Document:

Exhibit

Exhibit 10.4

ENCORE CAPITAL GROUP, INC. 
2017 INCENTIVE AWARD PLAN

PERFORMANCE SHARE UNIT AWARD GRANT NOTICE (TSR)
Encore Capital Group, Inc. (the “Company”) has granted to the participant listed below (“Participant”) a Performance Share Unit award (the “PSUs” or the “Award”) described in this Performance Share Unit Award Grant Notice (the “Grant Notice”), subject to the terms and conditions of the 2017 Incentive Award Plan (as amended from time to time, the “Plan”) and the Performance Share Unit Award Agreement attached as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference. Capitalized terms not specifically defined in this Grant Notice or the Agreement have the meanings given to them in the Plan.

	
					
	Participant:
	 

	Grant Date:
	 

	End Date:
	 

	Normal Vesting Date:
	 

	Target Number of PSUs: 
	 

	Performance Period:
	Grant Date – End Date

	Performance Goals:
	Except as otherwise set forth in the Agreement, Participant is eligible to Vest in and receive Shares based upon the Company’s attainment, during the Performance Period, of the TSR Performance Goals set forth below, and satisfaction of continued status as a Service Provider requirements, as set forth in Sections 3.1-3.3 of the Agreement.

	Performance Vesting:
	The number of PSUs that Performance-Vest and become eligible to Vest shall be determined in accordance with the applicable table below based on the Relative TSR actually attained by the Company during the Performance Period, by multiplying (i) the percentage corresponding to the Company’s achievement of Relative TSR during the Performance Period as set forth in the “Number of Target PSUs that Performance-Vest” column below by (ii) the Target Number PSUs. In the event that the Company’s actual achievement of Relative TSR falls between two Performance Goals on the table below, then the number of PSUs that shall Performance-Vest for the Performance Period shall be determined by means of linear interpolation. 

Notwithstanding the foregoing, if the Company’s TSR for the Performance Period is less than zero, then the maximum number of PSUs that may Performance-Vest shall be no greater than the Target Number of PSUs.

Any PSUs remaining unearned and/or unvested following the determination of the TSR actually attained by the Company during the Performance Period shall be forfeited immediately. 

US-DOCS\98891375.3

	
		
	Relative TSR for Performance Period
	Number of Target PSUs that Performance-Vest

	Below __th Percentile
	0%

	__th Percentile
	50%

	__th Percentile
	62.5%

	__th Percentile
	75%

	__th Percentile
	87.5%

	__th Percentile
	100%

	__th Percentile
	112.5%

	__th Percentile
	125%

	__th Percentile
	137.5%

	__th Percentile
	150%

	__th Percentile
	162.5%

	__th Percentile
	175%

	__th Percentile
	187.5%

	__th Percentile and Above
	200%

By accepting (whether in writing, electronically or otherwise) the PSUs, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement.  Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement. 
	
				
	ENCORE CAPITAL GROUP, INC.
	PARTICIPANT

	By:
	 
	 

	Name:
	 
	 

	Title:
	 
	 
	 

US-DOCS\98891375.3

PERFORMANCE SHARE UNIT AWARD AGREEMENT
 
ARTICLE I.
GENERAL
1.1    Defined Terms.  Wherever the following terms are used in this Agreement they shall have the meanings specified below, unless the context clearly indicates otherwise.  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.  
(a)    “Beginning Price” means, with respect to the Company and any Peer Group Company, the 30 trading-day average market closing price, on the principal exchange on which the Company’s common stock is traded, over the period beginning on (and including) the Grant Date.  For purposes of determining the Beginning Price, the value of dividends and other distributions that have an ex-dividend date during such 30 trading-day period shall be determined by treating them as reinvested in additional shares of the applicable company’s common stock at the closing market price on the date of distribution.
(b)    “Cause” has the meaning set forth in the Letter Agreement.
(c)    “Disability” means Participant’s “disability” within the meaning of Section 409A.
(d)    “Ending Price” means the Share Value as of the last day of the Performance Period (which may be the date of a Change in Control, if applicable).
(e)    “Good Reason” means (i) a material reduction in Participant’s base compensation; (ii) a material reduction in Participant’s authority, duties or responsibilities; (iii) a material reduction in the authority, duties or responsibilities of the person to whom Participant reports; (iv) a material reduction in the budget over which Participant retains authority; or (v) a material change in the location at which Participant provides services for the Company (which is defined as any relocation by the Company of Participant’s employment to a location that is more than 35 miles from Participant’s present office location and is more than 35 miles from Participant’s primary residence at the time of such relocation, without Participant’s consent).  To be eligible to receive any benefits set forth herein in connection with a termination for Good Reason, (x) Participant must provide written notice of the “Good Reason” condition to the Company within 90 days after the initial existence of such condition; (y) the Company must not have cured such condition within 30 days of receipt of Participant’s initial written notice or it must have stated unequivocally in writing that it does not intend to attempt to cure such condition; and (z) Participant must resign from employment within 12 months following the end of the period within which the Company was entitled to remedy the condition constituting Good Reason but failed to do so.
(f)    “Letter Agreement” means that certain letter agreement by and between Participant and the Company dated February 24, 2014, as may be amended.
(g)    “Peer Group Companies” means only those entities that are set forth on Schedule I attached hereto (collectively, the “Peer Group”); provided, however, that if a Peer Group Company is acquired or otherwise ceases to have a class of equity securities that is both registered under the Securities 

