UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-K/A

(Amendment No. 1)

SANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

OR

£ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File No. 000-51401

FEDERAL HOME LOAN BANK OF CHICAGO

(Exact name of registrant as specified in its charter)

Federally chartered corporation	36-6001019
(State or other jurisdiction of  incorporation or organization)	(I.R.S. Employer  Identification No.)
200 East Randolph
Chicago, IL	60601
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (312) 565-5700

Securities to be registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Capital stock, $100 per share par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes £No S

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes £ No S

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filings requirements for the past 90 days. Yes S No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes SNo £

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. S

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Large Accelerated Filer £         Accelerated Filer £         Non-accelerated Filer S     Smaller Reporting Company £

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes £ NoS

The aggregate par value of capital stock held by non-affiliates of the registrant was approximately $2,330,661,752 as of the last business day of the registrant's most recently completed second fiscal quarter, June 30, 2010. The registrant's capital stock is not publicly traded, so there is no market value.

There were 28,631,347 shares of registrant's capital stock outstanding as of February 28, 2011.

1

Federal Home Loan Bank of Chicago

Explanatory Note

In January 2011, the Board of Directors (Board) of the Federal Home Loan Bank of Chicago approved 2010 incentive compensation awards for our named executive officers (NEOs) under our Executive Incentive Compensation Plan and our Key Employee Long Term Incentive Compensation Plan, which awards were to be effective after completion of a review by our primary regulator, the Federal Housing Finance Agency (FHFA). On March 17, 2011 when we filed our 2010 Annual Report on Form 10-K (Form 10-K Report) we identified our NEOs based on estimated incentive award payments. Subsequent to filing our Form 10-K Report and our discussions of the proposed awards with the FHFA, the P&C Committee gave further consideration to management's achievements and performance during 2010 and related potential award payments which resulted in adjusted incentive awards for certain of our NEOs. After modification of the awards, we received notice of non-objection from the FHFA for the 2010 incentive award payments to our NEOs under our Executive Incentive Compensation Plan and Key Employee Long Term Incentive Compensation Plan on June 1, 2011 and October 7, 2011, respectively.

As a result of the final awards, the NEOs originally identified in our Form 10-K Report have changed and we are issuing this Amendment to our Form 10-K Report. Item 11, Executive Compensation of our Form 10-K Report is amended in its entirety and replaced with the disclosure included in this 10-K/A Report. No other changes have been made to the Form 10-K. This Amendment No. 1 to the Form 10-K does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way other disclosures made in the original Form 10-K. Accordingly, this Amendment should be read in conjunction with our Form 10-K Report and with our filings with the SEC subsequent to the Form 10-K Report.

PART III

Item 11. Executive Compensation.

This section provides information regarding our compensation program for our 2010 named executive officers (NEOs): Matthew Feldman, President and CEO; Roger Lundstrom, Executive Vice President & Chief Financial Officer; Sanjay Bhasin, Executive Vice President & Group Head, Members and Markets; Michael Ericson, Executive Vice President & Group Head, Risk Management; and John Stocchetti, Executive Vice President & Group Head, Products, Operations and Technology.

All dollar amounts within this Item 11 Executive Compensation are presented in whole dollars unless otherwise specified.

Compensation Discussion & Analysis

Compensation Program Objectives and Philosophy

Our Board of Directors has established a Personnel & Compensation Committee (the P&C Committee) to assist it in matters pertaining to the employment and compensation of the President and CEO, other executive officers and our employment and benefits programs in general.

The goal of our compensation program is to set compensation at a level which allows us to attract, motivate, and retain talented executives who can enhance our business performance and help us fulfill our mission. Our compensation program is designed to reward:

• Individual performance and attainment of bank-wide goals and business strategies on both a short-term and long-term basis;

• The delivery of enhanced value to our members as shareholders;

• Fulfillment of our mission;

• Effective and appropriate management of risks, including financial, operational, market, credit, legal, regulatory, and other risks; and

• The growth and enhancement of executive leadership.

