Document:

FHLB Pit ex10.6 10K 2012

                                

Federal Home Loan Bank of Pittsburgh

Supplemental Thrift Plan
Amended and Restated Effective June 26, 2007
Revised September 26, 2007, December 19, 2008, December 18, 2009, and October 26, 2012

    

Table of Contents

Article    Page

Preamble      1

   I.    Definitions    2
        
  II.    Participation and Vesting    5
        
 III.    Deferral Elections; Employee Deferrals; Bank Deferrals    6

 IV.    Accounts and Investment Vehicles    8

      V.    Distribution of Benefits    9

 VI.    Administration of the Plan    12

VII.    General Provisions    14

                                    

Preamble

The Federal Home Loan Bank of Pittsburgh (the "Bank") participates in the Financial Institutions Thrift Plan (the "Thrift Plan"), a retirement savings plan qualified under the Internal Revenue Code (the "Code") for employees of the Federal Home Loan Bank of Pittsburgh.  The Thrift Plan permits eligible employees to elect to reduce and defer a percentage of their compensation, contributing the same to the Thrift Plan.  The Bank matches employee contributions based on length of service and the amount of employee contributions.

However, as a result of the limitations imposed upon the aggregate amount of contributions which can be made to the Thrift Plan under Section 415 and other sections of the Code, such limitations causing a reduction in the benefits otherwise provided to certain of the Bank's executives, the Bank has adopted this nonqualified, unfunded Supplemental Thrift Plan (the "Plan").  The purpose of this Plan is to allow those employees whose benefits under the Thrift Plan would otherwise be significantly restricted by the terms of the Thrift Plan itself or the Code to make elective pretax deferrals and to receive the Bank match relating to such deferrals.  Additionally, under the Plan, the Bank will match 200 percent of such employee's contributions; provided, however, that the Bank's matching contribution will not exceed the excess of 3 percent of the employee's compensation (as defined in the Plan) over the Bank's contribution to the Thrift Plan.

  Article I
Definitions

		
	1.1
	"Account" means the book reserve account established and maintained hereunder to record the contributions deemed to be made by the Participant and the Bank, as well as the increase in value attributable to the earnings thereon, all as described hereafter.

		
	1.2
	“Bank" means the Federal Home Loan Bank of Pittsburgh.

		
	1.3
	“Bank Deferral" means an amount allocated by the Bank to a Participant's Account pursuant to Section 3.3.

		
	1.4
	"Beneficiary" means the person or persons designated by a Participant under the provisions of this Supplemental Thrift Plan to receive his/her benefits in the event of his/her death prior to receipt of all benefits hereunder.  If no person is designated by a Participant or the designated person or persons do not survive the Participant, the Participant's Beneficiary shall be his/her estate.  If a Beneficiary who is receiving payments from a Participant's Account dies before the entire Account has been distributed, the remaining payments shall be made to the Beneficiary's estate.

		
	1.5
	"Board" or "Board of Directors" means the Board of Directors of the Federal Home Loan Bank of Pittsburgh.

		
	1.6
	“Code” means the Internal Revenue Code of 1986, as amended from time to time.

		
	1.7
	"Compensation" means annual base salary plus incentive compensation.  Provided that, as to any incentive compensation award under  an incentive plan adopted by the Bank and in effect from time to time the amount that is included in “Compensation” shall not exceed the following (expressed as a percentage of Participant's base salary): 1) President and CEO-50%; 2) other executive committee members-37.50%; and 3) other Participants-30%.  

		
	1.8
	"Deferral Election" means a Participant's irrevocable election to defer a portion of his/her Compensation.

		
	1.9
	"Deferral Period" means the period commencing with the date a Deferred Amount is first credited to a Participant's Account and continuing until payment of the final installment of a Participant's Deferred Amount.

		
	1.10
	"Deferred Amount" means the sum of all amounts deferred pursuant to a Participant's Deferral Election, plus the Bank match, plus investment earnings thereon, plus any increments thereof credited to the Participant's Account, less any benefit payments made from the Participant's Account.

		
	1.11
	"Disability" means with respect to eligibility for payment of a Participant's vested benefit under the Plan through December 31, 2004, a Participant's total or partial disability as determined by the Thrift Plan in accordance with the Thrift Plan in effect at October 3, 2004.  With respect to eligibility for payment of a Participant's vested benefit amounts under the Plan after December 31, 2004, “Disability” means that the Participant is: a) 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; b) 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, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Bank; or c) determined to be totally disabled by the Social Security Administration.  

		
	1.12
	"Effective Date" means January 1, 1991.

		
	1.13
	"Employee Deferral" means an amount deferred by a Participant under the Plan.

		
	1.14
	"Governance, Public Policy, and Human Resources Committee" means the Governance Committee of the Board including any successor Board Committee as shall be designated by the Board from time to time as having responsibility for Bank compensation and benefits programs.

		
	1.15
	"Participant" means an executive or other key employee who has been recommended by the President, and confirmed by the Board, as eligible to participate in the Plan.

		
	1.16
	"Plan Administrator" means such officer(s) or manager of the Bank who has been appointed by the Governance Committee to administer the Plan as set forth in Section 6.1 of the Plan.  The Human Resources   Director (and any successor) shall serve as the Plan Administrator unless the Board shall appoint another Bank officer(s) or manager.  

1.17    “Deferred Incentive Award” means that portion of a Participant's award under a Bank incentive plan, if any,
 that is contingent and subject to payment deferral under the terms of such incentive plan.   

1.18    “Separation from Service” means the Participant's death, retirement, the time at which the Participant's
 services performed for the Bank are permanently reduced to no more than 20 percent of the average level
 of services performed by the Participant over the preceding 36-month period, or other termination of
 employment all as set forth in applicable definitions under 26 C.F.R. 1.409A-1(h) and related and
 successor regulations as may be in effect from time to time.

