Document:

Exhibit

EXECUTION COPY

Exhibit 10.7

FEDERAL HOME LOAN BANK OF INDIANAPOLIS
2016 SUPPLEMENTAL EXECUTIVE THRIFT PLAN

(Effective as of January 1, 2016)

Krieg DeVault LLP
One Indiana Square, Suite 2800
Indianapolis, IN 46204-2079
www.kriegdevault.com

ADOPTION OF
FEDERAL HOME LOAN BANK OF INDIANAPOLIS 
2016 SUPPLEMENTAL EXECUTIVE THRIFT PLAN
Pursuant to resolutions adopted by the Board of Directors of the Federal Home Loan Bank of Indianapolis (the “Bank”), the undersigned officers of the Bank hereby adopt the Federal Home Loan Bank of Indianapolis 2016 Supplemental Executive Thrift Plan, effective as of January 1, 2016, on behalf of the Bank, in the form attached hereto.
Dated this ____ day of December, 2015.

FEDERAL HOME LOAN BANK OF INDIANAPOLIS

By:_________________________________
      James D. MacPhee, Chairman

By:_________________________________
      Michael J. Hannigan, Vice Chairman
ATTEST:

By:________________________________
      Kania D. Warbington, Corporate Secretary

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FEDERAL HOME LOAN BANK OF INDIANAPOLIS
2016 SUPPLEMENTAL EXECUTIVE THRIFT PLAN
TABLE OF CONTENTS

        
	
			
	 
	 
	PAGE

	Article I INTRODUCTION............................................................................................................................................
	1

	Section 1.1
	Purpose.....................................................................................................................................
	1

	Section 1.2
	Effective Date; Plan Year..........................................................................................................
	1

	Section 1.3
	Administration..........................................................................................................................
	1

	Section 1.4
	Supplements.............................................................................................................................
	1

	Section 1.5
	Definitions................................................................................................................................
	1

	Article II ELIGIBILITY AND PARTICIPATION........................................................................................................
	2

	Section 2.1
	Eligibility..................................................................................................................................
	2

	Section 2.2
	Participation.............................................................................................................................
	2

	Article III CONTRIBUTIONS AND ALLOCATIONS................................................................................................
	2

	Section 3.1
	Participant Salary Deferral Contributions................................................................................
	2

	Section 3.2
	Participant Bonus Contributions..............................................................................................
	3

	Section 3.3
	Deferral Elections.....................................................................................................................
	3

	Section 3.4
	Excess Matching Contributions...............................................................................................
	4

	Section 3.5
	Supplemental Contributions.....................................................................................................
	5

	Section 3.6
	Plan Account............................................................................................................................
	5

	Section 3.7
	Investment Credits....................................................................................................................
	5

	Section 3.8
	Account Allocations.................................................................................................................
	5

	Section 3.9
	Military Service........................................................................................................................
	6

	Article IV BENEFIT PAYMENTS..................................................................................................................................
	6

	Section 4.1
	Time of Payment of Benefits....................................................................................................
	6

	Section 4.2
	Method of Payment..................................................................................................................
	7

	Section 4.3
	Method of Payment Elections..................................................................................................
	7

	Section 4.4
	Vesting......................................................................................................................................
	8

	Section 4.5
	Disability and Death.................................................................................................................
	8

	Section 4.6
	Unforeseeable Emergency........................................................................................................
	8

	Section 4.7
	Acceleration of Time of Payment.............................................................................................
	9

	Article V PLAN ADMINISTRATION............................................................................................................................
	9

	Section 5.1
	Appointment of the Committee................................................................................................
	9

	Section 5.2
	Powers and Responsibilities of the Committee........................................................................
	9

	Section 5.3
	Liabilities..................................................................................................................................
	10

	Section 5.4
	Income and Employment Tax Withholding..............................................................................
	10

ii

	
			
	Section 5.5
	Disclosure to Participant Upon Separation from Service........................................................
	10

	Section 5.6
	Plan Expenses..........................................................................................................................
	10

	Article VI BENEFIT CLAIMS.......................................................................................................................................
	10

	Article VII FUNDING AND TRANSFERS...................................................................................................................
	10

	Section 7.1
	Unfunded Status.......................................................................................................................
	10

	Section 7.2
	Investments..............................................................................................................................
	10

	Article VIII AMENDMENT AND TERMINATION OF THE PLAN........................................................................
	11

	Section 8.1
	Amendment of the Plan...........................................................................................................
	11

	Section 8.2
	Termination of the Plan............................................................................................................
	11

	Article IX MISCELLANEOUS......................................................................................................................................
	11

	Section 9.1
	Governing Law.........................................................................................................................
	11

	Section 9.2
	Headings and Gender...............................................................................................................
	11

	Section 9.3
	Spendthrift Clause....................................................................................................................
	11

	Section 9.4
	Counterparts.............................................................................................................................
	11

	Section 9.5
	No Enlargement of Employee Rights......................................................................................
	11

	Section 9.6
	Limitations on Liability............................................................................................................
	11

	Section 9.7
	Incapacity of Participant or Beneficiary..................................................................................
	11

	Section 9.8
	Evidence...................................................................................................................................
	12

	Section 9.9
	Action by Bank........................................................................................................................
	12

	Section 9.10
	Severability..............................................................................................................................
	12

	Section 9.11
	Information to be Furnished by a Participant..........................................................................
	12

	Section 9.12
	Attorneys' Fees.........................................................................................................................
	12

	Section 9.13
	Binding on Successors.............................................................................................................
	12

	Supplement A CLAIMS AND REVIEW PROCEDURES...........................................................................................
	A-1

	Section A-1
	Procedures Governing the Filing of Benefit Claims................................................................
	A-1

	Section A-2
	Notification of Benefit Determinations...................................................................................
	A-1

	Section A-3
	Manner And Content of Notification of Benefit Determinations............................................
	A-1

	Section A-4
	Appeal of Adverse Benefit Determinations.............................................................................
	A-2

	Section A-5
	Benefit Determination on Review............................................................................................
	A-2

	Section A-6
	Notification of Benefit Determination on Review...................................................................
	A-2

	Section A-7
	Manner and Content of Notification of Benefit Determination on Review.............................
	A-3

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ARTICLE I

INTRODUCTION

Section 1.1    Purpose.  The purpose of the Federal Home Loan Bank of Indianapolis 2016 Supplemental Executive Thrift Plan (the “Plan”) is to permit certain management or highly compensated employees of the Federal Home Loan Bank of Indianapolis (the “Bank”) to elect to defer compensation from the Bank.  It is the intention of the Bank that the Plan constitute a deferred compensation arrangement that complies with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).  Consequently, the Plan will be administered and its provisions interpreted consistently with that intention.

Section 1.2    Effective Date; Plan Year.  The “Effective Date” of the Plan is January 1, 2016.  The “Plan Year” is the 12-month period beginning on each January 1 and ending on the next following December 31.

Section 1.3    Administration.  The Plan will be administered by an administrative committee (“Committee”) appointed by the Bank’s Board of Directors (“Board”), which initially will be the Human Resources Committee of the Board.  The Committee, from time to time, may adopt any rules and procedures it deems necessary or desirable for the proper and efficient administration of the Plan that are consistent with the terms of the Plan.  Any notice or document required to be given or filed with the Committee will be properly given or filed if delivered to or mailed by registered mail, postage paid, to the Corporate Secretary of the Board of Directors, Federal Home Loan Bank of Indianapolis, 8250 Woodfield Crossing Blvd., Suite 400, Indianapolis, Indiana  46240.

Section 1.4    Supplements.  The provisions of the Plan may be modified by supplements to the Plan.  The terms and provisions of each supplement are a part of the Plan and supersede any other provisions of the Plan to the extent necessary to eliminate any inconsistencies between the supplement and any other Plan provisions.

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

	
		
	Term
	Plan Section

	 
	 

	Account...........................................................
	3.6

	Adverse Benefit Determination......................
	A-3

	Bank................................................................
	1.1

	Benefit Claim..................................................
	A-1

	Board...............................................................
	1.3

	Bonus..............................................................
	3.2

	Claimant..........................................................
	A-1

	Code................................................................
	1.1

	Committee.......................................................
	1.3

	Disabled..........................................................
	4.5(b)

	Effective Date.................................................
	1.2

1

	
		
	Excess Matching Contribution........................
	3.4(a)

	Investment Account........................................
	7.2

	Matching Contribution....................................
	3.4(a)

	Participant.......................................................
	2.1

	Participant Bonus Deferral Contribution........
	3.2

	Participant Deferral Contribution...................
	3.3

	Participant Salary Deferral Contribution........
	3.1

	Plan.................................................................
	1.1

	Plan Year.........................................................
	1.2

	Salary...............................................................
	3.1

	Separation from Service..................................
	4.1(c)

	Supplemental Contribution.............................
	3.5

	Termination of Employment...........................
	4.1(c)

	Thrift Plan.......................................................
	2.1

	Trust................................................................
	7.1

	Unforeseeable Emergency...............................
	3.3(e)

ARTICLE II

ELIGIBILITY AND PARTICIPATION

Section 2.1    Eligibility.  Any employee of the Bank who is a member of the Financial Institutions Thrift Plan as from time to time amended and adopted by the Bank (“Thrift Plan”), or who is not a member of the Thrift Plan because the employee has not yet met the Thrift Plan service requirement, is eligible to become a “Participant” in the Plan, provided the employee is designated as a Participant by the Board in writing.  Any employee of the Bank who is a member of the Thrift Plan or who is not a member of the Thrift Plan because the employee has not yet met the Thrift Plan service requirement, and who is an officer with a title of First Vice President or a higher officer level, is automatically eligible to become a Participant without the need for designation by the Board.