Our current compensation program is comprised of a combination of base salary, short-term incentive compensation, long-term incentive compensation, retirement, severance, and other benefits which reflect total compensation that is consistent with individual performance, business results, job responsibility levels and the competitive market. Because we are a cooperative and our capital stock generally may be held only by members, we are unable to provide compensation to executives in the form of stock or stock options which is typical in the financial services industry.

Regulatory Oversight of Executive Compensation

The FHFA provides certain oversight of FHLB executive officer compensation. Under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended, the FHFA Director must prohibit an FHLB from paying compensation to its executive officers that is not reasonable and comparable to that paid for employment in similar businesses involving similar duties and responsibilities. In connection with this responsibility, the FHFA has directed the FHLBs to submit all compensation actions involving named executive officers to the FHFA for prior review.

The FHFA has also issued an advisory bulletin establishing certain principles for executive compensation at the FHLBs and the Office of Finance. These principles include that: (1) such compensation must be reasonable and comparable to that offered to executives in similar positions at comparable financial institutions; (2) such compensation should be consistent with sound risk management and preservation of the par value of FHLB stock; (3) a significant percentage of an executive's incentive based compensation should be tied to longer-term performance and outcome-indicators and be deferred and made contingent upon performance over several years; and (4) the Board of Directors should promote accountability and transparency in the process of setting compensation. Under the Housing and Economic Recovery Act of 2008, the FHFA Director has the right to prohibit or limit golden parachute payments under certain conditions as described in Severance Arrangements

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Federal Home Loan Bank of Chicago

on page 8.

The P&C Committee considered the FHFA guidance in connection with its review of compensation for our executive officers for 2010 and 2011. In addition, our Chief Risk Officer reviewed our short- and long-term incentive compensation plans and goals and delivered a risk analysis report prepared by our Risk Management Group to the P&C Committee in January 2010 and again in January 2011. The P&C Committee reviewed this information, along with base salary information, and determined that the compensation payable to our executive officers for each of 2010 and 2011 was and is reasonable and comparable to that paid within the FHLB System and complies with the FHFA guidance.

In January 2011, our Board approved 2010 incentive compensation awards for our NEOs under our Executive Incentive Compensation Plan and our Key Employee Long Term Incentive Compensation Plan, which awards were to be effective after completion of a review by the FHFA. On March 17, 2011 when we filed our Form 10-K Report we identified our NEOs based on estimated incentive award payments. Subsequent to filing our Form 10-K Report and our initial discussions of the proposed awards with FHFA, the P&C Committee gave further consideration to management's achievements and performance during 2010 and related potential award payments which resulted in adjusted incentive awards for certain of our NEOs. After modification of the awards, we have received notice of non-objection from the FHFA for the 2010 incentive award payments to our NEOs under our Executive Incentive Compensation Plan and Key Employee Long Term Incentive Compensation Plan on

June 1, 2011 and October 7, 2011 respectively.

Use of Compensation Consultants and Surveys

It is the intent of the P&C Committee to set overall compensation packages at competitive market levels. In order to evaluate and maintain our desired market compensation position, the P&C Committee reviews comparable market compensation information.

We participate in the annual Federal Home Loan Bank System Key Position Compensation Survey. This survey, conducted annually by Reimer Consulting, contains executive and non-executive compensation information for various positions across the 12 FHLBs.

The Federal Home Loan Bank System also engages McLagan Partners, a compensation consulting firm, to conduct an annual compensation survey including market statistics on salary, annual incentives, total cash, long-term/deferred awards and total compensation.  The survey covers all the major functional areas from entry level positions to the President/CEOs. Participants include the twelve FHLBs, banks and other financial service firms.  McLagan reviews the data collection and results with our Human Resources senior management so that we may understand the appropriateness of the survey comparisons adjusting for scale and scope of the survey position versus the other survey participants. Our Human Resources senior management reviews the surveys with our P&C Committee.

The information obtained from these studies was considered by the Board of Directors, the P&C Committee and our President and CEO, as appropriate, when making compensation decisions for 2010 and 2011.

Elements of Our Compensation Program

On an annual basis, the P&C Committee reviews the components of our NEO compensation: salary, short- and long-term incentive compensation, matching bank contributions, severance benefits and projected payments under our retirement plans.

