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PINNACLE FINANCIAL PARTNERS, INC.

FIRST AMENDMENT TO
NAMED EXECUTIVE OFFICERS
2020 PERFORMANCE UNIT AWARD AGREEMENT

This First Amendment (the “Amendment”) to the Named Executive Officers 2020 Performance Unit Award Agreement (the “Agreement”) by and between Pinnacle Financial Partners,  Inc.,  a Tennessee corporation (the “Company”) and _____________ (the "Grantee") dated January ___, 2020, is effective this 21st day of January, 2021, and amends the Agreement. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Agreement.

WHEREAS, the Company and the Grantee are parties to the Agreement pursuant to which the Company has granted to the Grantee, subject to the terms and conditions of the Agreement and the Pinnacle Financial Partners, Inc. 2018 Omnibus Equity Incentive Plan (the “Plan”), certain Performance Units (as defined in the Agreement);

WHEREAS, pursuant to Section 3.1 of the Plan and Section 11.6 of the Agreement, the Company, upon the approval of the Human Resources and Compensation Committee of the Board of Directors (the “Committee”), may amend the Agreement without the consent of the Grantee if the modifications or changes to the award evidenced by the Agreement don’t materially change or impair the rights of the Grantee under the Agreement in a manner that is adverse to the Grantee;

WHEREAS, as a result of the SARS-COV-2 virus, also known as COVID-19, the Company and the Committee believe that the ROATA performance metrics established in the Agreement are unlikely to be achieved and therefore believe it is advisable and in the best interests of the Company and the Grantee to amend the Agreement to replace those performance metrics and the Committee has approved the Amendment to the Agreement; and

NOW THEREFORE, the Agreement is hereby amended as follows:

1.    Amendment to Agreement. The Agreement is hereby amended as follows:

1.1    Section 1(a) of the Agreement is hereby deleted in its entirety and replaced with the following:

Grant of Performance Units. The Company hereby grants to the Grantee, subject to the terms and conditions set forth in this Agreement (including Exhibit A hereto) and in the Plan, Performance Units (the  “Target  Amount  of  Performance Units”) (subject to adjustment under Section 4.2 of the Plan) which may be earned by the Grantee in the event that (i) one or both of the Performance Measures for each of the fiscal years ended December 31, 2020, December 31, 2021 and December 31, 2022 (each such fiscal year a “Performance Period” and collectively, the “Performance Periods”) are achieved and (ii) the Grantee remains

employed by the Company, or a Subsidiary or Affiliate thereof, through the one year anniversary of the last day of the applicable Performance Period (the “Required Employment Period”); provided that to the extent that the Grantee vests in greater or less than one hundred percent (100%) of the Target Amount of Performance Units (as provided for in this Section 1(a) and Exhibit A), additional or fewer, as applicable, Performance Units than the Target Amount of Performance Units will be issued to the Grantee hereunder. For purposes  of clarity and for the avoidance of doubt, the actual number of Performance Units earned by the Grantee pursuant to this Agreement may be a higher or lower number of Performance Units than the Target Amount of Performance Units. Subject to adjustment under Section 4.2 of the Plan and as provided for in Section 3 of this Agreement, the maximum number of Performance Units that the Grantee may earn under this Agreement shall be__ (the “Maximum Amount of Performance Units”). Subject to, and in accordance with, the terms of Section  1(b) of this Agreement, the Company shall issue to the Grantee one share of the Company's common stock, $1.00 par value per share (the "Common Stock"), for each Performance Unit that is earned by the Grantee pursuant to the terms of this Agreement. The Compensation Committee shall determine whether the Company’s performance exceeds the applicable levels of the Performance Measures set forth on Exhibit A with respect to a Performance Period.

1.2    Section 3(b) of the Agreement is deleted in its entirety and replaced with the following:

(b) Adjustment of Dividend Equivalents on Performance Units. If any Performance Unit granted under this Agreement is not earned (or is otherwise forfeited) for any reason, including as a result of (i) the failure of the Company to achieve either of the Performance Measures for any Performance Period at or above any minimum or threshold level required pursuant to the Performance Measures attached hereto as Exhibit A; (ii) the failure of Pinnacle Bank’s NPA Ratio as of December 31, 2024 to be equal to or less than [___]%; (iii) the Grantee’s employment with the Company, or any Subsidiary or Affiliate thereof, terminating prior to the one-year anniversary of the last day of an applicable Performance Period; or (iv) the extent to which the Maximum Amount of Performance Units are not earned, any dividend or distribution previously  credited with respect to such Performance Unit, whether in the form of cash, property or additional Performance Units, shall be forfeited on the date on which the underlying Performance Units are forfeited.

1.3    Exhibit A of the Agreement is hereby deleted in its entirety and replaced with Exhibit A attached hereto.

2.    Except as expressly modified hereby, the Agreement shall remain in full force and
effect.

3.    This Amendment shall be governed and construed exclusively in accordance with the laws of the State of Tennessee applicable to agreements to be performed in the State of Tennessee.

Exhibit A 
Performance Measures

See attached.

Exhibit A 
Performance Measures

Award Tied to Fiscal 2020 Performance. Should the Company’s Return on Average Tangible Assets for the fiscal year ended December 31, 2020 (“Fiscal 2020”) be less than [ ]% (the “Fiscal 2020 Threshold Amount of ROATA”), then one-third of the Performance Units awarded under the Agreement shall be forfeited as of the earlier of the date that the Company’s Annual Report on Form 10-K for Fiscal 2020 is filed with the Securities and Exchange Commission (the “SEC”) or such other regulatory body or agency as such Annual Report shall be required to be filed or the last date that such Form 10-K could be timely filed with the SEC or such other regulatory body or agency, in either case, if the Company is then required to file such reports or, if the Company is not then required to file such reports, the date by which such Annual Report would have been required to be filed with the SEC or such other regulatory body or agency on a timely basis if the Company was at such time still required to file such reports, and no shares of the Common Stock shall be issued to the Grantee in regards to the portion of the Performance Units granted hereunder related to the Company’s Fiscal 2020 Performance Period.

Should the Company’s Return on Average Tangible Assets for Fiscal 2020 equal [ ]% (the “Fiscal 2020 Target Amount of ROATA”) then so long as the Required Employment Period applicable thereto is met by the Grantee, one-third of the Target Amount of Performance Units shall be settled by the issuance to the Grantee of one share of the Company’s Common Stock for each such vested Performance Unit (less any shares withheld pursuant to Section 6 of the Agreement, if any) in accordance with, and subject to, Section 1(b) of the Agreement.

Should the Company’s Return on Average Tangible Assets for Fiscal 2020 be equal to or greater than [ ]% (the “Fiscal 2020 Maximum Amount of ROATA”) then so long as the  Required Employment Period applicable thereto is met by the Grantee one-third of the Maximum Amount of Performance Units shall be settled by the issuance to the Grantee of one share of the Company’s Common Stock for each such vested Performance Unit (less any shares withheld pursuant to Section 6 of the Agreement, if any) in accordance with, and subject to, Section 1(b) of the Agreement.

In the event that the Company’s Return on Average Tangible Assets for the Fiscal 2020 Performance Period is between the Fiscal 2020 Threshold Amount of ROATA and the Fiscal 2020 Target Amount of ROATA or between the Fiscal 2020 Target Amount of ROATA and the Fiscal 2020 Maximum Amount of ROATA, straight line interpolation, rounded up to the next whole share of Common Stock, will be used to determine the number of Performance Units that shall vest and, subject to Grantee’s satisfying the Required Employment Period, be settled in shares of the Company’s Common Stock in accordance with, and subject to, Section 1(b) of the Agreement based on the Fiscal 2020 Performance Period..

