Document:

capitalplaneffective10-02000

 

 

 

 

Effective as of: October 2, 2020

 

 

 

AMENDED AND RESTATED

 

 

CAPITAL PLAN

 

of the

 

Federal Home Loan Bank of New York

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table of Contents 

 

	

Definitions

	
 

	
 

	

iii

	

1.

	

Overview

	
 

	
 

	

1

	

2.

	

The Capital Structure

	

2

	
 

	

2.1

	

Authorized Stock

	

2

	
 

	
 

	

2.1.1

	

Par Value

	

2

	
 

	
 

	

2.1.2

	

Ownership of Retained Earnings

	

2

	
 

	

2.2

	

Purchase, Redemption and Repurchase of Stock

	

2

	
 

	
 

	

2.2.1

	

Purchase of Capital Stock

	

2

	
 

	
 

	

2.2.2

	

Redemption of Capital Stock by Members

	

3

	
 

	
 

	

2.2.3

	

Repurchase of Excess Stock by the FHLBNY

	

4

	
 

	
 

	

2.2.4

	

Limitations on Redemptions and Repurchases

	

5

	
 

	
 

	

2.2.5

	

Retirement of Redeemed and Repurchased Stock

	

7

	
 

	
 

	

2.2.6

	

Transfer of Capital Stock

	

7

	
 

	
 

	

2.2.7

	

Limitation on Converting or Exchanging Excess

	
 

	
 

	
 

	
 

	

Stock as Between Subclasses

	

7

	
 

	

2.3

	

Dividends

	

7

	
 

	

2.4

	

Rights Upon Liquidation, Merger or Consolidation of the
FHLBNY

	

7

	
 

	
 

	

2.4.1

	

Liquidation of the FHLBNY

	

7

	
 

	
 

	

2.4.2

	

FHLBNY Acquired by another Federal Home Loan Bank

	

8

	
 

	
 

	

2.4.3

	

FHLBNY Acquires Other Federal Home Loan Bank

	

8

	

3.

	

Responsibilities of Directors and Management and Voting of
Stock

	

9

	
 

	

3.1

	

Responsibilities of Directors and Management

	

9

	
 

	

3.2

	

Voting Rights

	

10

	

4.

	

Member Stock Purchase Requirements

	

11

	
 

	

4.1

	

Membership Stock Purchase Requirement

	

11

	
 

	

4.2

	

Activity-Based Stock Purchase Requirement

	

11

	
 

	

4.3

	

Periodic Review of Capital Stock Purchase Requirements

	

12

	
 

	

4.4

	

Member Compliance with Adjusted Requirements

	

13

	

5.

	

Capital Requirements of the FHLBNY

	

14

	
 

	

5.1

	

Statutory Capital Requirements

	

14

	
 

	
 

	

5.1.1

	

Total Capital Requirement

	

14

	
 

	
 

	

5.1.2

	

Leverage Capital Requirement

	

14

	
 

	
 

	

5.1.3

	

Permanent Capital Requirement

	

14

	
 

	
 

	

5.1.4

	

FHFA Authority to Require More Capital

	

14

	
 

	

5.2

	

Risk-Based Capital Requirement

	

14

	
 

	
 

	

5.2.1

	

Credit Risk Capital Requirement

	

15

	
 

	
 

	

5.2.2

	

Market Risk Capital Requirement

	

15

	
 

	
 

	

5.2.3

	

Operations Risk Capital Requirement

	

16

	

6.

	

Reporting Requirements to the Finance Agency

	

17

	
 

	

6.1.

	

Changes in Membership

	

17

	
 

	

6.2

	

Leverage and Risk Based Capital

	

17

	
 

	

6.3

	

Voting Shares

	

17

	

7.

	

Termination of Membership in the FHLBNY

	

18

	
 

	

7.1

	

Voluntary Withdrawal from Membership

	

18

	
 

	
 

	

7.1.1

	

Written Notification

	

18

	
 

	
 

	

7.1.2

	

Access to Benefits of Membership

	

18

	
 

	
 

	

7.1.3

	

Finance Agency Notification

	

18

	
 

	
 

	

7.1.4

	

Disposition of Claims

	

18

	
 

	
 

	

7.1.5

	

Effective Date of Withdrawal

	

19

	
 

	

7.2

	

Involuntary Termination of Membership

	

19

	
 

	
 

	

7.2.1

	

Written Notification

	

19

	
 

	
 

	

7.2.2

	

Access to Benefits of Membership

	

19

	
 

	
 

	

7.2.3

	

Disposition of Claims

	

19

	
 

	

7.3

	

Merger or Consolidation of Members

	

20

	
 

	
 

	

7.3.1

	

Termination of Charter and Stock Redemption Period

	

20

	
 

	
 

	

7.3.2

	

Capital Stock Requirement of Surviving Member

	

20

	
 

	

7.4

	

Merger or Consolidation of Member into a Member of another Federal
Home

	
 

	
 

	
 

	

Loan Bank or into a Nonmember

	

21

	
 

	
 

	

7.4.1

	

General

	

21

	
 

	
 

	

7.4.2

	

Disposition of Claims

	

21

	
 

	
 

	

7.4.3

	

Acquiring Institution Applies for FHLBNY Membership

	

22

	
 

	

7.5

	

Relocation of Principal Place of Business

	

22

	
 

	
 

	

7.5.1

	

General

	

22

	
 

	
 

	

7.5.2

	

Disposition of Claims

	

22

	

8.

	

[Reserved]

	
 

	

23

	

9.

	

[Reserved]

	
 

	

23

	

10.

	

Amendments to the Capital Plan and Notices

	

24

	
 

	

10.1

	

Amendments to the Capital Plan

	

24

	
 

	

10.2

	

Notices Relating to the Capital Plan

	

24

	
 

	
 

	

10.2.1

	

Notices by the FHLBNY

	

24

	
 

	
 

	

10.2.2

	

Notices to the FHLBNY

	

24

	

11. Joint Capital Enhancement Agreement

	

25

	
 

	

11.1

	

Retained Earnings Enhancement Implementation and Definitions

	

25

	
 

	
 

	

11.1.1

	

Implementation

	

25

	
 

	
 

	

11.1.2

	

Definitions applicable to Sections 11.1 through 11.4 of this
Capital Plan

	

25

	
 

	

11.2

	

Establishment of Restricted Retained Earnings

	

28

	
 

	
 

	

11.2.1

	

Segregation of Account

	

28

	
 

	
 

	

11.2.2

	

Funding of Account

	

28

	
 

	

11.3

	

Limitation on Dividends, Stock Purchase and Stock
Redemption

	

29

	
 

	
 

	

11.3.1

	

General Rule on Dividends

	

29

	
 

	
 

	

11.3.2

	

Limitations on Repurchase and Redemption

	

30

	
 

	

11.4

	

Termination of Retained Earnings Capital Plan Amendment
Obligations

	

30

	
 

	
 

	

11.4.1

	

Notice of Automatic Termination Event

	

30

	
 

	
 

	

11.4.2

	

Notice of Voluntary Termination

	

31

	
 

	
 

	

11.4.3

	

Consequences of an Automatic Termination Event or Vote to
Terminate

	
 

	
 

	
 

	
 

	

the Agreement

	

31

	

Appendix I – Member Stock Purchase Requirements

	
 

	

A.

	

Membership Stock Purchase Requirement

	
 

	

B.

	

Activity-Based Stock Purchase Requirement

	
 

	
 

	
 

	
 

	
 

	
 

Definitions

 

For
purposes of the Capital Plan, all capitalized terms used but not
defined elsewhere have the meanings set forth below. In the Capital
Plan unless the context otherwise requires, words describing the
singular number include the plural and vice versa.

 

Activity-Based Stock means Capital Stock that is purchased
and held by a Member to meet the Member’s Activity-Based
Stock Purchase Requirement.

 

Activity-Based Stock Purchase Requirement means the
requirement under which a Member must acquire and maintain a
specific amount of Activity-Based Stock based on the specified
value of certain transactions of the Member with the FHLBNY as
described in Section 4.2 of the Capital Plan.

 

Acquired Member Assets or AMA means assets acquired by the FHLBNY
from a Member through either a purchase or funding transaction
under Part 1268 of the Regulations, and includes assets acquired
through transactions undertaken through the FHLBNY’s
“Community Mortgage Asset” program.

 

Advances Agreement means the Bank’s Advances,
Collateral Pledge and Security Agreement, as may be amended from
time to time. For avoidance of doubt, the term
“advances” for purposes of the Capital Plan shall
include funding agreements between the FHLBNY and life insurance
company Members.

 

Bank Act means the Federal Home Loan Bank Act, as
amended.

 

Board of Directors means the Board of Directors of the
FHLBNY.

 

Capital Plan means the capital plan of the FHLBNY as adopted
by the Board of Directors and approved by the Finance Agency, as
amended from time to time.

 

Capital Stock means all shares of Class B Stock issued by
the FHLBNY, including subclasses, in accordance with the Bank Act,
the Regulations and the Capital Plan.

 

Class B Stock means the capital stock that has the
characteristics of Class B stock as described in the Bank Act and
the Regulations, and as specified in Section 2.1 of the Capital
Plan.

 

Credit Risk Capital Requirement means the amount of
Permanent Capital that is required to support the FHLBNY’s
credit risk, as defined by Section 1277.4 of the
Regulations.

 

Derivative Contract means a financial contract the value of
which is derived from the values of one or more underlying assets,
reference rates, or indices of asset values, or credit-related
events.

 

Excess Stock means the shares of each subclass of Capital
Stock held by a Member, or Other Institution, that exceeds the
Member’s, or Other Institution’s, Membership Stock
Purchase Requirement or Activity-Based Stock Purchase Requirement
related to the respective subclass.

 

FHFA or Finance
Agency means, as the context requires in this Capital Plan,
either (1) the Federal Housing Finance Agency, (2) any successor
agency, or (3) the Federal Housing Finance Board, the predecessor
agency to the Federal Housing Finance Agency.

 

FHLBNY means the Federal Home Loan Bank of New
York.

GAAP means Generally Accepted Accounting Principles in the
United States of America.

 

General Allowance for Losses means an allowance established
by the FHLBNY in accordance with GAAP for expected losses, but does
not include any amounts held against specific assets of the
FHLBNY.

 

Market Risk Capital Requirement means the amount of
Permanent Capital to support the FHLBNY’s market risk, as
required by Section 1277.5 of the Regulations.

 

Member means an institution that has been approved for
membership by the FHLBNY in accordance with Part 1263 of the
Regulations and which has satisfied the Membership Stock Purchase
Requirement.

 

Membership means all the rights, privileges and obligations
associated with being a Member.

 

Membership Stock means Capital Stock that is purchased and
held by each Member to meet the Membership Stock Purchase
Requirement.

 

Membership Stock Purchase Requirement means the level of
Membership Stock that must be purchased and maintained by a Member
as a condition of Membership as described in Section 4.1 of the
Capital Plan.

 

Member Stock Purchase Requirements means, respectively, the
Activity-Based Stock Purchase Requirement and the Membership Stock
Purchase Requirement.

 

Minimum Regulatory Capital Requirement means a minimum
regulatory capital requirement for the FHLBNY established by the
Regulations, as referred to in Sections 5.1.1, 5.1.2, 5.1.3 and 5.2
of the Capital Plan, or on a basis specifically applicable to the
FHLBNY by the Finance Agency, as referred to in Section 5.1.4 of
the Capital Plan.

 

Minimum Stock Investment Requirement means the Capital Stock
that a Member or Other Institution is required, as applicable, to
hold to meet its Membership Stock Purchase Requirement and the
Capital Stock that a Member or Other Institution is required, as
applicable, to hold to meet its Activity-Based Stock Purchase
Requirement. For avoidance of doubt, in order for a Member or Other
Institution to be deemed to satisfy its Minimum Stock Investment
Requirement it must at the relevant point in time hold both the
number of shares of Membership Stock required to meet, to the
extent applicable, the Member’s or Other Institution’s
Membership Stock Purchase Requirement and the number of shares of
Activity-Based Stock required to meet, to the extent applicable,
the Member’s or Other Institution’s Activity-Based
Stock Purchase Requirement.