1.19    “Unforeseeable Emergency” means: a) a severe financial hardship to a Participant resulting from an illness
 or accident of: (i) the Participant; (ii) the Participant's spouse; (iii) the Participant's dependent as defined in
 Code Section 152(a)); or (iv) if the Participant is already receiving payments under the Supplemental Thrift
 Plan, a severe financial hardship resulting from illness or accident of the Beneficiary; b) loss of the
 Participant's property due to casualty; or c) other similar extraordinary and unforeseeable circumstances
 arising as a result of events beyond the control of the Participant.  

Article II
Participation and Vesting

		
	2.1
	Eligibility to Participate.  A Participant shall become eligible for Plan participation on the later of the first day of the calendar month coincident with or next following the date his/her participation is approved by the Board or the Effective Date.  Once selected as a Participant, the Participant shall continue as a Participant until the Board determines otherwise.  No Participant shall have the right to continue as a Participant in the Plan.

Upon designation as a Participant, each Participant will be given a copy of the Plan.  Upon becoming eligible to participate in the Plan, a Participant shall have the option to make a Deferral Election to defer a portion of his/her annual Compensation.

		
	2.2
	Termination of Participation.  No further Employee Deferrals or Bank Deferrals shall occur with respect to a Participant after the Participant's employment with the Bank terminates.  However, until the amounts in a Participant's Account are fully paid out to the Participant and/or his/her Beneficiary, the Participant's Account shall continue to be notionally invested as provided in Section 4.2, and the Participant (or his/her Beneficiary) shall continue to have the right to change such investments by written notice (which includes electronic notice and in the form prescribed by the Plan Administrator) to the Plan Administrator.  Once a Participant's Account has been fully paid out, such Participant shall cease to be a Participant in the Plan and neither the Participant nor his/her Beneficiary shall have any further rights hereunder.

2.3    Vesting.  All benefits under the Plan are fully vested at all times subject only to Forfeiture for Cause as
 defined in Section 7.6.  For all purposes of the Plan, earnings with respect to amounts in a Participant's
 Account which were vested as of December 31, 2004 (and earnings on such earnings) shall be deemed to
 have been vested as of December 31, 2004 and all other earnings with respect to amounts in a Participant's
 Account shall be deemed not to have been vested as of December 31, 2004.

Article III
Deferral Elections; Employee Deferrals; Bank Deferrals

		
	3.1
	Deferral Elections.  The Plan Administrator shall provide each Participant with a form on which to make a Deferral Election within 10 days after such Participant becomes eligible to participate in the Plan and at least 30 days prior to the end of each calendar year.  Each Participant shall execute and deliver the Deferral Election to the Plan Administrator no later than the last business day of each calendar year with respect to Compensation to be earned and amounts eligible pursuant to the incentive compensation plan to be earned in the following calendar year excluding any Deferred Incentive Award.  

An executive or key employee who becomes eligible to participate during a calendar year shall have the option to execute a Deferral Election and deliver it to the Administrator within 30 days of the date he/she becomes eligible to participate in the Plan.  Such election shall apply only to Compensation and awards under an incentive plan (excluding any Deferred Incentive Award) to be earned after the date of the delivery of the Deferral Election to the Administrator and the Bank shall defer such amounts on a prorated basis when applicable.

The Deferral Election will state the percentage of Compensation and amounts eligible to be earned pursuant to   the incentive plan then in effect which the Participant elects to defer for the remainder of the first year of his/her eligibility or for the forthcoming calendar year, as the case may be.  In the case of the deferral of a VIP, TIP (or other incentive plan with a retention feature) amount, it is expressly agreed that the Deferred Incentive Award portions of such incentive compensation is not subject to deferral.  A Deferral Election shall be irrevocable for the calendar year (or portion thereof in the case of the first year of eligibility) for which the deferral is elected unless an amendment of the Thrift Plan requires a new election by a Participant, and such a new election is permissible under I.R.C. Section 409A and implementing regulations.  If such an event occurs, the Plan Administrator will communicate in writing with the Participant to request a new Deferral Election.  Notwithstanding an amendment of the Thrift Plan:

		
	(a)
	(i) As to amounts earned in the first calendar year of participation, no modification of a Deferral Election may be made more than thirty (30) days after a Participant becomes eligible to participate in the Plan; and (ii) as to amounts earned in the second and subsequent calendar years of participation, no modification of a Deferral Election may be made after December 31 of the calendar year preceding the calendar year in which the amounts are earned; and 

		
	(b)
	as to amounts in a Participant's Account which are not vested as of December 31, 2004, the last four sentences of Section 5.5 shall apply.

		
	3.2
	Employee Deferrals.  Once the Participant has made the maximum amount of employee contributions allowable under the Thrift Plan in a calendar year, additional amounts shall be deferred under this Plan in accordance with the Participant's Deferral Election.  Amounts deferred under this Plan with respect to any calendar year may not exceed 80 percent of the sum of the Participant's Compensation and amounts earned pursuant to the incentive plan then in effect during such calendar year less the Participant's contributions to the Thrift Plan; provided that, in no event shall a Participant be able to defer under this Plan any portion of a Deferred Incentive Award.  For this purpose, a Participant's contributions to the Thrift Plan shall include any after‐tax contributions to the Thrift Plan by such Participant.  

3.3    Bank Deferrals.  For each Employee Deferral, the Bank shall allocate a matching Bank Deferral equal to
 200 percent of the Employee Deferral; provided that, Bank Deferrals for each Participant with respect to
 each calendar year shall not exceed the excess of (a) three percent of the Participant's Compensation over
 (b) the Bank's matching contribution to the Thrift Plan.  

Article IV
Accounts and Investment Vehicles

		
	4.1
	Accounts.  The total of the Employee and Bank Deferrals shall be credited monthly to the applicable Participant Account as the deferred amounts are earned and shall be recorded on the financial books and records of the Bank as a liability owed to the Participant.