Awards Tied to Fiscal 2021 and Fiscal 2022 Performance.

One third of the Performance Units granted under the Agreement may be earned by the Grantee based on the Company’s Relative ROATCE (as defined below) and Relative TBV

Accretion (as defined below) performance for each of the fiscal years ending December 31, 2021 (“Fiscal 2021”) and December 31, 2022 (“Fiscal 2022”), which shall be weighted equally (such Performance Units, the “Relative ROATCE Performance Units” and the “Relative TBV Accretion Performance Units,” respectively).

(a)        Relative ROATCE (1/2 weighting):

The Grantee may earn Relative ROATCE Performance Units based on the Company’s Return on Average Tangible Common Equity (“ROATCE”) for the relevant Performance Period relative to the ROATCE for the peer financial institutions identified on Annex 1 attached hereto (hereinafter referred to as the “Peer Group Companies”) for such Performance Period, which calculation shall be computed by taking the Company’s ROATCE for such Performance Period and comparing that to the ROATCE for each of the Peer Group Companies for such Performance Period (“Relative ROATCE”), using the method known as the “Continuous Percentile Rank Calculation” which interpolates the Company’s rank in relation to the Peer Group Companies that perform just above and below the Company (as further detailed below).

For purposes of this Exhibit A, “Return on Average Tangible Common Equity” means, for each of the Company and the Peer Group Companies, the quotient, expressed as a percentage rounded to two decimal places, of (I) such company’s net income for the relevant Performance Period divided by (II) such company’s average tangible common equity for the relevant Performance Period, in each case as reflected in such company’s Annual Report on Form 10-K (if such company is required to file such Annual Report) for Fiscal 2021 or Fiscal 2022, as applicable, or such other financial report as the company shall prepare if not required to file an Annual Report on Form 10-K.

The Compensation Committee may, in its good faith discretion, adjust the Return on Average Tangible Common Equity with respect to the Company or any Peer Group Company to eliminate the effects of the following: (a) gains or losses on the sale (or contemplation of a sale) of a business or a business segment, (b) gains or losses on the extinguishment or restructuring of indebtedness, including Federal Home Loan Bank advances, or the sale of investment securities,
(c) asset or investment impairment charges (other than those related to such company’s loan portfolio in the ordinary course of business), (d) restructuring charges, including charges or expenses associated with transactions involving the unwinding of previously entered into interest rate swaps, caps, hedges or other balance sheet derivative transactions, (e) changes in law (including federal and state tax laws) or accounting principles, (f) losses or other expenses associated with other real estate owned (g) costs or expenses associated with any merger or acquisition affecting such company or any of its subsidiaries, (h) any other expenses or losses resulting from significant, unusual and/or nonrecurring events and (i) events, including those resulting from macro-economic conditions that impact the Company’s financial condition or results of operations in a significant manner, either not directly related to the operations of such company or not within the reasonable control of the company’s management, in each case if applicable. Moreover, and without limiting the foregoing, Return on Average Tangible Common Equity may be adjusted by the Committee to exclude the effects of any corporate transaction affecting the shares of the Company’s Common Stock as described in Section 4.2 of the Plan.

(b)        Relative TBV Per Share Plus Common Dividends Accretion (1/2 weighting):

The Grantee may earn Relative TBV Accretion Performance Units based on the Company’s Tangible Book Value Per Common Share plus Common Dividends Accretion (“TBV Accretion”) for the relevant Performance Period relative to the TBV Accretion for the Peer Group Companies for the relevant Performance Period (“Relative TBV Accretion”), using the Continuous Percentile Rank Calculation methodology.

For purposes of this Exhibit A, “TBV Accretion” means, for each of the Company and the Peer Group Companies, the quotient, which may be positive or negative, expressed as a percentage, rounded to two decimal places, resulting from dividing (x) the sum of (I) the difference between (A) the Company’s or the Peer Group Companies’, as applicable, tangible book value per common share as of December 31, 2021 or December 31, 2022, as applicable, and (B) the Company’s or the Peer Group Companies’, as applicable, tangible book value per common share as of December 31, 2020 or December 31, 2021 (as applicable) and (II) the dividends declared on shares of the Company’s, or such Peer Group Companies’, common stock during the relevant Performance Period by (y) the Company’s or the Peer Group Companies’, as applicable, tangible book value per share as of December 31, 2020 or December 31, 2021, as applicable (such calculation, the “TBV/SH Plus Dividends Accretion Amount”). The TBV/SH Plus Dividends Accretion Amount for the Company and each of the Peer Group Companies, as applicable, shall, in each case, be calculated utilizing (i) financial data contained in such company’s Annual Report on Form 10-K or Quarterly Reports on Form 10-Q (if such company is required to file such Annual or Quarterly Reports) for Fiscal 2021 or Fiscal 2022, as applicable, or such other financial report as such company shall prepare if not required to file an Annual Report on Form 10-K or (ii) such other financial data and calculation methodology as the Compensation Committee shall reasonably determine applied consistently among the Company and the Peer Group Companies.

The Compensation Committee may, in its good faith discretion, adjust the TBV Accretion with respect to the Company or any Peer Group Company to eliminate the effects of the following: (a) gains or losses on the sale (or contemplation of a sale) of a business or a business segment, (b) gains or losses on the extinguishment or restructuring of indebtedness, including Federal Home Loan Bank advances, or the sale of investment securities, (c) asset or investment impairment charges (other than those related to such company’s loan portfolio in the ordinary course of business), (d) restructuring charges, including charges or expenses associated with transactions involving the unwinding of previously entered into interest rate swaps, caps, hedges or other balance sheet derivative transactions, (e) changes in law (including federal and state tax laws) or accounting principles, (f) losses or other expenses associated with other real estate owned (g) costs or expenses associated with any merger or acquisition affecting such company or any of its subsidiaries, (h) any other expenses or losses resulting from significant, unusual and/or nonrecurring events and (i) events, including those resulting from macro-economic conditions that impact the Company’s financial condition or results of operations in a significant manner, either not directly related to the operations of such company or not within the reasonable control of the company’s management, in each case if applicable. Moreover, and without limiting the foregoing, TBV Accretion may be adjusted by the Committee to exclude the effects of any corporate transaction affecting the shares of the Company’s Common Stock as described in Section 4.2 of the Plan.

Relative ROATCE and Relative TBV Accretion will be determined by ranking the Company’s and each Peer Group Company’s ROATCE and TBV Accretion performance, respectively, from highest to lowest for the relevant Performance Period. After this ranking, the percentile performance of the Peer Group Companies performing just above and just below the Company will be determined as follows:
						
	Ppeer = 1 -
	R - 

	N - 1

Where:
“Ppeer” represents the percentile performance of the Peer Group Company which will be rounded, if necessary, to the nearest whole percentile by application of regular rounding.
“R”     represents the Peer Group Company’s ranking among the members of the Peer Group Companies, excluding the Company.
“N”     represents the number of Peer Group Companies, excluding the Company.

Then, the Company’s interpolated percentile performance between the percentile performances of such Peer Group Companies will be determined as follows:

																					
	PCompany
	=
	Pa
	+
	(Pb - Pa)
	x
	(Xa – XCompany)

	(Xa - Xb)

Where:
“Pa” represents the percentile performance of the Peer Group Company just  above the Company.
“Xa” represents the ROATCE or TBV Accretion, as applicable for the Peer  Group Company just above the Company.
“Pb” represents the percentile performance of the Peer Group Company just  below the Company.
“Xb” represents the ROATCE or TBV Accretion, as applicable for the Peer  Group Company just below the Company.
“XCompany” represents the ROATCE or TBV Accretion, as applicable for the Company.
“PCompany” represents the percentile performance of the Company which will be rounded, if necessary, to the nearest whole percentile by application of regular rounding.

