments at age 65 could revoke that election
and instead elect to commence benefits at age 70 but not at any earlier age.
Finally, no election change can accelerate a Member’s receipt of his benefits
unless the accelerated distribution is requested on account of and is consistent
with an event beyond the Member’s control. Any request for an acceleration of
benefits shall be accompanied by an explanation of the Member’s need for the
acceleration and shall be granted or denied in the sole discretion of the
Committee.
	 
	 	(f)	 	Notwithstanding the foregoing, if, as of any date, the Member’s Article IV
Account contains less than $25,000, the Committee may disregard the Member’s
installment election and pay the Member’s entire remaining Article IV benefit in the
form of a lump sum.

	4.04	 	For each elective contribution addition credited to a Member’s Account under Section 4.01,
such Member shall also be credited with a matching contribution

14

 

	 	 	under this Plan equal to the
matching contribution, if any, that would be credited under the Thrift Plan with respect to
such amount if contributed to the Thrift Plan. However, no matching contribution shall be
made for any Member who has not completed at least one year of employment with the Bank so
that he has become eligible for a match under the Thrift Plan. Matching contributions shall
be determined as if the provisions of the Thrift Plan were administered without regard to the
Code Limitations, but with regard to the maximum percentage of Base Salary matched for a
Thrift Plan participant with the same number of years of service as the Member. For each
Incentive Compensation contribution credited to a Member’s Account under Section 4.02, such
Member shall also be credited with a matching contribution under this Plan equal to the
matching contribution, if any, that would be credited under the Thrift Plan with respect to
such amount if contributed to the Thrift Plan, determined as if the provisions of the Thrift
Plan were administered without regard to the Code Limitations (but with regard to the maximum
percentage matched for a Thrift Plan Participant with the same number of years of service as
the Member) and on the basis that Base Salary under the Thrift Plan included Incentive
Compensation in the year payable. However, no Incentive Compensation matching contribution
shall be made for any Member who has not completed at least one year of employment with the
Bank.
	 
	4.05	 	The Plan shall maintain an Article IV Account for each Eligible Executive who is a Member by
reason of amounts credited under Sections 4.01, 4.02, and 4.04. Such amounts shall be
credited to the Member’s Account as soon as practical after the date that the deferred
compensation would otherwise have been paid to the Member. Such Account shall be further
administered as provided in Section 5.03 below.
	 
	4.06	 	If a Member has elected an installment payment of his Article IV Accounts, the installment
payments shall be made as follows. On the date of the first installment payment, the Plan
shall divide the Member’s Article IV Account by the number of monthly, quarterly, annual or
semiannual installment payments elected by the Member. At the first month (for a Member
electing monthly installment payments), third month (for a Member electing quarterly
installment payments) six month (for a Member electing semi-annual payments), or one year
(for a Member electing annual payments) anniversary of that first payment, the Plan shall
determine the next installment payment amount by revaluing the

15

 

	 	 	Member’s Article IV Account
as provided in Section 5.03 (a) below and dividing the revalued Account by the number of
installment payments then remaining. This process shall continue, subject to Section 4.03
(f) above, until the Member’s entire Article IV Account has been paid out.
	 
	4.07	 	If a Member dies prior to receiving the balance credited to his Article IV Account under
Section 4.06 above, the balance in his Article IV Account shall be paid to his Beneficiary in
a lump sum payment as soon as reasonably practicable after his death.
	 
	4.08	 	Notwithstanding anything to the contrary herein, while employed by the Bank, a Member may, in
the event of an unforeseeable emergency which results in severe financial hardship, request a
withdrawal from his Article IV Account and a suspension of his deferrals under the Plan. The
request shall be for an amount not greater than the lesser of (i) the amount required to meet
the financial hardship, or (ii) the amount of his Article IV Account plus the suspension of
his deferrals for the portion of the calendar year remaining after the Committee’s
determination that the Member has incurred a severe financial hardship and shall be subject to
approval by the Committee. For purposes of this Section 4.08, an unforeseeable emergency
means a severe financial hardship resulting from a sudden or unexpected illness or accident of
the Member or one of his dependents, loss of property due to casualty, or other similar
extraordinary and unforeseen circumstances arising as a result of events beyond the Member’s
control and which the Member is unable to satisfy with funds reasonably available from other
sources. The circumstances that will constitute an unforeseeable emergency will depend upon
the facts of each case as determined by the Committee.

16

 

ARTICLE V. SOURCE OF PAYMENT

	5.01	 	All payments of benefits under the Plan shall be paid from, and shall only be a general claim
upon, the general assets of the Bank, notwithstanding that the Bank, in its discretion, may
establish a bookkeeping reserve or a “Rabbi” or grantor trust (as such term is used in Code
Sections 671 through 677) to reflect or to aid it in meeting its obligations under the Plan
with respect to any Member. No benefit provided by the Plan shall in any circumstances be
payable from the assets of the Retirement Fund or the Thrift Plan.