		
	4.2
	Notional Investments.  Effective November 1, 2007, all Employee and Bank Deferrals credited to a Participant's Account will be assumed to be notionally invested in the investment funds selected by Participant from time to time from a list provided to the Participant by the Bank (such list is referred to as the “Eligible Investments”).  Such Eligible Investments shall be substantially similar to the investment choices available under the Thrift Plan from time to time.  Each Participant's notional share in the investment funds shall be represented by notional units in such funds.  Each valuation day the number of new notional units credited to a Participant in the investment funds will be determined by dividing the total amount of such Participant's Employee and Bank Deferrals notionally invested in the investment funds during the month by the unit value of the investment funds as of the most recent valuation date.  The notional allocations of Employee and Bank Deferrals to the investment funds shall be as set forth in the investment election forms completed by each Participant and submitted to the Plan Administrator from time to time.  Such election forms may be submitted in electronic form in accordance with instructions from the Plan Administrator or, at the option of the Participant in written form.  

4.3    Records.  The Plan Administrator shall maintain such records as it deems necessary to administer this Plan
 and shall direct the calculation of amounts in the Participants' Accounts.  To this end, the Plan
 Administrator is authorized to use Bank employees, agents or contractors to calculate the benefits due
 hereunder.

Article V
Distribution of Benefits

		
	5.1
	Amount of Benefits.  A Participant's Account shall be valued as of the last day of the month preceding each month with respect to which the Participant is entitled to receive a distribution hereunder, assuming no contributions were made since the last day of the preceding month.  If a contribution was made since the last day of the preceding month, the amount of such contribution shall be added to the value determined under the preceding sentence.

		
	5.2
	Events Which Trigger Payment of Amounts Vested as of 12/31/04.  The amounts in a Participant's Account which are vested as of December 31, 2004, including all earnings thereon, shall become payable to him/her pursuant to Section 5.3 as of the earliest of the date of his/her termination of employment with the Bank, including termination due to death, his/her Disability, or his/her retirement or other Separation from Service as defined above.  With respect to amounts in a Participant's Account which are vested as of December 31, 2004, notwithstanding any deferral election previously made, a Participant may at any time submit a request, through the Plan Administrator, to the Governance Committee seeking a distribution of part or all of such amounts for reasons of severe financial hardship or other reasons as permitted under the provisions of the Thrift Plan in its form as of October 3, 2004.  The Governance Committee may, in its absolute discretion, grant or refuse any such request.  It is the intention of the Board that hardship and other withdrawals of amounts in a Participant's Account which are vested as of December 31, 2004 shall be available for the same reasons as such withdrawals are available from the Thrift Plan (in its form as of October 3, 2004) and that the Participant shall provide such proof and documentation as is required for hardship and other withdrawals from the Thrift Plan.

		
	5.3
	Amounts Vested as of 12/31/04 - Form and Timing of Payment.  When a Participant's Account is payable pursuant to Section 5.2, it shall be paid in a lump sum within 90 days following the applicable payment event set forth in Section 5.2.  Alternatively, if the Participant has so elected, the Participant's Account shall be paid in from two to ten annual installments.  In the case of installment payments, the first installment payment shall be made within 90 days of the applicable payment event set forth in Section 5.2 and each remaining annual installment shall be paid no later than March 31 of each succeeding year.  The amount of the installment payment to be distributed in each calendar year shall be the amount calculated by dividing the value of the Participant's Account as of the immediately preceding month-end by the number of remaining installment payments, including the one whose value is being calculated.  The elections and any changes to an election which are permitted hereunder will become effective on the first January 1 which is at least twelve months after the date of the election.  Failure to make an election shall result in a lump sum payment within 90 days of the triggering payment event.

		
	5.4
	Events Which Trigger Payment of Amounts Not Vested as of 12/31/04.  The amount in a Participant's Account which is not vested as of December 31, 2004, including all earnings thereon, shall become payable to him/her pursuant to Section 5.5 as of the earliest of the date of his/her termination of employment with the Bank (including retirement or other Separation from Service as defined above), his/her Disability or his/her death.  With respect to amounts in a Participant's Account which are not vested as of December 31, 2004, notwithstanding any deferral election previously made, in the event that a Participant suffers an Unforeseeable Emergency, the Participant may submit a request, through the Plan Administrator, to the Governance Committee seeking a distribution of part or all of the amount credited to such Participant's Account.  The Governance Committee may, in its absolute discretion, grant or refuse any such request.  The amount of a distribution that the Bank may make hereunder in response to such a Participant request shall be limited to the amount needed to satisfy the Unforeseeable Emergency plus taxes reasonably anticipated as a result of the distribution.  Distributions shall not be allowed to the extent that the Unforeseeable Emergency may be relieved through reimbursement or compensation by insurance or otherwise, or by liquidation of a Participant's assets (to the extent such liquidation would not itself cause a severe financial hardship).   

		
	5.5
	Amounts Not Vested as of 12/31/04 - Form of Payment.  When a Participant's Account is payable pursuant to Section 5.4, it shall be paid in a lump sum within 90 days following the applicable payment event set forth in Section 5.4.  Alternatively, if the Participant has so elected, the Participant's Account shall be paid in from two to ten annual installments.  Failure to make an election at any time shall result in a lump sum payment.  Any change in an installment payment election, from an installment payment election to a lump sum election or from a lump sum election to an installment payment election (“Revised Election”) will become effective on the first January 1 which is at least twelve months after the date of the election.  In addition, with respect to any such Revised Election which changes the timing of any payment, each payment to be made to the Participant shall be deferred by a date which is at least 5 years after the date on which such payment would have been made; provided that, for this purpose, a series of installment payments shall be treated as the entitlement to a single payment on the date of the first payment.  A Revised Election which changes an Existing Election from installment payments to a lump sum payment shall require that the date of such lump sum payment shall be a date that is at least 5 years from the date the initial installment payment would have been made.  Notwithstanding the foregoing or any provision in this Plan, a Revised Election may not cause the impermissible acceleration of any payment, within the meaning of Internal Revenue Code Section 409A or its implementing regulations.   