Number of PSUs Earned

Subject to the Maximum Award Cap (as defined below), the total number of Performance Units earned for the relevant Performance Period by the Grantee shall equal the sum of the Relative ROATCE Performance Units earned and the Relative TBV Accretion Performance Units earned for such Performance Period (with linear interpolation for earning between levels) pursuant to the following table:

									
	

Performance Goal Achieved(1)
		Percent of Target Award Earned (payout percentage)(2)

	At or below the 25th percentile:
		0%

	At 26th percentile (Threshold):
		1%

	At 50th percentile:
		50%

	At 75th percentile (Target):
		100%

	At 95th percentile (Maximum):
		200%

(1) Percentile performance shall be rounded, if necessary, to the nearest whole percentile by application of regular rounding.
(2) Percent of Target Award Earned shall be determined for the target amount of Relative ROATCE Performance Units (1/2 weighting) and the Relative TBV Accretion Performance Units (1/2 weighting).

The percentage of Relative ROATCE Performance Units and Relative TBV Accretion Performance Units that become earned for the relevant Performance Period shall be interpolated between payout levels for performance between each performance level set forth above. In the event that the total number of Performance Units earned for such Performance Period by the Grantee shall, when adding together the Relative ROATCE Performance Units and Relative TBV Accretion Performance Units earned for such Performance Period, constitute more than 150% of the Target Performance Units granted for such Performance Period, then the total number of Performance Units earned for such Performance Period shall be reduced to an exact number of Performance Units that constitutes 150% of the Target Performance Units granted for such Performance Period (the “Maximum Award Cap”).

Return on Average Tangible Assets. For purposes of this Exhibit A, “Return on Average Tangible Assets” means the quotient, expressed as a percentage rounded to two decimal points, of (I) the Company’s net income for the applicable Performance Period as reported in the Company’s audited financial statements for the applicable Performance Period divided by (II) the Company’s average tangible assets for the applicable Performance Period as reflected in the Company’s Annual Report on Form 10-K (if the Company is required to file such Annual Report) for the applicable Performance Period, or such other financial report as the Company shall prepare if not required to file an Annual Report on Form 10-K, as adjusted to eliminate the effects of the following: (a) gains or losses on the sale of a business or a business segment, (b) gains or losses on the extinguishment of debt or the sale of investment securities, (c) asset or investment impairment charges (other than those related to the Company’s loan portfolio in the ordinary course of business), (d) restructuring charges, (e) changes in law or accounting principles, (f) any other expenses or losses resulting from significant, unusual and/or nonrecurring events and (g) events either not directly related to the operations of the Company or not within the reasonable control of the Company’s management, in each case as and if determined in good faith by the Compensation Committee. Moreover, and without limiting the foregoing, Return on Average Tangible Assets shall be adjusted to exclude the effects of any costs or expenses associated with any merger or acquisition affecting the Company or any of its Subsidiaries or any other corporate transaction affecting the shares of the Company’s Common Stock as described in Section 4.2 of the Plan.

NPA Ratio. When calculating the NPA Ratio for purposes of the Agreement, in the event that the Company or a subsidiary of the Company acquires a finance company, financial institution or a holding company of a financial institution or a branch office thereof, by way of merger or otherwise, or in the event the Company or a subsidiary of the Company shall acquire in an arms- length purchase from a third party any low-quality asset, such acquired non-performing assets or purchased low-quality assets shall be excluded from the calculation of the NPA Ratio.

Peer Group Company. For the Purposes of this Exhibit A, “Peer Group Company and Peer Group Companies” means the peer financial institutions identified on Annex 1 attached hereto.

Statement on Section 162(m) of the Code. For the avoidance of doubt, this Award need not be administered consistent with the “qualified performance-based compensation” rules of Section 162(m) of the Code, as in effect prior to January 1, 2018.

ANNEX 1
Peer Group Companies

Synovus Financial Corp. 
TCF Financial Corp.
Wintrust Financial Corp. 
Valley National Bancorp 
Cullen/Frost Bankers Inc. 
South State Corporation
F.N.B. Corp.
Western Alliance Bancorp 
Prosperity Bancshares Inc. 
Hancock Whitney Corp.
Commerce Bancshares Inc. 
Sterling Bancorp
UMB Financial Corp.
Umpqua Holdings Corp.
PacWest Bancorp
Bank OZK
Fulton Financial Corp. 
BancorpSouth Bank 
Simmons First National Corp. 
First Midwest Bancorp Inc.
Atlantic Union Bankshares Corp.

The Peer Group Companies may be changed as follows:

(i) In the event of a merger, acquisition, or business combination transaction of a Peer Group Company with or by another Peer Group Company, the surviving entity shall remain a Peer Group Company.

(ii) In the event of a merger of a Peer Group Company with an entity that is not a Peer Group Company, or the acquisition or business combination transaction by or with a Peer Group Company, or with an entity that is not a Peer Group Company, in each case where the Peer Group Company is the surviving entity and remains publicly traded, the surviving entity shall remain a Peer Group Company.

(iii) In the event of a merger, acquisition, or business combination transaction of a Peer Group Company by or with an entity that is not a Peer Group Company or a “going private” transaction involving a Peer Group Company where the Peer Group Company is not the surviving entity or is otherwise no longer publicly traded, the company shall no longer be a Peer Group Company.

(iv) In the event of a bankruptcy, liquidation, or delisting of a Peer Group Company, such company shall remain a Peer Group Company and the lowest rank shall be assigned such Peer Group Company.

(v) The Compensation Committee shall have the authority to make other appropriate adjustments in response to a change in circumstances that results in a Peer Group Company no longer satisfying the criteria for which such company was originally selected.Document

						
		 Exhibit 10.1
		Board Approved
December 16, 2020

Federal Home Loan Bank of Indianapolis
Incentive Plan

1

ESTABLISHMENT OF ANNUAL AND LONG-TERM  2021 - 2024
INCENTIVE PLAN GOALS FOR THE
FEDERAL HOME LOAN BANK OF INDIANAPOLIS
INCENTIVE PLAN

Pursuant to resolutions adopted by the Board of Directors of the Federal Home Loan Bank of Indianapolis (the "Bank"), the undersigned hereby execute the Federal Home Loan Bank of Indianapolis Incentive Plan, effective as of January 1, 2012, and setting forth goals effective as of January 1, 2020, on behalf of the Bank, in the form attached hereto.

Dated this 16th day of December, 2020.

