Document:

EX-10.3

“Transitional” Long-Term Incentive Plan

December 15, 2011

Policy Information

	 	 	 
	Document Title:

	 	“Transitional” Long-Term Incentive Plan
	Content Owner:

	 	Director of HRA
	Certification of Compliance Contact:

	 	N/A
	Policy Category:

	 	FHLBank Policy
	FHLBank-Level Approver:

	 	Policy Oversight Group
	Board-Level Approver:

	 	Full Board (Compensation)
	Review Frequency:

	 	Annually
	Initial Effective Date:

	 	12/18/2008
	Last Review Date:

	 	3/24/2011
	Next Review Date:

	 	12/2012

1

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	1.0	 	 	Plan Objectives
	 	 	2	 
	 	2.0	 	 	Definitions
	 	 	3	 
	 	3.0	 	 	Eligibility
	 	 	4	 
	 	4.0	 	 	Base Award Opportunity
	 	 	5	 
	 	5.0	 	 	Performance Measures
	 	 	6	 
	 	6.0	 	 	Final Award Determination
	 	 	6	 
	 	7.0	 	 	Distribution of Final Awards
	 	 	8	 
	 	8.0	 	 	Plan Communication
	 	 	8	 
	 	9.0	 	 	Administrative Control
	 	 	8	 
	 	10.0	 	 	Miscellaneous Conditions
	 	 	9	 
	 	 	 	 	Appendices
	 	 	14	 
	 	 	 	 	 
	 	 	 	 

	1.0	 	Plan Objectives

	 	1.1	 	The purpose of the Federal Home Loan Bank of Topeka Long-Term Incentive Plan
is to:

	 	1.1.1	 	Promote consistently high value creation for FHLBank Topeka
members by promoting the long-term growth and profitability of FHLBank Topeka
in accordance with the achievement of its long-term strategic objectives and
mission;

	 	1.1.2	 	Promote key employee loyalty and dedication to FHLBank
Topeka and its strategic objectives by rewarding performance that facilitates
the growth and financial stability and success of FHLBank Topeka;

	 	1.1.3	 	Increase FHLBank Topeka’s capacity to attract, retain and
motivate key employees by enhancing its ability to offer competitive total
compensation to key employees who are also vital to FHLBank Topeka’s future
success.

Payments awarded under this plan, when combined with base salary, Short Term
Incentive Plan (STIP) awards, and other benefits are designed to provide
competitive total compensation to key employees for achieving FHLBank Topeka’s
desired strategic objectives. Total compensation is targeted to be at the
50th percentile relative to similar key employee positions at other
FHLBanks. If total targeted compensation is above the 50th percentile,
then the Compensation Committee may recommend a corresponding decrease in the STIP
targeted award during that corresponding period.

	 	1.2	 	The Plan is a cash-based long-term incentive plan that establishes individual
Base Award Opportunities related to achievement of FHLBank Topeka performance hurdles
relative to the other FHLBanks and individual performance over a three-year
Performance Period.

	 	1.3	 	The Base Award Opportunity, Performance Measures, Final Value of Incentive,
Participants, and other terms are set forth in Appendix A.

	2.0	 	Definitions

	 	2.1	 	When used in this Long-Term Incentive Plan, the following words and phrases
shall have the following meaning:

	 	2.1.1	 	Base Award Opportunity means the award that may be earned
during a Performance Period for achieving target performance levels under each
Performance Measure;

	 	2.1.2	 	Board means FHLBank Topeka’s Board of Directors;

	 	2.1.3	 	Compensation Committee means the Compensation Committee of
the Board;

	 	2.1.4	 	Extraordinary Occurrences means those events that, in the
opinion and discretion of the Compensation Committee, are outside the
significant influence of the Participants or FHLBank Topeka and are likely to
have a significant unanticipated effect, whether positive or negative, on
FHLBank Topeka’s operating and/or financial results;

	 	2.1.5	 	FHFA means Federal Housing Finance Agency or any successor;

	 	2.1.6	 	FHLBank Topeka means Federal Home Loan Bank of Topeka;

	 	2.1.7	 	Final Award means the amount ultimately paid to a
Participant under the Plan for a Performance Period;

	 	2.1.8	 	Participant means a person who is eligible to take part in
the Plan for a designated Performance Period as set forth in Appendix A;

	 	2.1.9	 	Performance Measure means each performance factor that is
taken into consideration under the Plan in determining the value of the Final
Award;

	 	2.1.10	 	Performance Period means a three-year period over which FHLBank Topeka’s
performance is measured, with the current period to be as set forth at
Appendix A;

	 	2.1.11	 	Plan means the Federal Home Loan Bank of Topeka Long-Term Incentive Plan;

	 	2.1.12	 	Plan Award means an amount that is provisionally determined at the end of
the Performance Period subject to adjustment as provided in Section 6.4;

	3.0	 	Eligibility

	 	3.1	 	Individual employees eligible for participation for a Performance Period will
be recommended by the President/CEO to the Compensation Committee for approval. In
the case of the President/CEO, the Compensation Committee has sole authority to
approve the President/CEO’s eligibility during that applicable Performance Period.

	 	3.2	 	Eligibility shall be limited to a select group of management or other
highly-compensated employees (i.e., key employees), but normally will be further
limited to the President/CEO and senior officers who are recommended as a Participant
by the President/CEO.

	 	3.3	 	There will be three levels of participation:

	 	 	 	Level I: President & CEO

	 	 	 	Level II: FHLBank Topeka employees as recommended by
the President/CEO and determined by the Compensation Committee

	 	 	 	Level III: Other FHLBank Topeka employees as recommended
by the President/CEO and determined by the Compensation Committee

	 	3.4	 	The list of eligible Participants for each Performance Period is set forth in
Appendix A.

	 	3.5	 	An employee who is otherwise eligible under this Plan as set forth above
remains otherwise subject to and shall cease to remain a Participant within the Plan
for violation of either or both of the following requirements:

	 	a)	 	Non-disclosure. In and as a result of the Participant’s
employment with FHLBank Topeka, Participant is or will be making use of,
acquiring knowledge of and/or adding to confidential or proprietary
information relating to FHLBank Topeka and its affiliates, including, without
limitation, FHLBank Topeka’s systems, procedures, policies, manuals, trade
secrets, business plans, financial data, strategies, methods of conducting
business, processes, procedures, standards, know-how, manuals, techniques,
technology, confidential reports and all other information, knowledge, or data
of any kind or nature relating to the products, services, or business of
FHLBank Topeka or any subsidiary, parent or other affiliate of FHLBank Topeka
(collectively, “Confidential Information”). As a material inducement to
FHLBank Topeka to allow Participant to be eligible under the Plan, Participant
shall not, at any time during or following the term of his employment with
FHLBank Topeka, directly or indirectly, except in furtherance of FHLBank
Topeka business and in accordance with FHLBank Topeka policies, use,
disseminate, divulge or disclose, for any purpose whatsoever, any Confidential
Information.