 

Mortgage-related Assets means loans and participations in
loans secured by residential real property and mortgage-backed
securities; loans secured by manufactured housing; certain other
mortgage-related securities; and certain loans secured by
nonresidential nonfarm real property, all as listed and described,
and as may be modified from time to time, on the FHLBNY’s web
site at www.fhlbny.com/capitalplan.

 

Operations Risk Capital Requirement means the amount of
Permanent Capital that is required to support the FHLBNY’s
operations risk, as required by Section 1277.6 of the
Regulations.

 

Other Institution means a financial institution that is not
a Member and that acquires, receives or retains Capital Stock under
the Capital Plan.

 

Par Value means $100 per share of Capital
Stock.

 

Permanent Capital means the retained earnings of the FHLBNY,
determined in accordance with GAAP, plus the amount paid-in for the
FHLBNY's Class B stock (whether required or excess).

 

Record Date means December 31st of the calendar
year preceding the election of directors.

 

Redemption Cancellation Fee means as applicable (i) a fee of
$500, which may be imposed in the event that a Member cancels a
Redemption Notice, or a Member’s Redemption Notice is subject
to automatic cancellation, or (ii) a fee of $500 that may be
imposed in the event that a Member cancels its notification of
intent to withdraw from Membership.

 

Redemption Notice means a written notice provided by a
Member to the FHLBNY in accordance with Section 2.2.2 of the
Capital Plan requesting redemption of a specified number of shares
of Capital Stock, subject to the time limits prescribed in the Bank
Act, for Class B Stock and the other restrictions set forth in the
Act, the Regulations and the Capital Plan.

 

Risk-based Capital Requirement means the amount of Permanent
Capital that the FHLBNY must maintain in accordance with Section
1277.3 of the Regulations.

 

Regulations means the regulations promulgated by the Finance
Agency, as amended from time to time.

 

Stock Redemption Period means the five-year period, as
applicable, following: (i) the FHLBNY’s receipt of a
Member’s Redemption Notice, (ii) the FHLBNY’s (or as
applicable, the Finance Agency’s) receipt of a Member’s
written notice to the FHLBNY (or as applicable, the Finance Agency)
of intent to withdraw from Membership, or the date of acquisition
or receipt of any additional shares of Capital Stock after the
FHLBNY’s (or as applicable, the Finance Agency’s)
receipt of such notice, (iii) a Member’s termination from
Membership as a result of merger or consolidation into a member of
another Federal Home Loan Bank or a nonmember, or the date of
acquisition or receipt of any additional shares of Capital Stock
after such termination from Membership, (iv) a Member’s
termination from Membership as a result of the relocation of its
principal place of business, or the date of acquisition or receipt
of any additional shares of Capital Stock after such termination of
Membership, or (v) a Member’s involuntary termination from
Membership, or the date of acquisition or receipt of any additional
shares of Capital Stock after such termination of
Membership.

 

Total Assets means the total assets of the FHLBNY, as
determined in accordance with GAAP.

 

Total Capital of the FHLBNY means the sum of Permanent
Capital, the amount of any General Allowance for Losses, and the
amount of other instruments identified in the Capital Plan that the
FHFA has determined to be available to absorb losses incurred by
the FHLBNY.

 

 

1.

Overview

 

Pursuant to the
Bank Act and the Regulations, the Board hereby establishes this
Capital Plan to:

 

●

provide a new
statutory capital structure for the FHLBNY that can be implemented
as described herein; and

 

●

ensure that the
FHLBNY is able to comply with each of its Minimum Regulatory
Capital Requirements at all times after
implementation.

 

In
developing this Capital Plan, the Board of Directors has kept in
mind the cooperative nature of the FHLBNY. The Board of Directors
hereby reaffirms the FHLBNY's continuing use of the cooperative
business model.

 

This
document takes into account the Bank Act and the Regulations, and
is not intended to contradict the same. Under Section 26 of the
Bank Act, the Finance Agency has the authority to liquidate or
reorganize a Federal Home Loan Bank and the provisions of this
Capital Plan are subject to that authority. In addition, certain
discretionary decisions of the Board of Directors under this plan
may be subject to Finance Agency review and/or approval. Nothing in
this plan may be construed as abrogating, nullifying or otherwise
interfering with such Finance Agency authorities.

 

All
references to the Regulations hereunder shall be deemed to include
any successor regulations.

 

 

2.          

The
Capital Structure

 

2.1                       

Authorized
Stock

 

The
Board of Directors hereby authorizes one class of Capital Stock,
Class B Stock. Shares of Class B Stock shall be redeemable in cash
at Par Value five years following the FHLBNY’s receipt of a
Member’s Redemption Notice, or in accordance with a
termination of Membership as provided in Section 7 of the Capital
Plan, or in accordance with Sections 8.1.1.2, 8.1.1.4 and 8.1.1.5
of the Capital Plan. Class B Stock will have two distinct
subclasses:

 

●

Membership Stock will be
purchased and held by each Member to meet the Membership Stock
Purchase Requirement established by the FHLBNY as a condition of
membership.

 

●

Activity-Based Stock will be
purchased and held by a Member to meet the Activity-Based Stock
Purchase Requirement established by the FHLBNY for certain
transactions with Members.

 

The
Board of Directors may determine in the future that it wishes to
authorize the issuance of additional subclasses of Class B Stock or
to authorize the issuance of Class A stock, including one or more
subclasses of Class A stock. In such cases, an amendment to this
Capital Plan will be submitted to the FHFA for approval in
accordance with Section 10.1 of the Capital Plan.

 

2.1.1               

Par
Value

 

All
Capital Stock will be issued, redeemed, repurchased or transferred
pursuant to Section 2.2.6 of the Capital Plan at Par
Value.

 

2.1.2               

Ownership
of Retained Earnings

 

The
retained earnings, surplus, undivided profits and equity reserves,
if any, of the FHLBNY shall be owned by the holders of Class B
Stock in an amount proportional to each holder’s share of the
total shares of Class B Stock; however, the holders shall have no
right to receive any portion of those items, except through the
declaration of a dividend or capital distribution approved by the
Board of Directors or through the liquidation of the
FHLBNY.

 

2.2            

Purchase,
Redemption and Repurchase of Stock

 

All
Members are required to purchase and redeem Capital Stock in
accordance with the requirements of the Bank Act, the Regulations
and this Capital Plan.

 

2.2.1

Purchase
of Capital Stock

 

Each
Member of the FHLBNY will be required to maintain a minimum
investment in Membership Stock as a condition of membership in
accordance with the requirements of Section 4 of this Capital Plan
and Appendix I hereto; in addition, each Member engaged in certain
transactions with the FHLBNY will also be required to maintain a
minimum investment in Activity-Based Stock in accordance with the
requirements of Section 4 of this Capital Plan and Appendix I
hereto.

 

 

The
FHLBNY will not issue stock other than in accordance with 12 C.F.R.
§1277.21 and the Capital Plan. Capital Stock shall be issued
to and owned only by Members, with the exception of Other
Institutions. Capital Stock may be traded only between the FHLBNY
and its Members. All Capital Stock will be issued in book entry
form only. The FHLBNY will act as its own transfer
agent.

 

2.2.2

Redemption
of Capital Stock by Members

 

A
Member may redeem shares of its Capital Stock by providing a
Redemption Notice to the FHLBNY. A redemption of Capital Stock may
also occur in accordance with Sections 7, 8.1.1.2 and 8.1.1.5 of
the Capital Plan. The FHLBNY shall (subject to the restrictions
contained in Section 2.2.4 below) redeem Capital Stock in
accordance with the two preceding sentences upon the expiration of
the applicable Stock Redemption Period, provided that the FHLBNY
shall not be obligated to redeem Capital Stock unless all
applicable conditions contained in the Bank Act, the Regulations
and the Capital Plan are met.

 

●

Redemption
Notice

 

A
Member that provides a Redemption Notice to the FHLBNY shall
identify in that Redemption Notice the particular shares that are
the subject of the Redemption Notice by reference to the subclass,
the date acquired and the manner in which the shares were acquired.
If a Member fails to identify the particular shares within a
subclass to be redeemed, the shares subject to redemption shall be
determined using a last acquired, first redeemed method of
identification within the subclass specified by the Member. Capital
Stock will be redeemed upon the expiration of the applicable Stock
Redemption Period subject to the conditions and limitations set
forth in Sections 2.2.4 and 2.2.5 of the Capital Plan. A Member may
not have more than one Redemption Notice outstanding at any time
with respect to the same shares of Capital Stock.

 

●

Cancellation of
Redemption Notice

 

A
Member may cancel its Redemption Notice by providing written notice
of such cancellation to the FHLBNY at any time prior to the
expiration of the applicable Stock Redemption Period. The FHLBNY
will assess a Redemption Cancellation Fee unless the Board of
Directors determines that it has a bona fide business purpose for
waiving the Redemption Cancellation Fee, and the waiver is
consistent with Section 7(j) of the Bank Act.

 

●

Repurchase of
Shares Subject to a Redemption Notice

 

To the
extent that the FHLBNY repurchases pursuant to Section 2.2.3 of the
Capital Plan shares of Capital Stock that are subject to a
Redemption Notice or Notices, the respective repurchased shares of
Capital Stock shall be deducted from the outstanding Redemption
Notice or Notices.

 

●

Automatic
Cancellation of a Redemption Notice

 

A
Redemption Notice will be automatically cancelled if the FHLBNY is
prevented from redeeming the Capital Stock within five business
days of the expiration of the applicable Stock Redemption Period
because the Member would not be in compliance with its Minimum
Stock Investment Requirement. In the event of an automatic
cancellation of a

 

Member’s
Redemption Notice as provided in the preceding sentence, the FHLBNY
will assess a Redemption Cancellation Fee unless the Board of
Directors determines it has a bona fide business purpose for
waiving the Redemption Cancellation Fee, and the waiver is
consistent with Section 7(j) of the Bank Act.

 

2.2.3               

Repurchase
of Excess Stock by the FHLBNY

 

●

Repurchase of
Activity-Based Stock

 

The
FHLBNY will, from time to time but not less than monthly, calculate
with respect to each Member, or Other Institution, the amount, if
any, of outstanding Activity-Based Stock that is Excess Stock. The
FHLBNY will then automatically repurchase for cash all such Excess
Stock at its Par Value on the same day as the calculation, subject
to the provisions of Section 2.2.4 of the Capital Plan. The FHLBNY
will notify members of changes to the repurchase methodology,
undertaken on its own initiative, no less than fifteen business
days prior to such changes.

 

●

Repurchase of
Membership Stock

 

Upon
written application by a Member, or Other Institution, to the
FHLBNY or on its own initiative, the FHLBNY may in its discretion
repurchase for cash at Par Value some or all of the outstanding
shares of Membership Stock that are determined by the FHLBNY to be
in excess of the Member’s, or Other Institution’s,
Membership Stock Purchase Requirement, subject to Section 2.2.4 of
the Capital Plan. If the FHLBNY determines that it will not
repurchase any or all shares of Membership Stock requested to be
repurchased under a written application by a Member, or Other
Institution, the FHLBNY will promptly notify the Member, or Other
Institution, that such Membership Stock will not be repurchased. No
prior notice of repurchase of shares of Membership Stock under a
written application by a Member, or Other Institution will be
given. The FHLBNY shall transmit, send or give written notice to
the Member, or Other Institution, of repurchases of shares of
Membership Stock undertaken on its own initiative at least 10
business days prior to the date of the repurchase.

 

●

Identification of
Repurchased Shares

 

If a
Member, or Other Institution, has one or more Redemption Notices
outstanding as of the date that the FHLBNY is to repurchase shares
of Capital Stock pursuant to this Section 2.2.3 of the Capital
Plan, the FHLBNY shall repurchase shares of Capital Stock by first
repurchasing shares of a Member, or Other Institution, that are
subject to a Redemption Notice applicable to the subclass that is
to be repurchased that has been outstanding for the longest period
of time and then, to the extent necessary, by repurchasing shares
that are subject to a Redemption Notice applicable to the subclass
to be repurchased that was outstanding for the next longest period
of time and continuing in that order, to the extent necessary,
until there are no remaining outstanding Redemption Notices with
respect to the subclass to be repurchased in which instance the
shares to be repurchased shall be determined by the FHLBNY using a
last acquired, first repurchased method of identification. If a
Member, or Other Institution, does not have any Redemption Notices
applicable to the subclass to be repurchased outstanding as of the
date that the FHLBNY is to repurchase shares of Capital Stock the
shares to be repurchased shall be determined by the FHLBNY using a
last acquired, first repurchased method of
identification.