Base salary is included in our NEO compensation package because the P&C Committee believes it is appropriate that a portion of the compensation be in a form that is fixed and liquid. We use the base salary element to provide the foundation of a fair and competitive compensation opportunity for each of our executive officers. We do not currently provide perquisites to our executives as part of our compensation program.

Performance-based compensation is split between our short-term and long-term incentive plans, providing incentive for our NEOs to pursue particular business objectives consistent with the overall business strategies and risk management criteria set by our Board of Directors. The plans for our NEOs, although designed to reward both overall Bank performance and individual performance, are heavily weighted toward overall Bank performance. The Key Employee Long Term Incentive Compensation Plan also serves as a retention incentive for our executives.

In determining executive compensation, we do not have to consider federal income tax effects on the Bank because we are exempt from federal income taxation.

Employment and other Agreements

Three of our NEOs had an employment agreement with the Bank in 2010 and two of those agreements have subsequently expired as further described below.

Matthew R. Feldman

Mr. Feldman entered into an employment agreement with the Bank effective as of May 5, 2008 that provided for an employment term ending on May 31, 2011, unless terminated earlier as provided for in the agreement. The agreement was replaced with a new employment agreement effective January 1, 2011 as further described under 2011Compensation Decisions on page 11.

Mr. Feldman's base salary for 2010 was $650,000, which had been established as his base salary for the three-year term of his 2008 employment agreement. Under the agreement, the Bank agreed to indemnify Mr. Feldman with respect to any tax liabilities and penalties and interest under Section 409A of the Internal Revenue Code of 1986.

The 2008 employment agreement provided that Mr. Feldman would be entitled to participate in the President's Incentive Compensation Plan and the Key Employee Long Term Incentive Compensation Plan, but that payments to Mr. Feldman under these plans would be subject to the further condition that the Bank had (A) earned a net profit for the fiscal year and (B) had paid dividends on its capital stock for at least two consecutive quarters during that fiscal year.

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Federal Home Loan Bank of Chicago

Mr. Feldman's 2008 employment agreement provided for severance benefits, including one year of base salary continuation payments, under certain circumstances and in a manner consistent with the severance benefits payable under the Bank's Severance Plan. See Post-Termination Compensation on page 8. The agreement also provided for participation in our health insurance, life insurance, retirement, and other benefit plans that are generally applicable to our other senior executives.

Senior Executive Contracts

All of our NEO's (other than the President and CEO) are employees at-will of the Bank. Mr. Lundstrom and Mr. Stocchetti became employees-at-will of the Bank when their three year employment agreements with the Bank expired in January of 2011 and were not renewed consistent with the Bank's current philosophy of employing most senior executives as employees-at-will.

These employment agreements provided for an initial base salary amount, subject to merit and promotional increases. The initial base salary amounts were as follows:

Name	Initial Base Salary
Mr. Lundstrom	$	270,000
Mr. Stocchetti	280,000

In addition, the employment agreements provided for benefits under our employee benefit plans, incentive compensation pursuant to any plans adopted by the Board of Directors and severance benefits under certain conditions. Mr. Stocchetti's contract also provided for a change-of-control payment under certain circumstances. See Post-Termination Compensation on page 8.

Base Salary

Base salary is a key component of our compensation program. In making base salary determinations, the P&C Committee and the President and CEO review competitive market data from the Federal Home Loan Bank System Key Position Survey and the McLagan Survey and consider factors such as prior related work experience, individual job performance, and the position's scope of duties and responsibilities within our organizational structure and hierarchy.

Generally, the Board of Directors each year determines base salary for the President and CEO after it has received a recommendation from the P&C Committee. However, the Board of Directors approved a three year employment agreement for Mr. Feldman in 2008 in connection with his appointment as President and CEO and set his base salary at $650,000 for the initial contract term consistent with the reduced base salary level of the prior Bank President and CEO. In setting the base salary, the Board of Directors took into account the fact that based upon the Bank's projected financial performance, Mr. Feldman's incentive compensation opportunities in the near term would most likely be limited.