	 	b)	 	Non-solicitation. In acknowledgement and recognition of the
highly competitive and unique nature of FHLBank Topeka’s business, Participant
shall not, during his continued employment and for the one-year period
following termination of such relationship, directly or indirectly, either by
himself or through others, as an individual, partner, employee, agent,
officer, stockholder or otherwise:

	 	a.	 	solicit, divert, take away or attempt to
take away the business of the FHLBank Topeka’s present or past
customers that otherwise exist at the time of termination, or such
customers of any affiliated or related companies;

	 	b.	 	solicit, hire, employ or endeavor to employ
any of FHLBank Topeka’s employees, or independent contractors.

	 	c)	 	Remedies. By virtue of his signing of the Participation
Agreement set forth at Appendix B, Participant acknowledges the terms and
conditions of that Agreement, as well as that FHLBank Topeka 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 Participant of
any provision of the Plan or the specific provisions of subparagraph a or b
above. Accordingly, in the event of a threatened, attempted or actual breach
by Participant of any provision of the Plan, or subparagraph a or b, in
addition to all other remedies to which FHLBank Topeka is entitled at law, in
equity or otherwise, FHLBank Topeka may be entitled to a temporary restraining
order and a permanent injunction or a decree of specific performance of any
provision of subparagraph a or b. The foregoing remedies will not be deemed
to be the exclusive rights or remedies of FHLBank Topeka for any breach of or
noncompliance with the terms of this Plan, or the Participation Agreement
signed by the Participant but will be in addition to all other rights and
remedies available to FHLBank Topeka at law, in equity or otherwise.

	4.0	 	Base Award Opportunity

	 	4.1	 	For each Performance Period, FHLBank Topeka will present a Base Award
Opportunity to Participants. The Base Award Opportunity is equal to a percentage of
each Participant’s annual base salary at the beginning of the Performance Period as
described in Appendix A. Certain key employees have a greater and more direct
impact than others on the annual success of FHLBank Topeka; therefore, these
differences are recognized by varying Base Award Opportunities for each Participant by
level of participation.

	 	4.2	 	For each Performance Period, the President/CEO may recommend to the
Compensation Committee that a discretionary award opportunity (the President’s Award)
be made to a Level II or Level III Participant indicated in Appendix A for
extraordinary performance and/or other criteria and considerations as determined by
the Compensation Committee.

	5.0	 	Performance Measures

5.1 Three achievement levels will be defined for each Performance Measure:

	 	 	 
	Threshold:
	 	The minimum achievement level acceptable for the Performance

Measure.

	Target:
	 	The expected achievement level for the Performance Measure.

	Maximum:
	 	The achievement level for the Performance Measure that

substantially exceeds the Target level of achievement.

	 	5.2	 	Performance between Threshold – Target, and Target – Maximum shall be
calculated by linear interpolation of the achievement point in the applicable
performance range, as determined by the Compensation Committee.

	 	5.3	 	Performance Measures for a Performance Period will be established by the
Compensation Committee.

	6.0	 	Final Award Determination

	 	6.1	 	Except as provided in Section 6.3, Plan Awards are based on the achievement
of Bankwide performance goals and Participants achieving satisfactory levels of
individual performance; provided, however, if FHLBank Topeka fails to achieve
performance at or above the Performance Measure(s) set forth in Section 5, Plan Awards
may be reduced or eliminated for that Performance Period.

	 	6.2	 	A Participant’s Plan Award for a Performance Period equals the Base Award
Opportunity plus any discretionary awards that may be granted under the President’s
Award as set forth in Section 4.2.

	 	6.3	 	Final Awards for a Performance Period are determined by the Compensation
Committee promptly after the Performance Period based upon the ?Compensation
Committee’s analysis of all applicable standards set forth herein and/or consideration
of performance that is not captured in the Performance Measures. The Compensation
Committee may also consider Extraordinary Occurrences when assessing performance
results and determining Final Awards and may adjust the Performance Measures to ensure
that the purpose of the Plan is served.

	 	6.4	 	The above notwithstanding, the Compensation Committee may in its discretion
reduce or eliminate a Final Award under any of the following circumstances:

	 	6.4.1	 	FHLBank Topeka receives a cumulative “3” or “4” rating in
its FHFA examination in any single year in any single Performance Period.

	 	6.4.2	 	The Board finds a serious, material safety-soundness
problem, or a serious, material risk-management deficiency exists at FHLBank
Topeka, or if: (i) operational errors or omissions result in material
revisions to the financial results, information submitted to the FHFA, or to
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) FHLBank Topeka fails to make sufficient progress, as determined
by the Board, in the timely remediation of significant examination, monitoring
or other supervisory findings.

	 	6.4.3	 	During the most recent examination of FHLBank Topeka by the
FHFA, the FHFA identified an unsafe or unsound practice or condition that is
material to the financial operation of FHLBank Topeka within the Participant’s
area(s) of responsibility and such unsafe or unsound practice or condition is
not subsequently resolved in favor of FHLBank Topeka by the last day of the
Performance Period, then all of a Participant’s Final Award may be forfeited.

	 	6.4.4	 	Specific to each Participant only, such Participant does not
achieve satisfactory individual achievement levels during the Performance
Period. For purposes of the Plan, the determination of whether performance is
deemed “satisfactory” is in the sole discretion of the Compensation Committee.

	 	6.5	 	The Final Award shall be reduced by 1/3 for each year during the Performance
Period in which FHLBank Topeka has negative net income, as defined and in accordance
with GAAP accounting standards.

	7.0	 	Distribution of Final Awards

	 	7.1	 	All Final Awards will be paid out in cash and will be subject to appropriate
payroll tax withholdings.

	 	7.2	 	No Final Award received by a Participant shall be considered as compensation
for purposes of determining benefits under any employee benefit plan of FHLBank
Topeka, except as otherwise determined by FHLBank Topeka.

	 	7.3	 	Final Awards will be made as soon as practical following the end of the
Performance Period, but no later than (i) 2 1/2 months following the end of the
applicable Performance Period, or (ii) as soon as practicable after a determination by
the director of the FHFA that the director will not act upon his authority to prohibit
compensation that is not reasonable and comparable to compensation paid to executives
at other financial institutions.