Section 2.2    Participation.  A designated employee or otherwise eligible employee will become a Participant as of the later of the Effective Date, the date specified by the Board, or the date the employee satisfies the automatic eligibility provisions described in Section 2.1.  A Participant may be removed as an active Participant by the Board effective as of any date, so that the Participant will not be entitled to make deferrals under Article III on or after that date. 

ARTICLE III

CONTRIBUTIONS AND ALLOCATIONS

Section 3.1    Participant Salary Deferral Contributions.  Subject to the terms and limitations of this Article, a Participant may elect, pursuant to Section 3.3, to have all or a portion of the Participant’s Salary payable in any Plan Year withheld by the Bank and credited as a “Participant Salary Deferral Contribution” under the Plan.  The term “contribution” is used for ease of reference; however, contributions are merely credits to each Participant’s Account, which is a bookkeeping account.  The term “Salary,” for purposes of the Plan, means a Participant’s base salary or wages and other cash compensation designated by the Committee as eligible compensation that is payable by the Bank, 

2

including amounts paid under the Sales Incentive Plan or an equivalent successor plan (excluding any annual bonus), plus the amount of any salary reduction contributions made on behalf of the Participant under the Plan or under the Thrift Plan or a plan that qualifies under Code Section 125 that would have been reported as taxable income on Form W-2 for that year but for the Participant’s deferral election and that is not deferred from a Participant’s Bonus.

Section 3.2    Participant Bonus Contributions.  Subject to the terms and limitations of this Article, a Participant may elect, pursuant to Section 3.3, to have all or a portion of the Participant’s Bonus payable for any Plan Year withheld by the Bank and credited as a “Participant Bonus Deferral Contribution” under this Plan.  The term “Bonus” for purposes of this Plan means the annual bonus payable to a Participant under the Bank’s Incentive Compensation Plan, Employee Incentive Plan or Internal Audit Incentive Plan or any equivalent successor plans that, at a minimum, have a performance period of at least 12 months.

Section 3.3    Deferral Elections.  “Participant Deferral Contributions” (including Participant Salary Deferral Contributions and Participant Bonus Deferral Contributions) will be withheld from a Participant’s compensation in accordance with the following terms and conditions.

		
	(a)
	Requirement for Deferral Elections.  As a condition to the Bank’s obligation to withhold and the Committee’s obligation to credit Participant Deferral Contributions for the benefit of a Participant pursuant to Section 3.1 or 3.2, the Participant must complete and file a deferral election form with the Committee (in a format prescribed by the Committee).  

		
	(b)
	Timing of Execution and Delivery of Elections.  

		
	(i)
	Salary.  To be effective to defer any portion of a Participant’s Salary, a deferral election form must be filed with the Committee with respect to that Salary on or prior to the last day of the calendar year preceding the Plan Year in which the services giving rise to the Salary are performed.  For example, to defer Salary payable with respect to services performed during the 2017 Plan Year, an election must be filed on or before December 31, 2016.  

		
	(ii)
	Bonuses.  Notwithstanding the preceding subsection, a deferral election form may be filed with the Committee with respect to a Bonus until a date that is no later than six months before the end of the performance period for which the Bonus is payable, if the Bonus is not readily ascertainable (i.e., both substantially certain to be paid and calculable) at the time of the election.  Such deferral election for a Bonus may be made only by a Participant who has performed services for the Bank continuously from the later of the beginning of the performance period, or the date the performance criteria for the Bonus are established through a date no earlier than the date on which the Participant makes the deferral election applicable to the Bonus.  A deferral election form for a Bonus attributable to the 2016 calendar year, payable in early 2017, may be filed on or before June 30, 2016, so long as the Bonus is not readily ascertainable by that date and so long as the Participant has performed services continuously from the later of January 1, 2016 or the date the performance criteria are established through the date the deferral election for the Bonus is filed with the Committee.  

		
	(c)
	Initial Eligibility.  In the case of the first Plan Year in which an individual becomes a Participant, the applicable deferral election form may be filed with the Committee at any time within 30 days of the date the individual becomes a Participant (rather than the date specified under 

3

subsection (b)).  This initial election will only apply to Salary or a Bonus paid for services performed after the filing of the deferral election form.  This special initial eligibility election rule will not apply if the Participant is or has been a participant in a deferred compensation arrangement required to be aggregated with this Plan under the rules of Section 409A.
		
	(d)
	Modification of Deferral Elections.  Subject to the provisions of subsection 3.3(e), once made for a Plan Year, a deferral election will remain in effect for that Plan Year, unless and until the election is revoked or a new election filed.  The revocation or new election must be filed in accordance with the requirements of subsection (b) above.  No election may be changed for Salary or a Bonus after the last day of the election period described in subsection (b).  For example, any election in place for 2017 Salary may not be changed after December 31, 2016, except as provided in subsections 3.3(e) and (f).

		
	(e)
	Unforeseeable Emergency.  The Committee, in its sole discretion, may cancel a Participant’s election to defer Salary or Bonus if the Committee determines the Participant has suffered an Unforeseeable Emergency.  The cancellation will apply to the period after the Committee’s determination.  The Participant must submit a signed statement of the facts causing the severe financial hardship and any other information required by the Committee, in its sole discretion.  An “Unforeseeable Emergency” means a severe financial hardship of the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary, or the Participant’s dependent (as defined in Code Section 152(a), without regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B)); loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); imminent foreclosure of or eviction from the Participant’s primary residence; the need to pay for medical expenses, including non-refundable deductibles, as well as for the costs of prescription drug medication; the need to pay for the funeral expenses of a spouse or a dependent (as defined in Code Section 152(a)) or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  An Unforeseeable Emergency will also be deemed to occur for purposes of cancellation of a Participant’s election to defer Salary or a Bonus if a Participant receives a hardship withdrawal from the Thrift Plan pursuant to Code Section 401(k) and Treasury Regulation §1.401(k)-1(d)(3).

		
	(f)
	Disability.  The Committee, in its sole discretion, may cancel a Participant’s election to defer Salary or a Bonus if the Committee determines that the Participant has suffered a disability, where such cancellation occurs by the later of the end of the taxable year of the Participant, or the 15th day of the third month following the date the Participant incurs a disability.  For purposes of this subsection, a “disability” refers to any medically determinable physical or mental impairment resulting in the Participant’s inability to perform the duties of his or her position or any substantially similar position, where such impairment can be expected to result in death or can be expected to last for a continuous period of not less than six months.

Section 3.4    Excess Matching Contributions.
		
	(a)
	Amount of Contribution.  The Bank will make “Excess Matching Contributions” each Plan Year in an amount equal to the difference between (i) and (ii) below:

		
	(i)
	The Matching Contributions which would have been allocated to the Participant’s account under the Thrift Plan for the Plan Year if the Participant Salary Deferral Contributions (but not Participant Bonus Deferral Contributions) were made to the 

4

Thrift Plan rather than this Plan.  However, the amount in the previous sentence will be limited to an amount equal to the Participant’s Salary unreduced for Participant Deferral Contributions under this Plan for the Plan Year multiplied by the maximum matching percentage applicable to the Participant under the Thrift Plan for that Plan Year.
		
	(ii)
	The amount of Matching Contribution actually allocated to the Participant’s account under the Thrift Plan for the Plan Year.  

A “Matching Contribution” is the employer matching contribution made to the Thrift Plan by the Bank and allocable to a Participant’s account under the Thrift Plan by reason of the Participant’s contributions made thereunder.
		
	(b)
	Additional Matching Contribution.  In addition to the Excess Matching Contribution specified in subsection (a), the Bank may make an additional Excess Matching Contribution to a Participant’s Account at any time prior to the March 15th following the Plan Year to which the Excess Matching Contribution is attributable, as determined by the Board, in its sole discretion.

		
	(c)
	Allocation.  An Excess Matching Contribution contributed for the benefit of a Participant for a Plan Year will be credited to a Participant’s Account at the time the Bank would have made such contribution as a Matching Contribution under the Thrift Plan.