 

 

2.2.4               

Limitations
on Redemptions and Repurchases

 

●

Prohibitions on
Redemptions and Repurchases

 

The
FHLBNY will not redeem or repurchase any shares of Capital Stock,
if following the redemption or repurchase the FHLBNY would not be
in compliance with each of its Minimum Regulatory Capital
Requirements.

 

The
FHLBNY will not redeem or repurchase any shares of Capital Stock
if, following such redemption or repurchase, the Member, or Other
Institution, would not be in compliance with the Member’s, or
Other Institution’s, Minimum Stock Investment
Requirement.

 

The
FHLBNY will not redeem or repurchase any shares of Capital Stock
without the prior written approval of the FHFA if the FHFA or the
Board of Directors has determined that the FHLBNY has incurred or
is likely to incur losses that result in or are likely to result in
“charges against the capital of the Bank,” as that
phrase is defined in the Regulations. This prohibition shall apply
even if the FHLBNY is in compliance with its Minimum Regulatory
Capital Requirements, and shall remain in effect for however long
the FHLBNY continues to incur such charges, or until the FHFA
determines that such charges are not expected to
continue.

 

●

FHLBNY’s
Discretion to Suspend Repurchases of Excess Capital
Stock

 

There
may be instances where the FHLBNY determines that it could be in
danger of falling below its regulatory-mandated or Board-approved
capital ratios as a result of the actions of any Member or Other
Institution with respect to the management of advance balances, and
the associated impact on the FHLBNY’s balance sheet,
especially with respect to its liquidity requirements.

 

There
may also be instances where the FHLBNY’s management, with the
concurrence of the Board, determines that the potential exists for
a Member or Other Institution to fail to honor its contractual
obligations to the FHLBNY.

 

In such
instances, the FHLBNY may, in order to:

 

●

keep capital ratios
at levels above the FHLBNY’s regulatory-mandated requirements
and the Board-approved threshold, as published by the FHLBNY from
time to time; or

 

●

help assure the
fulfillment of the contractual obligation to the
FHLBNY,

 

suspend
the repurchase of any shares of any Member’s or Other
Institution’s excess Capital Stock.

 

 

Upon
the FHLBNY’s determination in its sole discretion that the
capital management or contractual obligation issues described above
have been mitigated or resolved, the FHLBNY will reinstate the
repurchase of shares.

 

 

●

FHLBNY’s
Discretion to Suspend Redemptions of Capital Stock

 

The
Board of Directors may suspend the redemption of Capital Stock, if
the FHLBNY reasonably believes that continued redemption of Capital
Stock would cause the FHLBNY to fail to meet its Minimum Regulatory
Capital Requirements, would prevent the FHLBNY from maintaining
adequate capital against a potential risk that may not be
adequately reflected in its Minimum Regulatory Capital
Requirements, or would otherwise prevent the FHLBNY from operating
in a safe and sound manner. If a decision is made to suspend
redemption of Capital Stock, the FHLBNY shall notify the Finance
Agency in writing within two business days of the decision,
informing the Finance Agency of the reasons for the suspension and
of the FHLBNY's strategies and time frames for addressing the
conditions that led to the suspension, as indicated in Section
1277.27(b) of the Regulations. The Finance Agency may require the
FHLBNY to re-institute the redemption of Capital Stock. The FHLBNY
may not repurchase any Capital Stock without the written permission
of the Finance Agency during any period in which the FHLBNY has
suspended the redemption of Capital Stock as provided for in this
section of the Capital Plan.

 

●

Retention of
Redemption or Repurchase Proceeds as Collateral

 

If the
FHLBNY reasonably determines that there is an existing or
anticipated collateral deficiency related to any obligations owed
by the Member, or Other Institution, to the FHLBNY and the Member,
or Other Institution, has failed to deliver additional collateral
to resolve the existing or anticipated collateral deficiency to the
FHLBNY’s satisfaction

the
FHLBNY may retain the proceeds of redemption or repurchase of
Capital Stock as additional collateral until all such obligations
have been satisfied or the existing or anticipated deficiency is
resolved to the FHLBNY’s satisfaction.

 

●

Limitations on
Redemptions and Repurchases Related to Terminations of
Membership

 

The
restrictions on redemptions and repurchases set forth in the
preceding provisions of this Section 2.2.4 of the Capital Plan
apply with respect to redemptions pursuant to a Redemption Notice
as well as to redemptions in connection with a termination of
Membership in accordance with Section 7 of the Capital Plan and to
redemptions in accordance with Sections 8.1.1.2, 8.1.1.4 and
8.1.1.5 of the Capital Plan and to all repurchases of Capital Stock
held by Members and by Other Institutions.

 

If a
Member whose Membership is terminated pursuant to Sections 7.1,
7.2, 7.4 or 7.5 of the Capital Plan has one or more Redemption
Notices outstanding as of the effective date of its termination
from Membership such Redemption Notice or Notices shall not be
subject to automatic cancellation in accordance with Section 2.2.2
of the Capital Plan. Such Redemption Notices shall remain pending
until they can be satisfied in accordance with this Section 2.2.4
of the Capital Plan.

 

●

Pro Rata Allocation
of Redemptions

 

If at
any time more than one Member or Other Institution has outstanding
a Redemption Notice in accordance with Section 2.2.2 of the Capital
Plan or redemption of Capital Stock in connection with a
termination of Membership in accordance with Sections 7.1, 7.2, 7.4
and 7.5 of the Capital Plan or redemption of Capital Stock in
accordance with Sections 8.1.1.2, 8.1.1.4 and 8.1.1.5 of the
Capital Plan as to which the applicable Stock Redemption Period has
expired, and if the redemption by the FHLBNY of all of the shares
of Capital Stock subject to such Redemption Notice or termination
of Membership would cause the FHLBNY to fail to be in compliance
with any of its Minimum Regulatory Capital Requirements, then the
FHLBNY shall fulfill such redemptions as the FHLBNY is able to do
so from time to time, beginning with such redemptions as to which
the Stock Redemption Period expired on the earliest date and
fulfilling such redemptions relating to that date on a pro rata
basis from time to time until fully satisfied, and then fulfilling
such redemptions as to which the Stock Redemption Period expired on
the next earliest date in the same manner, and continuing in that
order until all such redemptions as to which the Stock Redemption
Period has expired have been fulfilled.

 

2.2.5               

Retirement
of Redeemed and Repurchased Stock

 

All
shares of Capital Stock that are acquired by the FHLBNY pursuant to
redemption or repurchase shall be retired.

 

2.2.6               

Transfer
of Capital Stock

 

A
Member, or Other Institution, may not transfer any Capital Stock to
any other person or entity, including another Member, except for
transfers of Capital Stock occurring pursuant to Sections 7.3 and
7.4 of the Capital Plan. Such transfers shall be deemed to be
approved by the FHLBNY as of the cancellation of the disappearing
Member’s charter.

 

2.2.7 

Limitation
on Converting or Exchanging Excess Stock as Between
Subclasses

 

A
member shall not convert or exchange (i) shares of Membership Stock
that are in excess of its Membership Stock Purchase Requirement
into shares of Activity-Based Stock or (ii) shares of
Activity-Based Stock that are in excess of its Activity-Based Stock
Purchase Requirement into shares of Membership Stock.

 

2.3            

Dividends

 

The
Board of Directors, in its discretion, subject to the provisions of
this Section 2.3 of the Capital Plan, may declare dividends to be
paid on the Capital Stock on a quarterly basis or as otherwise
determined by the Board of Directors. Each Member, or Other
Institution, that continues to hold Capital Stock is entitled to
receive dividends that are declared on all Capital Stock held
during the applicable period for the period of time the Member, or
Other Institution, owns the Capital Stock. Dividends are
non-cumulative with respect to payment obligations.

 

Dividends may be
paid only in accordance with the Bank’s Retained Earnings and
Dividend Policy, as such may be amended by the Bank’s Board
of Directors from time to time. Dividend payments may be in the
form of cash, additional shares of Capital Stock, or a combination
thereof as determined by the Board of Directors. The Board of
Directors may not declare or pay a dividend if the FHLBNY is not at
the time in compliance with each of its Minimum Regulatory Capital
Requirements or if following such declaration or payment of such a
dividend the FHLBNY would not be in compliance with each of its
Minimum Regulatory Capital Requirements.

 

2.4            

Rights
Upon Liquidation, Merger or Consolidation of the
FHLBNY

 

2.4.1               

Liquidation
of the FHLBNY

 

Upon
the liquidation of the FHLBNY, following the retirement of all
outstanding liabilities of the FHLBNY to its creditors, all shares
of Capital Stock are to be redeemed at Par Value, provided that if
sufficient funds are not available to accomplish the redemption in
full of the Capital Stock, then such redemption shall occur on a
pro rata basis among all holders of Capital Stock. Following the
redemption in full of all Capital Stock any remaining assets will
be distributed on a pro rata basis to holders of Capital Stock
immediately prior to such liquidation. This provision does not
limit the authority granted the Finance Agency under 12 U.S.C.
§ 1446 to prescribe rules, regulations or orders governing the
liquidation of a Federal Home Loan Bank that modify, restrict or
eliminate any of the rights set forth above.

 

2.4.2               

FHLBNY
Acquired by another Federal Home Loan Bank

 

In the
event that the FHLBNY is merged or consolidated into another
Federal Home Loan Bank, the holders of the outstanding Capital
Stock of the FHLBNY will be entitled to the rights and benefits set
forth in any applicable plan of merger and/or terms established or
approved by the Finance Agency.

 

2.4.3               

FHLBNY
Acquires Other Federal Home Loan Bank

 

In the
event that another Federal Home Loan Bank is merged or consolidated
into the FHLBNY, the holders of the outstanding stock of the other
Federal Home Loan Bank will be entitled to the rights and benefits
set forth in any applicable plan of merger and/or terms established
or approved by the Finance Agency.

 

 

3. 

Responsibilities
of Directors and Management and Voting of Stock

 

 

3.1            

Responsibilities
of Directors and Management

 

The Board of Directors

 

The
duties and responsibilities of the FHLBNY’s Board of
Directors under the Capital Plan include:

 

●

approval
of:

 

➢

authorization to
issue Capital Stock;

 

➢

“operating
ratios” for leverage and risk based capital to be specified
in the FHLBNY’s risk management policy in accordance with
12 C.F.R. § 1239.11;

 

➢

initial minimum
Member Stock Purchase Requirements;

 

➢

policy limits for
market and credit risk;

 

➢

involuntary
terminations of membership; and

 

➢

dividend
distributions.

 

●

periodic review and
approval of:

 

➢

amendments to the
Capital Plan to be submitted for Finance Agency
approval;

 

➢

adjustments to the
minimum Member Stock Purchase Requirements; and

 

➢

independent annual
validations of the FHLBNY’s internal risk measurement
model.

 

●

monitoring of
compliance with the terms and conditions of the Capital Plan,
including a continuing obligation to review and adjust the Member
Stock Purchase Requirements, as necessary to ensure that the FHLBNY
remains in compliance with its Minimum Regulatory Capital
Requirements.

 

FHLBNY Management

 

The
duties and responsibilities of FHLBNY management under the Capital
Plan delegated by the Board of Directors include:

 

➢

maintenance of the
internal risk measurement model in accordance with the
Regulations;

 

➢

maintenance of
procedures and systems to support the purchase and redemption of
stock under the capital structure; and

 

➢

maintenance of
reporting systems and procedures for Member Stock Purchase
Requirements and stock ownership.

In
addition, management is also responsible for the maintenance of an
effective internal control system to provide:

 

●

Member compliance
with Member Stock Purchase Requirements;

 

●

the FHLBNY’s
compliance with its Minimum Regulatory Capital Requirements at all
times; and

 

●

timely reporting to
the Finance Agency and the Board of Directors.