US-DOCS\98891375.3

Exchange Act of 1934 and actively traded on a U.S. public securities market, such Peer Group Company will be removed from the Peer Group.
(h)    “Performance Goals” means the Relative TSR and TSR goals with respect to the Performance Period, as set forth in the Grant Notice.  
(i)    “Performance-Vest” means that, with respect to a PSU, the applicable Performance Goal has been achieved or deemed achieved pursuant to this Agreement.
(j)    “Qualifying Termination” means a Termination of Service (i) by the Company without Cause, (ii) by Participant for Good Reason on or within 12 months after a Change in Control, or (iii) due to Participant’s death or Disability.
(k)    “Relative TSR” means, with respect to the Performance Period, the Company’s TSR, as a percentile with respect to the range of TSRs of each of the Peer Group Companies.
(l)    “Separation from Service” means Participant’s “separation from service” from the Company within the meaning of Section 409A(a)(2)(A)(i) of the Code.
(m)    “Share Value,” as of any given date, means the 30 trading-day trailing average market closing price ending on and including such date; provided, however, that if the Performance Period ends upon the consummation of a Change in Control, Share Value with respect to the Company shall mean the price per Share paid by the acquiror in the Change in Control transaction or, to the extent that the consideration in the Change in Control transaction is paid in stock of the acquiror or its affiliate, then Share Value shall mean the value of the consideration paid per Share based on the average of the closing trading prices of a share of such acquiror stock on the principal exchange on which such shares are then traded for each trading day during the five consecutive trading days ending on and including the date on which a Change in Control occurs, unless otherwise determined by the Administrator in connection with valuing any shares that are not publicly traded.  For purposes of determining the Share Value, the value of dividends and other distributions that have an ex-dividend date during such 30 trading-day period shall be determined by treating them as reinvested in additional shares of the applicable company’s common stock at the closing market price on the date of distribution.
(n)    “TSR” means, with respect to the Company and any Peer Group Company, the quotient obtained by dividing (i) the sum of (A) the difference obtained by subtracting the applicable Beginning Price from the applicable Ending Price, plus (B) the aggregate per share dividends and other distributions that have an ex-dividend date during the Performance Period (assuming the reinvestment in shares of such dividends and distributions) by (ii) the applicable Beginning Price; provided, however, that TSR for a Peer Group Company will be deemed to be negative one hundred percent (-100%) if the Peer Group Company (i) files for bankruptcy, reorganization or liquidation under any chapter of the U.S. Bankruptcy Code; (ii) is the subject of an involuntary bankruptcy proceeding that is not dismissed within 30 days; (iii) is the subject of a stockholder approved plan or liquidation or dissolution; or (iv) otherwise becomes involved or ceases to conduct substantial business operations.
(o)    “Vest” or “Vested” means that, with respect to a PSU, both (i) such PSU has Performance-Vested and (ii) the continued service condition has been satisfied.
(p)    “Vesting Date” means, with respect to a PSU, the date on which the PSU becomes Vested.

1.2    Incorporation of Terms of Plan.  The PSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.
ARTICLE II
PSUS AND DIVIDEND EQUIVALENTS
2.1    Grant of PSUs. The Company has granted the PSUs to Participant effective as of the grant date set forth in the Grant Notice (the “Grant Date”).  Each PSU represents the right to receive one Share, as set forth in this Agreement.  Participant will have no right to the distribution of any Share underlying a PSU until the time (if ever) such PSU has Vested.
2.2    Dividend Equivalents.  The Company hereby grants to Participant, with respect to each PSU, a Dividend Equivalent for ordinary cash dividends paid to substantially all holders of outstanding Shares with a record date after the Grant Date and prior to the date the applicable PSU is settled, forfeited or otherwise expires.  Each Dividend Equivalent entitles Participant to receive the equivalent value of any such ordinary cash dividends paid on a single Share that becomes Vested in accordance with this Agreement.  The Company will establish a separate Dividend Equivalent bookkeeping account (a “Dividend Equivalent Account”) for each Dividend Equivalent and credit the Dividend Equivalent Account (without interest) on the applicable dividend payment date with the amount of any such cash paid.  Any Dividend Equivalents granted in connection with the PSUs issued hereunder, and any amounts that may become distributable in respect thereof, shall be treated separately from such PSUs and the rights arising in connection therewith for purposes of the designation of time and form of payments required by Section 409A. Participant shall not be entitled to any Dividend Equivalent payment with respect to any PSU that does not Vest in accordance with this Agreement.  
2.3    Unsecured Promise.  The PSUs and Dividend Equivalents will at all times prior to settlement represent an unsecured Company obligation payable only from the Company’s general assets.
     
ARTICLE III.
VESTING; FORFEITURE AND SETTLEMENT
3.1    Performance-Based Right to Payment.  The Administrator shall determine the Company’s achievement of the applicable Performance Goals after the end of the Performance Period, but no later than the Normal Vesting Date.  Subject to Sections 3.2 and 3.3 hereof, the number of PSUs that Performance-Vest shall be determined as of such determination date, and shall Vest on the Normal Vesting Date subject to Participant’s continued status as a Service Provider through the Normal Vesting Date.  
3.2    Change in Control.  Notwithstanding Section 3.1 hereof, and subject to Section 3.3 hereof, in the event that a Change in Control occurs at any time prior to the End Date, Participant is a Service Provider as of immediately prior to such Change in Control:
(a)    And an Assumption of the PSUs does not occur in connection with such Change in Control, then a number of PSUs shall Performance-Vest and Vest as of immediately prior to such Change 