Section 3.5    Supplemental Contributions.  The Bank may, as determined by the Board in its sole discretion, make a “Supplemental Contribution” under the Plan, in accordance with subsections (a) and (b).
		
	(a)
	Amount of Contribution.  The Bank may, but is not required to, credit to a Participant’s Account such amount as the Board may in its discretion determine from time to time, which amount will constitute a Supplemental Contribution under the Plan.

		
	(b)
	Timing of Contribution.  A Supplemental Contribution may be credited to a Participant’s Account at any time prior to the March 15th following the Plan Year to which the Supplemental Contribution is attributable.

Section 3.6    Plan Account.  The Committee will establish and maintain an “Account” on the Bank’s records under the Plan for each Participant and will increase and decrease a Participant’s Account as provided in Section 3.8.

Section 3.7    Investment Credits.  A Participant’s Account will be increased or decreased to reflect the increase or decrease in the value of the Investment Account established for the Participant pursuant to Section 7.2.

Section 3.8    Account Allocations.  As of each accounting date, each Participant’s Account will be:
		
	(a)
	increased by the amount credited to the Account under Section 3.1 through Section 3.5 since the last accounting;

		
	(b)
	increased or decreased by the amount determined under Section 3.7 since the last accounting; and

5

		
	(c)
	decreased by any payment made under Article IV.

The accounting date under this Section will be any date determined by the Committee.  However, the accounting required under this Section must be made, at a minimum, as of the last day of each Plan Year quarter.

Section 3.9    Military Service.  Notwithstanding any provision of this Plan to the contrary, contributions and benefits with respect to qualified military service will be provided in accordance with Code Section 414(u).

ARTICLE IV

BENEFIT PAYMENTS

Section 4.1    Time of Payment of Benefits.  Except as provided in Section 4.5 through 4.7, a Participant will receive or will begin to receive payment of his Account balance within 90 days following the date specified for payment or the commencement of payment effectively elected by the Participant, as provided in this Section.  
		
	(a)
	Timing of Execution and Delivery of Payment Election.  A Participant may elect the date his Account balance will be paid or will begin to be paid by completing and filing with the Committee an election form approved by the Committee.  The specified date must be a date at least two years from the beginning of the Plan Year for which the first deferral under the Plan is made.  To be effective, the election under this Section must be filed with the Committee no later than the time the Participant first makes a deferral election under this Plan (or under any other plan required to be aggregated with this Plan pursuant to the requirements of Code Section 409A).  In lieu of specifying a date certain, a Participant may elect to have payment made or commenced within a specified period of time following the date the Participant experiences a Separation from Service.  If no date is specified, payment will be made or commenced within 90 days following the date of the Participant’s Separation from Service.  

		
	(b)
	Modification of Elections.  An election as to the date payment will be made or commenced may be modified by a Participant by filing a new election form with the Committee; provided, however, that: (i) the new election will not take effect until at least 12 months after the date the new election is filed, (ii) the single lump sum payment or the commencement of installment payments will be delayed for a period of not less than five years from the date the payment or first payment would otherwise have been made, and (iii) the new election is filed with the Committee at least 12 months prior to the date of the first scheduled payment under the Plan.

		
	(c)
	Separation from Service.  “Separation from Service” means the date on which the Participant dies, retires or otherwise experiences a Termination of Employment with the Bank; provided, however, a Separation from Service does not occur if the Participant is on military leave, sick leave, or other “bona fide leave of absence” if the period of such leave does not exceed six months, or if the leave is for a longer period, so long as the individual’s right to reemployment with the Bank is provided either by statute or by contract.  For purposes of this subsection, a leave of absence constitutes a “bona fide leave of absence” only if there is a reasonable expectation that the Participant will return to perform services for the Bank.  If the period of leave exceeds six months and the Participant’s right to reemployment is not provided either by statute or contract, there will be a Separation from Service on the first date immediately following such six-month period.  Notwithstanding the foregoing, where a leave of absence 

6

is due to any medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of not less than six months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29-month period of absence may be substituted for such six-month period.  An Employee will incur a “Termination of Employment” when a termination of employment is incurred under Treasury Regulation §1.409A-1(h)(ii).

Section 4.2    Method of Payment.  Except as provided in Sections 4.5 through 4.7, the balance of a Participant’s Account will be distributed in cash in one of the following methods effectively elected by the Participant:
		
	(a)
	A single lump sum payment; 

		
	(b)
	Annual installment payments over a period of two to 10 years; or

		
	(c)
	A combination of the methods specified in subsections (a) and (b).

However, if the Participant Account is less than $10,000, then the entire Account will be paid in a single lump sum payment regardless of any Participant election to the contrary.

Section 4.3    Method of Payment Elections.  
		
	(a)
	Initial Election.  A Participant may elect the manner in which his Account balance will be paid to him under Section 4.2 in accordance with the terms and conditions of this Section.  To make an election a Participant must file an election with the Committee (on a form or forms prescribed by the Committee).  To be effective, the election under this Section must be filed with the Committee no later than the later of the time the Participant first makes a deferral election under the Plan (or under any other plan required to be aggregated with the Plan pursuant to the requirements of Code Section 409A).  If no election is made or if the election is not timely or properly made, distribution will be made in the form of a single lump sum payment.

		
	(b)
	Change of Method of Payment Election.  An election as to the manner of payment may not be changed after the payment has been made or payments have commenced.  Prior to that time, a Participant may change his election by filing a new election form with the Committee; provided, however, that: (i) the new election will not take effect until at least 12 months after the date the new election is filed; (ii) the single lump sum payment or the commencement of installment payments with respect to which such election is made must be deferred for a period of not less than five years from the date such payment would otherwise have been made; and (iii) the new election is filed at least 12 months prior to the date of the first scheduled payment under the Plan.  

		
	(c)
	Installments.  If installment distributions are elected, the initial installment amount will be the Account balance otherwise payable in a single sum multiplied by a fraction, the numerator of which is one and the denominator of which is the total number of installment payments.  Subsequent installments will also be a fraction of the unpaid Account balance, the numerator of which is always one but the denominator of which is the denominator used in calculating the previous installment minus one.  For example, if five installment payments are elected, the initial installment will be one-fifth of the single sum Account balance, the second 

7

installment will be one-fourth of the remaining Account balance, the third installment will be one-third of the remaining Account balance, and so on.  

Section 4.4    Vesting.  A Participant will be fully “vested” in his Account balance at all times.

Section 4.5    Disability and Death.  In the event a Participant Separates from Service due to the Participant’s Disability or if the Participant dies or becomes Disabled before he has received his entire Account balance, the unpaid balance will be paid to the Participant, or in the event of his death to his designated beneficiary or beneficiaries, in a single lump sum within 90 days of a determination by the Committee that the Participant is Disabled or within 90 days of the Participant’s death.  
		
	(a)
	Beneficiary Designations.  A Participant may designate a beneficiary or beneficiaries to receive any amount payable under this Section as a result of his death.  A Participant may change his designation of beneficiaries at any time by filing with the Committee a written notice of the change on a form approved by the Committee.  Each beneficiary designation filed with the Committee will cancel all previously filed beneficiary designations.  If no designation is in effect on the Participant’s death, or if the designated beneficiary does not survive the Participant, his beneficiary will be his surviving spouse, if any, and then his estate.  

		
	(b)
	Disabled.  A Participant is “Disabled” for purposes of the Plan if the Participant in question is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.  A Participant who, by reason of any medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of not less than 12 months, is receiving income replacement benefits for a period of not less than three months under an accident and health plan sponsored by an Employer will be deemed to be Disabled.  The Committee will be the sole and final judge of whether a Participant is Disabled for purposes of this Plan, after consideration of any evidence it may require, including the reports of any physician or physicians it may designate.

Section 4.6    Unforeseeable Emergency.  In the event the Committee determines in its sole discretion that a Participant has experienced an Unforeseeable Emergency, as defined in subsection 3.3(e), all or a portion of a Participant’s Account may be distributed in a single lump sum no later than 90 days after the Committee’s determination.  The Participant must submit a signed statement of the facts causing the severe financial hardship and any other information required by the Committee, in its sole discretion.  Payment under this Section is subject to the following conditions:
		
	(a)
	The emergency must not be able to be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets, to the extent liquidation of such assets would not cause severe financial hardship, or by cessation of deferrals under this Plan.

		
	(b)
	The amount of the distribution must be limited to the amount reasonably necessary to satisfy the emergency need (which may include amounts necessary to pay any Federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution) and must take into account any additional compensation available due to cancellation of a deferral election under subsection 3.3(e).  However, the determination of amounts reasonably necessary to satisfy the emergency need is not required to take into account any additional compensation that due to the unforeseeable emergency is available under another nonqualified deferred 

8

compensation plan but has not actually been paid, or that is available due to the unforeseeable emergency under another plan that would provide for deferred compensation except due to the application of the effective date provisions of Treasury Regulation §1.409A-6.  The payment may be made from any plan in which the Participant participates that provides for payment upon an Unforeseeable Emergency, provided that the plan under which the payment was made must be designated at the time of payment. 