 

3.2            

Voting
Rights

 

Holders
of Capital Stock that are Members as of the Record Date shall be
entitled to vote for the election of directors to the Board of
Directors in accordance with Part 1261 of the Regulations. For
purposes of applying Part 1261 of the Regulations, the Capital
Stock that a Member is “required to hold” shall be the
Member’s Minimum Stock Investment Requirement as of the
Record Date. The number of shares of Capital Stock that a
particular Member, or Other Institution (to the extent such
institution is permitted to vote under Part 1261 of the
Regulations), may vote in connection with an election of directors
shall be subject to the limitations set forth in the Bank Act and
Part 1261 of the Regulations.

 

In
addition, holders of Capital Stock that are Members as of a date to
be determined by the Board of Directors shall be entitled to vote
on the ratification of a merger agreement as to which the FHLBNY is
a constituent in accordance with Part 1278 of the Regulations. For
purposes of applying Part 1278 of the Regulations, the Capital
Stock that a Member is “required to own” shall be the
Member’s Minimum Stock Investment Requirement as of the
aforementioned date that is to be determined by the Board of
Directors. The number of shares of Capital Stock that a particular
Member, or Other Institution (to the extent such institution is
permitted to vote under Part 1278 of the Regulations), may vote in
connection with the ratification of a merger agreement shall be
subject to the limitations set forth in the Bank Act and Part 1278
of the Regulations.

 

 

4.          

Member
Stock Purchase Requirements

 

The
FHLBNY requires all Members to purchase Capital Stock of the
FHLBNY. The FHLBNY's Member Stock Purchase Requirements are based
on the potential and actual volume of, and risks inherent in, the
financial products and services provided by the FHLBNY to its
Members. Therefore:

 

●

a Member will be
required to maintain a minimum Capital Stock investment of
Membership Stock for as long as the institution remains a Member of
the FHLBNY, irrespective of the volume of activity with the FHLBNY;
and

 

●

a Member will also
be required to purchase Activity-Based Stock in proportion to that
Member’s transactions with the FHLBNY.

 

4.1            

Membership
Stock Purchase Requirement

 

As a
condition of Membership, each Member is required to purchase and
maintain a minimum investment in Membership Stock. The Membership
Stock Purchase Requirement will be equal to a specified percentage
of the Mortgage-related Assets held by the Member, in all events
rounded up to the next even $100 increment. The FHLBNY will perform
calculations of the Membership Stock Purchase Requirement for each
Member on at least an annual basis and may recalculate such
Requirement for any one or more Members more frequently as the
Board of Directors may determine from time to time. The Board of
Directors may increase or decrease the Membership Stock Purchase
Requirement from time to time. Except as provided in Sections 7.2.3
and 7.4.2 of this Capital Plan, in no event will the requirement be
less than the greater of (i) $1,000 or (ii) an amount to be
determined by the Board of Directors that will be no less than
0.10% or more than 0.25% of the Mortgage-related Assets held by the
Member. In addition, notwithstanding the requirements in this
section, the Board of Directors in its discretion may implement a
limit on Membership Stock purchases otherwise required under this
section of no less than $25 million and no more than $100
million.

 

The
currently approved Membership Stock Purchase Requirement is
specified in Appendix I attached hereto. Notice of changes to the
Membership Stock Purchase Requirement will be transmitted, sent or
given to Members and Other Institutions at least 10 days prior to
the effective date of such changes.

 

4.2            

Activity-Based
Stock Purchase Requirement

 

From
time to time, the FHLBNY will adopt one or more percentages or
amounts for the calculation of the Activity-Based Stock Purchase
Requirement, which will require a Member or Other Institution to
purchase and maintain Activity-Based Stock in an amount equal
to:

 

●

a specified
percentage (but in no event less than 4.0% or more than 5.0%) of
the outstanding principal balance of advances under the Advances
Agreement between the FHLBNY and the Member; and

 

●

a specified
percentage (but in no event less than 4.0% or more than 5.0%) of
the outstanding principal balance of Acquired Member Assets
originated for or sold to the FHLBNY by a Member that remain on the
FHLBNY’s balance sheet plus the principal amount of delivery
commitments issued to the Member by FHLBNY for Acquired Member
Assets to be held on the FHLBNY’s balance sheet, provided
that the outstanding principal balance of Acquired Member Assets
originated for or sold to the FHLBNY by a Member that were on the
FHLBNY’s balance sheet as of November 30, 2005 will not be
subject to this requirement; and

 

●

a specified
percentage (but in no event less than 0.10% or more than 2.50%) of
the outstanding principal balance of the off-balance sheet item
relating to all types of new and renewing letters of credit which
the FHLBNY has transacted on a Member’s behalf and issued
under the Irrevocable Letter of Credit Agreement between the FHLBNY
and the Member; and

 

●

a specified dollar
amount ranging between (a) zero and (b) the FHLBNY’s Credit
Risk Capital Requirement for the remaining off-balance sheet items
(specifically excluding both the outstanding principal balance for
letters of credit and the delivery commitments issued to the Member
by the FHLBNY for Acquired Member Assets) listed in Section
1277.4(h), Table 5, of the Regulations which the FHLBNY has
transacted on a Member's behalf and which are continuing, with such
Credit Risk Capital Requirement being calculated in accordance with
Section 1277.4(d) of the Regulations; and

 

●

a specified
percentage (but in no event less than 0% or more than 5.0%) of the
carrying value on the
Bank’s balance sheet of Derivative Contracts between the
Member and the FHLBNY, as determined by the FHLBNY under
GAAP,

 

in all
events rounded up to the next even $100 increment.

 

The
Board of Directors may increase or decrease one or more of the
percentages or amounts for the calculation of the Activity-Based
Stock Purchase Requirement from time to time within the foregoing
ranges. 

 

The
currently approved percentages and amounts for the calculation of
the Activity-Based Stock Purchase Requirement are specified in
Appendix I attached hereto. Notice of changes to any of the
components of the Activity-Based Stock Purchase Requirement will be
transmitted, sent or given to Members and Other Institutions at
least 10 days prior to the effective date of such
changes.

 

4.3            

Periodic
Review of Capital Stock Purchase Requirements

 

The
Board of Directors will review the FHLBNY’s Capital Plan on a
continuing basis to ascertain whether changes to the Member Stock
Purchase Requirements are required in order to ensure that the
FHLBNY is in compliance with its Minimum Regulatory Capital
Requirements, and shall make adjustments as necessary.

 

The
Board of Directors may at any time modify:

 

●

the Membership
Stock Purchase Requirement within the limits defined in Section 4.1
above; and/or

 

●

the applicable
percentage or amount for any of the components of the
Activity-Based Stock Purchase Requirement, so long as such
requirement is within the limits defined in Section 4.2
above.

 

With
regard to any changes made to the Membership Stock Purchase
Requirement, such changes shall be applied to all Members without
preference.

With
regard to any changes made to any components of the Activity-Based
Stock Purchase Requirement, such changes shall be applied to all
outstanding activity at the time that such changes become
effective, provided that such changes shall not apply to the
outstanding principal balance of Acquired Member Assets originated
for or sold to the FHLBNY by a Member that were on the
FHLBNY’s balance sheet as of November 30, 2005.

 

4.4            

Member
Compliance with Adjusted Requirements

 

Each
Member must comply promptly with any adjusted Membership Stock
Purchase Requirement or Activity-Based Stock Purchase Requirement
established by the Board of Directors as described above; however,
Members will be allowed a reasonable time (as determined by the
Board of Directors from time to time, but in no event longer than
three months), which period of time shall be specified in any
notice provided in accordance with Sections 4.1 or 4.2 of the
Capital Plan, to come into compliance. Each Other Institution must
comply promptly with any adjusted Activity-Based Stock Purchase
Requirement established by the Board of Directors as described
above; however, Other Institutions will be allowed a reasonable
time (as determined by the Board of Directors from time to time,
but in no event longer than three months) which period of time
shall be specified in any notice provided in accordance with
Section 4.2 of the Capital Plan to come into compliance. Members
and Other Institutions may reduce their outstanding activity with
the FHLBNY as an alternative to purchasing additional
Activity-Based Stock.

 

In the
event that a Member or Other Institution does not comply with any
adjusted Activity-Based Stock Purchase Requirement by the
expiration of the time period specified in a notice provided in
accordance with Section 4.2 of the Capital Plan, the FHLBNY is
hereby authorized, in its discretion, to issue a notice of
noncompliance to the Member or Other Institution and, ten business
days after transmitting, sending or giving such notice of
noncompliance to the Member or Other Institution, to accelerate the
maturity of an amount of advances sufficient to reduce the
Member’s or Other Institution’s Activity-Based Stock
Purchase Requirement to an amount not more than the Activity-Based
Stock then held by the Member or Other Institution. Without regard to the discretion
conferred on the Board of Directors under the foregoing sentence,
and without in any respect limiting the Board of Directors’
authority under Section 7.2.1 of the Capital Plan, the Board of
Directors in its discretion may determine that a Member’s
failure to comply with any adjusted Membership Stock Purchase
Requirement or Activity-Based Stock Purchase Requirement by the
expiration of the period of time specified in any notice provided
in accordance with Sections 4.1 or 4.2 of the Capital Plan
constitutes the basis for a determination to terminate the
Membership of a Member for a failure to comply with a requirement
of the Capital Plan.

 

 

5.          

Capital
Requirements of the FHLBNY

 

The
FHLBNY is required to maintain Permanent Capital and Total Capital
to:

 

●

provide for the
safe and sound operation of the FHLBNY;

 

●

protect the
FHLBNY’s creditors against potential loss;

 

●

generate earnings
sufficient to meet the FHLBNY’s community support and public
purpose obligations; and

 

●

comply with
regulatory requirements as established by the Finance
Agency.

 

5.1            

Statutory
Capital Requirements

 

5.1.1               

Total
Capital Requirement

 

Total
Capital must be equal to at least 4.0% of the FHLBNY’s Total
Assets.

 

5.1.2               

Leverage
Capital Requirement

 

The
FHLBNY must maintain a leverage ratio of Total Capital to Total
Assets of at least 5.0% of the FHLBNY's Total Assets. For purposes
of determining the leverage ratio, Total Capital shall be computed
by multiplying by 1.5 the FHLBNY’s Permanent Capital, and
adding to the product all other components of Total
Capital.

 

5.1.3               

Permanent
Capital Requirement

 

Permanent Capital
must at all times be equal to or exceed the value of the
FHLBNY’s Risk-based Capital Requirement, calculated in
accordance with Section 5.2 below.

5.1.4               

FHFA
Authority to Require More Capital

 

The
FHFA may, in its discretion, require the FHLBNY to hold more Total
Capital or Permanent Capital than is indicated in Sections 5.1.1 or
5.1.3 of the Capital Plan.

 

5.2            

Risk-Based
Capital Requirement

 

The
FHLBNY’s Risk-based Capital Requirement shall be equal to the
sum of:

 

●

the FHLBNY’s
Credit Risk Capital Requirement,

 

●

the FHLBNY’s
Market Risk Capital Requirement, and

 

●

the FHLBNY’s
Operations Risk Capital Requirement as defined by the
FHFA.

 

Unless
otherwise directed by the FHFA, the FHLBNY will measure its Credit,
Market and Operations Risk Capital Requirements as of the close of
business of the last business day of the month for which the credit
risk capital charge is being calculated.

 

5.2.1                       

Credit
Risk Capital Requirement

 

The
Credit Risk Capital Requirement shall be equal to the sum of the
credit risk capital charges for all assets, off-balance sheet items
and derivative contracts. Credit risk percentage requirements are
established by the FHFA from time to time.

 

Assets

 

The
credit risk capital charge for an asset on the FHLBNY’s
balance sheet is equal to the book value of the asset multiplied by
the credit risk percentage requirement assigned to that asset class
in the Regulations.

 

Off-balance sheet items

 

The
credit risk capital charge for an off-balance sheet item is equal
to the credit equivalent amount of the item (based on conversion
factors provided by the FHFA) multiplied by the credit risk
percentage requirement assigned to that item in the
Regulations.