	8.0	 	Plan Communication

	 	8.1	 	The Compensation Committee, or its designee(s) shall communicate with
Participant(s) regarding the Plan in accordance with the following schedule:

	 	 	 
	First quarter of the Performance Period:
	 	Communicate Performance Measures and

identify Plan Participants for the

next Performance Period.

	First quarter of the Performance Period:
	 	Communicate Performance Measures and

specific hurdles for the Performance

Period.

	Annually:
	 	Interim assessments of progress

toward achieving Performance

Measures.

	End of Performance Period:
	 	Final assessment of FHLBank Topeka

and individual performance.

	9.0	 	Administrative Control

	 	9.1	 	Oversight of the Plan’s operation will be provided by the Compensation
Committee. Administration of the Plan shall be provided by the Compensation
Committee, with delegated authority to FHLBank Topeka’s President/CEO, Human Resources
and Administration Department, or other employees as applicable.

	 	9.2	 	The Compensation Committee, in consultation with the President/CEO, has full
discretion and authority and is otherwise responsible for interpreting and applying
the terms of the Plan. These interpretations and applications shall be final and
binding.

	10.0	 	Miscellaneous Conditions

	 	10.1	 	Except as provided in Section 10.3, Participants must be employed by FHLBank
Topeka on the date of payment for the Performance Period, and otherwise not in
violation of Section 3.5, to receive a Final Award.

	 	10.2	 	Employees of FHLBank Topeka who are hired, transferred, or promoted during
the first six months of the Performance Period may be recommended for: (i)
participation in the Plan or (ii) participation in the Plan at a level other than the
one originally designated, in accordance with Section 3.1, and receive a prorated Base
Award Opportunity calculated as a percentage of the employee’s new base salary at the
time of the promotion.

	 	10.3	 	Notwithstanding the provisions of Section 10.1, if a Participant incurs a
Termination of Service (i) due to death, (ii) due to Disability, (iii) due to
Retirement, (iv) by the Participant for Good Reason or (v) by FHLBank Topeka without
Cause during the Performance Period any portion of his or her Plan Award eligible to
become earned in the Performance Periods in which the termination occurs will, to the
extent the Performance Measures for such Performance Periods are satisfied, be treated
as earned and payable to the Participant or his or her beneficiary (as designated
under a completed Beneficiary Designation) in a pro rata manner equivalent to the
period of time during the Performance Periods that the Participant participated in the
Plan.

	 	a)	 	For purposes of the Plan and this section, 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 FHLBank Topeka for
an aggregate of 12 out of 15 consecutive months and, within 30 days after a
written notice of termination is thereafter given by FHLBank Topeka to the
Participant, the Participant does not return to the full-time performance of
the Participant’s duties.

	 	b)	 	Retirement means the planned and voluntary termination of the
Participant’s employment on or after the Participant has attained age 62 with
five years of employment.

	 	c)	 	For purposes of the Plan, “Good Reason” will mean a
Termination of Service by the Participant under any of the following
circumstances:

	 	a.	 	During the period: (A) beginning with the
earliest to occur of the following three dates, as applicable:
(I) 12 months prior to the execution of a definitive agreement
regarding a Reorganization of FHLBank Topeka or (II) if a
Reorganization has been mandated by federal statute, rule, regulation
or directive, 12 months prior to the effective date of such
Reorganization or (III) 12 months prior to the adoption of a plan or
proposal for the liquidation or dissolution of FHLBank Topeka, and
(B) ending on the effective date of such Reorganization.

	 	i.	 	a material change in
the Participant’s status, position, job title or principal
duties and responsibilities as a key employee of FHLBank
Topeka which does not represent a promotion from the
Participant’s status and position as in effect as of the
date hereof (hereinafter, Position), or

	 	ii.	 	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, or

	 	iii.	 	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;

	 	b.	 	any material breach by FHLBank Topeka of
any provisions of this Plan or any other agreement with the
Participant; or

	 	c.	 	any failure by FHLBank Topeka or its
successors and assigns to obtain the assumption of this Plan by any
successor or assign of FHLBank Topeka.

	 	d)	 	For purposes of the Plan, “Cause” means (1) continued failure
of the Participant to perform his or her duties with FHLBank Topeka (other
than any such failure resulting from Disability), after a demand for
performance by the Board; (2) personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, or willful violation of any law, rule or
regulation (other than routine traffic violations or similar offenses); or
(3) removal of the Participant for cause by the FHFA pursuant to 12 U.S.C.
4636a or by any successor agency to the FHFA pursuant to a similar statute.

	 	10.4	 	The designation of an employee as a Participant in the Plan does not
guarantee employment. Nothing in this Plan will confer on any employee the right to
be retained in the service of FHLBank Topeka nor limit the right of FHLBank Topeka to
terminate or otherwise deal with any employee.

	 	10.5	 	The Board has the right to revise, modify, or terminate the Plan in whole or
in part at any time or for any reason without the consent of any Participant.

	 	10.6	 	No benefit or interest available under the Plan will be subject in any manner
to anticipation or alienation and no Participant has any direct or indirect right to
sell, transfer, assign, pledge, attach, garnish or otherwise encumber any anticipated
Plan Award and any effort(s) to do so shall be void and unenforceable, and FHLBank
Topeka shall not be liable in any manner for or subject to the debts, contracts,
liabilities, engagements or torts of any person who might anticipate a Plan Award
under this Plan.

	 	10.7	 	This Plan shall at all times be entirely unfunded and no provision shall at
any time be made with respect to segregating assets of FHLBank Topeka for payment of
any Plan Award under this program.

	 	10.8	 	Except to the extent superseded by laws of the United States, the laws of the
State of Kansas will be controlling in all matters relating to the Plan without regard
to the choice of law principles therein. The Plan and all Award Agreements are
intended to comply, and will be construed by FHLBank Topeka in a manner 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 and a provision of Code Section 409A, the applicable
provision of Code Section 409A will control.

	 	10.9	 	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.

	 	10.10	 	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.

	 	10.11	 	The individual members of the Board and Compensation Committee will, in
accordance with FHLBank Topeka’s By-laws and other Board governance, be indemnified
and held harmless by FHLBank Topeka with respect to any alleged breach of
responsibilities performed or to be performed hereunder. In addition, notwithstanding
any other provision of the Plan, neither FHLBank Topeka nor any individual acting as
an employee or agent of FHLBank Topeka 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.