in Control based on the Company’s actual achievement of the Performance Goals during the Performance Period through such Change in Control.
(b)    And an Assumption of the PSUs occurs in connection with such Change in Control, then a number of PSUs shall Performance-Vest as of immediately prior to such Change in Control based on the Company’s actual achievement of the Performance Goals during the Performance Period through such Change in Control,  and thereafter shall remain outstanding and eligible to Vest on the Normal Vesting Date, subject to Participant’s continued status as a Service Provider through such date (and any PSUs that do not Performance-Vest shall be forfeited as of immediately prior to such Change in Control).  The PSUs that remain outstanding from the Change in Control to the Normal Vesting Date are referred to herein as the “Time-Vesting Units”.
3.3    Termination.  Notwithstanding Section 3.1 hereof:
(a)    In the event that Participant experiences a Qualifying Termination due to Participant’s death or Disability, in either case prior to a Change in Control, then the number of PSUs that Performance-Vest and Vest and become payable hereunder as of the termination date shall equal the Target Number of PSUs.  In the event that Participant experiences a Qualifying Termination due to Participant’s death or Disability on or following a Change in Control, then the Time-Vesting Units shall Vest and become payable hereunder as of the termination date.
(b)    Subject to Section 3.3(c), in the event that Participant experiences a Qualifying Termination due to a termination by the Company without Cause, then the PSUs will be subject to vesting and forfeiture in accordance with the terms and conditions in the Letter Agreement; provided, however, that notwithstanding anything to the contrary contained in the Letter Agreement (which, to the extent of such contradiction, is expressly superseded by this Agreement), if such termination occurs prior to a Change in Control the Award will not be subject to Section 3.2 and instead shall be forfeited as of immediately prior to such Change in Control. 
(c)    In the event that Participant experiences a Qualifying Termination due to a termination by the Company without Cause or by Participant for Good Reason, in either case, on or within 12 months after a Change in Control, then the Time-Vesting Units shall Vest and become payable hereunder as of the termination date.
3.4    Forfeiture.
(a)    Termination of Service.  
(i)    In the event that Participant experiences a Termination of Service that is not a Qualifying Termination, all of the PSUs shall thereupon automatically be forfeited by Participant as of the date of termination, and Participant’s rights in any such PSUs, including without limitation any Dividend Equivalents (including any Dividend Equivalent Account balance), shall thereupon lapse and expire.
(ii)    Any PSUs (including any Time-Vesting Units) that do not become Vested in connection with a Qualifying Termination due to Participant’s death or Disability, or due to Participant’s termination by the Company without Cause or by Participant for Good Reason, in either case, on or within 12 months after a Change in Control, shall thereupon automatically be forfeited by Participant as of the date of termination.  Any PSUs (including any Time-Vesting Units) that do not become Vested in connection with 

a Qualifying Termination due to Participant’s termination by the Company without Cause shall be forfeited by Participant in accordance with the forfeiture terms in the Letter Agreement.  In the event that any PSUs are forfeited by Participant, Participant’s rights in any such PSUs and such portion of the Award, including without limitation any Dividend Equivalents (including any Dividend Equivalent Account balance), shall thereupon lapse and expire.
(b)    Failure to Achieve Performance Goals; Change in Control.  Except as set forth in Sections 3.2 and 3.3, any outstanding PSUs that do not Performance-Vest due to the failure by the Company to achieve the Performance Goals (in whole or in part), including in connection with a Change in Control, or do not Vest on a Change in Control in which an Assumption of the Award does not occur, shall automatically be forfeited by Participant as of the End Date or Change in Control, as applicable, and Participant’s rights in any such PSUs and such portion of the Award, including without limitation any Dividend Equivalents, shall thereupon lapse and expire.
3.5    Settlement
(a)    The PSUs that Vest in accordance with this Agreement will be paid in Shares within 30 days after the applicable Vesting Date; provided, however, that such payment will occur no later than March 15 immediately following the applicable Vesting Date.  Dividend Equivalents (including any Dividend Equivalent Account balance) will be paid in Shares or cash (at the Company’s option) as soon as administratively practicable after the Vesting of the applicable underlying PSU, but in no event more than 30 days after such PSU’s Vesting Date (but in no event later than March 15 immediately following the applicable Vesting Date).  Notwithstanding anything to the contrary contained herein, the exact payment date of any PSUs and any Dividend Equivalents shall be determined by the Company in its sole discretion (and Participant shall not have a right to designate the time of payment).  
(b)    Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Law until the earliest date the Company reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)), provided the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.
(c)    If a Dividend Equivalent is paid in Shares, the number of Shares paid with respect to the Dividend Equivalent will equal the quotient, rounded down to the nearest whole Share, of the Dividend Equivalent Account balance divided by the Fair Market Value of a Share on the day immediately preceding the payment date.
 
ARTICLE IV. 
TAXATION AND TAX WITHHOLDING
4.1    Representation.  Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of this Award and the transactions contemplated by the Grant Notice and this Agreement.  Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.
4.2    Tax Withholding.  

(a)    The Company shall withhold, or cause to be withheld, Shares otherwise vesting or issuable under this Award (including the PSUs or Dividend Equivalents) in satisfaction of any applicable withholding tax obligations.  The number of Shares which may be so withheld or surrendered shall be limited to the number of Shares which have a fair market value on the date of withholding no greater than the aggregate amount of such liabilities based on the maximum individual statutory withholding rates in Participant’s applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income.  To the extent that any Federal Insurance Contributions Act tax withholding obligations arise in connection with the PSUs or the Dividend Equivalents prior to the applicable vesting or payment date, the Administrator may accelerate the payment of a portion of the award of PSUs sufficient to satisfy (but not in excess of) such tax withholding obligations and any tax withholding obligations associated with any such accelerated payment, and the Administrator shall withhold such amounts in satisfaction of such withholding obligations. 
(b)    Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the PSUs and the Dividend Equivalents, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the PSUs or Dividend Equivalents.  Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the PSUs or the Dividend Equivalents or the subsequent sale of Shares.  The Company and the Subsidiaries do not commit and are under no obligation to structure the PSUs or Dividend Equivalents to reduce or eliminate Participant’s tax liability.
4.3    Section 409A.  
(a)    To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A, including without limitation any such regulations or other guidance that may be issued after the effective date of this Agreement.  Notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that the PSUs or the Dividend Equivalents (or, in each case, any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate either for the PSUs and/or Dividend Equivalents to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.
(b)    All payments of nonqualified deferred compensation subject to Section 409A to be made upon a termination of employment or service under this Agreement may only be made upon Participant’s Separation from Service.
(c)    Notwithstanding anything to the contrary in this Agreement, no amounts shall be paid to Participant under this Agreement during the six-month period following Participant’s Separation from Service to the extent that the Administrator determines that Participant is a “specified employee” (within the meaning of Section 409A) at the time of such Separation from Service and that paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code.  If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of such six-month period (or such earlier date upon which such amount can be paid under Section 409A without being subject to such additional taxes), the Company shall 

pay to Participant in a lump-sum all amounts that would have otherwise been payable to Participant during such six-month period under this Agreement.
      