	5.02	 	No Member shall have any right, title or interest whatsoever in or to any investments. which
the Bank may make or any specific assets which the Bank may reserve to aid it in meeting its
obligations under the Plan. To the extent that any person acquires a right to receive payments
from the Bank under the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Bank.

	5.03	 	The Accounts established by the Plan to hold the Members’ Article IV deferrals and matches
shall be held in trust and the trust shall have its situs within the United States. The trust
shall at all times qualify as a “Rabbi Trust.” To that end it shall be a grantor trust, the
net income from which shall be taxable to the Bank and the assets of which shall be available
to the Bank and its creditors in the event of the Bank’s insolvency. The trust’s status as a
grantor trust shall not be affected by changes in the Bank’s financial condition.

	 	(a)	 	Each Member may direct the investment of his Article IV Account in and among
various mutual funds or other investment vehicles chosen by the Trustee. The
performance of the investment vehicles chosen by the Member will establish the deemed
rate of return on the Member’s Article IV Account. Other than as set forth in the
preceding sentence, no Member shall be entitled to any guaranteed rate of return, nor
shall any investment vehicle or index be deemed to be the measure of investment
performance for any Member’s Article IV Account.

17

 

	 	(b)	 	The Bank may also use the trust to fund its Article III obligations, in whole
or in part, and such trust shall comply with the requirements of the initial paragraph
of Section 5.03. However, no Member shall have any right to direct (or even monitor)
the investment of the funds contributed to the Trust for such purpose. The Bank may
direct the investment of all or part of such funds, or may rely upon the trustee to
invest all or part of such funds. The Bank shall have no obligation to set aside
funds to help meet its Article III obligations.
	 
	 	(c)	 	In the event a Member elects to have his Article III benefits paid in
installments, the Plan shall establish a separate Article III Account within the trust
to hold such benefits during the installment period. The account shall accrue
interest from the date of calculation of the Member’s lump sum benefit pursuant to
Section 3.02 (c) above. The interest rate shall remain constant during the
installment payout and shall be equal to the Bank’s cost of funds for an annuity of
equivalent duration as the installment payout on the date of calculation of the lump
sum benefit.
	 
	 	(d)	 	In the event the Member becomes unable to direct the investment of his
Article IV Account as contemplated by paragraph (a) above, such direction may be given
by the Member’s spouse, personal representative or designated Beneficiary. The
Trustee may also invest the Member’s Account without any direction. The Trustee shall
invest a Member’s Account without any direction if there is no person willing and able
to act for the Member pursuant to the preceding sentences of this subparagraph, if the
available and willing person is a minor or otherwise incapacitated, or if there are
multiple Beneficiaries, none of whom is a spouse or personal representative. If the
Trustee is acting without investment direction, the Trustee shall consider the
financial needs of the Member, the age(s) and financial needs of the Member’s
Beneficiaries if the Member is deceased, and the security of the principal which shall
be of paramount importance if the Trustee is acting without investment direction.

18

 

ARTICLE VI. DESIGNATION OF BENEFICIARIES

	6.01	 	For purposes of calculating the benefits payable under Article III of this Plan, the Member’s
designated beneficiary shall be deemed to be the same individual or entity designated by the
Member to receive benefits under the Retirement Fund in case of the Member’s death.

	6.02	(a)	 	However, the Member may designate a different individual or entity as Beneficiary to
receive any death benefit payable under Article III of this Plan. In such event, the Actuary
shall make sure that the actuarial value of the Member’s Article III benefits is not increased
by the Member’s designation of different beneficiaries under this Plan and the Retirement
Fund. The Member shall not be required to obtain the consent of any family member or
previously designated Beneficiary before designating a beneficiary for any Article III death
benefit. Nor shall this Plan be bound by any Qualified Domestic Relations Order submitted to
or accepted by the Retirement Fund. However, the Actuary shall take the Qualified Domestic
Relations Order into account in calculating the Member’s benefit under this Plan so that the
Qualified Domestic Relations Order does not cause an increase in the benefits payable to the
Member pursuant to Article III of this Plan.

	 	(b)	 	For purposes of benefits payable under Article IV hereof, each Member may
file a written designation of one or more individuals or entities as the Beneficiary
who shall be entitled to receive the amount, if any, payable under the Plan upon the
Member’s death.
	 
	 	(c)	 	The Member may, from time to time, revoke or change his Beneficiary
designation (without the consent of any prior Beneficiary or any other person) by
filing a new designation. The last beneficiary designation received shall be
controlling. However, no designation, or change or
revocation of Beneficiary shall be effective unless actually received by an
appropriate Plan representative prior to the Member’s death.