	 	10.12	 	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 Compensation 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 FHLBank Topeka and the Plan.

	 	10.13	 	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.

	 	10.14	 	Any action required of or permitted by FHLBank Topeka under the Plan will be
made by the Compensation Committee through delegated authority of the Board, or its
designated authorities or individual designee(s).

	 	10.15	 	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.

	 	10.16	 	A Participant, or any other person entitled to benefits under the Plan, must
furnish the Compensation 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 Compensation Committee, and on the
prompt execution of any document reasonably related to the administration of the Plan
requested by the Compensation Committee.

	 	10.17	 	The Plan will be binding upon and inure to the benefit of FHLBank Topeka 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
FHLBank Topeka, but nothing in the Plan will preclude FHLBank Topeka 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 FHLBank Topeka
hereunder. FHLBank Topeka 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 FHLBank Topeka, the term “FHLBank Topeka” will refer
to such other organization and the Plan will continue in full force and effect.

2

Appendix A

2012-2014 Performance Period

Performance Period

The Performance Period described in this Appendix shall be January 1, 2012 through December 31,
2014.

Eligibility

The following individuals are eligible to participate in the 2012-2014 Performance Period.

	 	 	 	 	 
	 	 	Base Award Opportunity
	 	 	Percentage
	Level I:

	 	

	Andrew J. Jetter, President & CEO

	 	 	40	%
	Level II:

	 	 	32.5	%
	David S. Fisher, SEVP & Chief Operating Officer

	 	

	Level III:

	 	 	25	%
	Mark E. Yardley, EVP & Chief Risk Officer

	 	

	Patrick C. Doran, SVP & General Counsel

	 	

	Sonia Betsworth, SVP& Director of Credit

	 	

	Dan Hess, SVP & Director of Member Products

	 	

	Wil Osborn, SVP & Chief Financial Officer

	 	

	Denise Cauthon, SVP & Chief Accounting Officer

	 	

	Terry Wise, FVP & Director of Strategic Planning and Development

	 	

3

Appendix A

Performance Measures

In calculating Base Award amounts, performance shall be measured by evaluating the following:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Minimum	 	Threshold	 	Target	 	Maximum
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	2/12 or 1/12 vs
	Total Return(1)
	 	>8/12 vs FHLBanks	 	8/12 vs FHLBanks	 	5/12 vs FHLBanks	 	FHLBanks
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable Salary
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Performance Measure Percentage
	 	 	0	%	 	 	75	%	 	 	100	%	 	 	125	%
	Weighting
	 	 	0.375	 	 	 	0.375	 	 	 	0.375	 	 	 	0.375	 
	Dollar Value (Salary x
Performance Measure Percentage x
Weight)
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	2/12 or 1/12
	Expense Growth(2)
	 	>9/12 vs FHLBanks	 	9/12 vs FHLBanks	 	6/12 vs FHLBanks	 	vs FHLBanks
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable Salary
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Performance Measure Percentage
	 	 	0	%	 	 	75	%	 	 	100	%	 	 	125	%
	Weighting
	 	 	0.25	 	 	 	0.25	 	 	 	0.25	 	 	 	0.25	 
	Dollar Value (Salary x
Performance Measure Percentage x
Weight)
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Market Value of Equity (MVE) /
Total Regulatory Capital Stock
	 	 	 	 	 	 	 	 	 	 	 	 	 	2/12 or 1/12
	(TRCS)(3)
	 	>9/12 vs FHLBanks	 	9/12 vs FHLBanks	 	6/12 vs FHLBanks	 	vs FHLBanks
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable Salary
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Performance Measure Percentage
	 	 	0	%	 	 	75	%	 	 	100	%	 	 	125	%
	Weighting
	 	 	0.375	 	 	 	0.375	 	 	 	0.375	 	 	 	0.375	 
	Dollar Value (Salary x
Performance Measure Percentage x
Weight)
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Total Value (Dollar Value for
Total Return + Dollar Value for
Expense Growth + Dollar Value
for MVE/TRCS)
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Base Award Opportunity Percentage
Level I (40%)
Level II (32.5%)
Level III (25%)
	 	 	%	 	 	 	%	 	 	 	%	 	 	 	%	 
	Total Base Award (Total Value x
Base Award Opportunity
Percentage)
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 

4

Footnotes:

1) Total Return. Total Return equals the Total Dividends, plus the Change in Retained
Earnings, divided by the Average Capital. For FHLBank Topeka: Total Dividends is defined as the sum
of the actual dividends paid on required Class A Common Stock and all Class B Common Stock during
the three-year Performance Period; Change in Retained Earnings is defined as the change in retained
earnings from 12/31/11 to 12/31/14; and Average Capital is defined as the average daily ending
balance of required Class A Common Stock and all Class B Common Stock for dates starting with
01/01/12 and ending 12/31/14. For the other FHLBanks, unless determined otherwise by the
Compensation Committee: Total Dividends is defined as all dividends paid on all capital stock
during the three-year period; Change in Retained Earnings is defined as the change in retained
earnings from 12/31/11 to 12/31/14; and Average Capital is defined as the average daily ending
balance of all capital stock outstanding for dates starting with 01/01/12 and ending 12/31/14. For
performance comparison purposes, FHLBank Topeka will be ranked against the other FHLBanks, with the
highest total return being the best performance, and ranking 1st out of the 12 FHLBanks.

2) Expense Growth. Expense growth is the dollar amount of the change in operating expenses
(including salaries and benefits, costs of quarters and other operating expenses) at FHLBank Topeka
from calendar year 2011 to calendar year 2014. For performance comparison purposes, FHLBank Topeka
will be ranked against the other FHLBanks, with the lowest increase (or greatest decrease) being
the best performance, and a 1st out of the 12 FHLBanks being the highest ranking.

3) MVE/TRCS. Using amounts reported on the Trendbook Analysis from the FHFA Call Report
System (CRS), MVE/TRCS is calculated by dividing base case MVE by TRCS (TRCS calculated as Total
Regulatory Capital minus Retained Earnings) calculated at the end of the Performance Period. For
performance comparison purposes, FHLBank Topeka will be ranked against the other FHLBanks, with the
highest MVE/TRCS being the best performance, and ranking 1st out of the 12 FHLBanks.

5

Appendix A

Final Award Calculation:

The value of the Final Award at the end of the Performance Period shall be determined as follows:

	 	1.	 	After the Performance Period ends, determine actual FHLBank Topeka performance under
the Performance Measure criteria (i.e., Minimum, Threshold, Target or Maximum) set forth
above.