		
	5.6
	Amounts Not Vested as of 12/31/04 - Timing and Calculation of Installment Payments.  Installment payments under this Plan shall be made as follows: the first payment shall be made within 90 days of the payment event with each remaining annual installment paid no later than March 31 of each succeeding year.  The amount of the installment payment to be distributed in each calendar year shall be the amount calculated by dividing the value of the Participant's Account as of the immediately preceding month end by the number of remaining installment payments, including the one whose value is being calculated.  

		
	5.7
	Amounts Not Vested as of 12/31/04 - Revision of Existing Payment Election Prior to 12/31/07.  The Plan is hereby amended to permit each Participant, on or before December 31, 2007, to amend his/her current payment election as in effect on June 25, 2007, covering amounts not vested as of December 31, 2004.  Such a revised payment election shall be referred to as a “Transition Election.”  Provided that such Transition Election does not result in a payment in 2007, such Transition Election shall become effective upon receipt by the Plan Administrator and shall not be subject to the terms of Section 5.5.  Any Transition Election shall be subject to the requirements of I.R.S. Notice 2006-79.  

Additional Transition Election Prior to 12/31/08:  Effective January 1, 2008, the Plan is hereby amended to permit Participant, on or before December 31, 2008, to amend his/her current payment election with respect to amounts not vested as of December 31, 2004.  Such revised payment election shall be referred to as the 2008 Transition Election.   Provided that such 2008 Transition Election does not result in a payment in 2008, such 2008 Transition Election shall become effective upon receipt by the Plan Administrator and shall not be subject to the terms of Section 5.5.  Any 2008 Transition Election shall be subject to the requirements of I.R.S. Notice 2006-79, as modified by IRS Notice 2007-86.

		
	5.8
	Death Benefits.  In the event of a Participant's death prior to the payment of all amounts in the Participant's Account, the amount then held in the Participant's Account shall become payable to his/her Beneficiary in the same manner as such amount would have been paid to the Participant had he/she not died.

		
	5.9
	Loans.  No loans are available from the Plan.

Article VI
Administration of the Plan

		
	6.1
	Governance Committee.  The Board has delegated to the Governance Committee authority over, and responsibility for, the interpretation and administration of the Plan; except that the power to determine eligibility for participation in the Plan pursuant to Section 2.1 is reserved to the Board.  The Governance Committee shall interpret and construe the Plan and have the responsibility to ensure that its provisions are carried out.  The Governance Committee shall exercise such power and responsibilities in its sole and absolute discretion.  The Governance Committee shall designate the Plan Administrator.

		
	6.2
	Plan Administration.  The Plan Administrator shall:

    

		
	(a)
	act as the point of contact for submission of claims for benefits due under the Plan;

(b)    calculate the benefits due under the Plan or arrange for the calculation of benefits;

(c)    inform Participants of the terms of the Plan and respond to their questions regarding the Plan;

(d)    review and process claims for the payment of benefits under the Plan;

(e)    provide necessary reporting to Bank management, Participants, the Governance Committee, the
 Board, and others as necessary; and

(f)    take such other action as is required to perform the tasks listed hereunder or otherwise administer
     the terms of the Plan.  In fulfilling the responsibilities in this section, the Plan Administrator may
 use other Bank staff, other agents or engage contractors.  

		
	6.3
	Claims Procedure.  All claims for benefits shall be in writing and shall be filed with the Plan Administrator.  If the Plan Administrator wholly or partially denies a Participant's or Beneficiary's claim for benefits, the Plan Administrator shall, within 90 days after the Plan's receipt of the claim, give the claimant written notice setting forth in understandable language:

		
	(a)
	the specific reason(s) for the denial;

		
	(b)
	specific reference to pertinent Plan provisions on which the denial is based;

		
	(c)
	a description of any additional material or information which must be submitted to perfect the claim, and an explanation of why such material or information is necessary; and

		
	(d)
	an explanation of the Plan's review procedure.

The claimant shall have 60 days after the day on which such written notice of denial is handed or mailed to him/her in which to apply (in person or by authorized representative) to the Governance Committee, in writing, for a full and fair review of the denial of this claim.  In connection with such review, the claimant (or this representative) shall be afforded a reasonable opportunity to review pertinent documents and may submit issues and comments in writing.

The Governance Committee shall issue its decision on review promptly and within 60 days after the Plan's receipt of the request for review, unless special circumstances require an extension to not later than 120 days after receipt of the request for review.  (Written notice of any such extension shall be furnished to the claimant before the commencement of such extension.)  The decision shall be in writing and shall set forth 

in understandable language specific reasons for the decision and specific references to pertinent Plan provisions on which the decision is based.

Article VII
          General Provisions

		
	7.1
	Rights to Employment.  The establishment of the Plan, and selection of an executive for inclusion as a Participant in the Plan, shall not be construed as conferring any legal rights upon any Participant or other person for the continuation of employment; nor shall it interfere with the rights of the Bank to discharge any Participant and to treat him/her without regard to the effect such treatment might have upon him/her as a Participant in the Plan.

		
	7.2
	Source of Funding-Participant as General Creditor.  The Bank has not established any form of trust or funded account for the purpose of providing benefits under this Plan.  In the event that the Bank establishes a rabbi trust or other similar arrangement, such arrangement shall preserve this Plan's status under the Internal Revenue Code as an unfunded nonqualified deferred compensation plan and the assets of the Bank held pursuant to any such arrangement shall remain subject to the claims of the Bank's general creditors.  Any Participant who may have or claim any interest in or right to any amount payable hereunder shall rely solely upon the unsecured promise of the Bank, as set forth herein, for the payment of the claim.  Nothing herein contained should be construed to give to or vest in any Participant, now or at any time in the future, any right, title, interest or claim in or to any specific asset, fund, reserve, account or property of any kind whatever owned by the Bank, or in which the Bank may have any right, title or interest, now or at any time in the future.  The Plan is not intended to be a qualified plan within the meaning of Section 401(a) of the Code and the Bank shall not be required to qualify the Plan under the Code.