19

 

	6.03	 	If no Beneficiary designation is in effect at the time of a Member’s death, or if no
designated Beneficiary survives the Member, or if, in the opinion of the Plan, any beneficiary
designation conflicts with applicable law or is unenforceable in any other way, the Member’s
estate shall be deemed to be the Member’s Beneficiary and shall receive the amount, if any,
payable under the Plan upon the Member’s death. If the Plan is in doubt as to the right of any
person to receive such amount, the Plan may retain such amount, without liability for any
interest thereon, until the rights thereto are determined. The Plan may also pay such amount
to any court of appropriate jurisdiction and such payment shall be a complete discharge of the
liability of the Plan and the Bank therefor.

20

 

ARTICLE VII. ADMINISTRATION OF THE PLAN

	7.01	 	The Committee shall have general authority over and responsibility for the administration and
interpretation of the Plan. The Committee shall have full power and discretionary authority to
interpret and construe the Plan, to make all determinations considered necessary or advisable
for the administration of the Plan and the calculation of the amount of benefits payable
thereunder, and to review claims for benefits under the Plan. Unless arbitrary or capricious,
the Committee’s interpretations and constructions of the Plan and its decisions and actions
thereunder shall be binding and conclusive on all persons for all purposes.

	7.02	 	The Committee shall arrange for the services of the Actuary, and if the Committee deems it
advisable, it shall arrange for the services of legal counsel and certified public accountants
(who may also be counsel or accountants for the Bank), and for other consultants, agents and
clerical or other personnel whose services may be necessary for purposes of the Plan. The
Committee may also utilize the services of agents and clerical or other personnel regularly
employed by the Bank. The Committee may rely upon the written opinions of such Actuary,
counsel, accountants and consultants, and upon any information supplied by the Retirement Fund
or the Thrift Plan for purposes of the Plan. The Committee may delegate to any agent or to
any sub-committee or Committee member its authority to perform any act hereunder, including
without limitations those matters involving the exercise of discretion; provided, however,
that such delegation shall be subject to revocation at any time at the discretion of the
Committee. The Committee shall report to the Board of Directors, or its designee, at such
intervals as shall be specified by the Board or such designee.

	7.03	 	No Committee member shall be entitled to participate in any decision or action relating
solely to his own membership or benefits under the Plan.

	7.04	 	Each Committee member shall be reimbursed by the Bank for any reasonable expenses incurred in
connection with his services to the Plan. No bond or other security shall be required of the
Committee or any member thereof, unless required by applicable law.

21

 

	7.05	 	All claims for benefits under the Plan shall be submitted in writing to the Committee.
Written notice of the Committee’s decision on each such claim shall be furnished with
reasonable promptness to the Member or his Beneficiary, such individual or entity being
referred to herein as the Claimant. The Claimant may request a review by the Committee of any
decision denying all or part of a claim. Such request shall be made in writing and shall be
filed with the Committee within 30 days of such denial. A request for review shall contain all
additional information which the Claimant wishes the Committee to consider and the Committee
shall not be obligated to undertake any review until it has received the Claimant’s completed
request for review. The Committee may hold any hearing or conduct any independent
investigation which it deems useful in rendering its decision, and the decision on review
shall be made with reasonable promptness after the Committee’s receipt of the completed
request for review. Written notice of the decision on review shall be furnished to the
Claimant. If no further review is timely requested in writing, the Committee’s decisions
shall be final, binding and conclusive on all interested persons as to all matters relating to
the Plan.

	7.06	 	All expenses incurred in the administration of the Plan shall be paid by the Bank.

22

 

ARTICLE VIII. AMENDMENT AND TERMINATION

	8.01	 	The Board of Directors may amend, suspend or terminate the Plan, in whole or in part, without
the consent of the Committee or any Member, Beneficiary or other person. However, no
amendment, suspension or termination shall retroactively impair or otherwise adversely affect
the rights of any Member, Beneficiary or other person to benefits which have accrued under the
Plan prior to the date of such action.

23

 

ARTICLE IX. GENERAL PROVISIONS

	9.01	 	The Plan shall be binding upon and inure to the benefit of the Bank and its successors, and
assigns and the Members, and their beneficiaries, successors, and assigns. The Plan shall
also be binding upon and inure to the benefit of any successor bank or organization succeeding
to substantially all of the assets and business of the Bank, but nothing in the Plan shall
preclude the Bank from merging or consolidating into or with, or transferring all or
substantially all of its assets to, another bank which assumes the Plan and all obligations of
the Bank hereunder. The Bank agrees that it will make appropriate provision for the
preservation of Members’ rights under the Plan in any agreement or plan into which it may
enter to effect any merger, consolidation, reorganization or transfer of assets. In case of
such a merger, consolidation, reorganization or transfer of assets, the term “Bank” shall
refer to the surviving or acquiring entity which shall assume the Bank’s obligations under the
Plan, and the Plan shall continue in full force and effect with no diminution in accrued Plan
benefits.