 

Off
balance sheet items include:

 

●

Asset sales with
recourse where the credit risk remains with the FHLBNY

 

●

Commitments to make
advances

 

●

Commitments to make
or purchase other loans

 

●

Standby letters of
credit

 

●

Other commitments
with original maturity of over 1 year

 

●

Other commitments
with original maturity of 1 year or less

 

Derivative Contracts

 

The
credit risk capital charge for Derivative Contracts is equal
to:

 

●

the current credit
exposure for the Derivative Contract multiplied by the credit risk
percentage requirement assigned to that derivative contract, as
determined in accordance with Section 1277.4 of the Regulations,
plus

 

●

the potential
future credit exposure for the Derivative Contract multiplied by
the credit risk percentage requirement assigned to that Derivative
Contract, as determined in accordance with Section 1277.4 of the
Regulations.

 

Guidelines
for calculating capital charges on Derivative Contracts are defined
by the FHFA from time to time.

 

5.2.2                       

Market
Risk Capital Requirement

 

The
Market Risk Capital Requirement shall equal the sum
of:

 

●

the market value of
the FHLBNY’s portfolio at risk from movements in market rates
and prices that could occur during periods of market stress. The
market value of the FHLBNY’s portfolio at risk is determined
using an internal market risk model (VaR model) that that has been
approved by the FHFA; and

 

●

the amount, if any,
by which the FHLBNY’s current market value of Total Capital
is less than 85% of the FHLBNY’s book value of Total Capital,
where:

 

✓

the current market
value of the FHLBNY’s Total Capital is calculated using the
internal market risk model approved by the FHFA; and

 

✓

the book value of
Total Capital is the same as the amount of Total Capital reported
by the FHLBNY to the FHFA on a monthly basis.

 

The
internal market risk model will:

 

●

estimate the market
value of the FHLBNY’s assets and liabilities, off-balance
sheet items, and Derivative Contracts, including any related
options, and

 

●

measure the market
value of the FHLBNY’s portfolio at risk, including all
assets, liabilities, off-balance sheet items, and Derivative
Contracts that represent a source of material market
risk.

 

5.2.3                       

Operations
Risk Capital Requirement

 

The
FHLBNY is required to meet its Operations Risk Capital Requirement
to cover unexpected losses associated with:

 

●

human
error

 

●

fraud

 

●

unenforceability of
legal contracts

 

●

deficiencies in
internal controls

 

●

deficiencies in
information controls

 

The
FHLBNY will meet its Operations Risk Capital Requirement through
maintenance of an amount of Permanent Capital equal to 30% of the
sum of its Credit Risk and Market Risk Capital Requirements subject
to modification as set forth below.

 

With
FHFA approval, the FHLBNY may have an Operations Risk Capital
Requirement equal to less than 30% but no less than 10% of the sum
of the FHLBNY’s Credit Risk and Market Risk Capital
Requirements if (i) the FHLBNY provides an alternative methodology
for assessing and quantifying an Operations Risk Capital
Requirement or (ii) if the FHLBNY obtains insurance to cover
operations risk from an insurer rated at least the second highest
investment grade credit rating by an NRSRO.

 

 

6.            

Reporting
Requirements to the Finance Agency

 

The
following are the FHLBNY's specific reporting requirements to the
Finance Agency pertaining to the Capital Plan.

 

6.1            

Changes
in Membership

 

The
FHLBNY shall notify the FHFA within 10 calendar days of receipt of
any notice of withdrawal or notice of cancellation of withdrawal
from Membership.

 

6.2            

Leverage
and Risk Based Capital

 

The
FHLBNY shall report to the FHFA by the 15th business day of each
month:

 

●

Risk-based Capital
Requirement by component amounts, and

 

●

actual Total
Capital and Permanent Capital outstanding.

 

Both
measures are calculated as of the close of business on the last
business day of the preceding month, or more frequently, as may be
required by the FHFA.

 

6.3            

Voting
Shares

 

On or
before April 10 of each year, the FHLBNY shall submit to the FHFA a
Capital Stock report that indicates, as of the Record
Date:

 

●

the number of
Members located in each voting state in the FHLBNY's
district,

 

●

the number of
shares of Capital Stock that each Member (identified by its docket
number) was required to hold, and

 

●

the number of
shares of Capital Stock that all Members located in each voting
state were required to hold. Excess Stock will not be included in
the calculation of outstanding Capital Stock for purposes of
voting.

 

The
FHLBNY shall certify to the FHFA that, to the best of its
knowledge, the information provided in the Capital Stock report is
accurate and complete, and that it has notified each Member of its
minimum Capital Stock holdings pursuant to this Capital
Plan.

 

 

7.            

Termination
of Membership in the FHLBNY

 

7.1            

Voluntary
Withdrawal from Membership

 

7.1.1                      Written
Notification

 

A
Member may withdraw from Membership at any time by providing
written notice of its intent to withdraw from Membership to the
FHLBNY. A Member may cancel a notice of withdrawal prior to its
effective date by providing the FHLBNY with written notice of such
cancellation. Any such cancellation will result in a Redemption
Cancellation Fee with respect to the Member's Capital Stock unless
the Board of Directors determines it has a bona fide business
purpose for waiving the imposition of the fee, and the waiver is
consistent with Section 7(j) of the Bank Act.

 

7.1.2                       

Access
to Benefits of Membership

 

Until
the effective date of a Member’s withdrawal from the FHLBNY,
such Member will continue to have access to the benefits of
Membership. On and after the effective date of the Member's
withdrawal, regardless of whether the Other Institution is required
to maintain an investment in the Capital Stock, the Other
Institution will no longer have the benefits of Membership
including access to the FHLBNY’s products and services and
will no longer have any voting rights other than as provided in the
Regulations, but the Other Institution will still be entitled to
any and all dividends declared on its Capital Stock until the
Capital Stock is redeemed or repurchased by the
FHLBNY.

 

7.1.3                       

Finance
Agency Notification

 

The
FHLBNY shall notify the Finance Agency within ten calendar days of
the receipt of any notice of intent to withdraw from Membership or
cancellation of a notice of withdrawal from
Membership.

 

7.1.4                       

Disposition
of Claims

 

The
FHLBNY shall determine an orderly manner for the disposition of
transactions outstanding with a Member that withdraws from
Membership. The Stock Redemption Period for the Capital Stock held
by a Member as of the date of the FHLBNY’s receipt of the
written notification of the Member’s intent to withdraw from
Membership and not already subject to a Redemption Notice shall
commence as of that date. The Stock Redemption Period for shares of
Capital Stock acquired or received by such a withdrawing Member
after the date that its notice of intent to withdraw is received by
the FHLBNY will commence on the date such shares are acquired or
received. If transactions remain outstanding beyond the effective
date of the termination of Membership, the FHLBNY will not redeem
any Activity-Based Stock that the Other Institution is required to
hold to comply with the Activity-Based Stock Purchase Requirement
corresponding to such outstanding transactions.

 

Upon
the effective date of a Member’s withdrawal from Membership,
it shall become an Other Institution under this Capital Plan. Such
Other Institution shall not be deemed to be subject to the
Membership Stock Purchase Requirement and the FHLBNY may repurchase
Membership Stock held by the Other Institution, that has not
otherwise been redeemed by the FHLBNY upon the expiration of an
applicable Stock Redemption Period. The FHLBNY may repurchase the
Other Institution’s Activity-Based Stock, that has not
otherwise been redeemed by the FHLBNY upon the expiration of an
applicable Stock Redemption Period, if the stock is not needed to
comply with the Activity-Based Stock Purchase Requirement
corresponding to such outstanding transactions, and not subject to
any of the limitations on redemption or repurchase in Section
2.2.4.

 

7.1.5                       

Effective
Date of Withdrawal

 

The
Membership of a Member that has submitted a notice of intent to
withdraw, and that has not cancelled such notice, shall terminate
as of the date on which the last applicable Stock Redemption Period
ends for Capital Stock that the Member is required to hold under
the Membership Stock Purchase Requirement as of the date that the
Member’s written notification of its intent to withdraw from
Membership was received by the FHLBNY.

 

7.2            

Involuntary
Termination of Membership

 

7.2.1                       

Written
Notification

 

The
Board of Directors may terminate the Membership of any Member that:
(i) fails to comply with any requirement of the Bank Act, any
Regulation, or any requirement of the Capital Plan, (ii) becomes
insolvent or otherwise subject to the appointment of a conservator,
receiver, or other legal custodian under federal or state law, or
(iii) would jeopardize the safety and soundness of the FHLBNY if it
were to remain a Member.

 

7.2.2                       

Access
to Benefits of Membership

 

A
Member whose Membership is terminated involuntarily shall cease
being a Member of the FHLBNY as of the date on which the Board of
Directors acts to terminate the Membership. After that date, such
terminated Member shall become an Other Institution under this
Capital Plan. Such Other Institution shall have no right to obtain
any of the benefits of Membership including access to the
FHLBNY’s products and services and will no longer have any
voting rights, other than as provided in the Regulations, but shall
be entitled to receive any dividends declared on its Capital Stock
until the Capital Stock is redeemed or repurchased by the
FHLBNY.

 

7.2.3                       

Disposition
of Claims

 

The
FHLBNY shall determine an orderly manner for the disposition of
transactions outstanding with the Other Institution. The Stock
Redemption Period for the Capital Stock owned by a Member as of the
date of its termination and not already subject to a Redemption
Notice shall commence on the date that the Member’s
Membership is terminated. The Stock Redemption Period for Capital
Stock acquired or received by the Other Institution after the date
of the termination of its Membership shall commence on the date of
such acquisition or receipt. If transactions remain outstanding
beyond the effective date of the termination of Membership, the
FHLBNY will not redeem any Activity-Based Stock to the extent that
the Other Institution is required to hold such stock to comply with
the Activity-Based Stock Purchase Requirement corresponding to such
outstanding transactions.

 

Capital
Stock held by the Member as of the effective date of its
termination shall not be deemed automatically to be Excess Stock
solely by virtue of the termination of the Member’s
Membership; provided however, that on and after the effective date
of termination, any Membership Stock that is not required to meet
the Other Institution’s Membership Stock Purchase Requirement
on the date on which the Member’s Membership was terminated
that has not otherwise been redeemed by the FHLBNY upon the
expiration of an applicable Stock Redemption Period, or any
Activity-Based Stock not required to meet the Other
Institution’s Activity-Based Stock Purchase Requirement that
has not otherwise been redeemed by the FHLBNY upon the expiration
of an applicable Stock Redemption Period, shall be Excess Stock
that shall be subject to repurchase by the FHLBNY; and provided further that
effective upon the expiration of the Stock Redemption Period that
commences on the date that the Member’s Membership is
terminated, the terminated Member’s Membership Stock Purchase
Requirement shall be deemed to be zero. However, notwithstanding
any other provision of this Capital Plan, in the event that
(a) a receiver or conservator has been appointed for the
Member, or the Member has acted to voluntarily dissolve or
liquidate itself and is no longer eligible for membership, and
(b) the Bank has terminated the Member’s Membership,
then the terminated Member’s Membership Stock Purchase
Requirement shall be deemed to be zero. In addition, in the event
that any Member otherwise fails to satisfy any statutory or
regulatory eligibility requirements for membership in the FHLBNY,
the Board of Directors shall involuntarily terminate that
institution’s membership in accordance with Section 7.2.1,
and the Membership Stock Purchase Requirement for that Other
Institution shall be deemed to be zero as of the date on which the
Bank next conducts its calculation of membership stock purchase
requirements for all members, and all Membership Stock then held by
that Other Institution shall be Excess Stock that shall be subject
to repurchase by the FHLBNY. Further, notwithstanding any of the
foregoing, any repurchases and redemptions of stock permitted
hereunder shall remain subject to the limitations in Section 2.2.4
of the Capital Plan.