		
	7.3
	Incapacity.  In the event that the Governance Committee shall find that a Participant is unable to care for his/her affairs because of illness or accident, the Governance Committee may direct that any payment due him/her, unless claim shall have been made therefor by a duly appointed legal representative, be paid to his/her spouse, a child, a parent or other blood relative, or to a person with whom he/she resides, and any such payment so made shall be a complete discharge of the liabilities of the Plan therefor.

		
	7.4
	Reporting and Withholding of Taxes.  The Bank shall file Form W-2 and other applicable tax documents as required under applicable federal and state law, including, without limitation, required annual federal tax filings of a Participant's accrued benefits under the Plan.  The Bank shall have the right to deduct from each payment to be made under the Plan any required withholding taxes and shall withhold or cause to be withheld from all payments or accruals of benefits under the Plan (if applicable), all federal, state or local taxes required to be withheld by law.  The Participant shall be liable for the payment of all taxes on the benefits under the Plan that are the Participant's responsibility under the laws establishing such taxes.

7.5    Alienation of Benefits under the Plan.  Benefits payable under this Plan shall not be subject in any
 manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, whether
 voluntary or involuntary, including any such liability which is for alimony or other payments for the
 support of a spouse or former spouse, or for any other relative of the Participant, prior to actually being
 received by the person entitled to the benefits under the terms of the Plan, and any attempt to anticipate,
 alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void; nor shall any such
 distribution or payment be in any way liable for or subject to the debts, contracts, liabilities, engagements
 or torts of any person entitled to such distribution or payment.  If any Participant or Beneficiary is
 adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge
 any such distribution or payment voluntarily or involuntarily, the Bank, in its discretion, may hold or cause
 to be held or applied such distribution or payment or any part thereof to or for the benefit of such
 Participant or Beneficiary in such manner as the Bank shall direct.

		
	7.6
	Forfeiture for Cause.  The Bank Deferrals and the earnings on the Bank Deferrals otherwise payable by the Plan may be subject to forfeiture for cause at any time.  "Cause" shall mean:

		
	(a)
	the perpetration by a Participant of a defalcation involving the Bank or any affiliate;

		
	(b)
	willful, reckless or grossly negligent conduct of a Participant entailing a substantial violation of any material provision of the laws, rules, regulations or orders of any governmental agency applicable to the Bank or an affiliate;

		
	(c)
	the repeated and deliberate failure by a Participant to comply with reasonable policies or directives of the Board of Directors; or

(d)      the breach by a Participant of a noncompetitive covenant or agreement with the Bank or affiliate.

Whether the facts in any given case amount to "Cause" shall be determined by the Board of Directors.

		
	7.7
	Compliance with Laws.  The provisions of the Plan shall be construed, administered and governed under the laws of the United States including, without limitation, Internal Revenue Code Section 409A and implementing regulations and, to the extent they defer to state law, the laws of the Commonwealth of Pennsylvania.  

		
	7.8
	Construction.  Whenever any words are used herein in the masculine gender, they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and whenever any words are used herein in the singular form, they shall be construed as though they were also used in the plural form in all cases where they would so apply.  Titles of Articles and Sections hereof are for convenience of reference only and are not to be taken into account in construing the provisions of this Plan.  In case any provision of the Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of the Plan, but the Plan shall be construed and enforced as if said illegal and invalid provision had never been inserted herein.

		
	7.9
	Amendment and Termination.  The Bank specifically reserves the right, in the sole and unfettered discretion of its Board, at any time, to amend, in whole or in part, any or all of the provisions of the Plan and to terminate the Plan in whole or in part; provided, however, that no such amendment or termination shall reduce or eliminate the rights of a Participant accrued hereunder to the date of such amendment or termination.  Provided further, that no such termination shall result in an impermissible acceleration of any amount deferred under this Plan that would violate the provisions of Internal Revenue Code Section 409A(a)(3) or Treasury Regulation Section 1.409A-3(j) or any successor regulations.  

7.10    Binding on Successors.  The Plan shall be binding upon and inure to the benefit of the Bank and its
 successors and assigns.  The Plan shall 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.  Nothing in the Plan
 shall preclude the Bank from merging or consolidating into or with, or transferring all or substantially all
 of its assets to, another 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 Participants' 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" shall refer to such other
 organization and the Plan shall continue in full force and effect.

7.11    Permissible Payment Acceleration.  In the event of an Internal Revenue Code Section 409A Plan failure
 that results in income inclusion to a Participant, payment of Participant's benefits under this Plan shall be
 accelerated; provided that, the amount of the accelerated payment shall not exceed the amount required to
 be included in Participant's income due to the Plan failure.FHLB Pit ex10.11 10K 2012

FEDERAL HOME LOAN BANK OF PITTSBURGH
EXECUTIVE OFFICER INCENTIVE COMPENSATION PLAN 

I.    EFFECTIVE DATE

This Executive Officer Incentive Compensation Plan (“Executive Officer Plan” or “Plan”) of the Federal Home Loan Bank of Pittsburgh is established effective as of January 1, 2013 and shall continue in effect until terminated by the Bank’s Board of Directors.  Incentive Awards (“Awards”) may be paid for the Plan Year (January 1 to December 31,each year) in accordance with the provisions of this Plan.  The goals for the Plan Year and terms of the Awards shall be set forth in a separate Attachment to this Plan.     

II.    PURPOSE AND OBJECTIVES

The Plan is designed to retain and motivate executive officers and reward the:  (i) achievement of key annual goals and (ii) maintenance of satisfactory financial condition and member value over the longer term.   

III.    PLAN ADMINISTRATION

The Plan is administered by the President; the Governance, Public Policy, and Human Resources Committee of the Board of Directors (the “Committee”); and the Board of Directors (the “Board”).

		
	A.
	Responsibilities of the President

The President will provide recommendations to the Committee and the Board regarding Plan participation, Bank performance goals, Bank achievements, and Awards for the Bank’s executive officers.  