	 	2.	 	Multiply the performance measure percentage achieved in step 1 for each performance
measure by its respective weighting.

	 	3.	 	Multiply the product from step 2 by the Participant’s Base Salary to equal initial
Dollar Value of award for each performance measure.

	 	4.	 	Add the respective Dollar Value for each performance measure to determine Total Value
amount.

	 	5.	 	Determine the applicable Base Award Opportunity Percentage, based on applicable
eligibility Level (i.e., Level I, II or III, but not Level IV).

	 	6.	 	Multiply Total Value by Base Award Opportunity Percentage to determine Base Award
amount.

	 	7.	 	Add President’s Award, if applicable, to determine Final Award amount.

	 	8.	 	Ensure that all conditions for receipt of a Final Award described in the Plan have
been met in accordance with Section 6.4.

6

Appendix B

Participation Agreement

	 	 	 
	Participant:

	 	Social Security No.:
	Address:

	 	Date of Birth:

1. Agreement to Participate. The Participant (identified above and sometimes hereinafter
referred to as “I”) hereby agrees to become a Participant in the Federal Home Loan Bank of Topeka
Long-Term Incentive Plan (the “Plan”).

2. Acknowledgements: I hereby acknowledge the following: (1) I have received and reviewed
a copy of the Plan; (2) all benefits under this Plan remain subject to the claims of the general
creditors of Federal Home Loan Bank of Topeka (“FHLBank Topeka”), and in the event of the
bankruptcy, insolvency, or any similar situation involving FHLBank Topeka, I acknowledge that I
would have the rights of a general unsecured creditor with respect to the benefits under this Plan;
(3) that any right to benefits hereunder are subject to the specific terms and conditions of the
Plan, including any specific Performance Measures set forth therein; (4) no benefits will be paid
under this Plan if I am terminated for “Cause” as set forth in the Plan; (5) no benefits will be
paid under this Plan or other remedies may be available to FHLBank Topeka if I violate or fail to
fulfill the non-disclosure or non-solicitation provisions set forth under Section 3.5 in this Plan,
if applicable; (6) the benefits of this Plan may be subject to FICA taxes before such amounts are
actually paid to me; and (7) all amounts received under this Plan shall be taxable to me as
ordinary income.

IN WITNESS WHEREOF, I have executed this Participation Agreement as of the date set forth
below.

	 	 	 
	Date:

	 	

	
 
	 	(Signature of Participant)

Received and acknowledged this        day of       , 20        .

	 
	FEDERAL HOME LOAN BANK OF TOPEKA

	By:

	Print Name:

	Print Title:

	“FHLBank Topeka”

7

BENEFICIARY DESIGNATION

CAREFULLY READ THE INSTRUCTIONS FOUND AT THE END

OF THIS FORM BEFORE PROCEEDING.

	 	 	 
	Participant:

	 	Social Security No.:
	Address:

	 	Date of Birth:

The Participant hereby designates the following individual(s) or entity(ies) as his or her
beneficiary(ies) pursuant to the terms of the Long-Term Incentive Plan of Federal Home Loan Bank of
Topeka (“FHLBank Topeka”) [Insert Name, Social Security Number, Relationship, Date of Birth and
Address of Individuals and/or fully identify any trust beneficiary by the Name of the Trust, Date
of Execution of the Trust, the Trustee’s Name, the address of the trust, and the employer
identification number of the trust]:

	 	 	 
	Primary Beneficiary(ies)

	 	SSN/Tax I.D.
	Contingent Beneficiary(ies)

	 	

The Participant hereby reserves the right to change this Beneficiary Designation, and any such
change shall be effective when the Participant has executed a new or amended Beneficiary
Designation form, and the receipt of such form has been acknowledged by FHLBank Topeka, all in such
manner as specified by FHLBank Topeka from time to time, or on a future date specified by any such
new or amended Beneficiary Designation form.

IN WITNESS WHEREAS, the Participant has executed this Beneficiary Designation on the date
designated below.

	 	 	 
	Date:

	 	

	
 
	 	Signature of Participant
	Received:

	 	

FEDERAL HOME LOAN BANK OF TOPEKA

Date:

By:

Print Name:

Print Title: 

8

INSTRUCTIONS FOR COMPLETION OF

BENEFICIARY DESIGNATION FORM

As a participant in the Federal Home Loan Bank of Topeka Long-Term Incentive Plan (the
“Plan”), you may be entitled to have certain benefits paid to a designated beneficiary under the
Plan in the event of your death. We recommend that you consult your attorney concerning the
completion of this form to assure that the desired federal tax consequences are achieved.

The originally-signed copy of this form must be mailed or delivered to FHLBank Topeka at the
following address: Federal Home Loan Bank of Topeka, One Security Benefit Pl., Suite 100, P.O.
Box 176, Topeka KS 66601-0176, and to the attention of Mr. Kurt Burger. You should also make and
keep one copy of the form, and it should be kept with your other important documents.

If no Primary Beneficiary is alive when the payment becomes due, the benefits will be paid in
equal shares to those of the Contingent Beneficiaries who are alive when the payment becomes due.

If you fail to designate a beneficiary, or if no designated beneficiaries are alive when the
payment becomes due, or if insufficient information is available to reasonably determine your
intent, the death benefits under the Plan will be paid to your estate.

THIS BENEFICIARY DESIGNATION DOES NOT ALTER OR MODIFY THE PROVISIONS OF THE PLAN. IN THE EVENT
THAT THIS BENEFICIARY DESIGNATION FORM INADVERTENTLY CONFLICTS WITH THE PROVISIONS OF THE PLAN, THE
PROVISIONS OF THE PLAN SHALL CONTROL.

9ex10-1.htm

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

(Carrie Majeski, CEO)

This Employment Agreement (“Agreement”) is entered into as of December 20, 2011 and effective as of the 1st day of December, 2011 by and between Art’s-Way Manufacturing Co., Inc. (the “Company”), and Carrie Majeski (“Employee”).

RECITALS

A.           Employee is currently employed by the Company as its President, Chief Executive Officer, and Principal Financial Officer.  Employee is currently employed at-will and is not a party to an employment agreement.

B.           Employee desires to continue to be employed by the Company as its President, Chief Executive Officer, and Principal Financial Officer and the Company desires to continue to employ Employee in such positions under the terms and conditions of this Agreement.