 

7.3            

Merger
or Consolidation of Members

 

7.3.1                       

Termination
of Charter and Stock Redemption Period

 

If a
Member’s Membership is terminated as a result of a
Member’s merger or other consolidation into another Member,
the Membership shall terminate upon cancellation of the
disappearing Member’s charter. On that date, the Capital
Stock held by the disappearing Member will be transferred on the
books of the FHLBNY into the name of the surviving Member. The
Stock Redemption Period for the Capital Stock previously held by
the disappearing Member shall not be deemed to commence on the date
on which the disappearing Member’s charter is cancelled, but
shall commence only upon: (i) the FHLBNY’s receipt of a
Redemption Notice from the surviving Member, (ii) the
FHLBNY’s receipt of the surviving Member’s written
notice of its intent to withdraw from Membership, (iii) the
surviving Member’s termination of Membership as a result of
merger or consolidation into a member of another Federal Home Loan
Bank or into a nonmember, (iv) the surviving Member’s
termination of Membership as a result of the relocation of its
principal place of business, or (v) the involuntary termination of
the surviving Member’s Membership. Stock Redemption Periods
applicable to a Redemption Notice or Notices received by the FHLBNY
from the disappearing Member prior to the effective date of the
cancellation of the disappearing Member’s charter shall
continue to run with respect to the surviving Member from the date
such Redemption Notice was received by the FHLBNY, subject to the
provisions of Section 2.2.2 of the Capital Plan.

 

7.3.2                       

Capital
Stock Requirement of Surviving Member

 

As of
the effective date of the cancellation of the disappearing
Member’s charter, the surviving Member’s Membership
Stock Purchase Requirement shall be immediately increased by the
amount of the disappearing Member’s Membership Stock Purchase
Requirement immediately prior to the cancellation of its charter.
Future calculations of the surviving Member’s Membership
Stock Purchase Requirement shall be as determined in accordance
with Section 4.1 of the Capital Plan, provided that if the mostly
recently available data from the regulatory reports for the
surviving Member does not include the assets of the disappearing
Member, then, in that event, the Membership Stock Purchase
Requirement for the surviving Member will be calculated by adding
together the most recently available regulatory report data for the
disappearing Member and for the surviving Member. As of the
effective date of the cancellation of the disappearing
Member’s charter, the surviving Member’s Activity-Based
Stock Purchase Requirement will be calculated based on its current
outstanding transactions with the FHLBNY including those acquired
from the disappearing Member.

 

7.4 

Merger
or Consolidation of Member into a Member of another Federal Home
Loan Bank or into a Nonmember

 

7.4.1                       

General

 

If a
Member’s Membership is terminated as a result of the
Member’s merger or consolidation into a member of another
Federal Home Loan Bank or a nonmember, the Membership shall
terminate as of the date on which the Member’s charter is
cancelled. On that date, the Capital Stock held by the disappearing
Member will be transferred on the books of the FHLBNY into the name
of the surviving institution. After that date the Other Institution
shall have no right to obtain any of the benefits of Membership
including access to the FHLBNY’s products and services and
will no longer have any voting rights other than as provided in the
Regulations, but shall be entitled to receive any dividends
declared on its Capital Stock until the Capital Stock is redeemed
or repurchased by the FHLBNY.

 

7.4.2                       

Disposition
of Claims

 

The
FHLBNY shall determine an orderly manner for the disposition of
transactions outstanding with the Other Institution. The Stock
Redemption Period for the Capital Stock then held by the Other
Institution and not already subject to a Redemption Notice shall be
deemed to commence on the date on which the Member’s charter
is cancelled. The Stock Redemption Period for any Capital Stock
acquired or received by the Other Institution after the date of the
termination of the Member’s Membership shall commence on the
date of acquisition or receipt. If transactions remain outstanding
beyond the effective date of the termination of Membership, the
FHLBNY will not redeem any Activity-Based Stock that the Other
Institution is required to hold to comply with the Activity-Based
Stock Purchase Requirement corresponding to such outstanding
transactions.

 

Capital
Stock held by the Member as of the effective date of its
termination shall not be deemed automatically to be Excess Stock
solely by virtue of the termination of the Member’s
Membership; provided however, that on and after the effective date
of termination any Membership Stock that is not required to meet
the Other Institution’s Membership Stock Purchase Requirement
on the date on which the Other Institution’s Membership was
terminated that has not otherwise been redeemed by the FHLBNY upon
the expiration of an applicable Stock Redemption Period, or any
Activity-Based Stock not required to meet the Other
Institution’s Activity-Based Stock Purchase Requirement that
has not otherwise been redeemed by the FHLBNY upon the expiration
of an applicable Stock Redemption Period, shall be Excess Stock
that shall be subject to repurchase by the FHLBNY. In lieu of the
formula specified in Section 4.1 and section A of Appendix I of
this Capital Plan, if the corporate existence of a Member is
terminated as a result of its merger into a nonmember, the FHLBNY
in its discretion may, at any time after thirty days subsequent to
the merger, recalculate the Membership Stock Purchase Requirement
based solely on Mortgage-related Assets, and in doing so may use
zero dollars ($0.00) as the amount of the Mortgage-related Assets
held by the former Member, and may thereafter repurchase any
resulting Excess Stock. Notwithstanding the foregoing, any
repurchases and redemptions of stock permitted hereunder shall
remain subject to the limitations in Section 2.2.4 of the Capital
Plan and the provisions, if applicable, of Section 7.4.3 of this
Capital Plan.

 

7.4.3                       

Acquiring
Institution Applies for FHLBNY Membership

 

If the
institution into which the Member merges or is consolidated is
eligible for Membership and intends to become a Member of the
FHLBNY, it must provide written notification to the FHLBNY of its
intention to apply for Membership within sixty calendar days of the
cancellation of the charter of the former Member.

 

Following the
submission of this notification, the application for Membership
must be submitted within sixty calendar days. If the institution is
approved for Membership, then it must purchase the appropriate
amounts, if any, of Capital Stock to comply with its Minimum Stock
Investment Requirement. Such purchase of Membership Stock must be
made within sixty days of approval for Membership and with respect
to any Activity-Based Stock Purchase Requirement, prior to engage
in such transactions.

 

If the
institution does not provide required notification and application
for Membership within the respective required time periods, or is
disapproved for Membership, the provisions of Section 7.4.2 of the
Capital Plan will apply with respect to the disposition of
outstanding transactions and redemption and repurchase of Capital
Stock.

 

7.5            

Relocation
of Principal Place of Business

 

7.5.1                       

General

 

If a
Member’s Membership is terminated as a result of the
relocation of the Member’s principal place of business, as
defined in the Regulations, the Membership shall terminate on the
date on which the transfer of Membership under such Regulations
becomes effective. After that date the Other Institution shall have
no right to obtain any of the benefits of Membership including
access to the FHLBNY’s products and services and will no
longer have any voting rights other than as provided in the
Regulations, but shall be entitled to receive any dividends
declared on its Capital Stock until the Capital Stock is redeemed
or repurchased by the FHLBNY.

 

7.5.2                       

Disposition
of Claims

 

The
FHLBNY shall determine an orderly manner for the disposition of
transactions outstanding with the Other Institution. If
transactions remain outstanding beyond the effective date of the
termination of Membership, the FHLBNY will not redeem any
Activity-Based Stock that the Other Institution is required to hold
to comply with the Activity-Based Stock Purchase Requirement
corresponding to such outstanding transactions. Any Activity-Based
Stock not required
to meet the Other Institution’s Activity-Based Stock Purchase
Requirement that has not otherwise been redeemed by the FHLBNY upon
the expiration of an applicable Stock Redemption Period shall be
Excess Stock that shall be subject to repurchase by the
FHLBNY.

 

If a
Member relocates its principal place of business to another Bank
district and transfers its membership to the Bank in that district,
its Membership Stock Purchase Requirement at the FHLBNY shall be
deemed to be zero as of the date that the Other Institution becomes
a member of the other Bank, and all Membership Stock then held at
the FHLBNY by that Other Institution shall be Excess Stock that
shall be immediately subject to repurchase by the FHLBNY. However,
if a Member relocates its principal place of business to another
Bank district but does not become a member of the Bank in that
district, then the Board of Directors shall involuntarily terminate
that Other Institution’s membership in accordance with
Section 7.2.1, and the Membership Stock Purchase Requirement for
the Other Institution shall be deemed to be zero as of the date on
which the Bank next conducts its calculation of membership stock
purchase requirements for all members, and all Membership Stock
then held at the FHLBNY by that Other Institution shall be Excess
Stock that shall be subject to repurchase by the FHLBNY.
Notwithstanding the foregoing, any repurchases and redemptions of
stock hereunder shall remain subject to the limitations in Section
2.2.4 of the Capital Plan.

 

8.            

[Reserved]

 

9.            

[Reserved]

 

 

10.               

Amendments
to the Capital Plan and Notices

 

10.1               

Amendments
to the Capital Plan

 

Any
amendment to the Capital Plan must be approved by the Board of
Directors and submitted to the Finance Agency. The effective date
for any proposed amendment shall be contained in any request for
approval that is submitted to the Finance Agency. In order to
become effective, any amendment to the Capital Plan must be
approved by the Finance Agency. The FHLNBY will transmit, send or
give its Members notice in writing at least thirty days prior to
the effective date of any amendment to the Capital
Plan.

 

10.2               

Notices
Relating to the Capital Plan

 

               

10.2.1                    

Notices
by the FHLBNY

 

Written
notices transmitted, sent or given by the FHLBNY under this Capital
Plan shall be addressed to the chief executive officer of the
Member, or Other Institution, or such other person, designated by
the Member, or Other Institution. Such written notices shall be
directed to the postal address, physical address or fax number
appearing in the FHLBNY’s records from time to
time.

 

               

10.2.2                    

Notices
to the FHLBNY

 

Written
notices given to the FHLBNY in accordance with the provisions of
the Capital Plan shall be addressed to the President of the FHLBNY
and delivered to 101 Park Avenue, New York, NY, 10178 or sent via
email to fhlbny@fhlbny.com, and shall be deemed to have been
received by the FHLBNY in each case upon actual receipt by the
FHLBNY. The FHLBNY may from time to time change the address or
email address at which it will receive such written notices by
transmitting, sending or giving written notice to the Member, or
Other Institution.

 

 

11.               

Joint
Capital Enhancement Agreement

 

11.1

Retained
Earnings Enhancement Implementation and Definitions

 

11.1.1                    

Implementation

 

The
provisions of sections 11.1 through 11.4 shall become effective
upon, and only upon, the occurrence of the Interim Capital Plan
Amendment Implementation Date. Until the Restriction Termination
Date, in the event of any conflict between sections 11.1 through
11.4 and the remainder of this Capital Plan, the applicable terms
of sections 11.1 through 11.4 shall govern, and shall be
interpreted in a manner such that the restrictions set forth
therein are supplementary to, and not in lieu of, the requirements
of the remainder of this Capital Plan.

 

11.1.2 

Definitions
applicable to Sections 11.1 through 11.4 of this Capital
Plan

 

As used
in these sections 11.1 through 11.4, the following capitalized
terms shall have the following meanings.  Other capitalized
terms used but not defined in these sections 11.1 through 11.4
shall have the meanings set forth in the Definitions section before
Section 1 of this Capital Plan.

 

‘Act’
means the Federal Home Loan Bank Act, as amended as of the
Effective Date.

 

‘Adjustment
to Prior Net Income’ means either an increase, or a decrease,
to a prior calendar quarter’s Quarterly Net Income subsequent
to the date on which any allocation to Restricted Retained Earnings
for such calendar quarter was made.

 

‘Agreement’ means the Joint Capital
Enhancement Agreement adopted by the FHLBanks on the
Effective Date and amended on the date on which the FHFA has
approved the Retained Earnings Capital Plan Amendments for all of
the FHLBanks that have issued capital stock pursuant to a capital
plan as of the Effective Date.

 

‘Allocation Termination Date’ means
the date the Bank’s obligation to make allocations to the
Restricted Retained Earnings account is terminated
permanently. That date is determined pursuant to section 11.4 of
this Capital Plan.

 

‘Automatic Termination Event’
means (i) a change in the Act,
or another applicable statute, occurring subsequent to the
Effective Date, that will have the effect of creating a new, or
higher, assessment or taxation on net income or capital of the
FHLBanks, or (ii) a change in the Act, another applicable statute,
or the Regulations, occurring subsequent to the Effective Date,
that will result in a higher mandatory allocation of an
FHLBank’s Quarterly Net Income to any Retained Earnings
account than the annual amount, or total amount, specified in an
FHLBank’s capital plan as in effect immediately prior to the
Automatic Termination Event.