Section 4.7    Acceleration of Time of Payment.  Except as provided in this Article or Treasury Regulation §1.409A-3(j)(4), the time or schedule of payment of a Participant’s Account may not be accelerated.

ARTICLE V

PLAN ADMINISTRATION

Section 5.1    Appointment of the Committee.    The Committee, or a duly authorized officer or officers of the Bank empowered by the Committee to act on its behalf under sub-section 5.2(e), will be responsible for administering the Plan, and the Committee will be charged with the full power and the responsibility for administering the Plan in all its details; provided that the power to determine eligibility pursuant to Article II is reserved to the Board.  

Section 5.2    Powers and Responsibilities of the Committee.
		
	(a)
	The Committee will have all powers necessary to administer the Plan, including the power to construe and interpret the Plan documents; to decide all questions relating to an individual’s eligibility to participate in the Plan; to determine the amount, manner and timing of any distribution of benefits or withdrawal under the Plan; to resolve any claim for benefits in accordance with Article VI and Supplement A, and to appoint or employ advisors, including legal counsel, to render advice with respect to any of the Committee’s responsibilities under the Plan.  Any construction, interpretation, or application of the Plan by the Committee will be final, conclusive and binding.  

		
	(b)
	Records and Reports.  The Committee will be responsible for maintaining sufficient records to determine each Participant’s eligibility to participate in the Plan, and for purposes of determining the amount of contributions that may be made on behalf of the Participant under the Plan.

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

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

9

		
	(e)
	Delegation.  The Committee may authorize one or more officers of the Bank to perform administrative responsibilities on its behalf under the Plan.  Any such duly authorized officer will have all powers necessary to carry out the administrative duties delegated to such officer by the Committee.

Section 5.3    Liabilities.    The individual members of the Committee will, in accordance with the Bank’s by-laws, be indemnified and held harmless by the Bank with respect to any alleged breach of responsibilities performed or to be performed hereunder.

Section 5.4    Income and Employment Tax Withholding.  The Bank will be responsible for withholding from the Participant’s Salary or Bonus, from the contribution to the Plan, or from the distribution of the Participant’s benefit under the Plan, of all applicable federal, state, city and local taxes.

Section 5.5    Disclosure to Participant Upon Separation from Service.  Within 90 days of a Participant’s Separation from Service or a termination of the Plan, the Bank will provide the Participant a comprehensive statement setting forth the value of the Participant’s benefit and the date and manner in which such benefit, plus earnings or minus losses, will be paid out to the Participant and stating that the Participant’s benefit is a liability of the Bank.

Section 5.6    Plan Expenses. The expenses incurred for the administration and maintenance of the Plan will be paid by the Bank.

ARTICLE VI

BENEFIT CLAIMS

While a Participant or beneficiary need not file a claim to receive his benefit under the Plan, if he wishes to do so, a claim must be made in writing and filed with the Committee.  If a claim is denied, the Committee will furnish the claimant with written notice of its decision.  A claimant may request a review of the denial of a claim for benefits by filing a written request with the Committee.  The Committee will afford the claimant a full and fair review of such request.  The claim and claim review process will be conducted in accordance with the provisions of Supplement A. 

ARTICLE VII

FUNDING AND TRANSFERS

Section 7.1    Unfunded Status.  All contributions credited to a Participant’s Account will be invested in an irrevocable “rabbi trust” (the “Trust”) to provide for the benefits created by the Plan.  The Trust will be maintained in such a fashion that the Plan at all times for purposes of ERISA and the Code will be unfunded and will constitute a mere promise by the Bank to make Plan benefit payments in the future.  Any and all rights created under this Plan will be unsecured contractual rights against the Bank.

Section 7.2    Investments.  Subject to the provisions of Section 7.1, the Bank will establish an investment account for each Participant under the Trust (the “Investment Account”).  The Investment Account will, consequently, at all times remain an asset of the Bank and will be subject to the claims of the Bank’s general creditors.  A Participant may request that the Investment Account be allocated among available investment options established by the Committee or the Board from time to time under the Investment Account.  The initial allocation request may be made at the time of enrollment.  Investment 

10

allocation requests will remain effective until changed in accordance with procedures established by the Committee.

ARTICLE VIII

AMENDMENT AND TERMINATION OF THE PLAN

Section 8.1    Amendment of the Plan.  The Bank may amend the Plan at any time in its sole discretion.  Notwithstanding the foregoing, the Bank may not amend the Plan to reduce a Participant’s Account balance as determined on the day preceding the effective date of the amendment or to otherwise retroactively impair or adversely affect the rights of a Participant or beneficiary.

Section 8.2    Termination of the Plan.  The Bank may terminate the Plan at any time in its sole discretion.  Absent an amendment to the contrary, Plan benefits that had accrued prior to the termination will be paid at the times and in the manner provided for by the Plan at the time of the termination.

ARTICLE IX

MISCELLANEOUS

Section 9.1    Governing Law.  The Plan will be construed, regulated and administered according to the laws of the State of Indiana, without reference to that state’s choice of law principles, except in those areas preempted by the laws of the United States of America in which case the federal laws will control.

Section 9.2    Headings and Gender.  The headings and subheadings in the Plan have been inserted for convenience of reference only and will not affect the construction of the Plan provisions.  In any necessary construction, the masculine will include the feminine and the singular the plural, and vice versa.

Section 9.3    Spendthrift Clause.  No benefit or interest available under the Plan will be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of a Participant or a Participant’s beneficiary, either voluntarily or involuntarily.  

Section 9.4    Counterparts.  This Plan may be executed in any number of counterparts, each one constituting but one and the same instrument, and may be sufficiently evidenced by any one counterpart.

Section 9.5    No Enlargement of Employment Rights.  Nothing contained in the Plan may be construed as a contract of employment between the Bank and any person, nor may the Plan be deemed to give any person the right to be retained in the employ of the Bank or limit the right of the Bank to employ or discharge any person with or without cause.

Section 9.6    Limitations on Liability.  Notwithstanding any other provision of the Plan, neither the Bank nor any individual acting as an employee or agent of a Bank will be liable to a Participant or any beneficiary 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.

Section 9.7    Incapacity of Participant or Beneficiary.  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 

11

a duly appointed guardian or other legal representative of the person, the Committee may provide for the distribution to be made to any other individual or institution then contributing toward or providing for the care and maintenance of the person.  Any payment made for the benefit of the person under this Section will be a payment for the account of such person and a complete discharge of any liability of the Bank and the Plan.

Section 9.8    Evidence.  Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person relying on the evidence considers pertinent and reliable, and signed, made or presented by the proper party or parties.

Section 9.9    Action by Bank.  Any action required of or permitted by the Bank under the Plan will be by resolution of the Board or by a person or persons authorized by resolution of the Board.

Section 9.10    Severability.  In the event any provisions of the Plan are held to be illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and endorsed as if the illegal or invalid provisions had never been contained in the Plan.

Section 9.11    Information to be Furnished by a Participant.  A Participant, or any other person entitled to benefits under the Plan, must furnish the Committee with any and all documents, evidence, data or other information the Committee considers necessary or desirable for the purpose of administering the Plan.  Benefit payments under the Plan are conditioned on a Participant (or other person who is entitled to benefits) furnishing full, true and complete data, evidence or other information to the Committee, and on the prompt execution of any document reasonably related to the administration of the Plan requested by the Committee.

Section 9.12    Attorneys’ Fees.  If any action is commenced to enforce the provisions of the Plan, payment of attorneys’ fees will be governed by the terms set forth in the mandatory “Agreement to Arbitrate” entered into between the Bank and the Participant.

Section 9.13    Binding on Successors.  The Plan will be binding upon and inure to the benefit of the Bank and its successors and assigns, and the successors, assigns, designees and estates of a Participant.  The Plan will also be binding upon and inure to the benefit of any successor organization succeeding to substantially all of the assets and business of the Bank, but nothing in the Plan will preclude the Bank from merging or consolidating into or with, or transferring all or substantially all of its assets to, another organization which assumes the Plan and all obligations of the Bank hereunder.  The Bank agrees that it will make appropriate provision for the preservation of a Participant’s rights under the Plan in any agreement or plan which it may enter into to effect any merger, consolidation, reorganization or transfer of assets.  Upon such a merger, consolidation, reorganization, or transfer of assets and assumption of Plan obligations of the Bank, the term “Bank” will refer to such other organization and the Plan will continue in full force and effect.

12

SUPPLEMENT A

CLAIMS AND REVIEW PROCEDURES

Section A-1    Procedures Governing the Filing of Benefit Claims.  All Benefit Claims must be filed on the appropriate claim forms available from the Committee or in accordance with the procedures established by the Committee for claim purposes.  The term “Benefit Claim” means a request for a Plan benefit or benefits, made by a Claimant or by an authorized representative of a Claimant, that complies with the Plan’s procedures for making benefit claims.  The term “Claimant” means a Participant, a Surviving Spouse of a Participant, a Beneficiary, or an Alternate Payee, who is claiming entitlement to the payment of any benefit payable under the Plan.