On an annual basis, the President and CEO reviews the performance of the other NEOs and makes salary recommendations to the P&C Committee. In setting base salaries, Mr. Feldman and the P&C Committee will generally consider competitive market data from the Federal Home Loan Bank System Key Position Survey and the McLagan Survey. The P&C Committee and Mr. Feldman have decided that the compensation guideline for base salaries for NEOs (other than the President and CEO) should target the 75^th percentile of the base salaries paid to senior executives serving in similar positions at the 12 FHLBs. They established this target based upon the complex nature and operations of the Bank relative to the other FHLBs and the importance of retaining key members of the executive management team. Following the recommendation of the President and CEO, the P&C Committee decided that based upon the expected financial performance of the Bank base salaries for our NEOs would not be increased for 2010. Further, none of our executive officers received base salary increases for 2011. See 2011 Compensation Decisions on page 11.

Short-Term Incentive Plans

Short-term incentive compensation is an important part of our overall compensation strategy and is designed to award the achievement of short-term performance goals and strategies.

For 2010, we had two short-term incentive bonus plans for our NEOs: the President's Incentive Compensation Plan covering the President and CEO and the Executive Incentive Compensation Plan covering the other NEOs. Both plans provide for the award of cash bonuses on the basis of performance over a one-year period calculated using weighted performance criteria correlated to our Board-approved strategic business plan for the year. Fifty percent of the bonus award under the Executive Incentive Compensation Plan is deferred and payable over a two-year period as further described below.

Each year, the Board of Directors approves the performance targets and plan criteria for the President and CEO, and the P&C Committee approves the performance targets and plan criteria for the other NEOs.

In determining the incentive compensation opportunity amounts under these plans, the P&C Committee considers several factors, including:

(1) the desire to ensure, as described above, that a significant portion of total compensation is performance-based;

(2) the relative importance, in any given year, of the short-term performance goals established under the plans;

(3) market comparisons as to short-term incentive compensation practices at other financial institutions within our peer group; and

(4) the target bonuses set, and actual bonuses paid, in recent years.

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Federal Home Loan Bank of Chicago

Performance Targets

Performance objectives for both the President's Incentive Compensation Plan and the Executive Incentive Compensation Plan are developed through an iterative process. Based on a review of our strategic business plan, the President and CEO, with input from senior management, develops performance criteria for consideration by the P&C Committee. The P&C Committee reviews the recommendations and establishes the final performance criteria. Prior to approval, the P&C Committee considers whether the performance criteria are aligned with our strategic business plan approved by the Board, whether the criteria are sufficiently ambitious so as to provide a meaningful incentive, and whether bonus payments, assuming that target levels of the performance criteria and goals are attained, will be consistent with the overall NEO compensation program.

Under both plans, the P&C Committee reserves the discretion to make adjustments in the performance criteria established for any award period either during or after the award period and to make or adjust award payments to compensate for or reflect any significant changes which may have occurred during the award period. Certain deferred payments may be adjusted in connection with material inaccuracies related to financial reporting.

For 2010, the target values and, performance criteria, and percentage attained for both the President's Incentive Compensation Plan and the Executive Incentive Compensation Plan are set forth in the following table:

Target Value		2010 Performance Criteria	Percentage Attained
35	%	$46 million GAAP net income for 2010 after REFCORP and AHP	150.0	%
20	%	$96.7 million net operating expenses. Net operating expenses means total operating expenses plus mortgage loan expenses less MPF-related fee income	94.6	%
7.5	%	Implementation of scheduled modules of software systems	100.0	%
7.5	%	Implementation of scheduled reengineering projects	100.0	%
5	%	Commitment of $5 million in funds in 2010 to qualifying AHP projects and the Downpayment Plus Program	132.0	%
25	%	Implementation of capital stock plan	—	%

Attainment of each performance criterion is measured on a percentage basis (not to exceed 150%) and multiplied by the target value, with results for the individual criteria then aggregated to determine a performance percentage, which was 124.0% for 2010.

President's Incentive Compensation Plan

Award payments under the President's Incentive Compensation Plan and Mr. Feldman's employment agreement, can range, on the basis of performance, from 0% to 100% of annual salary with the target bonus being 60% of annual salary as described below. The P&C Committee, with the approval of the Board of Directors, may also make additional discretionary awards in consideration of extraordinary performance. For 2010, Mr. Feldman was not eligible to receive an award under the President's Incentive Compensation Plan because the conditions under his employment agreement were not met.