 

‘Automatic
Termination Event Declaration Date’ means the date specified
in section 11.4.1.1 or 11.4.1.2 of this Capital Plan.

 

‘Bank’s
Total Consolidated Obligations’ means the daily average
carrying value for the calendar quarter, excluding the impact of
fair value adjustments (i.e., fair value option and hedging
adjustments), of the Bank’s portion of outstanding System
Consolidated Obligations for which it is the primary
obligor.

‘Declaration
of Automatic Termination’ means a signed statement, executed
by officers authorized to sign on behalf of each FHLBank that is a
signatory to the statement, in which at least 2/3 of the then
existing FHLBanks declare their concurrence that a specific
statutory or regulatory change meets the definition of an Automatic
Termination Event.

 

‘Dividend’
means a distribution of cash, other property, or stock to a
Stockholder with respect to its holdings of Capital
Stock.

 

‘Dividend
Restriction Period’ means any calendar quarter: (i) that
includes the REFCORP Termination Date, or occurs subsequent to the
REFCORP Termination Date; (ii) that occurs prior to an Allocation
Termination Date; and (iii) during which the amount of the
Bank’s Restricted Retained Earnings is less than the amount
of the Bank’s RREM. If the amount of the Bank’s
Restricted Retained Earnings is at least equal to the amount of the
Bank’s RREM, and subsequently the Bank’s Restricted
Retained Earnings becomes less than its RREM, the Bank shall be
deemed to be in a Dividend Restriction Period (unless an Allocation
Termination Date has occurred).

 

‘Effective
Date’ means February 28, 2011.

 

‘GAAP’
means accounting principles generally accepted in the United States
as in effect from time to time.

 

‘FHFA’
means the Federal Housing Finance Agency, or any successor
thereto.

 

‘FHLBank’
means a Federal Home Loan Bank chartered under the
Act.

 

‘Interim
Capital Plan Amendment Implementation Date’ means 31 days
after the date by which the FHFA has approved a capital plan
amendment substantially the same as the Retained Earnings Capital
Plan Amendment for all of the FHLBanks that have issued capital
stock pursuant to a capital plan as of the Effective
Date.

 

‘Net
Loss’ means that the Quarterly Net Income of the Bank is
negative, or that the annual net income of the Bank calculated on
the same basis is negative.

 

‘Quarterly Net Income’ means
the amount of net income of an FHLBank for a calendar quarter
calculated in accordance with GAAP, after deducting the
FHLBank’s required contributions for that quarter to the
Affordable Housing Program under section 10(j) of the Act, as
reported in the FHLBank’s quarterly and annual financial
statements filed with the Securities and Exchange
Commission.

 

‘REFCORP
Termination Date’ means the last day of the calendar quarter
in which the FHLBanks’ final regular payments are made on
obligations to REFCORP in accordance with Section 997.5 of the
Regulations and Section 21B(f) of the Act.

 

‘Regular
Contribution Amount’ means the result of (i) 20 percent of
Quarterly Net Income; plus (ii) 20 percent of a positive Adjustment
to Prior Net Income for any prior calendar quarter that includes
the REFCORP Termination Date, or occurred subsequent to the REFCORP
Termination Date, to the extent such adjustment has not yet been
made in the current calendar quarter; minus (iii) 20 percent of the
absolute value of a negative Adjustment to Prior Net Income for any
prior calendar quarter that includes the REFCORP Termination Date,
or occurred subsequent to the REFCORP Termination Date, to the
extent such adjustment has not yet been made in the current
calendar quarter.

‘Regulations’
mean: (i) the rules and regulations of the Federal Housing Finance
Board (except to the extent that they may be modified, terminated,
set aside or superseded by the Director of the FHFA) in effect on
the Effective Date; (ii) the rules and regulations of the FHFA, as
amended from time to time.

 

‘Restricted Retained Earnings’
means the cumulative amount of Quarterly Net Income and Adjustments
to Prior Net Income allocated to the Bank’s Retained Earnings
account

restricted pursuant
to the Retained Earnings Capital Plan Amendment, and does not
include amounts retained in: (i) any accounts in existence at the
Bank on the Effective Date; or (ii) any other Retained Earnings
accounts subject to restrictions that are not part of the terms of
the Retained Earnings Capital Plan Amendment.

 

‘Restricted
Retained Earnings Minimum’ (‘RREM’) means a level
of Restricted Retained Earnings calculated as of the last day of
each calendar quarter equal to one percent of the Bank’s
Total Consolidated Obligations.

 

‘Restriction
Termination Date’ means the date the restriction on the Bank
paying Dividends out of the Restricted Retained Earnings account,
or otherwise reallocating funds from the Restricted Retained
Earnings account, is terminated permanently. That date is
determined pursuant to section 11.4 of this Capital
Plan.

 

‘Retained
Earnings’ means the retained earnings of an FHLBank
calculated pursuant to GAAP.

 

‘Retained Earnings Capital Plan
Amendment’ means the amendment to this Capital Plan, made a
part thereof, adopted effective on the Interim Capital Plan
Amendment Implementation Date adding sections 11.1 through
11.4 to this Capital Plan.

 

‘Special
Contribution Amount’ means the result of: (i) 50 percent of
Quarterly Net Income; plus (ii) 50 percent of a positive Adjustment
to Prior Net Income for any prior calendar quarter that includes
the REFCORP Termination Date, or occurred subsequent to the REFCORP
Termination Date, to the extent such adjustment has not yet been
made in the current calendar quarter; minus (iii) 50 percent of the
absolute value of a negative Adjustment to Prior Net Income for any
prior calendar quarter that includes the REFCORP Termination Date,
or occurred subsequent to the REFCORP Termination Date, to the
extent such adjustment has not yet been made by the current
calendar quarter.

 

‘Stockholder’
means (i) a Member, or (ii) an Other Institution.

 

‘System
Consolidated Obligation’ means any bond, debenture, or note
authorized under the Regulations to be issued jointly by the
FHLBanks pursuant to Section 11(a) of the Act, as amended, or any
bond or note previously issued by the Federal Housing Finance Board
on behalf of all FHLBanks pursuant to Section 11(c) of the Act, on
which the FHLBanks are jointly and severally liable, or any other
instrument issued through the Office of Finance, or any successor
thereto, under the Act, that is a joint and several liability of
all the FHLBanks.

 

‘Total
Capital’ means Retained Earnings, the amount paid-in for
Capital Stock, the amount of any general allowance for losses, and
the amount of other instruments that the FHFA has determined to be
available to absorb losses incurred by the Bank.

 

 

11.2               

Establishment
of Restricted Retained Earnings

 

11.2.1                  

Segregation
of Account

 

No
later than the REFCORP Termination
Date, the Bank shall establish an account in its official books and
records in which to allocate its Restricted Retained Earnings, with
such account being segregated on its books and records from the
Bank’s Retained Earnings that are not Restricted Retained
Earnings for purposes of tracking the accumulation of Restricted
Retained Earnings and enforcing the restrictions on the use of the
Restricted Retained Earnings imposed in the Retained Earnings
Capital Plan Amendment.

 

11.2.2                  

Funding
of Account

 

11.2.2.1                               

Date
on which Allocation Begins

 

The
Bank shall allocate to its Restricted
Retained Earnings account an amount at least equal to the Regular
Contribution Amount beginning on the REFCORP Termination Date. The
Bank shall allocate amounts to the Restricted Retained
Earnings account only through contributions from its Quarterly Net
Income or Adjustments to Prior Net Income occurring on or after the
REFCORP Termination Date, but nothing in the Retained Earnings
Capital Plan Amendment shall prevent the Bank from allocating a
greater percentage of its Quarterly Net Income or positive
Adjustment to Prior Net Income to its Restricted Retained Earnings
account than the percentages set forth in the Retained Earning
Capital Plan Amendment.

 

11.2.2.2                               

Ongoing
Allocation

 

During
any Dividend Restriction Period that occurs before the Allocation
Termination Date, the Bank shall continue to allocate its Regular
Contribution Amount (or when and if required under subsection
11.2.2.4 below, its Special Contribution Amount) to its Restricted
Retained Earnings account.

 

11.2.2.3                               

Treatment
of Quarterly Net Losses and Annual Net Losses

 

In the
event the Bank sustains a Net Loss for a calendar quarter, the
following shall apply: (i) to the extent that its cumulative
calendar year-to-date net income is positive at the end of such
quarter, the Bank may decrease the amount of its Restricted
Retained Earnings such that the cumulative addition to the
Restricted Retained Earnings account calendar year-to-date at the
end of such quarter is equal to 20 percent of the amount of such
cumulative calendar year-to-date net income; (ii) to the extent
that its cumulative calendar year-to-date net income is negative at
the end of such quarter (a) the Bank may decrease the amount of its
Restricted Retained Earnings account such that the cumulative
addition calendar year-to-date to the Restricted Retained Earnings
at the end of such quarter is zero, and (b) the Bank shall apply
any remaining portion of the Net Loss for the calendar quarter
first to reduce Retained Earnings that are not Restricted Retained
Earnings until such Retained Earnings are reduced to zero, and
thereafter may apply any remaining portion of the Net Loss for the
calendar quarter to reduce Restricted Retained Earnings; and (iii)
for any subsequent calendar quarter in the same calendar year, the
Bank may decrease the amount of its quarterly allocation to its
Restricted Retained Earnings account in that subsequent calendar
quarter such that the cumulative addition to the Restricted
Retained Earnings account calendar year-to-date is equal to 20
percent of the amount of such cumulative calendar year-to-date net
income. In the event the Bank sustains a Net Loss for a calendar
year, any such Net Loss first shall be applied to reduce Retained
Earnings that are not Restricted Retained Earnings until such
Retained Earnings are reduced to zero, and thereafter any remaining
portion of the Net Loss for the calendar year may be applied to
reduce Restricted Retained Earnings.

 

11.2.2.4                                 

Funding
at the Special Contribution Amount

 

If
during a Dividend Restriction Period, the amount of the
Bank’s Restricted Retained Earnings decreases in any calendar
quarter, except as provided in subsections 11.2.2.3(i) and (ii)(a)
above, the Bank shall allocate the Special Contribution Amount to
its Restricted Retained Earnings account beginning at the following
calendar quarter-end (except as provided in the last sentence of
this subsection). Thereafter, the Bank shall continue to allocate
the Special Contribution Amount to its Restricted Retained Earnings
account until the cumulative difference between: (i) the
allocations made using the Special Contribution Amount; and (ii)
the allocations that would have been made if the Regular
Contribution Amount applied, is equal to the amount of the prior
decrease in the amount of its Restricted Retained Earnings account
arising from the application of subsection 11.2.2.3(ii)(b). If at
any calendar quarter-end the allocation of the Special Contribution
Amount would result in a cumulative allocation in excess of such
prior decrease in the amount of Restricted Retained Earnings: (i)
the Bank may allocate such percentage of Quarterly Net Income to
the Restricted Retained Earnings account that shall exactly restore
the amount of the prior decrease, plus the amount of the Regular
Contribution Amount for that quarter; and (ii) the Bank in
subsequent quarters shall revert to paying at least the Regular
Contribution Amount.

 

11.2.2.5                       

Release
of Restricted Retained Earnings

 

If the
Bank’s RREM decreases from time to time due to fluctuations
in the Bank’s Total Consolidated Obligations, amounts in the
Restricted Retained Earnings account in excess of 150 percent of
the RREM may be released by the Bank from the restrictions
otherwise imposed on such amounts pursuant to the provisions of the
Retained Earnings Capital Plan Amendment, and reallocated to its
Retained Earnings that are not Restricted Retained Earnings. Until
the Restriction Termination Date, the Bank may not otherwise
reallocate amounts in its Restricted Retained Earnings account
(provided that a reduction in the Restricted Retained Earnings
account following a Net Loss pursuant to subsection 11.2.2.3 is not
a reallocation).