ARTICLE V.
OTHER PROVISIONS
5.1    Administration.  The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules.  Without limiting the generality of the foregoing, all determinations, interpretations and assumptions relating to the calculation and payment of the PSUs (including, without limitation, determinations, interpretations and assumptions with respect to TSR calculations) shall be made by the Administrator.  All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon Participant, the Company and all other interested persons.  
5.2    Adjustments.  Participant acknowledges that the PSUs, the Shares subject to the PSUs, the Dividend Equivalents and the Performance Goals are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.  The Administrator shall also have the exclusive authority, in its reasonable discretion, to make proper adjustments and/or modifications to one or more Performance Goals in the event of any extraordinary, unusual or infrequent events or occurrences, or changes in accounting principles or Applicable Laws, affecting a Performance Goal that the Administrator determines have an unintended effect on the calculation of the Performance Goals.
5.3    Other Stock or Cash Based Awards. This Award shall constitute an Other Stock or Cash Based Award for purposes of the Plan. 
5.4    Notices.  Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Secretary at the Company’s principal office or the Secretary’s then-current email address or facsimile number.  Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files.  By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party.  Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.
5.5    Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
5.6    Conformity to Securities Laws.  Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.
5.7    Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in this Agreement or the Plan, this Agreement 

will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
5.8    Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement, the PSUs and the Dividend Equivalents will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule.  To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.
5.9    Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.
5.10    Agreement Severable.  In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.
5.11    Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the PSUs and Dividend Equivalents, and rights no greater than the right to receive cash or the Shares as a general unsecured creditor with respect to the PSUs and Dividend Equivalents, as and when settled pursuant to the terms of this Agreement.
5.12    Not a Contract of Employment.  Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.
5.13    Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.
* * * * 

SCHEDULE I
Peer Group CompaniesExhibit

Exhibit 10.5

FEDERAL HOME LOAN BANK OF CINCINNATI    

Incentive Compensation Plan 
Plan Document

As of January 1, 2018
Approved November 16, 2017

i

FEDERAL HOME LOAN BANK OF CINCINNATI                        
Incentive Compensation Plan
	
				
	Table of Contents

	 
	 
	Page

	 
	 
	 

	 
	Overview
	1
	

	1.
	Plan Objectives
	2
	

	2.
	Definitions
	2
	

	3.
	Eligibility
	5
	

	4.
	Incentive Award Opportunity
	6
	

	5.
	Performance Mix
	7
	

	6.
	Performance Measures
	7
	

	7.
	Award Determination
	8
	

	8.
	Preconditions to Award
	9
	

	9.
	Vesting of Awards, Timing of Benefit Payments
	11
	

	10.
	Plan Communication
	12
	

	11.
	Administrative Control
	12
	

	12.
	Miscellaneous Conditions
	13
	

FEDERAL HOME LOAN BANK OF CINCINNATI                        
Incentive Compensation Plan
PLAN DOCUMENT
Overview
The Incentive Compensation Plan is a cash-based annual incentive plan with a long-term deferral component established to provide incentive award opportunities related to the achievement of Bankwide and individual performance objectives by eligible Participants. Performance is evaluated on an annual basis using annual performance measures to determine a total incentive award opportunity. Subject to the conditions described herein, an approved award is paid in cash shortly after the close of the year to which the performance incentive relates.  With regard to Participant Levels I through IV, a portion of the incentive award is mandatorily deferred for three years after the end of the Plan year to which the incentive relates; and the final value of the award is determined using separate performance measures over the three-year Deferral Period.  This Incentive Compensation Plan replaces the former Executive and Staff Incentive Plans and the Executive Long-Term Incentive Plan.  

1

		
	1.
	Plan Objectives

		
	1.1
	The purpose of the Federal Home Loan Bank of Cincinnati's Incentive Compensation Plan is to achieve the following:

		
	1.1.1
	Promote awareness and achievement of the Bank's annual and long-term profitability and business goals; 

		
	1.1.2
	Link performance and compensation to specific Bankwide and individual performance measures; 

		
	1.1.3
	Provide a competitive reward structure for officers and other employees; 

		
	1.1.4
	Provide a vehicle for closer Board involvement and communication with management regarding Bank strategic plans; and

		
	1.1.5
	Promote loyalty and dedication to the Bank and its objectives. 

		
	2.
	Definitions

		
	2.1
	When used in the Incentive Compensation Plan, the following words and phrases shall have the following meaning: 

		
	2.1.1
	Annual Incentive Award means the award based upon the results of a single Plan year, the Eligibility Level, Performance Mix, and other factors detailed in this Plan.

		
	2.1.2
	Audit Committee means the Audit Committee of the Board.

		
	2.1.3
	Bank means the Federal Home Loan Bank of Cincinnati. 

		
	2.1.4
	Board means the Bank's Board of Directors. 

		
	2.1.5
	Chief Risk Officer means the Bank’s Chief Risk Officer.

		
	2.1.6
	Deferred Incentive Award means the portion of the Annual Incentive Award Opportunity which is mandatorily deferred for the applicable Deferral Period and which is subject to change based on the Bank’s performance over the Deferral Period.

		
	2.1.7
	Deferral Period means the three-year period over which a portion of the Annual Incentive Award for a Participant in Level I, II, III, IV, or V is mandatorily deferred and over which Bank performance is measured to determine the amount of the Final Award for that Participant. 

2

		
	2.1.8
	Disability means a Participant who (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Bank. All determinations as to the date and extent of disability shall be made upon the basis of such evidence, including independent medical reports and data, as the Personnel & Compensation Committee deems necessary and desirable. All determinations of the Committee shall be final and binding. 

		
	2.1.9
	Enterprise Risk Management (“ERM”) means the Bank’s Enterprise Risk Management Department. 

		
	2.1.10
	Executive Officers means the Bank’s Named Executive Officers

		
	2.1.11
	Extraordinary Events may include changes in business strategy, impact of severe economic fluctuations, significant growth or consolidation of the membership base or other factors that materially impact the Bank or the Federal Home Loan Bank system. 

		
	2.1.12
	Final Award means the amount ultimately paid to a Participant under the Plan.  With respect to Participants in Levels VI, VII, VIII and IX, each year the Final Award will be composed solely of that immediately preceding year’s Annual Incentive Award.  With respect to Participants in Levels I, II, III, IV, and V the Final Award for each year will be composed of a combination of that immediately preceding year’s Annual Incentive Award and the Deferred incentive Award.