B.    Responsibilities of the Committee

The Committee will review all Plan recommendations and revisions (including all performance goals and Awards) from the President and present final recommendations to the Board for its approval.  In addition, the Committee will review the performance of the President and the Bank’s other executive officers and make recommendations regarding any Award payouts under the Plan.

C.    Responsibilities of the Board

The Board will review and approve (as it determines appropriate) recommendations from the Committee. 

IV.    ELIGIBILITY

The Bank’s executive officers are eligible to participate on the terms described in this Executive Officer Plan.  Upon designation as a participant, each participant will be provided a copy of the Plan. 

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	V.
	EXECUTIVE OFFICER PLAN AWARD OPPORTUNITY LEVELS

A summary of the Award levels is attached as Attachment A.  Each participant shall be provided with a separate document showing his/her level of participation in the Plan.  

VI.    PERFORMANCE MEASURES 

The Plan Year for the Award opportunity shall mean the annual period ending December 31, (unless otherwise specifically stated in regard to a goal(s) in the applicable goal attachment to this Executive Officer Plan for the Plan Year).  The Plan goals can be both quantitative and qualitative.  Overall performance of Bank goals, and individual and group goals (as applicable), as well as individual performance objectives as measured through the Bank’s performance evaluation process, in aggregate, quantify the performance measures under the Plan that will be considered when determining overall actual performance and any Award payout amount. 

Certain positions have a greater and more direct impact than others on the achievement of Bank performance.  Those differences are recognized by varying the incentive opportunity expressed as a percentage of a participant's base salary.  For executive management, generally, the greater the control and influence a participant can exert over Bank goals, the larger a portion of their incentive Award will be based on Bank performance.  Executive officer goals may consist solely of Bank goals or they may include a combination of Bank goals and individual or group goals as determined by the Board.  

In general, goals requiring attainment of specified performance or completion of specified tasks and activities shall not be considered as having been met when the actual performance as measured by completion of the activities has not been attained.  Interpolation of Award amounts is permissible for achieved performance (measured by completion of the stated goals) at levels between threshold and target, and target and maximum.  Awards for performance results between the threshold and target levels are calculated as a percentage of the target level.  Awards for performance between the target and maximum levels are calculated as a percentage of maximum.  Additionally, the specific terms of an approved goal(s) may establish further standards for interpolation.    

		
	VII.
	AWARD DETERMINATION AND PAYMENT

No participant has a vested right to any Award under the Plan until: (i) a determination of an Award payment has been made by the Board; (ii) the participant has met all applicable requirements for such Award and for receiving payment of such an Award, including, without limitation, any continued service and performance requirements as set forth in this Plan; and (iii) all the other conditions and criteria regarding payment of such Award as set forth in this Executive Officer Plan are met. 

At the conclusion of the applicable Plan Year after considering the Bank's performance against the Bank goal(s), individual performance, and actual overall Bank performance, the President shall recommend to the Committee the Awards to be paid to the Bank’s executive officers, excluding the President.   With respect to the determination of any Awards to the executive officers under this Plan the Committee and the Board shall consider, in addition to individual and overall Bank performance, Bank financial condition, operating environment, and any other factors it considers relevant, including, 

            

without limitation, the extent (if any) to which any extraordinary or non-recurring transaction had a material effect on whether a goal(s) was attained.   
A participant who is on formal corrective action for performance at any time during the Plan Year, or is rated as “Unsatisfactory” or “Needs Improvement” on their most recent performance evaluation will be ineligible to receive any payment of any Award.  
In order for any Award payment to be made, the most recent examination by the Federal Housing Finance Agency of the participant’s area(s) of responsibility must not have identified any unsafe or unsound practice or condition.  

		
	A.
	Assessment of Performance

Following December 31 of each year  the Board will evaluate performance against the incentive goals set forth on the attached Annual Goal Scorecard and determine the total amount of the Award (if any) based on that performance (such amount shall be referred to as the “Total Award”). The Total Award, if any, will be divided such that: 1) 50 percent of the Total Award shall be referred to as the “Current Incentive Award” and 2) the remaining 50 percent of the Total Award shall be referred to as the “Deferred Incentive Award.”  The following illustrates how the 2013 Current Award and Deferred Incentive Award would be paid:

	
			
	Payment
	Description
	Payment Year*

	Current Incentive Award
	50% of the Total Award
	2014

	Deferred Incentive Award installment
	Up to 33 1/3%  Deferred Incentive Award
	2015

	Deferred Incentive Award installment
	Up to 33 1/3% of the Deferred Incentive Award
	2016

	Deferred Incentive Award installment
	Up to 33 1/3% of the Deferred Incentive Award
	2017

*Payment will be made no later than March 15 in the year indicated.  

All payments are subject to the terms of this Plan, including Section B below.  In no event shall the aggregate amount of any Current Incentive Award and Deferred Incentive Award installments paid to a participant in any payment year exceed 100 percent of the participant’s base salary.    

		
	B.
	Payment of Each Deferred Incentive Award Installment Contingent on the Bank Continuing to Meet Stated Criteria and Contingent on the Participant Meeting Stated Payment Criteria

1.    Maintenance of Satisfactory Bank Performance

Except as set forth in Subsection 2., it is intended that a condition to payment of each Deferred Incentive Award installment is that in the annual period preceding the designated Payment Year for such installment, the Board determines that the Bank has met at least one (1) of the Deferred Incentive Award criteria set forth in Attachment B to this Plan.  If the Board determines that the Bank has not met any of the stated criteria, then, such Deferred Incentive Award installment payment shall not be made.  For the avoidance of doubt, if the Bank fails to meet at least one (1) of the criteria in the year preceding a designated Payment Year for one installment of a Deferred Incentive Award 

            

and such installment payment is not made, but then, the Bank meets at least one of the criteria in the annual period before the designated Payment Year for the next installment payment, then, a subsequent Deferred Incentive Award installment payment shall be made.  The actual amount of each Deferred Incentive Award installment payment shall be determined pro-rata or on such other basis as the Board shall determine in assessing the extent to which the stated criteria set forth on Attachment B were met by the Bank during the preceding annual period.  In no case may the maximum amount of any Deferred Incentive Award installment be paid unless all of the stated criteria in Attachment B have been met in the preceding year.  This provision shall not in any manner limit the Board’s authority under Articles VIII. and IX. of the Plan.  