 

11.2.2.6 

No
Effect on Rights of Shareholders as Owners of Retained
Earnings

 

In the
event of the liquidation of the Bank, or a taking of the
Bank’s Retained Earnings by any future federal action,
nothing in the Retained Earnings Capital Plan Amendment shall
change the rights of the holders of the Bank’s Class B stock
that confer ownership of Retained Earnings, including Restricted
Retained Earnings, as granted under Section 6(h) of the
Act.

 

11.3                       

Limitation
on Dividends, Stock Purchase and Stock Redemption

 

11.3.1                  

General
Rule on Dividends

 

From
the REFCORP Termination Date through the Restriction Termination
Date, the Bank may not pay Dividends, or otherwise reallocate funds
(except as expressly provided in subsection 11.2.2.5, and further
provided that a reduction in the Restricted Retained Earnings
account following a Net Loss pursuant to subsection 11.2.2.3 is not
a reallocation), out of Restricted Retained Earnings. During a
Dividend Restriction Period, the Bank may not pay Dividends out of
the amount of Quarterly Net Income required to be allocated to
Restricted Retained Earnings.

 

11.3.2                  

Limitations
on Repurchase and Redemption

 

From
the REFCORP Termination Date through the Restriction Termination
Date, the Bank shall not engage in a repurchase or redemption
transaction if following such transaction the Bank’s Total
Capital as reported to the FHFA falls below the Bank’s
aggregate paid-in amount of Capital Stock.

 

11.4                       

Termination
of Retained Earnings Capital Plan Amendment
Obligations

 

11.4.1                  

Notice
of Automatic Termination Event

 

11.4.1.1                       

Action
by FHLBanks

 

If the
Bank desires to assert that an Automatic Termination Event has
occurred (or will occur on the effective date of a change in a
statute or the Regulations), the Bank shall provide prompt written
notice to all of the other FHLBanks (and provide a copy to the
FHFA) identifying the specific statutory or regulatory change that
is the basis for the assertion. For the purposes of this section,
‘prompt written notice’ means notice delivered no later
than 90 calendar days subsequent to: (1) the date the specific
statutory change takes effect; or (2) the date an interim final
rule or final rule effecting the specific regulatory change is
published in the Federal Register.

 

If
within 60 calendar days of transmission of such written notice to
all of the other FHLBanks, at least 2/3 of the then existing
FHLBanks (including the Bank) execute a Declaration of Automatic
Termination concurring that the specific statutory or regulatory
change identified in the written notice constitutes an Automatic
Termination Event, then the Declaration of Automatic Termination
shall be delivered by the Bank to the FHFA within 10 calendar days
of the date that the Declaration of Automatic Termination is
executed. After the expiration of a 60 calendar day period that
begins when the Declaration of Automatic Termination is delivered
to the FHFA, or is delivered to the FHFA by another FHLBank
pursuant to the terms of its capital plan, an Automatic Termination
Event Declaration Date shall be deemed to occur (except as provided
in subsection 11.4.1.3).

 

If a
Declaration of Automatic Termination concurring that the specific
statutory or regulatory change identified in the written notice
constitutes an Automatic Termination Event has not been executed by
at least the required 2/3 of the then existing FHLBanks within 60
calendar days of transmission of such notice to all of the other
FHLBanks, the Bank may request a determination from the FHFA that
the specific statutory or regulatory change constitutes an
Automatic Termination Event. Such request must be filed with the
FHFA within 10 calendar days after the expiration of the 60
calendar day period that begins upon transmission of the written
notice of the basis of the assertion to all of the other
FHLBanks.

 

11.4.1.2                       

Action
by FHFA

 

The
Bank may request a determination from the FHFA that a specific
statutory or regulatory change constitutes an Automatic Termination
Event, and may claim that an Automatic Termination Event has
occurred, or will occur, with respect to a specific statutory or
regulatory change only if the Bank has complied with the time
limitations and procedures of subsection 11.4.1.1.

If
within 60 calendar days after the Bank delivers such a request to
the FHFA, or another FHLBank delivers such a request pursuant to
its capital plan, the FHFA provides the requesting FHLBank with a
written determination that a specific statutory or regulatory
change is an Automatic Termination Event, then an Automatic
Termination Event Declaration Date shall be deemed to occur as of
the expiration of such 60 calendar day period (except as provided
in subsection 11.4.1.3). The date of the Automatic Termination
Event Declaration Date shall be as of the expiration of such 60
calendar day period (except as provided in subsection 11.4.1.3) no
matter on which day prior to the expiration of the 60 calendar day
period the FHFA has provided its written
determination.

 

If the
FHFA fails to make a determination within 60 calendar days after an
FHLBank delivers such a request to the FHFA, then an Automatic
Termination Event Declaration Date shall be deemed to occur as of
the date of the expiration of such 60 calendar day period (except
as provided in subsection 11.4.1.3); provided, however, that the
FHFA may make a written request for information from the requesting
FHLBank, and toll such 60 calendar day period from the date that
the FHFA transmits its request until that FHLBank delivers to the
FHFA information responsive to its request.

 

If
within 60 calendar days after an FHLBank delivers to the FHFA a
request for determination that a specific statutory or regulatory
change constitutes an Automatic Termination Event (or such longer
period if the 60 calendar day period is tolled pursuant to the
preceding sentence), the FHFA provides that FHLBank with a written
determination that a specific statutory or regulatory change is not
an Automatic Termination Event, then an Automatic Termination Event
shall not have occurred with respect to such change.

 

11.4.1.3 

Proviso
as to Occurrence of Automatic Termination Event Declaration
Date

 

In no
case under this subsection 11.4.1 may an Automatic Termination
Event Declaration Date be deemed to occur prior to: (1) the date
the specific statutory change takes effect; or (2) the date an
interim final rule or final rule effecting the specific regulatory
change is published in the Federal Register.

 

11.4.2                       

Notice
of Voluntary Termination

 

If the
FHLBanks terminate the Agreement, then the FHLBanks shall provide
written notice to the FHFA that the FHLBanks have voted to
terminate the Agreement.

 

11.4.3 

Consequences
of an Automatic Termination Event or Vote to Terminate the
Agreement

 

11.4.3.1                       

Consequences
of Voluntary Termination

 

In the
event the FHLBanks deliver written notice to the FHFA that the
FHLBanks have voted to terminate the Agreement, then without any
further action by the Bank or the FHFA: (i) the date of delivery of
such notice shall be an Allocation Termination Date; and (ii) one
year from the date of delivery of such notice shall be a
Restriction Termination Date.

 

11.4.3.2                       

Consequences
of an Automatic Termination Event Declaration Date

 

If an
Automatic Termination Event Declaration Date has occurred, then
without further action by the Bank or the FHFA: (i) the date of the
Automatic Termination Event Declaration Date shall be an Allocation
Termination Date; and (ii) one year from the date of the Automatic
Termination Event Declaration Date shall be a Restriction
Termination Date.

 

11.4.3.3 

Deletion
of Operative Provisions of Retained Earnings Capital Plan
Amendment

 

Without
any further action by the Bank or the FHFA, on the Restriction
Termination Date, sections 11.1 through 11.4 of this Capital Plan
shall be deleted.

 

 

Appendix I -- Member Stock Purchase Requirements

 

(Note: This Appendix I to the Capital Plan is effective as of
October 2, 2020 and supersedes the Appendix dated January 1,
2019.)

 

A.          

Membership
Stock Purchase Requirement

 

Each
Member is required to purchase Membership Stock equal to the
greater of (i) $1,000 or (ii) 0.125% of the
Mortgage-related Assets held by the Member but in no event greater
than $100 million.

 

B.          

Activity-Based
Stock Purchase Requirement

 

Each
Member is required to purchase Activity-Based Stock in the
following amounts:

 

1.

Advances

Members
are required to purchase Activity-Based Stock equal to 4.50% of the
dollar amount of any outstanding advances under the Advances
Agreement.

 

2. 

Acquired Member Assets

Members
are required to purchase Activity-Based Stock equal to 4.50% of the
outstanding principal balance of the Acquired Member
Assets originated for
or sold to the FHLBNY by a Member that remain on the FHLBNY’s
balance sheet plus the principal amount of delivery commitments
issued to the Member by FHLBNY for Acquired Member Assets to be
held on the FHLBNY’s balance sheet, provided that the
outstanding principal balance of Acquired Member Assets originated
for or sold to the FHLBNY by a Member that were on the
FHLBNY’s balance sheet as of November 30, 2005 will not be
subject to this requirement.

 

3.          

Letters of Credit

Members
will be required to purchase Activity-Based Stock equal to a
percentage to be announced ahead of time by the FHLBNY of the
outstanding principal balance of the off-balance sheet item
relating to all new and renewing types of letters of credit which
the FHLBNY has transacted on a Member’s behalf and issued
under the Irrevocable Letter of Credit Agreement between the FHLBNY
and the Member. The announcement of the specific purchase
requirement will take place no later than 10 days before the
implementation date of this requirement. The implementation date
will be no later than March 31, 2021.

 

4.          

Remaining Off-Balance Sheet Items

Members
are required to purchase Activity-Based Stock equal to the credit
equivalent amount of any off-balance sheet items listed in Section
1277.4(h), Table 5 of the Regulations which the FHLBNY has
transacted on a Member's behalf and which are continuing, excluding
both the outstanding principal balance for letters of credit and
the principal amount of delivery commitments issued to the Member
by FHLBNY for Acquired Member Assets, multiplied by
zero.

 

5.          

Derivative Contracts

Members
are required to purchase Activity-Based Stock equal to 0% of the
carrying value on the FHLBNY’s balance sheet of Derivative
Contracts between the Member and FHLBNY, as determined by FHLBNY
under GAAP.Exhibit 10.1

 

AMENDMENT TO EXECUTIVE EMPLOYMENT
AGREEMENT

 

This Amendment To Executive
Employment Agreement (“Amendment”), effective June 30, 2020, hereby amends the Executive Employment Agreement
(the “Agreement”) dated July 1, 2010, as amended to date, between Reprints Desk, Inc., a Delaware corporation
(the “Company”), Research Solutions, Inc., a Nevada corporation (“Research Solutions”), and
Peter Derycz (“Executive”).

 

WHEREAS, the parties
have complied with the terms of the Agreement until the date hereof; and

 

WHEREAS, the parties
wish to amend the terms of the Agreement.

 

NOW THEREFORE, for
the mutual promises and other consideration described herein, the parties hereto agree as follows:

 

1.       Section
1(d) Term is amended as follows:

 

Term. The term
of employment of Executive by the Company pursuant to this Employment Agreement shall be for the period commencing on the Commencement
Date and ending on June 30, 2021, or such earlier date that Employee’s employment is terminated in accordance with the provisions
of this Employment Agreement.

 

2.       Section
2(a) Base Salary is amended as follows:

 

Base Salary.
In consideration of the services to be rendered under this Agreement, the Company shall pay Executive a salary at the rate of Three
Hundred Seventy-One Thousand Five Hundred Twenty Dollars ($371,520) per year (“Base Salary”). The Base Salary
shall be paid in accordance with the Company’s regularly established payroll practice. Executive’s Base Salary will
be reviewed from time to time in accordance with the established procedures of the Company for adjusting salaries for similarly
situated employees and may be adjusted in the sole discretion of the Company.

 

Except as expressly
amended or modified herein, all terms and conditions of the Agreement are hereby ratified, confirmed and approved and shall remain
in full force and effect. In the event of any conflict or inconsistency between this Amendment and the Agreement, this Amendment
shall govern.

 

This Amendment and
all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and
interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

 

This Amendment may
be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

 

 

[Signature Page Follows]

 

     

     

    

 

IN WITNESS WHEREOF, the parties have
duly executed this Amendment as of the date first written above.

 

 

	REPRINTS
    DESK, INC.:	 
	 	 	 	 
	 	 	 	 
	By:	 	/s/
    Alan Urban	 
	Name and
    Title: Alan Urban, CFO & Secretary	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	RESEARCH
    SOLUTIONS, INC.:	 
	 	 
	 	 	 	 
	By:	 	/s/
    Alan Urban	 
	Name and
    Title: Alan Urban, CFO & Secretary	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	EXECUTIVE:	 
	 	 	 	 
	 	 	 	 
	By:	 	/s/
    Peter Derycz	 
	Name: Peter
    Derycz

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00313-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00313-of-00352.parquet"}]]