		
	2.1.13
	Incentive Award Opportunity means the award that may be earned at various levels (Threshold, Target and Maximum) based on the Plan year results, the Eligibility Level, and Performance Mix and other factors detailed in this Plan. 

		
	2.1.14
	Internal Audit Department means the Bank’s Internal Audit Department. Participant means a person who, at the discretion of the Board, is eligible to take part in the Plan for a designated Plan year and/or Deferral Period, and whose position is included 

3

in one of the levels defined within this Plan or who has been separately named as a Participant for that Plan year by the President, with the concurrence of the Personnel & Compensation Committee. 
		
	2.1.15
	Performance Measure means each performance factor that is taken into consideration under the Plan in determining the value of the Final Award. 

		
	2.1.16
	Performance Mix means the weighting of Performance Measures taken into consideration under the Plan in determining the value of the Final Award.

		
	2.1.17
	Performance Period means the period of time over which Bank performance is measured.  In the case of a Participant in Level VI, VII, VIII, or IX this is the Plan year.  In the case of any Participant in Level I, II, III,IV, or V this is the Plan year and the Deferral Period.  

		
	2.1.18
	Personnel & Compensation Committee or Committee means the Personnel & Compensation Committee of the Board. 

		
	2.1.19
	Plan means this Incentive Compensation Plan. 

		
	2.1.20
	Plan Administrator means the Board or its designee(s). 

		
	2.1.21
	Plan Year means the calendar year, January 1 through December 31, over which both Bank and Participant performance is measured.

		
	2.1.22
	President means the President of the Bank. 

		
	2.1.23
	Retire, Retires, or Retirement mean a Participant’s Separation from Service after the Participant has (i) been employed with the Bank for at least five (5) years and (ii) reached at least age 62. 

		
	2.1.24
	Senior Officer means an officer with a rank of Senior Vice President or above.

		
	2.1.25
	Separation from Service or Separates from Service means, generally, a termination of employment with the Bank.  Except in the case of a Participant on a bona fide leave of absence as provided below, a Participant is deemed to have incurred a Separation from Service if the Bank and the Participant reasonably anticipate that the level of services to be performed by the Participant after a certain date will be reduced to 20% or less of the average services rendered by the Participant during 

4

the immediately preceding 36-month period (or the total period of employment, if less than 36 months), disregarding periods during which the Participant was on a bona fide leave of absence.  A Participant who is absent from work due to military leave, sick leave, or other bona fide leave of absence shall incur a Separation from Service on the first date immediately following the later of (i) the six-month anniversary of the commencement of the leave or (ii) the expiration of the Participant’s right, if any, to reemployment under statute or contract.   For purposes of determining whether a Separation from Service has occurred, the Bank means, with respect to employees it employs, the Bank and each corporation, trade or business that, together with the Bank, is treated as a single employer under Code Section 414(b) or (c), except that common ownership of at least 50% shall be determinative.  The Personnel & Compensation Committee will determine, in accordance with Code Section 409A, whether a Separation from Service has occurred. 
		
	2.1.26
	Target Award Opportunity means the award that may be earned during a Performance Period for achieving target performance levels under each Performance Measure. 

		
	3.
	Eligibility

		
	3.1
	Eligibility shall normally be limited to all Employees who: 

		
	•
	occupy positions with an employment status of scheduled full time or scheduled part time as of December 31st of the Plan year; and

		
	•
	are not in a probationary period due to poor performance or disciplinary action or have received an overall rating equal to or below 3.0 at the time of payment of the Final Award. 

		
	3.2
	Employees of the Bank who are hired into an eligible position by August 31st of the Plan year shall be eligible for participation in the Plan in accord with Section 3.1, and shall receive a prorated incentive award. 

		
	3.3
	Employees of the Bank who are hired into an eligible position on or after September 1st of the Plan year will only be eligible to participate for that Plan year if specifically nominated by the President and shall receive a prorated incentive award. 

		
	3.4
	The Chief Risk Officer and other ERM officers and staff will participate in the Plan but their award opportunities will be weighted 75 percent on the Bank-wide program and 25 percent on ERM-specific goals. 

5

		
	3.5
	Due to its unique role for the Bank and reporting relationship to the Board, the Internal Audit Department will not be included as eligible positions under the Plan, but will be eligible for a similar plan administered by the Audit Committee. 

		
	3.6
	There will be nine levels of participation, with participation in the cash and deferral features of the Plan as follows:

	
				
	 
	 
	Applicable Feature

	 
	 
	Annual
Cash Payment
	

Mandatory
Deferral

	Level I:
	President
	Yes
	Yes

	Level II:
	Executive Vice Presidents
	Yes
	Yes

	Level III:
	Senior Vice Presidents
	Yes
	Yes

	Level IV
	First Vice Presidents
	Yes
	Yes

	Level V:
	Vice Presidents
	Yes
	Yes

	Level VI:
	Assistant Vice Presidents/Functional Officers
	Yes
	No

	Level VII:
	Professional Staff (Grade 15 and above)
	Yes
	No

	Level VIII:
	Other Exempt Employees (Grade 14 and below)
	Yes
	No

	Level IX:
	Other Non-exempt Employees
	Yes
	No

		
	4.
	Incentive Award Opportunity

		
	4.1
	Each Plan year, the Bank will provide an award opportunity to Participants. The award opportunity shall be a percentage of each Participant's compensation. Certain executive positions have a greater and more direct impact than others on the annual success of the Bank; therefore, these differences are recognized by varying award opportunities for each Participant level. (See Appendix B – Incentive Award Opportunity and Performance Mix for current Plan year award opportunities.) 

		
	4.2
	Compensation for Levels I through VI is defined as the applicable Participants’ base salary including any salary adjustments made during the Plan year.  

		
	4.3
	Compensation for levels VII VIII and IX is defined as the sum of the applicable Participant’s base pay including any salary adjustments made 

6

during, as well as shift differential and overtime paid through the Plan year. 
		