		
	2.
	Board Discretion—Strategic Transactions

If prior to payout of all Deferred Incentive Award payments, Bank management recommends and the Board approves, a PLMBS risk reduction strategy including, without limitation, sale of some or all of the Bank’s PLMBS portfolio, then, the maintenance of satisfactory Bank performance requirement stated above in Subsection 1 requiring that the Bank meet at least one (1) of the stated criteria set forth in Attachment B shall not serve as a condition that must be met prior to payout of the remaining Deferred Incentive Award payments.  In such case, the Bank does not have to meet any of the Deferred Incentive Award criteria in the annual period preceding each designated Payment Year and the Board may waive this condition separately on a year-by-year basis as to each remaining unpaid Deferred Incentive Award installment.  If the Board does not take action with respect to an installment to waive the condition in the year preceding the Payment Year(s) for such installment, then, such condition shall not be waived as to that installment.   

If prior to the payout of all Deferred Incentive Award payments a Change in Control event occurs (as defined below) then, in such case, the Deferred Incentive Award criteria set forth on Attachment B are inapplicable and all unpaid Deferred Incentive Awards: (i) shall vest 30 days after the Finance Agency issues its written approval of such a transaction and (ii) shall be paid to the participants 30 days after the closing of the transaction.  

For purposes of this section “Change in Control” shall mean:  (i) the merger, reorganization, or consolidation of the Bank with or into another Federal Home Loan Bank or other entity, (ii) the sale or transfer of all or substantially all of the business or assets of the Bank to another Federal Home Loan Bank or other entity, (iii) the purchase by the Bank or transfer to the Bank of all or substantially all of the business or assets of another Federal Home Loan Bank, (iv) a change in the composition of the Board of Directors, as a result of one or a series of related transactions, that causes the number of directors of the Bank elected by members of the Bank located in Pennsylvania, West Virginia, and Delaware to cease to constitute a majority of the directors of the Bank that are elected by members of the Bank (excluding, for purposes of this clause (iv), non-member independent directors), or (v) the liquidation of the Bank.  Provided that the term "reorganization" contained in this definition shall not include any reorganization that is mandated by federal statute, rule, regulation, or directive, including 12 U.S.C. Section 1421, et seq., as amended, and 12 U.S.C. Section 4501 et seq., as amended, and which the Director of the Finance Agency (or successor agency) has determined should not be a basis for making payment under this Plan, by reason of the capital condition of the Bank or because of unsafe or unsound acts, practices, or condition ascertained in the course of the Agency's supervision of the Bank or because any of the conditions 

            

identified in 12 U.S.C. Section 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. Section 1431(d)).
  
		
	3.
	Termination of Employment; Pro-Rated and Deferred Incentive Award Payments; Participant Performance Condition 

Participants who terminate employment with the Bank for any reason, other than death, disability, or retirement prior to the Current Incentive Award payout date will not be eligible for such an Award.  Participants who are hired during the Plan Year or whose employment ends due to involuntary termination (excluding involuntary termination for cause), death, disability, or retirement prior to the Current Incentive Award payout date may be eligible to be considered for a pro-rated Current Incentive Award.  

Participants who terminate employment due to retirement or involuntary termination (other than for cause) after the Current Incentive Award payout date but before completion of the payment of all corresponding Deferred Incentive Award installments (as set forth above) shall receive such Deferred Incentive Award installment payments at the same time as such payments are made to Plan participants who are current Bank employees.  Participants who otherwise resign employment before the completion of the payment of all corresponding Deferred Incentive Award installments shall not receive payment of such installments.  Any participant that is terminated by the Bank for cause (as defined in this Plan) prior to receiving payment of all corresponding Deferred Incentive Award installments shall not receive payment of any remaining unpaid Deferred Incentive Award installments.  This provision shall not in any manner limit the Board’s authority under Articles VIII. and IX. of the Plan.  

In the case of a participant whose employment terminates due to death or disability before completion of the payment of all corresponding Deferred Incentive Award installments, such installments shall promptly vest following the death or disability and the remaining installments shall be paid by the Bank within 90 days of the date of death or determination of disability.  

C.    Provisions Applicable to All Awards Under the Plan

Except as expressly set forth otherwise in this Plan, payments under the Plan are intended to satisfy the “short-term deferral” exception under Section 409A of the Internal Revenue Code (“Code”).  Each payment under the Plan will be treated as a separate payment for purposes of Section 409A of the Code and corresponding IRS 409A Regulations.  Appropriate provisions shall be made for any taxes that the Bank determines are required to be withheld from any Awards under the applicable laws or other regulations of any governmental authority, whether federal, state, or local.  For the avoidance of doubt, Participants will be solely responsible for any applicable taxes (including income and excise taxes) and penalties, and any interest that accrues thereon, that they incur in connection with the receipt of any Award under the Plan.  This Plan and the payment of any Award hereunder shall be subject to the Finance Agency’s authority over executive compensation pursuant to 12 U.S.C.§ 4518.  The payment of any Award shall be subject to such obligations, terms, and conditions as the Committee or the Board may specify in making the Award and, in exercising its discretion to make any Award determination hereunder, the Board may choose to consider factors such as overall Bank financial performance, operating environment, and other relevant 

            

considerations.  Acceptance of any Award shall constitute agreement by the participant to all obligations, terms, conditions, and restrictions so imposed.   

