Directors' Nonqualified Deferred Compensation Program Federal Home Loan Bank of Topeka

1)  

Deferral Election .  In order to utilize the deferral option provided by this Program, a director must file an election form with the Bank electing to defer all or a portion of the fees the director will earn in a calendar year.  Any election to defer director’s fees earned in a calendar year will become irrevocable on the first day of that calendar year.

a)  

The election form must be filed with the Bank prior to the beginning of the calendar year for which a deferral election will be in effect.

b)  

Notwithstanding subsection (a), a director appointed or elected to the board of directors after the beginning the of the calendar year may elect to defer fees in that initial calendar year so appointed or elected, provided that an election form is filed with the Bank within thirty (30) days after the date he or she first becomes eligible to participate in the Program, or within such other earlier deadline as may be established by the Bank, in its sole discretion, in order to participate for that calendar year.

2)  

Account .  The Bank will maintain a separate memorandum account (Account) for each director deferring fees under the Program.  All deferred fees will be credited to the Account and interest will be credited or debited to the Account pursuant to procedures set forth in this Program.  The Account constitutes an unsecured claim against the general assets of the Bank, equal in priority to other unsecured claims against the Bank.  A director has no entitlement of claim to the Account until payments are due under the Program.  Deferred fees and accrued interest are not held in trust for a director.

3)  

Interest Accrual .  The Account will earn interest at a rate equal to the Bank’s return on equity in the prior calendar year calculated in accordance with generally accepted accounting principles, excluding any impact or adjustment required because of Financial Accounting Standards No. 133 (referred to as the Bank’s pre-FAS 133 return on equity).  Interest on the Account will be computed and credited quarterly.

4)  

Distribution of Account .

a.  

In conjunction with the filing of an election form, a director may make an election as to when and in what manner the director is to be paid the balance of the Account.  A benefit shall be payable under the Program to or on account of a director only upon the following distribution events (the “Distribution Event”):  the director’s cessation of his or her role as a director, death, Disability, or a Change of Control of the Bank, except as provided in Sections 7, 8, or 12.  Payment shall commence ninety (90) days after the director’s Distribution Event.  Notwithstanding the preceding sentence, if it is administratively impracticable to make the payment by the required payment date, and such impracticability is unforeseeable, then such payment shall be made as soon as administratively practicable.  For purposes of this Program, “Change of Control” has the meaning set forth in Code Section 409A and the Treasury Regulations promulgated thereunder.

b.  

A director may elect to have the balance of the Account paid in a lump sum or in five equal consecutive annual installments.  Such election shall be made at the time the director’s deferral election is made.  If no election is made, the entire Account balance shall be paid in a lump sum, which shall commence ninety (90) days after the director’s Distribution Event.  Notwithstanding the preceding sentence, if it is administratively impracticable to make the payment by the required payment date, and such impracticability is unforeseeable, then such payment shall be made as soon as administratively practicable.

5)  

Beneficiaries .  A director may designate one or more beneficiaries to receive the balance of the director’s Account, including the relative portion of the Account to go to each beneficiary if more than one beneficiary is designated in the event the director dies before the Account is fully distributed to the director.  A director may make an election as to when and in what manner the beneficiaries are to be paid the balance of the Account.  Such designation may be changed by a director at any time by delivering to the Bank in writing a new beneficiary designation.

a)  

A director may elect to have the balance of the Account paid to the beneficiaries in a lump sum or in five equal consecutive annual installments, which shall commence ninety (90) days after the director’s death. Notwithstanding the preceding sentence, if it is administratively impracticable to make the payment by the required payment date, and such impracticability is unforeseeable, then such payment shall be made as soon as administratively practicable.

6)  

Prohibition on Assignment .  No right or claim of any director or any designated beneficiary under the Program may be assigned, transferred, pledged or encumbered.

7)  

Taxes .

a)  

For each calendar year in which an annual contribution amount credited to a director’s Account Balance becomes vested, to the extent required or applicable the Bank shall withhold from that portion of the director’s base salary, bonus and/or commissions, in a manner determined by the Bank, the director’s share of FICA and other emp