	4.4
	In addition to the incentive award opportunity described above, the President may also approve an additional discretionary incentive award opportunity (the “President’s Award”) for employees in Levels VII VIII and IX.  Based upon the recommendation of a Senior Officer, an employee in Level VII, VIII or IX may be nominated for a President’s Award in order to recognize extraordinary individual performance or to address competitive compensation practices within the Bank’s labor market. Generally, the President’s Award will not exceed an additional ten percent (10%) incentive opportunity for the Participant based on compensation as defined in section 4.3. 

		
	5.
	Performance Mix

		
	5.1
	Participants will earn their incentive award by achieving a combination of Bankwide objectives and individual goals. 

		
	5.2
	A Level I, II, III, IV, VII, VIII, or IX Participant will earn an incentive award based solely on the achievement of Bankwide objectives. 

		
	5.3
	The incentive award of a Level V or VI Participant will be weighted between Bankwide objectives and individual goals and will vary by Participant level. The more control and influence a Participant has on Bankwide goals, the greater the Participant's weighting on Bank goals will be.  Likewise, the less control and influence a Participant has on Bankwide goals, the greater the weighting on that Participant's individual goals.  See Appendix B – Incentive Award Opportunity and Performance Mix for current Plan year weightings.  

		
	6.
	Performance Measures

		
	6.1
	Bankwide and individual performance measures will be established with respect to each Plan year. Three achievement levels will be set for each Bankwide and, where applicable, individual measure, and include: 

		
	Threshold
	The minimum achievement level accepted for the Performance Measure. 

		
	Target
	The planned achievement level for the Performance Measure. 

		
	Maximum
	The achievement level for the Performance Measure which substantially exceeds (as defined by the Committee) the planned level of achievement. 

7

		
	6.2
	Bankwide measures will be established by the Personnel & Compensation Committee with Board approval.  See Appendix C - Annual Bank Performance Measures and Bank Performance Measures for the Long-Term Deferred Component. 

		
	6.3
	Participants in Levels V and VI typically will have three to five major individual goals established that reflect the priorities of the Participant for the Plan year.  Each goal will be weighted to reflect its relative importance, with a minimum weight of 10 percent per goal.  In order to be eligible to receive an incentive award based on his or her individual performance, a Level V or VI Participant must submit his or her individual goals in writing to their Senior Officer and the President may approve or modify those goals.

		
	6.4
	All individual performance goals are to remain in effect for the entire Plan year, however, after the Plan year commences, at the sole discretion of the Personnel & Compensation Committee with Board approval, the Committee may revise Bank Performance Measures and/or the President may also revise individual performance goals for the Plan year.  All material changes, which occur after initial Finance Agency review and which impact Executive Officers are subject to further Finance Agency review. 

		
	7.
	Award Determination

		
	7.1
	The method of determining the Annual Incentive Award will be according to the following sequence: 

		
	7.1.1
	Define the dollar value of the Target Award Opportunity for the Participant. 

		
	7.1.2
	Determine the amount of the Target Award Opportunity that is attributable to Bank performance and to individual performance. 

		
	7.1.3
	After the Plan year ends, evaluate actual Bank performance against the Bankwide Performance Measures stated in Appendix C. Assess Bank performance as it relates to the threshold, target and maximum awards, interpolating between the threshold, target, and maximum awards as necessary. 

		
	7.1.4
	Using the award opportunity table described in Appendix B, determine the Bank incentive award by relating the level of actual Bank performance derived in 7.1.3 to the award opportunity for the Participant's level. Interpolate between the threshold, target, and maximum awards as necessary. 

8

		
	7.1.5
	After the Plan year ends, where applicable, evaluate actual individual Participant performance against the individual performance goals.  Assess performance as it relates to the threshold, target, and maximum performance measures. 

		
	7.1.6
	Using the award opportunity table in Appendix B, determine the individual incentive award by relating the level of actual individual performance derived in 7.1.5 to the award opportunity for the Participant's Level.  Interpolate between the threshold, target and maximum awards as necessary. 

		
	7.1.7
	Sum the Bank and individual awards to determine a total award for each Participant.  The President with Personnel & Compensation Committee approval may recommend the Board adjust the award of a Participant or one or more Levels of Participants. The Personnel & Compensation Committee may recommend the Board adjust the award of the President.  All material changes, which occur after initial Finance Agency review and which impact Executive Officers are subject to further Finance Agency review.

		
	7.1.8
	Determine whether the Participant is eligible to receive an incentive award for the Plan year and applicable Deferral Period by applying the rules of Sections 8 and 9 below.

		
	8.
	Preconditions to Award

		
	8.1
	Certain preconditions must be satisfied before a final award may be made to a Participant:

		
	8.1.1
	The Bank must achieve one or more of the threshold measures of performance as defined in Appendix C; 

		
	8.1.2
	The President must determine and the Personnel & Compensation Committee must concur that Bank performance is consistent with bestowing achievement awards; and

		
	8.1.3
	The Participant's immediate supervisor and the President must determine that the individual's overall performance meets their expectations.  The President's performance (Level I) will be appraised by the Personnel & Compensation Committee.  All other Participants will be appraised by the President and/or the Participant's immediate supervisor.

9

		
	8.2
	Should any individual Participant's performance meet these expectations but the Bank fail to achieve one or more of its threshold performance measures no Final Award will be made to any Participant (see exception in Section 8.3).  Likewise, if the Bank achieves all its threshold performance measures but a Participant's performance fails to meet such expectations no Final Award will be made to that Participant. 

		
	8.3
	In the event the Bank does not achieve threshold performance levels, the President may recommend, with the concurrence of the Personnel & Compensation Committee, an incentive award for extraordinary individual performance. Additionally or alternatively, at the Personnel & Compensation Committee’s sole discretion, an incentive award may be recommended for Bank performance below threshold subject to final approval by the Board of Directors.  All material changes, which occur after initial Finance Agency review and which impact Executive Officers are subject to further Finance Agency review.