FEDERAL HOME LOAN BANK OF INDIANAPOLIS

By: /s/ Dan L. Moore                
Dan L. Moore, Chair

By: /s/ James L. Logue, III            
James L. Logue, III, Vice Chair

ATTEST:

By: /s/ Matthew R. St. Louis            
Matthew St. Louis, Corporate Secretary

2

FEDERAL HOME LOAN BANK OF INDIANAPOLIS
INCENTIVE PLAN

TABLE OF CONTENTS

									
			PAGE
	Article I	INTRODUCTION 	5
			
	Section 1.1	Purpose             	5
	Section 1.2	Effective Date   	5
	Section 1.3	Administration  	5
	Section 1.4	Supplements     	5
	Section 1.5	Definitions         	6
			
	Article II	ELIGIBILITY AND PARTICIPATION	6
			
	Section 2.1	Eligibility	6
	Section 2.2	Participation	7
			
	Article III	AWARDS AND EXTRAORDINARY OCCURRENCE ADDITIONS/REDUCTIONS	7
			
	Section 3.1	Awards	7
	Section 3.2	Performance Goals	8
	Section 3.3	Earning and Vesting of Awards for Level I Participants	9
	Section 3.4	Earning and Vesting of Awards for Level II Participants	10
	Section 3.5	Reserved	10
	Section 3.6	Effect of Termination of Service	11
	Section 3.7	Effect of Reorganization	13
	Section 3.8	Payment of Awards	14
	Section 3.9	Reduction or Forfeiture of Awards	15
			
	Article IV	ADMINISTRATION	16
			
	Section 4.1	Appointment of the Committee	16
	Section 4.2	Powers and Responsibilities of the Committee	16
	Section 4.3	Income and Employment Tax Withholding	16
	Section 4.4	Plan Expenses	16
			
	Article V	BENEFIT CLAIMS	17
			
	Article VI	AMENDMENT AND TERMINATION OF THE PLAN	17
			
	Section 6.1	Amendment of the Plan	17
	Section 6.2	Termination of the Plan	17

3

									
			
	Article VII	MISCELLANEOUS	17
			
	Section 7.1	Governing Law	17
	Section 7.2	Headings and Gender	17
	Section 7.3	Spendthrift Clause	17
	Section 7.4	Counterparts	19
	Section 7.5	No Enlargement of Employment Rights	19
	Section 7.6	Limitations on Liability	19
	Section 7.7	Incapacity of Participant	19
	Section 7.8	Evidence	20
	Section 7.9	Action by Bank	20
	Section 7.10	Severability	20
	Section 7.11	Information to be Furnished by a Participant	20
	Section 7.12	Attorneys' Fees	20
	Section 7.13	Binding on Successors	20
			
	APPENDIX I	2021 PERFORMANCE PERIOD AWARDS FOR LEVEL II PARTICIPANTS	22
	APPENDIX II	2021 PERFORMANCE PERIOD AWARDS FOR LEVEL I PARTICIPANTS	27
	APPENDIX III	FORM OF NON-SOLICITATION AND NON-DISCLOSURE AGREEMENT	31

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ARTICLE I

INTRODUCTION

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

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

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

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

5

          Section 1.5      Definitions. The following terms are defined in the Plan in the following Sections:
						
	Term	Plan Sections
	Annual Award	3.3(a), 3.4(a)
	Award	3.1
	Bank	1.1
	Board	1.3
	Cause 	3.6(d)(i)
	Committee	1.3
	Compensation	3.1
	Deferral Performance Period	3.1(a)
	Deferred Award	3.3(b)
	Disability	3.6(d)(ii)
	Discretionary Award	3.1(d)
	Effective Date	1.2
	Extraordinary Occurrences	3.1(e)
	FHFA	3.6(d)(i)
	Final Award	3.1(e)
	Good Reason	3.6(d)(iii)
	Level I Participant	3.1(c)
	Level II Participant	3.1(c)
	Maximum	3.2(b)(iii)
	Non-Solicitation Agreement	2.1
	Participant	2.1
	Performance Goals	3.2
	Performance Period	3.1(a)
	Plan	1.1
	Position	3.6(d)(iii)(A)
	Reduction in Force	3.6(d)(iv)
	Reorganization	3.7(b)
	Retirement	3.6(d)(v)
	Termination of Service	3.6(d)(vi)
	Target	3.2(b)(ii)
	Threshold	3.2(b)(i)

ARTICLE II

ELIGIBILITY AND PARTICIPATION

            Section 2.1      Eligibility. Any employee of the Bank, hired before October 1st of the calendar year, will become a "Participant" in the Plan for that calendar year, provided the employee is not classified as a "temporary," an "intern," "contract" or "temporary agency" employee, and does not participate in the Federal Home Loan Bank of Indianapolis Internal Audit Incentive Plan. Level I Participants, as defined in subsection 3.1(c), must have an executed agreement on file with the Bank containing non-solicitation and non-disclosure provisions in a form similar to the form provided in Appendix III to the Plan ("Non-Solicitation Agreement").
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            Section 2.2      Participation. A designated employee or otherwise eligible employee will become a Participant as of the later of the Effective Date, the employee's date of hire, or the date on or after the Effective Date the employee satisfies the automatic eligibility provisions described in Section 2.1. Any Participant may be removed as an active Participant by the Board effective as of any date.

ARTICLE III

AWARDS AND EXTRAORDINARY OCCURRENCE ADDITIONS/REDUCTIONS

Section 3.1      Awards. At the beginning of each Performance Period (and at such other times as it may designate as to Discretionary Awards), the Board will make an "Award" to eligible Participants. As described in this Article, Awards may be Annual Awards (as defined in subsection 3.3(a)), Deferred Awards (as defined in subsection 3.3(b)), or Discretionary Awards (as defined in subsection 3.1(d)). Each Award (other than Discretionary Awards) will be equal to a percentage of the Participant's annual Compensation, as described in the applicable Appendices for Level I Participants and Level II Participants, multiplied by the achievement level of the applicable Performance Goals (as defined in Section 3.2). "Compensation" means the Participant's annual earned base salary or wages for hours worked, including overtime, and hours paid under the Bank's paid-time-off policies, as applicable, but in any case excluding any bonus, incentive compensation, deferred compensation payments, lump sum payouts for accrued but unused vacation time, or long-term disability insurance payments paid for the current or a prior year. In the event a Participant receives a raise during a calendar year, the Participant's Compensation for the year will reflect the actual wages paid to the Participant for the year.

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

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

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

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

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

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

(e)Final Award and Extraordinary Occurrences. The "Final Award" is the amount of an earned and vested Annual Award, Deferred Award, or Discretionary Award, as adjusted based upon the level at which the Performance Goals have been achieved, that is ultimately paid to a Participant under the Plan. The amount of a Final Award may be increased or decreased at the Board's discretion to account for performance that is not captured in the Performance Goals. The Board, in its discretion, may also consider Extraordinary Occurrences when assessing performance results and determining Final Awards. "Extraordinary Occurrences" mean those events that, in the opinion and discretion of the Board, are outside the significant influence of the Participant or the Bank and are likely to have a significant unanticipated effect, whether positive or negative, on the Bank's operating and/or financial results. Examples of Extraordinary Occurrences include, but are not limited to, change in law, regulation, or regulatory policy, or systemic macroeconomic events outside of management's control.

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

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

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

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

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

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

The Bank will measure the achievement level for each Performance Goal on a uniform basis, and may assign different values for achievement levels depending on the Participant’s position.  The relative weights assigned to achievement levels and to Performance Goals will be set forth in the applicable Appendix.

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

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

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

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

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

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

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

i.At least one of the applicable Performance Goals for the Performance Period are satisfied at or above the Threshold level;

ii.The Participant received (or, in the case of a Termination of Service described in Section 3.6(b) or Section 3.6(c) or a Reorganization described in Section 3.7, the President-CEO determines that the Participant would have received) an overall 
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weighted performance rating for the Performance Period of 2.5 or greater on a scale of 1-5 (with 5 being the highest rating), or equivalent measure; and

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

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

i.At least one of the applicable Performance Goals for the Deferral Performance Period are satisfied at or above the Threshold level;

ii.The Participant received (or, in the case of a Termination of Service described in Section 3.6(b) or Section 3.6(c) or a Reorganization described in Section 3.7, the President-CEO determines that the Participant would have received) an average overall weighted performance rating for each year of the Deferral Performance Period of 2.5 or greater on a scale of 1-5 (with 5 being the highest rating), or equivalent measure; and

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

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

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

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

i.At least one of the applicable Performance Goals for the Performance Period are satisfied at or above the Threshold level;

ii.The Participant received (or, in the case of a Termination of Service described in Section 3.6(b) or Section 3.6(c), the President-CEO determines that the Participant would have received) an overall weighted performance rating for the Performance Period of 2.5 or greater on a scale of 1-5 (with 5 being the highest rating), or equivalent measure; and

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

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

                Section 3.5      Reserved.