C.           Employee recognizes, agrees and understands that execution of this Agreement is an express condition of continued employment with the Company as its President, Chief Executive Officer, and Principal Financial Officer under the terms of this Agreement.

NOW, THEREFORE, in consideration of the Company employing Employee as its President, Chief Executive Officer, and Principal Financial Officer under this Agreement and/or other benefits now or hereafter paid or made available to Employee by the Company, Employee and the Company agree as follows:

ARTICLE 1

EMPLOYMENT AND TERMS OF AGREEMENT

1.1           Employment.  The Company hereby employs Employee and Employee hereby accepts employment as President, Chief Executive Officer, and Principal Financial Officer of the Company.  This is a full-time position.

1.2           Term.  This Agreement is effective, and Employee’s employment hereunder shall commence, as of the effective date set forth above.  Employee’s employment with the Company shall be “at will,” meaning either Employee or the Company may terminate this Agreement and the employment relationship at any time, with or without cause, and with or without advance notice.  The
circumstances under which this Agreement may be terminated are set forth in more detail in Section 3.1 of this Agreement.

1.3           Duties.

	
  

	
(a)

	
Employee agrees, during her employment with the Company, to devote her full business and professional time and best efforts to the business of the Company, including, without limitation, the performance of those duties and responsibilities reasonably and customarily associated with her position; provided, however, that Employee’s duties and responsibilities shall be subject to determination by the Board of Directors of the Company.

 

  

Page 1

  

 

	
  

	
(b)

	
Employee shall report to, and at all times shall be subject to the direction of the Company’s Board of Directors or their designee.

	
  

	
(c)

	
Employee shall, at all times during her employment with the Company, comply with the Company’s reasonable standards, regulations and policies as determined or set forth by the Company from time to time.

1.4           Outside Activities.  During her employment with the Company, Employee shall not engage in any other business activity that would conflict or interfere with her ability to perform her duties under this Agreement.

ARTICLE 2

COMPENSATION AND BENEFITS

2.1           Base Salary.  Employee’s initial annual base salary under this Agreement shall be $145,000.00, subject to required and authorized deductions and withholdings. This base salary is subject to upward or downward adjustment by the recommendation of the Compensation Committee and the approval of the Board, and shall be reviewed by the Employee, the Compensation Committee and the Board of the Company at least annually. The
Company shall pay the base salary to Employee in accordance with its standard payroll practices.  Employee’s base salary may be subject to review and adjustment by the Company from time to time.

2.2           Incentive Pay.  Employee shall be eligible to receive incentive pay, including cash bonuses and equity awards under an equity incentive plan of the Company, from time to time in the exclusive discretion of the Company.  The form, amount, and other terms of any such incentive pay shall be determined by the Board of Directors (or a committee authorized by the Board).

2.3           Signing Bonus.  As consideration for Employee’s acceptance of the terms and conditions of this Agreement, including the covenants in Article 5, the Company shall grant to Employee upon execution of this Agreement a restricted stock grant for 2,000 shares of Company common stock, issued under the Company’s 2011 Equity Incentive Plan as of the close of the market on the date of full execution of this Agreement; provided, however, said restricted stock shall be held by
the Company subject to a risk of forfeiture. The risk of forfeiture shall lapse immediately as to 400 shares upon execution hereof and shall lapse as to 800 shares on the first and second anniversaries of the issue date provided the Employee is still employed by the Company on such dates, The Company shall hold the shares until so issued.  A separate equity award agreement, entered into by Employee and the Company, shall govern the terms of the grant.

  

Page 2

  

 

2.4           Other Benefit Plans.  Employee shall be eligible to participate in any and all other employee benefit plans, health plans, or arrangements, if any, made available from time to time by the Company to its employees to the extent Employee meets the eligibility requirements to receive such benefits.  Nothing in this Agreement is intended to or shall in any way restrict the Company’s right to, or not to, offer,
amend, modify or terminate any of its benefits or benefit plans during the terms of Employee’s employment.

2.5           Vacation & Sick Days.  Employee shall be eligible to accrue vacation in an amount to be determined by the Company in accordance with and subject to the Company’s employee policies as they may exist from time to time.  Currently the Employee is eligible to accrue vacation for up to three (3) weeks (21 work days) per year, accruing equally during the year as of each pay period.  In accordance with
current policies, Employee may accrue and carry forward up to 160 hours of vacation time, which upon termination from the Company would be paid for pro rata for the then current annual salary.  In addition, in accordance with current policies, the Employee may take sick leave in accordance with current Company policy.  Company reserves the right to modify and alter its vacation and sick day policies, and Employee’s benefits thereunder, in its sole discretion, provided, however, the Employee shall have the right to use then existing accrued and carried vacation time up to the current maximum of 160 hours.

2.6           Expense Reimbursement.  During the term of this Agreement, Employee shall be entitled to reimbursement of all ordinary and necessary expenses incurred by Employee for the Company, in accordance with the Company’s policies and practices with regard to documentation and payment of such expenses. Employee shall be provided with one cell phone, which may be used incidentally for personal use, but which phone number, phone
and related data shall be solely owned by the Company.   The type of phone and phone plan shall be determined in the sole discretion of the Company.

ARTICLE 3

TERMINATION OF EMPLOYMENT

3.1           Termination.  Employee’s employment with the Company may be terminated at any time upon occurrence of any of the following:

(a)           By mutual written agreement of the Company and Employee.

(b)           Immediately upon the death of Employee.

(c)           Immediately by the Company for Cause, which shall mean the following:

	
  

	
(i)

	
Failure of Employee to (A) faithfully, diligently or competently perform the material duties, requirements and responsibilities of her employment as contemplated by this Agreement or as reasonably assigned by the Company’s Board of Directors; or (B)  Employee’s material breach of any provision of this Agreement or of the policies, regulations and directives of the Company as in effect from time to time;

 

  

Page 3

  

 

	
  

	
(ii)

	
Any negligent or intentional act or omission on the part of Employee that is materially injurious (or would be reasonably likely to be materially injurious) to the reputation or business of the Company, including, but not limited to, professional or personal conduct of Employee which is dishonest, disloyal, or inconsistent with federal and state laws respecting harassment of, or discrimination against, one or more of the Company’s employees; or

	
  

	
(iii)

	
Commission by or conviction of Employee of, or a guilty or nolo contendere plea by Employee with respect to, any crime punishable as a felony.