Section A-2    Notification of Benefit Determinations.  The Committee will notify a Claimant, in accordance with Section A-3, of the Plan’s benefit determination within a reasonable period of time after receipt of a Benefit Claim, but not later than 90 days (45 days in the case of a Disability Claim) after receipt of the Benefit Claim by the Plan.

If special circumstances require an extension of time for processing the Benefit Claim, the Committee will notify the Claimant of the extension prior to the termination of the initial period described above.  The notice will indicate the special circumstances requiring the extension of time and the date by which the Plan expects to make the benefit determination.  In no event will the extension exceed a period of 90 days from the end of the initial period.
In the case of a Disability Claim, the extension period will not exceed 30 days, unless prior to the end of first 30-day extension period, the Committee determines that, due to matters beyond its control, a decision cannot be rendered within the extension period, in which case the period for making the determination may be extended for an additional 30 days.  Every Disability Claim notice will specifically explain the standards on which entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, the additional information needed to resolve those issues and the Claimant’s right to provide the specified information within 45 days.  If the extension is in effect due to the Claimant’s failure to submit information necessary to decide a Disability Claim, the period for making the benefit determination will be tolled from the date on which the notice of the extension is sent to the Claimant until the date on which the Claimant responds to the request for information.  The term “Disability Claim” means a request for a Plan benefit made by a Claimant due to the purported Total and Permanent Disability of a Plan Participant.

Section A-3    Manner And Content of Notification of Benefit Determinations.  All notices given by the Committee will be given to a Claimant, or to his authorized representative, in a manner that satisfies the standards of 29 CFR 2520.104b-1(b) as appropriate with respect to the particular material required to be furnished or made available to that individual.  The Committee may provide a Claimant with either a written or an electronic notice of the Plan’s benefit determination.  Any electronic notification will comply with the standards imposed by 29 CFR 2520.104b-1(c)(1)(i), (ii), (iii) and (iv).  In the case of an Adverse Benefit Determination, the notice will set forth, in a manner calculated to be understood by the Claimant:
		
	(a)
	The specific reasons for the adverse determination;

		
	(b)
	Reference to the specific Plan provisions (including any internal rules, guidelines, protocols, criteria, etc.) on which the determination is based;

A-1

		
	(c)
	A description of any additional material or information necessary for the Claimant to complete the claim and an explanation of why such material or information is necessary;

		
	(d)
	For a Disability Claim, the identification of any medical or vocational experts whose advice was obtained on behalf of the Plan in connection with Claimant’s Adverse Benefit Determination, without regard to whether the advice was relied upon; and

		
	(e)
	A description of the Plan’s review procedures and the time limits applicable to such procedures.

The term “Adverse Benefit Determination” means a denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, any benefit payable under the Plan.

Section A-4    Appeal of Adverse Benefit Determinations.  A Claimant who receives an Adverse Benefit Determination and desires a review of that determination must file, or his authorized representative must file on his behalf, a written request for a review of the Adverse Benefit Determination, not later than 60 days (180 days for a Disability Claim) after receiving the determination.
The written request for a review must be filed with the Committee.  Upon receiving the written request for review, the Committee will advise the Claimant, or his authorized representative, in writing that:
		
	(a)
	The Claimant, or his authorized representative, may submit written comments, documents, records, and any other information relating to the claim for benefits; and

		
	(b)
	The Claimant will be provided, upon request of the Claimant or his authorized representative, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant’s Benefit Claim, without regard to whether those documents, records, and information were considered or relied upon in making the Adverse Benefit Determination that is the subject of the appeal.

Section A-5    Benefit Determination on Review.  All appeals by a Claimant of an Adverse Benefit Determination will receive a full and fair review by an appropriate named fiduciary of the Plan.  In the case of a Disability Claim, the named fiduciary will not be: (i) the party who made the Adverse Benefit Determination that is the subject of the appeal, nor (ii) the subordinate of that party.  In performing this review for a Disability Claim, the named fiduciary will take into account all comments, documents, records, and other information submitted by the Claimant (or the Claimant’s authorized representative) relating to the claim, without regard to whether the information was submitted or considered in the initial benefit determination, and will not afford deference to the initial Adverse Benefit Determination.  For a Disability Claim, the named fiduciary will consult with a healthcare professional who has appropriate training and experience in the field of medicine involved in the medical judgment and who was not consulted in connection with the Adverse Benefit Determination and who is not the subordinate of such an individual if the named fiduciary believes that such a consultation is necessary to properly complete the review process.

Section A-6    Notification of Benefit Determination on Review.  The Committee will notify a Claimant, in accordance with Section A-7, of the Plan’s benefit determination on review within a reasonable period of time, but not later than 60 days (45 days in the case of a Disability Claim) after the Plan’s receipt of the Claimant’s request for review of an Adverse Benefit Determination.  If, however, special circumstances require an extension of time for processing the review by the named fiduciary, the Claimant will be notified, prior to the termination of the initial 60-day (or 45 day) period, of the special circumstances requiring the extension and the date by which the Plan expects to render the Plan’s benefit 

A-2

determination on review, which will not be later than 120 days (90 days in the case of a Disability Claim) after receipt of a request for review; provided, however, in the case of a Plan with a Committee or other group designated as the appropriate named fiduciary that holds regularly scheduled meetings at least quarterly, the time limit of this Section will be modified in accordance with 29 CFR 2560.503-1(i)(1)(ii) or 29 CFR 2560.503-1(i)(3)(ii), whichever is applicable.
If the extension period is in effect for a Disability Claim but the extension is due to the Claimant’s failure to submit information necessary to decide a claim, the period for making the benefit determination on review will be tolled from the date on which notification of the extension is sent to the Claimant until the date on which the Claimant responds to the request for additional information.

Section A-7    Manner and Content of Notification of Benefit Determination on Review.  The Committee will provide a Claimant with notification of its benefit determination on review in a method described in Section A-3.
In the case of an Adverse Benefit Determination on review, the notification must set forth, in a manner calculated to be understood by the Claimant:
		
	(a)
	The specific reasons for the adverse determination on review;

		
	(b)
	Reference to the specific Plan provisions (including any internal rules, guidelines, protocols, criteria, etc.) on which the benefit determination on review is based;

		
	(c)
	A statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant’s Benefit Claim, without regard to whether those records were considered or relied upon in making the Adverse Benefit Determination on review, including any reports, and the identities, of any experts whose advice was obtained.

KD_7472373_3.docx

FIRST AMENDMENT
OF
FEDERAL HOME LOAN BANK OF INDIANAPOLIS
2016 SUPPLEMENTAL EXECUTIVE THRIFT PLAN

WHEREAS, the Federal Home Loan Bank of Indianapolis (the “Bank”) maintains the Federal Home Loan Bank of Indianapolis 2016 Supplemental Executive Thrift Plan (Effective as of January 1, 2016) (the “SETP”); and

WHEREAS, pursuant to Article VIII of the SETP, the Bank reserved the right to amend the SETP by action of its Board of Directors; and

WHEREAS, the Bank determined that the SETP should be amended to provide an excess basic contribution that corresponds to the basic contribution provided to participants under the Financial Institutions Thrift Plan as adopted by the Bank; and

WHEREAS, the Board of Directors of the Bank authorized this First Amendment to the SETP as set forth below;

NOW, THEREFORE, pursuant to the power reserved to the Bank under Article VIII of the SETP, the SETP is hereby amended, effective as of January 1, 2018, as follows:

1.  By adding a new Section 3.5 Excess Basic Contributions immediately before the existing Section 3.5 Supplemental Contributions resulting in the current Section 3.5 along with all of the remaining sections of Article III to be consecutively renumbered.  The new Section 3.5 shall read as follows:

“Section 3.5.    Excess Basic Contributions.

		
	(a)  
	Amount of Contributions.  The Bank will make “Excess Basic Contributions” to the Participant who is eligible to receive Basic Contributions under the terms of the Thrift Plan for a Plan Year in an amount equal to the difference, if any, between (i) and (ii) below:    

		
	(i)  
	The Basic Contributions which would have been allocated to the Participant’s account under the Thrift Plan for the Plan Year if such contributions were allocated:

(a)  as if the Participant did not participate in this Plan; and
(b)  without application to benefit or compensation limits imposed by the 
      Code.

		
	(ii)
	The amount of Basic Contributions actually allocated to the Participant’s account under the Thrift Plan for the Plan Year.

A “Basic Contribution” is the employer basic contribution made to the Thrift Plan by the Bank and allocable to a Participant’s account under the Thrift Plan.
    