		
	8.4
	The Level I, II, III,  IV, and V Participants shall not receive a Final Award under this Plan if during the most recent examination of the Bank by the Federal Housing Finance  Agency (“FHFA”), the Bank received the lowest Composite Rating (as defined in the FHLBank Rating System) indicating the Bank has been found to be operating in an unacceptable manner, exhibits serious deficiencies in corporate governance, risk management or financial condition and performance, or in substantial noncompliance with laws, FHFA regulations or supervisory guidance. Any awards to Levels VI, VII,  VIII, and IX under these conditions are at the sole discretion of the Committee. 

		
	8.5
	Furthermore, the incentive award calculated may be reduced (but not to a number that is less than zero), for all Participants or for an individual Participant, as applicable, if the Committee in its discretion determine that any of the following occur such that if it had occurred prior to the payment of the award, it would have negatively impacted the goal results and/or been determined that it should have reduced the associated payout calculation: 

		
	8.5.1
	Operational errors or omissions resulting in material revisions to:  the financial results, information submitted to FHFA or payout calculation, or other data used to determine the award; 

		
	8.5.2
	Submission of significant information to the Securities and Exchange Commission, Office of Finance and/or FHFA materially beyond any deadline or applicable grace period, other than late submissions that are caused by acts of God or other events beyond the reasonable control of the Participants; or

10

		
	8.5.3
	Failure by the Bank to make sufficient progress, as determined by the Committee, in the timely remediation of examination and other supervisory findings and matters requiring attention. 

		
	9.
	Vesting of Awards, Timing of Benefit Payments 

		
	9.1
	Except as provided in Sections 9.2, 9.3, or 9.4 below, a Participant must be employed by the Bank both on the last day of the Performance Period and on the date the Final Award payment is made as authorized by the Board.  

		
	9.2
	Any Participant on an approved bona fide leave of absence on the date the Board authorizes the payment of the Final Award applicable to that Participant shall be paid his or her Final Award according to the normal payment schedule.

		
	9.3
	Except as provided in Section 9.3.1, 9.3.2, or 9.4 below, in the event a Participant voluntarily or involuntarily terminates employment during the Performance Period, no Final Award will be made to the Participant.

		
	9.3.1
	A Participant who dies or becomes Disabled during the Performance Period may receive a Final Award which is prorated for the applicable period, but only if the President nominates and the Board approves such action.  In any such case, all Deferral Period payments will be made at the target level.  Any Participant who becomes eligible for a prorated Final Award pursuant to this Section will be paid such Final Award, as soon as practicable following his or her death or Disability but in all events, no later than 21⁄2 months following the close of the calendar year in which the death or Disability occurred.   

		
	9.3.2
	A Participant who Retires during the Performance Period may receive a Final Award prorated for the applicable period.  Any incentive award payments made pursuant to this Section will continue to be earned and evaluated according to the otherwise applicable criteria and shall be paid according to the normal payment schedule. 

		
	9.4
	If a Participant ceases employment during the Performance Period or after the Performance Period but before the Board approves the Final Award for that Performance Period, the President may nominate and the Board may approve the Participant to receive a Final Award.  In any such case, the Participant’s Final Award shall be paid according to the normal payment schedule.

11

		
	9.5
	Each Final Award shall be paid no later than 21⁄2 months following the close of the calendar year in which the applicable Performance Period ends.  This means that any Annual Incentive Award (because it is not subject to mandatory deferral) shall be paid no later than 21⁄2 months following the close of the calendar year to which it relates; and any Deferred Incentive Award will be paid no later than 21⁄2 months following the close of the calendar year in which the mandatory three-year Deferral Period ends. In the case of Executive Officers, the Final Award is subject to Agency review prior to payment.

		
	9.6
	All Final Awards will be paid out in cash and will be subject to applicable payroll tax withholdings. 

		
	9.7
	No Final Award shall be considered as compensation under any employee benefit plan of the Bank, except as determined by the Board.

		
	10.
	Plan Communication

		
	10.1
	The Plan administrator will communicate with Participants regarding the Plan according to the following schedule: 

	
			
	First quarter of the Plan year
	 
	Communicate Bankwide and individual goals for Plan year.

	Quarterly
	 
	Interim assessments of progress toward achieving Bank and individual goals.

	End of Plan year
	 
	Final assessment of Bank and individual performance.

		
	11.
	Administrative Control

		
	11.1
	The Board has ultimate authority over the Plan, however, the Board may delegate any and all of its authority regarding the administration and amendment of the Plan to a committee or individual designee.  Notwithstanding the foregoing, the Board reserves unto itself the authority to terminate the Plan.

		
	11.2
	The Bank's Director of Human Resources will assist, as requested, the President and the Committee in the administration of the particular provisions of the Plan delegated and specified throughout the Plan as the duties of the Committee and/or the President. 

		
	11.3
	In addition to the authority expressly provided in the Plan, the Board or its designee shall have such authority in its sole discretion to control and manage the operation and administration of the Plan and shall have all 

12

authority necessary to accomplish these purposes, including, but not limited to, the authority to interpret the terms of the Plan, and to decide questions regarding the Plan and the eligibility of any person to participate in the Plan and to receive benefits under the Plan.  The Board’s determinations and interpretations regarding the Plan (or those of the Board’s designee) shall be final, binding, and conclusive.
		
	11.4
	The Board has the right to revise, modify, or terminate the Plan in whole or in part at any time or for any reason, and the right to modify any recommended incentive award amount (including the determination of a greater or lesser award, or no award), without the consent of any Participant.  Any payment under the Plan may be impacted by Extraordinary Events, a failure to meet certain minimum financial performance or control requirements, and is subject to the claw back provisions described in Section 12.1.   In the case of Plan termination, unless otherwise agreed by the Board, all Annual Incentive Awards and Deferred Incentive Awards hereunder which have not yet been paid are cancelled and forfeited.