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Section 3.6      Effect of Termination of Service.

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

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

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

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

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

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

(c)Termination Due to Other Events.

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

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

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

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

(d)Definitions.

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

ii."Disability" means, as a result of the Participant's incapacity due to physical or mental illness, the Participant has been absent from his or her duties with the Bank for an aggregate of 12 out of 15 consecutive months and, within 30 days after a written notice of termination is thereafter given by the Bank to the Participant, the Participant does not return to the full-time performance of the Participant's duties.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

iv.The liquidation or dissolution of the Bank.

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

Section 3.8      Payment of Awards.

(a)Payments Related to Termination of Service. The following provisions apply to Final Awards payable as a result of a Termination of Service.

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

ii.In the event of a Termination of Service due to Retirement or a termination by a Level I Participant for Good Reason, payment of a Final Award will be made in a 
14

single sum within 75 days following the end of the Performance Period or Deferral Performance Period, as applicable.  

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

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

Section 3.9      Reduction or Forfeiture of Awards.

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

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

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

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

ADMINISTRATION

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

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

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

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

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

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

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

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

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ARTICLE V

BENEFIT CLAIMS

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

AMENDMENT AND TERMINATION OF THE PLAN

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

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

ARTICLE VII

MISCELLANEOUS

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

Section 7.2      Headings and Gender. The headings and subheadings in the Plan have been inserted for convenience of reference only and will not affect the construction of the Plan provisions. In any necessary construction, the masculine will include the feminine and the singular the plural, and vice versa. All calculations of events that last a portion of a calendar year or are to be determined pro rata as to a calendar year will be determined by the actual number of days the condition or event existed and assuming a 365-day year.

Section 7.3      Spendthrift Clause. No benefit or interest available under the Plan will be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or attachment by creditors of a Participant, either voluntarily or involuntarily.  Notwithstanding the foregoing, a Participant may, by completing and signing a written beneficiary designation form which is delivered to and accepted 
17

by the Bank, designate a beneficiary to receive any payment and/or exercise any rights with respect to outstanding Awards upon the Participant’s death.  If at the time of the Participant’s death there is not on file a fully effective beneficiary designation form, or if the designated beneficiary did not survive the Participant, the person or persons surviving at the time of the Participant’s death in the first of the following classes of beneficiaries in which there is a survivor, shall have the right to receive any payment and/or exercise any rights with respect to outstanding Awards:

(a)    Participant’s surviving spouse.    

(b)Participant’s surviving domestic partner.

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

(d)    Participant’s estate. 

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

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

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

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

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

ii.         Neither partner is married to another person under either statutory or common law, neither has another spouse, and neither is a member of another 
18

domestic partnership or has been a member of another domestic partnership within the prior 6 months.

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

iv.        The partners are not blood relatives.

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

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

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

(B)Joint checking account;

(C)Joint credit cards; 

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

(E)Joint ownership of a motor vehicle; or 

(F)Designation of partner under power of attorney.

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

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

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

Section 7.7      Incapacity of Participant. If any person entitled to receive a distribution under the Plan is physically or mentally incapable of personally receiving and giving a valid receipt for any payment 
19

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

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

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

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

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

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

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

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2021 PERFORMANCE GOALS AS APPROVED BY THE BOARD OF DIRECTORS:

Pursuant to Section 3.2 of the Federal Home Loan Bank of Indianapolis ("Bank") Incentive Plan, effective as of January 1, 2012, and as amended (the "Plan"), the following Appendices were adopted by the Board of Directors (the "Board") of the Bank on December 16, 2020, after consideration and review by the Human Resources Committee of the Board. These Appendices to the Plan are effective as of January 1, 2021. All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Plan.
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APPENDIX I

2021 PERFORMANCE PERIOD AWARDS FOR LEVEL II PARTICIPANTS
Federal Home Loan Bank of Indianapolis

A.           Incentive Opportunities for Level II Participants
Annual Awards payable to Level II Participants are calculated by multiplying (a) the Compensation (as defined in Section 3.1 of the Federal Home Loan Bank of Indianapolis Incentive Plan) available to the Participant, by (b) the percentages as set forth below, and by (c) the sum of the applicable weighted values of the achievement level for all Performance Goals.

						
		TOTAL INCENTIVE AS % OF COMPENSATION
	Position	Maximum Percentage of Compensation
	1st VP	30%
	Member Outreach(1)
	40%
	VP	25%
	AVP	15%
	Other Employees	10%

(1) The "Member Outreach" group includes the Marketing Director, Member Research & Strategies Director, Senior Account Directors, Senior Account Managers, Account Managers, Business Development Analysts, Member Research & Strategies Analysts, MPP Business Development Managers, and all persons performing similar functions to any of the foregoing, but excludes individuals who provide administrative support for the foregoing.

B.     2021 Performance Goals

Performance Goal achievement will be determined for all Level II Participants based on the following values for the different achievement levels:

									
	PERCENTAGE VALUE FOR ACHIEVEMENT OF PERFORMANCE GOALS
	Threshold	Target	Maximum
	50%	75%	100%

The Bank's 2021 Performance Goals are as follows: 

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	MISSION GOALS	WEIGHTED VALUE	THRESHOLD	TARGET	MAXIMUM
	Bank (1)
	ERM	Sales (2)

	FINANCIAL PERFORMANCE AND OPERATIONAL EFFICIENCY						
	(a) Profitability (3)
	25%	15%	10%	189 bps	292 bps	414 bps
	(b) Operating Expenses vs. Budget  (4)
	10%	10%	10%	<=100%	<=97.5%	<=95%
	MEMBER ACTIVITY						
	(a) Member Participation (5)
	10%	5%	15%	58%	60%	62.5%
	(b) Member Education and Outreach (6)
	10%	5%	15%	50% of All Members	Achieve Threshold and 75% of Tier 1 Members	Achieve Target and 50% of Tier 2 Members
	(c) Fee Income Increase (7)
	5%	5%	15%	5%	10%	20%
	(d) CIP Advances Originated (8)
	10%	5%	15%	$37.5 MM	$75 MM	$150 MM 
	ENTERPRISE RISK MANAGEMENT	10%	35%	—%	2	3	4
	Complete Enterprise Risk Management Objectives (9)

	DIVERSITY, EQUITY, AND INCLUSION						
	(a) Host education/information sessions to prepare diverse businesses for opportunities to do business with member institutions in Indiana and Michigan	5%	5%	5%	1	2	3
	(b)  Develop and promote each Employee Resource Group through hosting cultural awareness events/activities (10)
	5%	5%	5%	30%	40%	50%
	OPERATIONAL EXCELLENCE						
	(a) Member facing technology (One Bank Portal & Access) (11)
	5%	5%	5%	Achieve Technical Readiness	Achieve Threshold and Operational Readiness	Achieve Target and Production Implementation
	(b) Workday Phase 2 (12)
	5%	5%	5%	Achieve Technical Readiness	Achieve Threshold and Operational Readiness	Achieve Target and Transition System of Record