		
	(b)
	Allocation.    An Excess Basic Contribution contributed for the benefit of a Participant for a Plan Year will be credited to a Participant’s Account at the time the Bank would have made such contribution as a Basic Contribution under the Thrift Plan.

A-3

2.    Due to the addition of a new Section 3.5 as referenced above, the cross-reference within the current Section 3.6 (Section 3.7 after the new renumbering) Plan Account, “Section 3.8,” shall now read “Section 3.9.”

3.    Due to the addition of a new Section 3.5 as referenced above, the cross-references within the current Section 3.8 (Section 3.9 after the new renumbering) Account Allocations, “Section 3.1 through Section 3.5” and Section 3.7” shall now read “Section 3.1 through 3.6” in subsection (a) and “Section 3.8” in subsection (b).”
 
IN WITNESS WHEREOF, the Federal Home Loan Bank of Indianapolis has caused this First Amendment to be executed on its behalf by its duly authorized officers this 19th day of January, 2018, but effective as of January 1, 2018.

FEDERAL HOME LOAN BANK OF INDIANAPOLIS
By: /s/ James D. MacPhee                                        
James D. MacPhee, Chairman
By: /s/ Dan L. Moore                                                
Dan L. Moore, Vice Chairman
ATTEST:
By: /s/ Mary M. Kleiman                                         
Mary M. Kleiman, (Acting Corporate Secretary)

A-4Exhibit

Exhibit 10.10
Approved by the Board of Directors 
November 17, 2017

KEY EMPLOYEE
SEVERANCE POLICY
1.Purpose of Policy.  The Federal Home Loan Bank of Indianapolis recognizes the valuable services that Covered Employees (as defined below) will provide and desires to be assured that the Covered Employees will continue their active participation in the business of the Bank.  The Covered Employees desire assurance that, in the event of any consolidation, change in control or reorganization of the Bank, they will continue to have the responsibility and status each has earned, either with the Bank or with a successor to the Bank.

2.Definitions.

“Bank” shall mean the Federal Home Loan Bank of Indianapolis and any other entity within the definition of “Bank” in Section 7(a). 
“Cause” shall mean (a) the continued failure of the Covered Employee to perform his duties with the Bank (other than any such failure resulting from Disability), after a demand for performance, pursuant to a resolution of the Bank’s Board of Directors, is delivered to the Covered Employee by the Chair of the Board of Directors of the Bank, which specifically identifies the manner in which the Covered Employee has not performed his duties, (b) the 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 (c) the removal of the Covered Employee by the Bank at the direction of the Federal Housing Finance Agency, or by the Federal Housing Finance Agency, or by or at the direction of any successor to the Federal Housing Finance Agency, pursuant to 12 U.S.C. §§ 4615, 4616, 4617 or 4636a, or any statutory provisions subsequently enacted that grant removal authority to such agency, or any rules or regulations issued thereunder.
“Compensated Termination” shall have the meaning set forth in Section 3(a).
“Covered Employees” shall mean each of the Bank’s Executive Vice Presidents and Senior Vice Presidents, including without limitation the Bank’s Chief Internal Audit Officer and Chief Risk Officer, and such other employees as designated from time to time by the Human Resources Committee of the Board of Directors.  This Policy does not apply to the Bank’s President-Chief Executive Officer.  Covered Employees shall be allocated into three (3) groups, Level 1 Participants, Level 2 Participants, and Level 3 Participants, each as described below.
“Disability” shall mean, as a result of the Covered Employee’s incapacity due to physical or mental illness, the Covered Employee shall have been absent from his duties with the Bank for an aggregate of twelve (12) out of fifteen (15) consecutive months and, within thirty (30) days after a Notice of Termination is thereafter given by the Bank to the Covered Employee, the Covered Employee shall not have returned to the full-time performance of the Covered Employee’s duties.  

“Good Reason” shall mean any of the following:
(a)during the period (i) beginning with the earliest to occur of the following three dates, as applicable: (A) six (6) months prior to the execution of a definitive agreement regarding a Reorganization of the Bank or (B) if a Reorganization has been mandated by federal statute, rule, regulation or directive, six (6) months prior to the effective date of such Reorganization or (C) six (6) months prior to the adoption of a plan or proposal for the liquidation or dissolution of the Bank, and (ii) ending twenty-four (24) months after the effective date of such Reorganization, 

		
	(i)
	a material change in the Covered Employee’s status, position, job title or principal duties and responsibilities as a key employee of the Bank which does not represent a promotion from the Covered Employee’s status and position as in effect as of the date hereof (“Position”), or 

		
	(ii)
	the assignment to the Covered Employee 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 Covered Employee from such Position (including, without limitation, all demotions and harassing assignments), except in connection with the termination of the Covered Employee’s employment for Cause or Disability, or as a result of the Covered Employee’s death;

(b)within twenty-four (24) months after the effective date of a Reorganization of the Bank, (i) a reduction by the Bank in the Covered Employee’s base salary as in effect immediately prior to such Reorganization, or (ii) the Bank’s (or its successor’s) failure to increase (within twelve (12) months of the Covered Employee’s last increase in base salary) the Covered Employee’s base salary after a Reorganization of the Bank in an amount which is not less than fifty percent (50%) of the average percentage increase in base salary for all officers of the Bank effected in the preceding twelve (12) months;

(c)within twenty-four (24) months after the effective date of a Reorganization of the Bank, (i) any failure by the Bank to continue in effect any plan or arrangement, including, without limitation, benefit and incentive plans, in which the Covered Employee is participating immediately prior to such Reorganization (hereinafter referred to as “Plans”), unless such Plans have been replaced with similar benefits that are not materially less than the Covered Employee’s benefits under such Plans, or (ii) the taking of any action by the Bank which would adversely affect the Covered Employee’s participation in or materially reduce the Covered Employee’s benefits under any such Plan or in or under fringe benefits enjoyed by the Covered Employee immediately prior to the time of such Reorganization of the Bank;

(d)any material breach by the Bank of any provisions of this Policy or any other agreement with the Covered Employee; or

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

“Level 1 Participant” shall mean each of the Bank’s Executive Vice Presidents.
“Level 2 Participant” shall mean each of the Bank’s Senior Vice Presidents.
“Level 3 Participant” shall mean each other officer of the Bank, other than an Executive Vice President or a Senior Vice President, whom the Human Resources Committee designates to be a Level 3 Participant from time to time.
“Notice of Termination” shall mean a written notice which shall indicate those specific termination provisions in this Policy upon which the Bank or the Covered Employee, as the case may be, has relied for such termination and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Covered Employee’s employment under the provision so indicated.  
“Payment Determination Date” shall have the meaning set forth in Section 3(b).
“Reorganization” of the Bank shall mean the occurrence at any time of any of the following events:
(a)The Bank is merged or consolidated with or reorganized into or with another bank or other entity, or another bank or other entity is merged or consolidated into the Bank;

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

(c)More than fifty percent (50%) of the total market value or total voting power of all ownership interests in the Bank is acquired, within any twelve (12) month period, by one person or entity or by more than one person or entity acting as a group; or

(d)The liquidation or dissolution of the Bank.

Provided that the term “Reorganization” shall not include any Reorganization that is mandated by federal statute, rule, regulation, or directive, including 12 U.S.C. § 1421, et seq., as amended, and 12 U.S.C. § 4501 et seq., as amended, and which the Director of the Federal Housing Finance Agency (or successor agency) has determined should not be a basis for making payment under this Policy, by reason of the capital condition of the Bank or because of unsafe or unsound acts, practices, or condition ascertained in the course of the Agency’s supervision of the Bank or because any of the conditions identified in 12 U.S.C. § 4617(a)(3) are met with respect to the Bank (which conditions do not result solely from the mandated reorganization itself, or from action that the Agency has required the Bank to take under 12 U.S.C. § 1431(d)).
“Retirement” shall mean the planned and voluntary termination by the Covered Employee of his or her employment on or after reaching the earliest retirement age permitted by the Bank’s qualified retirement plans.  

3.Compensated Termination.

(a)Compensated Termination.  If the Covered Employee incurs a Compensated Termination while the Covered Employee is employed by the Bank or within twenty-four (24) months after the effective date of a Reorganization of the Bank (whether the Covered Employee is then employed by the Bank or a successor to the Bank as a result of such Reorganization), the Covered Employee shall be entitled to the benefits provided in Section 5.  For purposes of this Policy, a “Compensated Termination” means termination of the Covered Employee’s employment under either of the following circumstances:
		
	(i)
	By the Covered Employee for Good Reason; or 

		
	(ii)
	By the Bank, or by its successor in a Reorganization, without Cause at any time during the period (1) beginning with the earliest to occur of the following three dates, as applicable (A) six (6) months prior to the execution of a definitive agreement regarding a Reorganization, or (B) if a Reorganization has been mandated by federal statute, rule, regulation or directive, six (6) months prior to the effective date of such Reorganization, or (C) six (6) months prior to the adoption of a plan or proposal for the liquidation or dissolution of the Bank, and (2) ending twenty-four (24) months after the effective date of such Reorganization.