	
(d)

	
Upon written notice by Employee for any reason, effective immediately, unless the Company, in its sole discretion, elects that Employee continue to provide services hereunder for up to 12 weeks from the date of such written notice, in which case the effective date shall be the date through which Employee provides services hereunder. Employee will use best efforts to provide 12 weeks written notice of Employee’s intent to terminate employment under this subsection 3.1(d) and agrees to provide services for up to 12 weeks from the date of such notice if requested by the Company.

	
(e)

	
Upon written notice by the Company for any reason, effective upon the date specified therein, which may, at the Company’s sole discretion, be a date that is up to twelve (12) weeks from the date of such written notice.

3.2           Compensation Upon Termination of Employee’s Employment.

	
(a)

	
In the event that Employee’s employment with the Company terminates, the following provisions shall govern as applicable:

	
  

	
(i)

	
If termination occurs pursuant to subsection 3.1(a), the agreement of the parties shall control.

	
  

	
(ii)

	
If termination occurs pursuant to subsection 3.1(b), all benefits and compensation shall terminate as of the date of Employee’s death.

	
  

	
(iii)

	
If termination occurs pursuant to subsection 3.1(c), all benefits and compensation shall terminate as of the termination date.

	
  

	
(iv)

	
If termination occurs pursuant to subsection 3.1(d), all benefits and compensation shall terminate as of the date the Employee ceases to provide services.

 

  

Page 4

  

 

	
  

	
(v)

	
If termination occurs pursuant to subsection 3.1(e), all benefits and compensation shall terminate as of the later of: (A) the date the Employee ceases to provide services; or (B) the date that is 12 weeks from the date of the written notice provided by the Company, provided that any payments under this subsection 3.2(a)(v)(B) shall be contingent upon Employee’s compliance through this period with her obligations under Section 3.3 and Articles IV, V and VI of this Agreement and Employee’s execution, delivery, compliance with, and non-rescission of a full and final release of any and all claims in favor of the Company and any related entities, and all such entities’ officers, directors,
shareholders, and employees, which release shall also affirm Employee’s compliance with her obligations under Sections 3.3 and Articles IV, V and VI of this Agreement. If payments are made to Employee under this subsection 3.2(a)(v)(B), the first such payment shall be made on the next regularly scheduled payroll date, and provided that all payments due under 3.2(a)(v)(B) shall be made within 13 weeks of the date of the written notice provided by the Company.

	
(b)

	
In addition to the consideration set forth in Section 2.3 of this Agreement, the parties acknowledge that the Company's agreement to provide Separation Payments in accordance with the terms of this paragraph constitutes consideration for Employee's acceptance of the terms and conditions of this Agreement, including the covenants in Article 5.

	
(c)

	
Notwithstanding anything in this Agreement to the contrary, if any of the payments described in this subsection 3.2 are subject to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”) and the Company determines that Employee is  a “specified employee” as defined in Code Section 409A as of the date of Employee’s termination of employment, such payments shall not be paid or commence earlier than the first day of the seventh month following the date of Employee’s termination of employment.

3.3           Return of Property.  Immediately upon termination (or at such earlier time as requested by the Company or its designees), Employee shall deliver to the Company all of its property, including but not limited to all work in progress, research data, equipment, originals and copies of documents and software, client information and lists, financial information, and all other material in her possession or control that belongs
to the Company or its clients or contains Confidential Information, as defined in Article 4.

ARTICLE 4

PROTECTION OF CONFIDENTIAL INFORMATION

4.1           Confidential Information.  “Confidential Information” shall mean any information not generally known or readily ascertainable by the Company’s competitors or the general public.  Confidential Information includes, but is not limited to, use of or customization to computer, software, and/or internet applications; data of any type that is created by Employee, which is provided, or to which access is
provided, in the course of Employee’s employment by the Company; data or conclusions or opinions formed by Employee in the course of employment; manuals; trade secrets; methods, procedures, or techniques pertaining to the business of the Company; specifications; systems; price lists; marketing plans; sales or service analyses; financial information; client names, contact information, requirements, purchase history or other information; supplier names or other information; employee names or other information; research and development data; diagrams; drawings; videotapes, audiotapes, or computerized media used as training regimens; and notes, memoranda, notebooks, and records or documents that are created, handled, seen, or used by Employee in the course of employment.  Confidential Information does not include information that Employee can demonstrate by reliable,
corroborated documentary evidence (1) is generally available to the public or (2) became generally available to the public through no act or failure to act by Employee.

 

  

Page 5

  

4.2           Confidentiality Restrictions.  Employee agrees at all times to use all reasonable means to keep Confidential Information secret and confidential.  Employee shall not at any time (including during and after termination of her employment with the Company) use, disclose, duplicate, record, or in any other manner reproduce in whole or in part any Confidential Information, except as necessary for the performance of
Employee’s duties on behalf of the Company.   Employee shall not at any time provide services to any person or entity if providing such services would require or likely result in her using or disclosing Confidential Information.  Upon termination of Employee’s employment with the Company, or upon Company’s earlier request, Employee shall immediately return to the Company all originals and copies of Confidential Information and other Company materials and property in Employee’s possession.  Employee acknowledges that use or disclosure of any of the Company’s confidential or proprietary information in violation of this Agreement would have a materially detrimental effect upon the Company, the monetary loss from which would be difficult, if not impossible, to measure.

ARTICLE 5

COVENANT NOT TO COMPETE

5.1           Noncompetition.  During Employee’s employment with the Company and for a period of one year following the termination of her employment for any reason, whether voluntary or involuntary, Employee agrees that she will not, anywhere in the United States (which Employee acknowledges to be Employer’s trade area), directly or indirectly, on behalf of herself or another individual or entity, own, manage, operate, control, be employed by, consult for, participate in, or
provide services to any business, entity or person that is in competition with Employer or sells or provides products or services that are the same as or similar to, or compete with, products or services offered by Employer at the time.

5.2           Nonsolicitation of Employees.  During Employee’s employment with the Company and for a period of one year following the termination of her employment for any reason, whether voluntary or involuntary, Employee agrees that she will not, directly or indirectly, on behalf of herself or another individual or entity, solicit or hire for employment or any other arrangement for compensation to perform services, any employee of
the Company.  For purposes of this Section 5.2, an “employee” means any individual who is then employed by the Company or has been employed by the Company at any time within the six-month period prior to Employee’s separation from employment.

 

  

Page 6

  

5.3           Nonsolicitation of Clients.  During Employee’s employment with the Company and for a period of one year following the termination of her employment for any reason, whether voluntary or involuntary, Employee agrees that she will not, directly or indirectly, on behalf of herself or another individual or entity, solicit or provide products or services that compete with the Company to any of the Company’s
clients.  For purposes of this Section 5.3, a “client” means any individual or entity that is then a client of the Company or has been a client of the Company at any time within the twelve-month period prior to Employee’s separation from employment.