(1)        For all Level II Participants, excluding those addressed in the ERM and Sales columns, and excluding those in the Internal Audit department. "ERM" means the Bank's Enterprise Risk Management department.
(2)           Applies to individuals included in the "Member Outreach" group above. Administrative support staff for individuals in the Member Outreach group are included in the Bank column for weighted value determination.
(3)       For purposes of this goal, profitability is defined as the Bank’s profitability rate in excess of the Bank’s cost of funds rate. Profitability is the Bank’s core net income reduced by the portion of net income to be added to restricted retained earnings under the Joint Capital Enhancement Agreement dated August 5, 2011, as amended, by and among the Federal Home Loan Banks and increased by the Bank’s accruals for incentive compensation, net of the AHP assessment. Core net income represents GAAP Net Income adjusted to exclude: (i) debt extinguishment costs and Advance prepayment fees received in cash on unswapped Advances that are not restructured, net of the AHP assessment, (ii) mark-to-market adjustments and other transitory effects from derivatives and hedging activities, net of the AHP assessment, (iii) interest expense on mandatorily redeemable capital stock, (iv) realized gains and losses on sales of investment securities, net of the AHP assessment, (v) accelerated amortization of concession fees on called COs, net of the AHP assessment, and (vi) other non-recurring components of GAAP earnings that do not necessarily reflect the underlying results of the operations of the Bank, net of the AHP assessment. However, certain excluded amounts may require amortization included in other periods to properly state core net income. The Bank’s profitability rate is profitability, as defined above, as a percentage of average total regulatory capital stock. Assumes no material change in investment authority under the FHFA's regulation, policy, directive, guidance, or law.  
(4)        Operating Expenses vs. Budget is a measure of to what degree our core operating expenses are equal to or less than the operating expense budget approved by our board. Core operating expenses are operating expenses excluding 
23

incentive compensation, excise tax, and voluntary contributions to the Bank’s qualified defined benefit pension plan. Core operating expenses are measured as a percentage of the core operating expense budget for 2021.
(5)        Member participation is the percentage of members that utilize any one of the following products during the year: advances, letters of credit, lines of credit or MPP. Any member that utilizes a qualifying product during the year will be counted in the numerator even if that member ceases to be a member as of December 31, 2021. Membership will be calculated as the simple average of the membership at the end of each month in 2021. Goal assumes no material change in membership eligibility under FHFA’s regulation, policy, directive, guidance or law.
(6)        Member education and outreach events for purposes of threshold achievement include symposia, conferences, workshops, webinars, educational events, presentations at trade conferences, presentation to member Boards of Directors or Committees thereof or to management committees, in-person joint presentations to members (where a subject matter expert or senior officer of the Bank participates) and other events educating Bank members about Advances, MPP, the Bank’s community investment products and activities, industry trends, and other products and services. For purposes of Target and Maximum achievement, member education and outreach events include presentations to member Boards of Directors or committees thereof, presentations to member management committees or in-person joint presentations to members (where a subject matter expert or senior officer of the Bank participates) to discuss or educate regarding Advances, MPP, the Bank’s community investment products, industry trends or other products and services. Member tiers are defined by management based upon core business levels or the capacity to engage in core business with the Bank and are established annually. Status and reporting on this Goal and its attainment will be supported by the Bank’s Customer Relationship Management (CRM) system. Achievement towards this goal will be calculated by dividing the number of members that participated in one of the above events (defined as a member at the time of participation in the event) during the calendar year by the simple average of the total number of members of the Bank (Threshold), total Tier 1 members (Target), or Tier 2 members (Maximum) as of the end of each month of 2021.
(7)        Fee income consists of fees earned on Bank products and services, including letters of credit, lines of credit, safekeeping services, and other products and services as may be approved by the Board from time to time. The goal is defined as the percentage increase in the total fee income relative to total fee income earned in 2020. 
(8)       "CIP" means Community Investment Program. "CIP Advances" are newly originated Community Investment Cash Advances, including CIP and other qualifying Advances and CIP qualified letters of credit, provided in support of targeted projects as defined in 12 C.F.R. Part 1291 and the Federal Home Loan Bank Act.
(9)        Status and reporting of this goal, and its attainment will be provided in writing to the Risk Committee. The Enterprise Risk Management Excellence objectives are:
Objective #1: Enhancements to the Board approved Risk Appetite Statement document. ERM is to prepare a comprehensive proposal to enhance the Risk Appetite Statement (“RAS”) policy, including recommendations of changes to methodology, risk categories and supporting key metrics. The proposal shall reflect feedback received from the Bank’s first line management while adhering to applicable regulatory guidance. In conjunction with the proposal, ERM shall develop a new or modify the existing process governing RAS metrics including, but not limited to, metric tracking and associated procedures. ERM’s proposal will be presented for approval by the Risk Committee and Risk Oversight Committee by June 30, 2021.
Objective #2: Implement enhancements to the AMA/MPP prepayment estimation process. ERM is to review the prepayment estimation process for AMA/MPP and propose enhancements to improve performance metrics related to prepayment modeling. The proposed enhancements shall reflect feedback from the model users (first and second line management), model risk management, subject matter experts and the model vendor, while adhering to applicable regulatory guidance. ERM’s proposal will be presented to the Risk Committee by September 30, 2021 and implemented by December 31, 2021. It is also understood that implementation of enhancements would require review by ERM Model Risk Management Group, approval from the Risk Committee, and non-objection from the FHFA.
Objective #3: Enhancements of the counterparty credit risk methodology. ERM is to review and revise the methodology used to monitor and evaluate unsecured credit counterparties, including the determination of the level used to determine a counterparty’s regulatory capacity. The proposal shall reflect feedback from the Bank’s first line management while adhering to applicable regulatory guidance. ERM’s proposal will be presented for approval by the Risk Committee and Risk Oversight Committee by August 31, 2021.
Objective #4: Enhancements to the scripting governance program. ERM, in collaboration with IT, will develop an enterprise-wide policy governing scripting use cases, guidelines and methodologies. The policy will establish baseline requirements for utilizing scripting languages across the organization as well as a method for inventorying. Determination for additional technical resources, formal training or establishment of working groups will be made and recommendations for such will be presented for approval by the appropriate committee(s). The policy and related elements will be presented for approval by the Risk Committee and Risk Oversight Committee by August 31, 2021.
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The criteria and milestones to successfully complete each objective will be reviewed and approved by the Risk Committee.
(10)      This goal applies to any ERGs in place as of January 1, 2021 and the number of members as of that date; however, non-members can also be counted in attendance.  The percentages are based on the average number of employees attending a total of 4 events hosted by each ERG.  (Example: If the Women’s ERG has 50 members, to reach the 50% maximum goal, there must be an average of 25 attendees at their 4 events, or 100 total attendees for the 4 events).  Each ERG is measured separately and both must meet the percentage goal separately.
(11)      The criteria and milestones for achievement, as well as the status and reporting of this goal and its attainment, will be reviewed and approved by the Information Technology Steering Committee. Threshold, Target, and Maximum performance achievement levels are defined as follows:
           “Technical Readiness” is the development and testing of the One Bank Portal. 
“Operational Readiness” is the governance, training, and operational activities required to support the operation of the One Bank Portal. 
“Production Implementation” is implementation of the One Bank Portal into production. 
 (12)     The criteria and milestones for achievement, as well as status and reporting of this goal and its attainment, will be reviewed and approved by the Information Technology Steering Committee. Threshold, Target, and Maximum performance achievement levels are as follows:
“Technical readiness” is the configuration and testing of the core financial modules of Workday. 
“Operational Readiness” is the governance, training, and operational activities required to support the operation of the core financial modules of Workday. 
“Transition System(s) of Record” is transitioning the system of record to the core financial modules of Workday. 