(b)Payment Determination Date.  “Payment Determination Date,” for purposes of determining when a payment resulting from a Compensated Termination must be made pursuant to Section 4(a), shall mean the effective date of the termination of the Covered Employee’s employment with the Bank if such termination is a “Compensated Termination.” 

(c)Non-Compensated Termination.  For the avoidance of doubt, none of the following events shall result in any payment to the Covered Employee for a Compensated Termination under Section 5(a): 

		
	(i)
	The termination of employment by the Covered Employee without Good Reason;

		
	(ii)
	The termination of the Covered Employee’s employment for Cause by the Bank or its successor in a Reorganization; 

		
	(iii)
	The termination of the Covered Employee’s employment Without Cause by the Bank or its successor in a Reorganization, (1) prior to the date which is the earliest to occur of the following three dates, as applicable: (A) six (6) months prior to the execution of a definitive agreement regarding a Reorganization of the Bank or (B) if a Reorganization has been mandated by federal statute, rule, regulation or directive, six (6) months prior to the effective date of such Reorganization or (C) six (6) months prior to the adoption of a plan or proposal for the liquidation or dissolution of the Bank, or (2) more than twenty-four (24) months after the effective date of a Reorganization;

		
	(iv)
	The termination of the Covered Employee’s employment by the Bank or its successor in a Reorganization for Disability; 

		
	(v)
	The death of the Covered Employee; or

		
	(vi)
	The Retirement of the Covered Employee, if the Covered Employee has delivered written notice to the Bank, before the commencement of the time period described in Section 3(c)(iii), of his or her intention to retire.

4.Termination of Employment.

(a)Termination by the Bank.  The Bank may terminate the employment of the Covered Employee as follows:  

		
	(i)
	For Cause upon the adoption of a resolution by the affirmative vote of not less than a majority of the entire membership of the Bank’s Board of Directors at a meeting of the Board (after reasonable notice to the Covered Employee and an opportunity for the Covered Employee, together with counsel, to be heard by the Board), finding that in the good faith opinion of the Board the Covered Employee was guilty of conduct set forth in the definition of “Cause” in Section 2 and specifying the particulars thereof in detail.  A vote of the Board is not required if the Covered Employee is removed for cause by the Bank at the direction of the Federal Housing Finance Agency, or by the Federal Housing Finance Agency, or by or at the direction of any successor to the Federal Housing Finance Agency, pursuant to 12 U.S.C. §§ 4615, 4616, 4617 or 4636a, or any statutory provisions subsequently enacted that grant removal authority to such agency, or any rules or regulations issued thereunder.; 

		
	(ii)
	Without Cause; 

		
	(iii)
	Upon the Disability of the Covered Employee; and

		
	(iv)
	Upon the death of the Covered Employee.  

(b)Termination by Covered Employee.  The Covered Employee may terminate his or her employment with the Bank as follows:

		
	(i)
	For Good Reason;

		
	(ii)
	Without Good Reason; or

		
	(iii)
	Upon the Covered Employee’s Retirement, in which case the Covered Employee shall be entitled to all benefits under any retirement plan of the Bank and other plans to which the Covered Employee is a party.

(c)Preservation of Compensated Termination.  The provisions of Sections 4(a) and 4(b) are included in this Policy for clarification of the rights of termination of the employment relationship between the Bank and the Covered Employee, but such provisions shall not prejudice the Covered Employee’s right to receive payments or benefits required to be provided to the Covered Employee if any such termination is a “Compensated Termination.”

(d)Notice of Termination.

		
	(i)
	Any termination by the Bank for Disability or Cause shall be communicated by a Notice of Termination; provided, however, that the failure by the Bank to give notice in such circumstances shall not constitute a Compensated Termination.

		
	(ii)
	Any termination of employment by the Covered Employee for Good Reason will be a Compensated Termination only if the Covered Employee gives Notice of Termination to the Bank therefore within ninety (90) days of the event or occurrence which constitutes “Good Reason,” provided, further, that, if the Covered Employee gives such Notice of Termination to the Bank in a timely manner, the Covered Employee shall not be deemed to have waived any of his or her rights hereunder in the event he or she remains in the employment of the Bank while he or she and the Bank engage in good faith discussions to resolve any event or occurrence which constitutes “Good Reason.”  The Bank has a thirty (30) day period following receipt of notice during which it may remedy the condition and not be required to pay the amount. 

		
	(iii)
	Any termination by the Bank without Cause or by the Covered Employee without Good Reason shall be communicated to the other party in accordance with the general notice provisions of this Policy.

5.Payment for Compensated Termination.

(a)In the event of a Compensated Termination, the Bank shall pay or provide the Covered Employee with an amount equal to the following: 

		
	(i)
	With respect to Level 1 Participants, two (2) times the average of the three (3) preceding calendar years’ gross base salary (inclusive of amounts deferred under a qualified or nonqualified plan sponsored by the Bank) and gross bonuses (inclusive of any amounts deferred under a qualified or nonqualified plan sponsored by the Bank) paid to the Covered Employee during such years (provided that for any calendar year in which the Covered Employee received base salary for less than the entire calendar year, the gross amount shall be annualized as if such amount had been payable for the entire calendar year). 

 
		
	(ii)
	With respect to Level 2 Participants, one and one-half (1.5) times the average of the three (3) preceding calendar years’ gross base salary (inclusive of amounts deferred under a qualified or nonqualified plan sponsored by the Bank) and gross bonuses (inclusive of any amounts deferred under a qualified or nonqualified plan sponsored by the Bank) paid to the Covered Employee during such years (provided that for any calendar year in which the Covered Employee received base salary for less than the entire calendar year, the gross amount shall be annualized as if such amount had been payable for the entire calendar year).  

		
	(iii)
	With respect to Level 3 Participants, one (1) times the average of the three (3) preceding calendar years’ gross base salary (inclusive of amounts deferred under a qualified or nonqualified plan sponsored by the Bank) and gross bonuses (inclusive of any amounts deferred under a qualified or nonqualified plan sponsored by the Bank) paid to the Covered Employee during such years (provided that for any calendar year in which the Covered Employee received base salary for less than the entire calendar year, the gross amount shall be annualized as if such amount had been payable for the entire calendar year).  

The Bank shall distribute such amount in a lump sum in cash within twenty (20) days of the Payment Determination Date.

(b)Notwithstanding Section 5(a), if the Bank is not in compliance with any applicable regulatory capital or regulatory leverage requirement or if the payment would cause the Bank to fall below applicable regulatory requirements, such payment shall be deferred until such time as the Bank achieves compliance with its regulatory requirement.

(c)To the extent the Covered Employee is eligible, he or she shall continue after a Compensated Termination to be covered by the Bank’s medical and dental insurance plans in effect immediately prior to the Compensated Termination, subject to the Covered Employee’s payment of the employee’s portion of the cost of such coverage.  This continuing medical and dental insurance shall continue for Level 1 Participants for twenty-four (24) months, for Level 2 Participants for eighteen (18) months, and for Level 3 Participants for twelve (12) months.  In the event the Covered Employee is ineligible under the terms of such plans to continue to be so covered or such plans shall have been modified, the Bank shall provide through other sources coverage which is substantially equivalent to the coverage provided immediately prior to the Compensated Termination, subject to the Covered Employee’s payment of a comparable portion of the cost of such coverage as under the Bank’s medical and dental insurance plans.  If during this time period the Covered Employee should enter into employment providing for comparable medical and dental insurance coverage, his or her participation in the medical and dental plans provided by the Bank shall cease.   

(d)The Bank will provide outplacement services for the Covered Employee after a Compensated Termination, at the Bank’s cost.  

(e)The Covered Employee shall be responsible for the payment of all federal, state and local income taxes which may be due with respect to any payments made to the Covered Employee pursuant to this Policy.  

(f)If the severance and other benefits provided for in this Agreement or otherwise payable to the Covered Employee (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and (ii) but for this provision, would be subject to the excise tax imposed by Section 4999 of the Code, then such severance and other benefits shall be collectively subject to an overall maximum limit.  The payment limit shall be one dollar ($1) less than the aggregate amount which would otherwise cause any such payments to be considered a “parachute payment” within the meaning of Section 280G of the Code.  Unless the Bank and the Covered Employee otherwise agree in writing, any determination required under this provision shall be made in writing by the Bank’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon the Covered Employee and the Bank for all purposes.  For purposes of making the calculations required by this provision, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Bank and the Covered Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this provision.  The Bank shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this provision.  Accordingly, to the extent that such severance and other benefits would be considered a “parachute payment,” or are “deferred compensation” within the meaning of Section 409A of the Code, the severance and other benefits will be reduced pro rata until the remaining severance and other benefits shall be reduced or eliminated in the following order until the remaining severance and other benefits payable hereunder are collectively within the maximum described in this Subsection:  

		
	(i)
	first, any cash payments to the Covered Employee;

		
	(ii)
	second, any change of control termination payments to the Covered Employee not described herein; and 

		
	(iii)
	third, any forgiveness of indebtedness of the Covered Employee to the Bank. 