	9.02	 	Neither the Plan nor any action taken thereunder shall be construed to give any Member the
right to be retained in the employ of the Bank or affect the Bank’s right to terminate the
employment of any Member. Neither the Plan nor any action taken thereunder shall affect the
Bank’s right to determine the Base Salary and Incentive Compensation, if any, of any Bank
employee, including any Member of this Plan.

	9.03	 	The Bank shall withhold or cause to be withheld all federal, state, or other taxes which the
Bank is required to withhold from Plan payments.

	9.04	 	No right or interest of a Member under the Plan may be assigned, sold, encumbered,
transferred or otherwise disposed of (including any disposition pursuant to the dissolution of
a Member’s marriage). Any attempted disposition of such right or interest shall be null and
void. Further, no right or interest of a Member may be reached by any creditor of the Member.

24

 

	9.05	 	If the Committee should find that any person to whom any amount is due under the Plan is
unable to care for his affairs because of illness or accident or legal incapacity, then any
payment due to such person may be paid to such person’s spouse, child or other relative, or to
an institution maintaining or having custody of such person, or to any other person whom the
Committee determines to be appropriate to receive payment on behalf of such person. Any such
payment shall be a complete discharge of the liability of the Plan and the Bank therefor, and
the Committee shall have no obligation to inquire regarding the recipient’s application of
such payment.

	9.06	 	All elections, designations, requests, notices, instructions, and other communications from a
Member, Beneficiary, or other person to the Plan or the Committee shall be in such form as is
prescribed from time to time by the Plan or the Committee and shall be mailed by first-class
mail or sent by telefacsimile or hand-delivered to such location as shall be specified by the
Plan or the Committee. Such documents shall not be deemed to have been given and delivered
until the actual receipt thereof by a Committee Member or appropriate Plan Representative.
All Members (and Beneficiaries of deceased Members) shall keep the Plan apprised of their
current mailing addresses.

	9.07	 	The benefits payable under the Plan shall be in addition to all other benefits provided for
employees of the Bank, and Plan benefits shall not be deemed salary or other compensation for
the purpose of computing benefits to which a Member may be entitled under any other plan or
arrangement of the Bank.

	9.08	 	No Committee member or Plan representative shall be personally liable on account of any
instrument executed by him or on his behalf, or any action taken by him for any mistake of
judgment made in good faith in connection with service to the Plan. The Bank shall indemnify
and hold harmless each Committee member, Plan representative, employee, officer or director of
the Bank, the Retirement Fund or the Thrift Plan to whom any duty, power, function or action
in respect of the Plan may be delegated or assigned or from whom any information is requested
for plan purposes against any cost or expense (including fees of legal counsel) and liability
(including any sum paid in settlement of a claim or legal action with the approval of the
Bank) arising out of anything done or omitted to be done in connection with the Plan, unless
such liability arises out of such person’s fraud or bad faith.

25

 

	9.09	 	As used in the Plan, the masculine gender shall be deemed to refer to the feminine, and the
singular person shall be deemed to refer to the plural, wherever appropriate.

	9.10	 	The captions preceding the Articles and Sections of the Plan have been inserted solely as a
matter of convenience and shall not in any manner define or limit the scope or intent of any
provisions of the Plan.

	9.11	 	The Plan shall be construed according to the laws of the State of Iowa unless such laws are
superseded by applicable federal law. It is the Bank’s intent that the plan be classified as
a non-qualified deferred compensation plan for income tax purposes so that no Member is
obligated to include Plan benefits in taxable income prior to the Member’s actual receipt of
such Plan benefits.
	 
	 	 	The Plan is also intended to qualify as a “Top Hat” Plan for purposes of the Employee
Retirement Income Security Act. The Plan shall be construed and administered to effectuate
such intentions.

26

 

     IN WITNESS WHEREOF, THE FEDERAL HOME LOAN BANK OF DES MOINES has caused the Plan to be
executed effective as of December 11, 2003.

FEDERAL HOME LOAN BANK OF DES MOINES

	 	 	 	 	 
	BY:

	 	          /s/ Dale J. Torpey	 	 
	 

	 	 	 	 
	 

	 	          Chairman of the Board	 	 
	 
	 	 	 	 
	DATE:

	 	          12/31/03	 	 
	 
	 	 	 	 
	Attest:
	 	 	 	 
	 
	 	 	 	 
	 

	 	                    /s/ Amy E. Angle	 	 
	 	 	 
	 

	 	                    Corporate Secretary	 	 

27

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]