 C.          Hypothetical Example Calculations

Assume that the Bank achieved the following on its Performance Goals for year 1:

																											
	MISSION GOALS	WEIGHTED VALUE	Achievement	Achievement Percentage Value	Bank Result	ERM Result	Sales Result
	Bank	ERM	Sales
	1. Performance Goal 1	25%	25%	20%	Target	75%	18.75%	18.75%	15.00%
									
	2. Performance Goal 2	50%	45%	65%	Threshold	50%	25%	22.50%	32.50%
									
	3. Performance Goal 3	10%	10%	3%	Over Maximum	100%	10%	10.00%	3.00%
									
	4. Performance Goal 4	10%	10%	10%	Below Threshold	—%	—%	—%	—%
									
	5. Performance Goal 5	5%	10%	2%	50% between Target and Maximum	87.5%	4.375%	8.75%	1.75%
									
						Total:	58.125%	60%	52.25%

A Vice President is eligible to receive an Annual Award of up to a maximum of 25% of his or her Compensation.  Depending on the Vice President's business unit, the Annual Award will be equal to the following proportion of the Vice President's Compensation (rounded to 2 decimal places):

									
	Bank Vice President	ERM Vice President	Sales Vice President (in Member Outreach group)
	25%*58.13%=14.53%	25%*60%=15.00%	40%*52.25%=20.09%

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Assuming the Vice President's Compensation is $80,000, his or her Annual Award will equal the following, depending on the Vice President's business unit:

									
	Bank Vice President	ERM Vice President	Sales Vice President (in Member Outreach group)
	$80,000*14.53%=$11,624	$80,000*15.00%=$12,000	$80,000*20.09%=$16,072

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APPENDIX II

 2021 PERFORMANCE PERIOD AWARDS FOR LEVEL I PARTICIPANTS
Federal Home Loan Bank of Indianapolis

A.           Incentive Opportunities for Level I Participants

Annual Awards payable to Level I Participants are calculated by multiplying (a) the Compensation (as defined in Section 3.1 of the Federal Home Loan Bank of Indianapolis Incentive Plan) available to the Participant, by (b) the percentages as set forth below, and by (c) the sum of the applicable weighted values of the achievement level for all Performance Goals.

												
	Position	TOTAL INCENTIVE AS % OF COMPENSATION	INCENTIVE AS % OF COMPENSATION, EARNED & VESTED AT YEAR-END	INCENTIVE AS % OF COMPENSATION, DEFERRED FOR 3 YEARS
	CEO	100%	50%	50%
	EVP	80%	40%	40%
	SVP	70%	35%	35%

Deferred Awards are subject to additional Performance Goals during the Deferral Performance Period, as described in Section C below.

B.           2021 Performance Goals for Level I Participants

Performance Goal achievement will be determined for Level I Participants based on the following values for the different achievement levels:

												
	PERCENTAGE VALUE FOR ACHIEVEMENT OF PERFORMANCE GOALS
	Position	Threshold	Target	Maximum
	CEO	50%	80%	100%
	EVP	50%	75%	100%
	SVP	50%	75%	100%

The Mission Goals, Weighted Values, Thresholds, Targets, Maximums, and notes set forth in Appendix I.B. above shall also apply to Level I Participants, and are incorporated herein by this reference.  For purposes of this Appendix II.B., "Bank" shall refer to Level I Participants other than those in ERM and Internal Audit, and "ERM" shall refer to Level I Participants in ERM.  No Level I Participant qualifies for "Sales."

C.           2022 – 2024 Performance Goals for Level I Participants

Deferred Awards are subject to additional Performance Goals during the Deferral Award Performance Period.  The achievement levels for Deferral Performance Period Performance Goals for all Level I Participants are:

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	DEFERRAL PERFORMANCE PERIOD
	PERFORMANCE GOAL PERCENTAGE VALUES
	Threshold	Target	Maximum
	75%	100%	125%

The Bank's Deferral Performance Period Performance Goals are:

																		
	MISSION GOALS	WEIGHTED VALUE	THRESHOLD	TARGET	MAXIMUM
	Bank (1)
	ERM
	1. PROFITABILITY (2)
	35%	35%	25 bp	50 bp	150 bp
						
	2. RETAINED EARNINGS (3)
	35%	35%	3.5%	3.9%	4.3%
						
	3. PRUDENTIAL	30%	30%	Achieve 1 Prudential Standard	—	Achieve 2 Prudential Standards
						
	A.Maintain a regulatory capital-to-assets ratio of at least 4.16% as measured on each quarter-end in 2022 through 2024.

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

(1)       For Level I Participants other than those in ERM and Internal Audit.
(2)       Attainment of this goal will be computed using the simple average of the annual Profitability Performance Goal achieved for the Annual Awards for each year of the Deferral Performance Period. If the Bank does not establish a Profitability Performance Goal in the Annual Award for any year in the Deferral Performance Period, the achievement for such year will be determined using the definition in the Profitability Performance Goal in effect for the prior year.
(3)       Total Retained Earnings divided by the sum of the carrying value of the MBS and AMA portfolios, measured at the end of each month. The calculation will be the simple average of 36 month-end calculations.

D.           Hypothetical Example Calculations

Assume that the Bank achieved the following on its Performance Goals for year 1 (calculated using weighting for Senior Vice Presidents):

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	MISSION GOALS	WEIGHTED VALUE	Achievement	Achievement Percentage Value	Bank Result	ERM Result
	Bank	ERM
	1. Performance Goal 1	25%	25%	Target	75%	18.75%	18.75%
							
	2. Performance Goal 2	50%	45%	Threshold	50%	25%	22.5%
							
	3. Performance Goal 3	10%	10%	Over Maximum	100%	10%	10%
							
	4. Performance Goal 4	10%	10%	Below Threshold	—%	—%	—%
							
	5. Performance Goal 5	5%	10%	50% between Target and Maximum	87.5%	4.375%	8.75%
							
					Total:	58.125%	60.00%

A Senior Vice President is eligible to receive an Annual Award of up to a maximum of 70% of his or her Compensation.  Depending on the Senior Vice President's business unit, the Annual Award will be equal to the following proportion of the Senior Vice President's Compensation (rounded to 2 decimal places):

						
	Bank Senior Vice President	ERM Senior Vice President
	70%*58.13%=40.69%	70%*60%=42%

Assuming the Senior Vice President's Compensation is $200,000, his or her total incentive will equal the following, depending on the Senior Vice President's business unit:

						
	Bank Senior Vice President	ERM Senior Vice President
	$200,000*40.69%=$81,380	$200,000*42%=$84,000

50% of this amount will be paid after year 1 as an Annual Award, and the other 50% will be deferred until after the Deferral Performance Period.