Each Covered Employee expressly and irrevocably waives any and all rights to receive any severance and other payments which exceed the maximum limit described in this Subsection.
6.No Obligation to Seek Further Employment; No Effect on Other Contractual Rights.

(a)The Covered Employee shall not be required to seek other employment, nor shall any payment made under this Policy be reduced by any compensation received from other employment.

(b)The provisions of this Policy, and any payment provided for hereunder, shall not reduce any amounts otherwise payable, or in any way diminish the Covered Employee’s existing rights, or rights which would accrue solely as a result of the passage of time, under any Plan, except to the extent set forth in Section 6(c).

(c)The following rules clarify the interaction of this Policy with the Bank’s Severance Pay Plan (“SPP”).  

		
	(i)
	If a Covered Employee becomes eligible to receive benefits under this Policy (e.g., if the Covered Employee experiences a Compensated Termination), the Covered Employee shall be entitled to receive benefits under this Policy and not under the SPP, regardless of whether the Covered Employee would otherwise be eligible for benefits under the SPP.  

		
	(ii)
	If a Covered Employee becomes eligible for benefits under the SPP, but does not become eligible to receive benefits under this Policy, the Covered Employee shall be entitled to receive benefits under the SPP. 

 
		
	(iii)
	Notwithstanding subsection 6(c)(ii), if (A) a Covered Employee receives benefits under the SPP, and (B) the Covered Employee subsequently becomes eligible to receive benefits under this Policy, then the Covered Employee shall be entitled to receive the benefits contemplated by this Policy, but the total benefits received by the Covered Employee on account of both the SPP and this Policy may not exceed those contemplated by this Policy alone.  Therefore, if the Covered Employee is entitled to receive any benefits under this Policy, such benefits shall be automatically reduced by the amount of benefits the Covered Employee received pursuant to the SPP.

7.Successor to the Bank.

(a)This Policy is binding upon the successors and assigns of the Bank.  The Bank and its successors and assigns will require any successor or assign (whether direct or indirect, in a Reorganization, by operation of law, or otherwise) to all or substantially all of the business and/or assets of the Bank, to enter into a written agreement in form and substance satisfactory to the Covered Employee.  In the written agreement, the successor and its assigns will expressly, absolutely and unconditionally assume and agree to perform this Policy in the same manner and to the same extent that the Bank would be required to perform it if no such succession or assignment had taken place.  In such event, the Bank agrees that it shall pay or shall cause such employer to pay any amounts owed to the Covered Employee pursuant to Section 5.

As used in this Policy, “Bank” shall mean the Bank as hereinbefore defined and any successor or assign to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section or which otherwise becomes bound by all the terms and provisions of this Policy by operation of law.  If at any time during the term of this Policy the Covered Employee is employed by any corporation a majority of the voting securities of which is then owned by the Bank, the term “Bank” shall include such employer.  Whether or not another entity becomes the successor or assign of the Bank under this Policy, the maximum amount which the Covered Employee may receive from all sources under this Policy in a Compensated Termination shall be the amounts set forth in Section 5.
(b)This Policy shall inure to the benefit of and be enforceable by the Covered Employee’s personal and legal representatives, executors, administrators, successors, heirs, distributees, and legatees.  If the Covered Employee should die while any amounts are still payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Policy to the beneficiary designated by notice in writing executed by the Covered Employee and filed with the Bank, or failing such designation, to the Covered Employee’s estate.

8.Late Payment of Benefits.  Any payment made later than the time provided for in Section 5(a) for whatever reason, including, without limitation, the reasons set forth in Section 5(b), shall include interest at the Bank’s cost of funds plus five percent (5%), which shall begin to accrue on the tenth (10th) day following the Covered Employee’s Payment Determination Date.

9.Employment Rights.  This Policy shall not confer upon the Covered Employee any right to continue in the employ of the Bank and shall not in any way affect the right of the Bank to dismiss or otherwise terminate the Covered Employee’s employment at any time and for any reason with or without cause.  This Policy is not intended (a) to be an employment agreement or (b) to define all aspects of the employment relationship between the Bank and the Covered Employee including, but not limited to applicable employment or benefit policies of the Bank.  To the extent there is any conflict between the terms hereof and the terms of any employment or benefit policies of the Bank, the terms of this Policy shall control.  Any payments or benefits to which the Covered Employee may be entitled under Section 5 will not constitute wages for work performed by the Covered Employee.

10.Tax Withholding.  The Bank will withhold from any amounts payable to Covered Employee under this Policy to satisfy all applicable federal, state, local or other withholding taxes.  All amounts payable under Section 5(a) are considered “wages” to be reported on Form W-2.  The normal withholding rules for wages apply.  The Bank will also withhold any excise taxes owed under Code Section 4999.

11.Notice.  For purposes of this Policy, notices and all other communications provided for in the Policy shall be in writing and shall be deemed to have been duly given when delivered by hand, delivered by a nationally-recognized overnight courier service, or mailed by United States registered mail, return receipt requested, postage prepaid, as follows:

If to the Bank:
Federal Home Loan Bank of Indianapolis
8250 Woodfield Crossing Boulevard
Indianapolis, Indiana 46240
Attention:  Chairman of the Board of Directors
With a copy to the President

If to the Covered Employee:
At the address on file with the Bank’s Human Resources department
or such other address as either party may have furnished to the other in writing in accordance herewith.  Any notice shall be effective upon receipt.

12.Legal Fees and Expenses.  The Bank shall pay all reasonable legal fees and expenses which the Covered Employee may incur as a result of the Bank’s contesting the validity or enforceability of this Policy or the calculation of amounts payable hereunder so long as the Covered Employee is wholly or partially successful on the merits or the parties agree to a settlement of the dispute.

13.Term.  This Policy is effective upon its approval by the Board of Directors.  The Human Resources Committee will review this Policy, recommend any changes, and recommend Board approval at least once per calendar year.  If the Human Resources Committee does not act to approve, amend, or terminate this Policy in a calendar year, this Policy shall automatically renew for an additional 3 year period.

14.Arbitration.

(a)Disputes regarding this Policy are subject to the Federal Home Loan Bank of Indianapolis Agreement to Arbitrate by and between the Bank and the Covered Employee (“Arbitration Agreement”).  No cancellation, replacement or modification to the arbitration procedures under the Arbitration Agreement shall be effective unless agreed to in writing by both the Bank and the Covered Employee.  In the event of any conflict between the provisions of this Policy and the Arbitration Agreement, the provisions of this Policy shall control.   

(b)If within thirty (30) days after any Notice of Termination is given, the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the Termination, the parties shall promptly proceed to arbitration as provided in Section 14(a).  Notwithstanding the pendency of any such dispute, the Bank shall continue to pay the Covered Employee his or her base salary and provide such other compensation and benefits, all as in effect immediately prior to the Notice of Termination.  If it is determined that the Covered Employee is not entitled to any compensation under Section 5, the Covered Employee shall return all cash amounts to the Bank promptly following the date of resolution by arbitration, with interest thereon commencing as of the date of the resolution of the dispute by arbitration at the prime rate of interest as published by the Wall Street Journal from time to time.  Any cash amounts paid to the Covered Employee pending the resolution of the dispute by arbitration shall offset any amounts determined to be due to the Covered Employee under Section 5.

15.Miscellaneous.

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

(b)Entire Policy.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Policy.

(c)Governing Law.  This Policy shall be governed by and construed in accordance with the laws of the State of Indiana (excluding conflicts of laws principles), except to the extent such law is preempted by the laws of the United States.

(d)Headings.  Section or paragraph headings contained herein are for convenience of reference only and are not to be considered a part of this Policy.

(e)Validity.  The invalidity or unenforceability of any provisions of this Policy shall not affect the validity or enforceability of any other provision of this Policy, which shall remain in full force and effect.

(f)Rescission of Prior Agreements.  This Policy shall rescind and be in full replacement of any prior “Key Employee Severance Agreement” entered into between the Covered Employee and the Bank.

(g)Administration.  This Policy shall be administered by the Director of Human Resources. Interpretations and decisions by the Bank’s Director of Human Resources regarding the application of this Policy, made in the Bank’s sole discretion, shall be final, provided the interpretations and decisions are consistent with the Bank’s authority under applicable federal and state law.

(h)No Discrimination.  This Policy will be applied on a non-discriminatory basis without regard to race, color, religion, national origin, sex, age, sexual orientation, handicap, gender identity, genetic information, veteran’s status, parental status, pregnancy status, citizenship status, or mental or physical disability, and without regard to whether the employee has made charges, testified, assisted or participated in enforcement proceedings based on an otherwise unlawful employment practice, in accordance with federal law.

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