5.4           Understandings.  Employee hereby acknowledges and agrees that the Company informed her that the restrictions contained in this Article 5 would be required as part of the terms and conditions of her employment under this Agreement; that she signed and returned this Agreement to the Company prior to commencing employment under the terms of this Agreement; that she has carefully considered the restrictions contained in this
Agreement and that they are reasonable; that the restrictions in this Agreement will not unduly restrict her in securing other employment in the event of a termination from the Company; and that the Signing Bonus in Section 2.3 amounts to valuable consideration, to which Employee would not otherwise be entitled, to support enforcement of the restrictions contained in this Article 5.

ARTICLE 6

INVENTIONS

6.1           Invention.  For purposes of this Agreement, the term “Invention” means ideas, discoveries, and improvements, whether or not shown or described in writing or reduced to practice, and whether patentable or not, relating to any of the Company’s present or future sales, research, or other business activities, or reasonably foreseeable business interests of the Company.

6.2           Disclosure.  Employee shall promptly and fully disclose to the Company, and will hold in trust for the Company’s sole right and benefit, any Invention which Employee, during the period of her employment, makes, conceives, or reduces to practice, or causes to be made, conceived, or reduced to practice, either alone or in conjunction with others, that:

(a)           Relates to any subject matter pertaining to Employee’s employment;

 

(b)           Relates to or is directly or indirectly connected with the business, products, projects, or Confidential Information of the Company; or

 

(c)           Involves the use of any time, material, or facility of the Company.

6.3           Assignment of Ownership.  Employee hereby assigns to the Company all of the Employee’s right, title, and interest in and to all such Inventions described in Section 6.2 and, upon request by the Company, Employee shall execute, verify, and deliver to the Company such documents, including, without limitation, assignments and applications for Letters Patent, and shall perform such other acts, including, without limitation, appearing as a witness in any action brought in
connection with this Agreement that is necessary to enable the Company to obtain the sole right, title, and benefit to all such Inventions.

 

  

Page 7

  

6.4           Excluded Inventions.  It is further agreed, and Employee is hereby so notified, that Section 6.3 does not apply to any invention for which no equipment, supplies, facility, or Confidential Information of the Company was used; which was developed entirely on Employee’s own time; and (a) which does not relate either to the Company’s businesses or actual or demonstrably anticipated research or development, or (b) which does not result from any work performed by Employee
for the Company.

6.5           Prior Inventions.  Attached to this Agreement and initialed by both parties is a list of all of the Inventions, if any, in which Employee possesses any right, title, or interest prior to commencement of her employment with the Company, which are not subject to the terms of this Agreement.

ARTICLE 7

MISCELLANEOUS PROVISIONS

7.1           Survival and Remedies.  The parties agree that the restrictions contained in Articles 4-6 shall survive the termination of this Agreement and Employee’s employment with the Company and shall apply no matter how Employee’s employment terminates and regardless of whether her termination is voluntary or involuntary.  The parties further acknowledge and agree that, if Employee breaches or threatens to
breach the terms of Articles 4-6, the Company shall be entitled as a matter of right to injunctive relief, in addition to any other remedies available at law or equity.   In the event any litigation, mediation or arbitration or other process that is instituted by any party in order to interpret or enforce any term or condition of this Agreement, including the payment of money, injunctive relief, and the matter is addressed or the money is collected, and the services of an attorney or attorneys are utilized for the same, the prevailing party will be entitled to recover from the losing party all attorney fees and costs, including court costs and fees and costs incurred through any appeal, collection or enforcement, incurred by the prevailing party.

 

7.2           Notification.  Employee authorizes the Company to notify third parties (including, but not limited to, Employee’s actual or potential future employers and the Company’s clients and employees) of the provisions of Articles 4-6, those provisions necessary for the enforcement of such articles, and Employee’s obligations hereunder.

7.3           Governing Law and Jurisdiction.  This Agreement shall be governed by and construed in accordance with the laws of the State of Iowa, without reference to its conflict of law provisions. Each of the parties agrees that any dispute between the parties will be resolved only in the courts of the State of Iowa or the United States District Court for the Northern District of Iowa and the appellate courts having jurisdiction
of appeals in such courts.

7.4           Entire Agreement.  This Agreement constitutes the entire understanding of the Company and Employee and supersedes all prior agreements, understandings, and negotiations between the parties, whether oral or written.  No modification, supplement, or amendment of any provision hereof shall be valid unless made in writing and signed by the parties.

 

  

Page 8

  

7.5           Successors and Assigns.  This Agreement may be assigned by Company to its successors and assigns.  The services to be performed by Employee are personal and are not assignable.

7.6           No Conflicting Obligations.  Employee represents and warrants to the Company that she is not under, or bound to be under in the future, any obligation to any person or entity that is or would be inconsistent or in conflict with this Agreement or would prevent, limit, or impair in any way the performance by her of her obligations hereunder, including but not limited to any duties owed to any former employers not to
compete or use or disclose confidential information.  Employee represents and agrees that she will not disclosure to Company or use on behalf of Company any confidential information belonging to a third party.

7.7           Waivers.  The failure of a party to require the performance or satisfaction of any term or obligation of this Agreement, or the waiver by a party of any breach of this Agreement, shall not prevent subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

7.8           Severability.  In the event that any provision hereof is held invalid or unenforceable by a court of competent jurisdiction, the Company and Employee agree that that part should be modified by the court to make it enforceable to the maximum extent possible.  If the part cannot be modified, then that part may be severed and the other parts of this Agreement shall remain enforceable.

7.9           Counterparts.  More than one counterpart of this Agreement may be executed by the parties hereto, and each fully executed counterpart shall be deemed an original.

[Signature Page Follows]

  

Page 9

  

With the intention of being bound hereby, the parties have executed this Agreement as of the date set forth above.

 

	 	
EMPLOYEE

 

	 
	 	 	 	 
	 	/s/ Carrie Majeski	 
	 	Carrie Majeski	 
	 	 	 	 
	 	

 

ART’S-WAY MANUFACTURING CO., INC.

 

 

	 
	 	By:	/s/ J. Ward McConnell, Jr.	 
	 	 	J. Ward McConnell, Jr.	 
	 	Its:	Chairman of the Board of Directors	 

 

 

 

 

[Signature Page to C. Majeski Employment Agreement]

 

 

Page 10

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