									
		Bank Senior Vice President	ERM Senior Vice President
	Annual Award	$81,380*50%=$40,690	$84,000*50%=$42,000

Assume the Bank achieved the following Performance Goals during the Deferral Award Performance Period:

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	MISSION GOALS	WEIGHTED VALUE	Achievement	Achievement Percentage Value	Bank Result	ERM Result
	Bank	ERM
	1. Goal 1	35%	35%	Target	100%	35%	35%
							
	2. Goal 2	35%	35%	Maximum	125%	43.75%	43.75%
							
	3. Goal 3	30%	30%	50% between Threshold and Target	87.5%	26.25%	26.25%
					Total:	105%	105%

After the Deferral Performance Period, the Senior Vice President would receive the following as a Deferred Award, depending on the Senior Vice President's business unit:

									
		Bank Senior Vice President	ERM Senior Vice President
	Deferred Award	$40,690*105%=$42,724.50	$42,000*105%=$44,100

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APPENDIX III

FORM OF NON-SOLICITATION AND NON-DISCLOSURE AGREEMENT

This Agreement is entered into as of the ____ day of _____________, 20__, by and between the FEDERAL HOME LOAN BANK OF INDIANAPOLIS, a corporation organized under the laws of the United States (the "Bank") and ____________________ (the "Executive").
WHEREAS, the Bank sponsors the Federal Home Loan Bank of Indianapolis Incentive Plan (the "Plan"); and
WHEREAS, as a condition of participation in the Plan, the Bank requires that the Executive agree to the terms and conditions found within this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual promises and agreements contained herein and other good and valuable consideration, the receipt, legal adequacy and sufficiency of which are hereby acknowledged, the parties agree as follows:

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

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

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

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

(i)materials, records, data, documents, lists, writings and information (in each case, whether in writing, printed, verbal, electronic, computerized or otherwise) (A) relating or referring in any manner to the business, operations, affairs, financial condition, results of operation, cash flow, assets, liabilities, sales, revenues, income, estimates, projections, policies, strategies, techniques, methods, products, developments, suppliers, regulators, members, relationships and/or customers of the Bank that are confidential, proprietary or not otherwise publicly available, in any event not without a breach of this Agreement, or (B) that the Bank has deemed confidential, proprietary, nonpublic or not otherwise publicly available without breaching this Agreement;
31

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

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

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

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

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

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

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

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

            3.         Non-Solicitation and No-Hire. The Executive hereby understands, acknowledges and agrees that, by virtue of his or her position with the Bank, the Executive has and will have advantageous familiarity and personal contacts with the employees of the Bank and has and will have advantageous familiarity with the business, operations and affairs of the Bank. In addition, the Executive understands, acknowledges and agrees that the business of the Bank is highly competitive. Accordingly, at all times while the Executive is employed by the Bank and for a twelve-month period following Termination of Service, the Executive will not, directly or indirectly, or individually or together with any other Person, as owner, shareholder, investor, member, partner, proprietor, principal, director, officer, Executive, manager, agent, representative, independent contractor, consultant or otherwise induce, request or attempt to influence any Bank employee who was employed by the Bank during the twelve-month period prior to Termination of Service, to terminate his or her employment with the Bank. In addition, the Executive agrees that for a period of twelve months following the Executive's Termination of Service, Executive will 
32

not hire any Bank employee who was employed by the Bank during the twelve-month period prior to the Executive's Termination of Service.

            4.         Periods of Noncompliance and Reasonableness of Periods. The restrictions and covenants contained in Section 3 will not run during all periods of noncompliance and will apply during the Term of this Agreement and for the full periods specified in Section 3. The Bank and the Executive understand, acknowledge and agree that the restrictions and covenants contained in Section 3 are reasonable in view of the nature of the business in which the Bank is engaged, the Executive's position with the Bank and the Executive's advantageous knowledge and familiarity with, the Bank's employees, business, operations, affairs and customers.

The Bank's obligation to pay an award to the Executive pursuant to the Federal Home Loan Bank of Indianapolis Incentive Plan will immediately terminate in the event the Executive breaches any of the provisions of Section 1 or 3 and all outstanding awards will be forfeited. Notwithstanding the foregoing:

(a)the Executive's covenants set forth in Sections 1 or 3 will continue in full force and effect and be binding upon the Executive;
(b)the Bank will be entitled to the remedies specified in Section 6; and
(c)the Bank will be entitled to its damages, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) resulting from or relating to the successful prosecution of the Executive's breach of any of the provisions of Section 1 or 3.

5.         Survival of Certain Provisions. Upon any termination of the Executive's employment with the Bank, the Executive and the Bank hereby expressly agree that the provisions of Sections 1, 3, 4 and 6 will continue to be in full force and effect and binding upon the Executive and the Bank in accordance with the applicable respective provisions of such Sections.

            6.         Remedies. The Executive agrees that the Bank will suffer irreparable damage and injury and will not have an adequate remedy at law in the event of any actual, threatened or attempted breach by the Executive of any provision of Section 1 or 3. Accordingly, in the event of a threatened, attempted or actual breach by the Executive of any provision of Section 1 or 3, in addition to all other remedies to which the Bank is entitled at law, in equity or otherwise, the Bank may be entitled to a temporary restraining order and a permanent injunction or a decree of specific performance of any provision of Section 1 or 3. The foregoing remedies will not be deemed to be the exclusive rights or remedies of the Bank for any breach of or noncompliance with this Agreement by the Executive but will be in addition to all other rights and remedies available to the Bank at law, in equity or otherwise.

            7.         Severability. In case any one or more of the provisions (or any portion thereof) contained herein will, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision of this Agreement, but this Agreement will be construed as if such invalid, illegal or unenforceable provision or provisions (or portion thereof) had never been contained herein. If any provision of this Agreement will be determined by a court of competent jurisdiction to be unenforceable because of the provision's scope, duration or other factor, then such provision will be considered divisible and the court making such determination will have the power to reduce or limit (but not increase or make greater) such scope, duration or other factor or to reform (but not increase or make greater) such provision to make it enforceable to the maximum extent permitted by law, and such provision will then be enforceable against the appropriate party hereto in its reformed, reduced or limited form; provided, however, that a provision will be enforceable in its reformed, reduced 
33

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

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

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

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

            11.       Non-Assignability. This Agreement contemplates that the Executive will personally provide the services described herein, and accordingly, the Executive may not assign the Executive's rights or obligations hereunder, whether by operation of law or otherwise, in whole or in part, without the prior written consent of the Bank.

            12.       Notice. Any notice, request, instruction or other document to be given hereunder to any party will be in writing and delivered by hand, telegram, registered or certified United States mail return receipt requested, or other form of receipted delivery, with all expenses of delivery prepaid, as follows:

If to the Executive:                      _________________________
                                                                             _________________________
                                                                             _________________________
                                                                             _________________________

If to the Bank:                         Federal Home Loan Bank of Indianapolis
c/o General Counsel
8250 Woodfield Crossing Boulevard
Indianapolis, IN 46240

            13.       Governing Law. This Agreement is being delivered in and will be governed by the laws of the State of Indiana without regard to the choice of law principles thereof. Any dispute regarding this Agreement will be brought in any Indiana state or federal court having jurisdiction in the matter and located in Marion County, Indiana, and the Executive expressly consents to the jurisdiction of such courts.

            14.       Prior Agreements. The Executive represents and warrants to the Bank that the Executive is not a party to or otherwise bound by any agreement that would restrict in any way the performance by the Executive of the Executive's duties, services and obligations under this Agreement, that the Executive has disclosed to the Bank all employment type agreements to which the Executive has been bound, including without limitation employment agreements, consulting agreements, non-compete agreements or 
34

covenants, confidentiality or non-disclosure agreements or covenants, and intellectual property assignment agreements, and that the Bank will not have any liability to any third party arising out of the Executive entering into this Agreement or performing hereunder.

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

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

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

IN WITNESS WHEREOF, the Bank, by its officer thereunder duly authorized, and the Executive, have caused this Non-Competition, Non-Solicitation and Non-Disclosure Agreement to be executed as of the day and year first above written.

FEDERAL HOME LOAN BANK
OF INDIANAPOLIS                                                    EXECUTIVE

By: __________________________                         _____________________________________  
                                           
Its:  __________________________ 

By:  __________________________            
     
Its:  __________________________                 

35

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