		
	12.
	Miscellaneous Conditions

		
	12.1
	Any undue incentives (the amount of the incentive over and above what should have been paid barring inaccurate, misstated and/or misleading achievement of financial or operational goals) paid to officers of the Bank (i.e., levels I-VI) based on achievement of financial or operational goals within this Plan that subsequently are deemed to be inaccurate, misstated or misleading shall be recoverable from the officer by the Bank.  Inaccurate, misstated and/or misleading achievement of financial or operational goals includes, but is not limited to, overstated revenue, income, capital, return measures and/or understated credit risk, market risk, operational risk or expenses.  Furthermore, the value of any benefits delivered or accrued related to the undue incentive shall be reduced and/or recovered by the Bank to the fullest extent possible. 

		
	12.2
	Notwithstanding any Plan provision to the contrary, mere participation in the Plan will not entitle a Participant to an award. 

		
	12.3
	The right of the Bank to discipline or discharge a Participant shall not be affected by reason of any provision of this Plan.  The designation of an employee as a Participant in the Plan does not guarantee employment.  Nothing in this Plan shall be deemed (i) to give any employee or Participant any legal or equitable rights against the Bank, except as expressly provided herein or provided by law; or (ii) to create a contract of employment with any employee or Participant, to obligate the Bank to continue the service of any employee or Participant, or to affect or modify any employee's or Participant's term of employment in any way.

13

		
	12.4
	No employee has a guaranteed right to any award under this Plan, and any attempt by an employee to sell, transfer, assign, pledge, or otherwise encumber any anticipated award shall be void, and the Bank shall not be liable in any manner for or subject to the debts, contracts, liabilities, engagements or torts of any person who might anticipate an award under this program. 

		
	12.5
	This Plan shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating assets of the Bank for payment of any award under this program.  If the Bank in its sole and absolute discretion chooses to maintain one or more trusts for the purpose of facilitating the payment of benefits or expenses hereunder, the following provisions shall apply: 

		
	12.5.1
	the Bank may set aside in such trust such amount as it deems, in its sole and absolute discretion, necessary to assist it in meeting its obligations to Participants and beneficiaries hereunder; 

		
	12.5.2
	any amount so set aside shall remain subject to the claims of the Bank’s general creditors; and 

		
	12.5.3
	no such trust nor the assets held therein shall be located outside of the United States of America.

		
	12.6
	The Plan shall be construed, regulated and administered in accordance with the laws of the state of Ohio, unless otherwise preempted by the laws of the United States. 

		
	12.7
	If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provision of the Plan, and the Plan shall be construed and enforced as if such provision had not been included herein. 

		
	12.8
	If a Participant dies before receiving his or her award, any amounts determined to be paid under this Plan shall be paid to the Participant’s surviving spouse, if any, or if none, to the Participant’s estate.  The Bank's determination as to the identity of the proper payee of any amount under this Plan shall be binding and conclusive and payment in accordance with such determination shall constitute a complete discharge of all obligations on account of such amount. 

		
	12.9
	Claims and Appeals Procedures. A Participant (such Participant being referred to below as a “Claimant”) may deliver to the Personnel & Compensation Committee a written claim for a determination with respect to any claim under this Plan. If such a claim relates to the contents of a 

14

notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant.  The claim must state with particularity the determination desired by the Claimant. 
The Personnel & Compensation Committee shall consider a Claimant's claim within a reasonable time, but no later than one-hundred-twenty (120) days after receiving the claim.  If the Personnel & Compensation Committee determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial one-hundred-twenty (120) day period. Upon reaching its decision, the Personnel & Compensation Committee shall notify the Claimant in writing. 
On or before sixty (60) days after receiving a notice from the Personnel & Compensation Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant's duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. The Committee shall render its decision on review promptly, in writing, and deliver it to the Claimant no later than one-hundred-twenty (120) days after it receives the Claimant’s written request for a review of the denial of the claim.  If the Personnel & Compensation Committee fails to render a decision within that time frame, the claim is deemed denied.  The Personnel & Compensation Committee’s decision upon review is final and binding upon the Participant, any beneficiary of the Participant, or any other person who claims to derive a benefit under this Plan by reference to the Participant.
		
	12.10
	Deadline to File Legal Action and Venue.  Any legal actions, suits or proceedings pertaining to this Plan shall be brought in the courts of Hamilton County, Ohio (whether federal or state) and the Participant, by submission of his or her individual goals hereunder to the President (or in the case of the President, to the Board or Committee), on his or her behalf and on behalf of his or her beneficiaries, persons claiming to be a beneficiary or any other persons who claim to derive a benefit under this Plan by reference to the Participant hereby irrevocably submits to the exclusive jurisdiction of said courts.  The Participant on his or her behalf and on behalf of his or her beneficiaries, persons claiming to be a beneficiary or any other persons who claim to derive a benefit under this Plan by reference to the Participant hereby waives, to the fullest extent permitted by law, any objections he or she, his or her beneficiaries or any such persons may now or hereafter have to the laying of venue in any suit, action or proceeding hereunder in any court, as well as any right he or she, his or her beneficiaries or any such persons may now or hereafter have to remove any such suit, action or proceeding once commenced to 

15

another court in any jurisdiction on the grounds of forum non conveniens or otherwise.
No legal action to recover benefits under this Plan or any other action arising from, or related to, this Plan may be brought by any Claimant on any matter pertaining to this Plan unless the legal action is commenced in the proper forum as required by this Section within:
(a)    180 days of the date on which the Claimant knew or reasonably should have known of the principal facts on which the claim is based, or
(b)    180 days after the Claimant has exhausted the claims procedures set forth in Section 12.9.
For purpose of applying the foregoing provisions, knowledge of all facts that the Participant knew or reasonably should have known shall be imputed to every Claimant who is or claims to be a beneficiary of the Participant or otherwise claims to derive a benefit under this Plan by reference to the Participant.
		
	12.11
	Any agreements or representations, oral or otherwise, express or implied, with respect to the subject matter of this Plan which are not contained herein will have no effect or enforceability.

		
	12.12
	This Plan and the awards hereunder are exempt from the Employee Retirement Income Security Act of 1973, as amended, on account of the Bank being a governmental entity.  This Plan and the awards hereunder are intended to comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.  Additionally, this Plan and the awards hereunder are intended to comply with the requirements of FHFA regulations and supervisory guidance and in accordance with Section 1116 of the Housing and Economic Recovery Act of 2008. 

16

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