VIII.    CLAWBACK AND REDUCTION OF AWARDS
In the event of gross misconduct, gross negligence, materially inaccurate financial statements, erroneous performance metrics related to incentive goal calculation or conviction of a felony, the Board will have the authority to adjust Award amounts or reclaim Award payments.  For the avoidance of doubt, the Board may in its sole discretion, decline to adjust the terms of any outstanding Award if it determines that such adjustment would violate applicable law or result in adverse tax consequences to a participant or the Bank.  
The Board will utilize its discretion to reduce the amount of any Current Award and Deferred Award installments if it determines that:
		
	(i)
	Operational errors or omissions result in material revisions to the financial results, information submitted to the Federal Housing Finance Agency (“Finance Agency”), or data used to determine incentive award payment amounts;

		
	(ii)
	The submission of information to the Securities and Exchange Commission (“SEC”), the Office of Finance (“OF”), and/or the Finance Agency has not been provided in a timely manner; or

		
	(iii)
	The Bank fails to make sufficient progress, as determined by the Finance Agency and communicated to Bank management and/or the Board by the Finance Agency, in the timely remediation of examination, monitoring, and other supervisory findings and matters requiring executive management’s attention.

            

IX.    TERMINATION OR AMENDMENT

The Plan, in whole or in part, may at any time or from time to time be amended, suspended, or reinstated and may at any time be terminated by action of the Board.  The Board has the power and authority to construe, interpret, and administer the Plan.  Any decision arising out of or in connection with the construction, interpretation, or administration of the Plan will lie within the Board's absolute discretion and will be binding on all parties. No provision of this Plan shall create any right to continued employment.  

Attachments

            

Attachment A—Award Levels

2012 Incentive Award Opportunity Levels (expressed as a percentage of base salary)
 

	
				
	Participant Level
	 Threshold
Incentive Award Opportunity
	 Target
Incentive Award Opportunity
	 Maximum
Incentive Award Opportunity

	Level A
	40%
	70%
	100%

	Level B
	30%
	50%
	70%

	Level C
	20%
	40%
	60%

 

Attachment B— 
2013

Criteria for Payment of Deferred Award Installments 

	
	
	(1)   Market Value of Equity to Par Value of Capital Stock (MV/CS) – Maintain MV/CS above 105% on average throughout the year.

	(2)   Retained Earnings Level – Maintain enough retained earnings to exceed the Bank’s retained earnings target at each year end of deferred payment period.

	The Board will consider the following criteria and may exercise its discretion to adjust an award based on such criteria:

Remediation of Examination Findings.  Defined as the Bank making sufficient progress, as determined by the FHFA and communicated to Bank management or the Board of Directors by the FHFA, in the timely remediation of examination, monitoring, and other supervisory findings and matters requiring executive management’s attention.  Refers to examination findings from the examination during the applicable deferral year for the installment.  For example, for the 2013 installment (payable in 2014), the applicable examination is the 2013 examination.

Timeliness of FHFA, SEC, and OF Filings.  Filings defined as SEC periodic filings, call report filings with FHFA, and FRS filings with OF that are timely filed and no material restatement by the Bank is required.

	Notes:  at least one of the (1) and (2) stated quantifiable criteria above must have been met in the preceding year in order for any installment payment to be made.  In no event shall the aggregate amount of any Current Incentive Award and Deferred Incentive Award installments paid to a participant in any payment year exceed 100 percent of the participant’s base salary.

2013 Incentive Goal Scorecard

	
						
	 
	Goal
	Weight
	Threshold
	Target
	Max

	Build Strength and Flexibility
	Market Value of Equity to par value of capital stock price at December 31, 2013.

Increase Retained Earnings consistent with the 2013 Operating  Plan ($ in millions). 
	25%

25%
	115

$48
	120

$85
	125

$105

	Embrace Operational Excellence
	Focus on Regulatory Matters by improving exam component ratings.
	15%
	 
	Maintain composite Exam rating
	Improve exam component ratings by 14%

	Serve the Membership
	Member and potential Member Outreach in 2013.1 
(Outreach is defined as in-person contact).

Average number of Bank product touch points with members.2
	15%

10%
	175

1.35
	190

1.42
	215

1.56

	Vitalize Communities
	Increase the number of touchpoints with members, which is defined as those members that submit an application or enroll in or participate in a community investment product including AHP, BOB, CLP and FFD.    
                                                                                                          
	10%
	85
	90
	95

Notes:
1 Member outreach includes Executive Committee participation on in-person member calls, member trades, member regulators. regional member meetings, educational sessions and member trade association conventions.
2 Product touch points include execution of the following transactions in 2013 by all members:  Advances, LOCs, Safekeeping, MPF Original/Government and MPF Xtra.

2013 Risk Management Incentive Goal Scorecard  

	
						
	 
	Goal
	Weight
	Threshold
	Target
	Max

	Build Strength and Flexibility
	Market Value of Equity to par value of capital stock price at December 31, 2013.

Increase Retained Earnings consistent with the 2013 Operating Plan 
($ in millions). 
	15%

15%
	115

$48
	120

$85
	125

$105

	Embrace Operational Excellence
	Focus on Regulatory Matters by improving exam component ratings.
	15%
	 
	Maintain composite Exam rating
	Improve exam component ratings by 14%

	 
	The Risk Management Department will complete the following five initiatives that improve analytics, efficiency, or compliance.  The five projects have been approved by the CEO and are as follows:

1.    QRM and AFT upgrades
2.    Counterparty Management – derivative clearing and derivative risk management
3.    Continued enhancement of Insurance Company risk oversight
4.    Compliance Framework design and implementation
5.    AB 2012-02 implementation
	40%
	Based on cumulative threshold/target/
maximum achievement of the five projects
	Based on cumulative threshold/target/
maximum achievement of the five projects
	Based on cumulative threshold/target/
maximum achievement of the five projects

	Serve the Membership
	Member and potential Member Outreach in 2013. (1) 
(Outreach is defined as in-person contact).
	15%
	175
	190
	215

Notes:
1 Member outreach includes in-person member calls, regional member meetings, member regulator meetings, educational sessions and Webinars conducted by 
Executive Committee.

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