President's Incentive Compensation Plan
Performance Percentage	Award Payment Level a
80% or lower	No payment
Every 1% increase between 80% and 100%	An additional 3.0% of annual salary
100% (target amount)	60% of annual salary
Every 1% increase between 100% and 130%	An additional 1.33% of annual salary (to a maximum of 100% of annual salary)

^a  As a condition of Mr. Feldman's 2008 employment agreement, that was effective during 2010, awards for Mr. Feldman under this plan were subject to the further condition that the Bank has (A) earned a net profit for the fiscal year and (B) has paid dividends on its capital stock for at least two consecutive quarters during that fiscal year.

Executive Incentive Compensation Plan

The Executive Incentive Compensation Plan covers the Bank's executive management team members including our NEOs (other than the President and CEO). The plan provides for the establishment of an award pool based upon the achievement of performance criteria and performance targets.

The award pool can range from 0% to 50% of the aggregate annual salaries of the Executive Team members (other than the President and CEO and General Auditor), with the pool target being 25% of the aggregate annual salaries as further described in the table below.

Executive Incentive Compensation Plan
Performance Percentage	Maximum Award Percentage
80% or lower	No payment
Every 1% increase between 80% and 100%	An additional 1.25% of annual salary
100% (target amount)	25% of annual salary
Every 1% increase between 100% and 130%	An additional 5/6ths of 1% of annual salary (to a maximum of 50% of annual salary)

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Federal Home Loan Bank of Chicago

The President and CEO has full discretion to make awards from the pool and may consider such factors as the satisfaction of individual goals and the achievement of specific levels of job performance for the plan year. Individual awards are approved by the P&C Committee. The President and CEO may also establish, subject to the approval of the P&C Committee, an additional bonus pool for any year from which the President and CEO may make discretionary awards.

Upon completion of the plan year, payments are made pursuant to the following schedule:

• 50% paid in cash after the end of the plan year;

• 25% paid after the end of the second year; and

• 25% paid at the end of the third year.

Payment of deferred award amounts are conditioned upon whether or not there were material inaccuracies related to financial reporting or award performance metric criteria for the plan award year or succeeding plan year as determined by the P&C Committee. In connection with establishing the Executive Incentive Compensation Plan, the P&C Committee considered both a deferral and claw-back provision and determined that a deferral provision that allows it to cancel or adjust deferred award payments as a result of material inaccuracies in financial reporting or performance metric criteria is preferential over a provision requiring the claw-back of previously paid amounts.

In the event of retirement, death or disability of a plan participant, a change-of-control or termination of the participant's employment for good reason, deferred award amounts become payable within sixty days of such event.

In determining the short-term incentive awards for Mr. Bhasin, Mr. Lundstrom and Mr. Stocchetti, the P&C Committee began with an award pool equal to 45.03% of the aggregate salaries of certain of the executive team members based upon achievement of plan performance criteria at 124.0%. See Performance Targets on page5 for a description of the performance criteria. In determining the short-term incentive award for Mr. Ericson, the P&C Committee began with an award equal to 45.03% of the aggregate salaries of the executive team (other than the President and CEO and General Auditor), plus a discretionary component. The President and CEO recommended individual awards recognizing the level of job performance for each participant and those awards were subsequently approved by the P&C Committee. See Executive Incentive Compensation Plan on page 13 for the awards made to the NEOs under this plan.

Key Employee Long Term Incentive Compensation Plan

The P&C Committee believes that long-term incentives for executives align the interests of our shareholder members and our executives.

Our NEOs participate in a Key Employee Long Term Incentive Compensation Plan under which the P&C Committee establishes performance periods, performance goals consistent with our long-term business strategies, related performance criteria, performance targets and target values (collectively, goals) for approval by the Board of Directors. The P&C Committee designates those officers, including our NEOs, who are eligible to participate in the plan for the performance period. The P&C Committee may make adjustments in the performance goals at any time to reflect major unforeseen transactions, events, or circumstances.

Participants are vested in their respective awards, if any, at the end of the performance period provided that the participant is actively employed by the Bank at that time. If a participant retires, dies, incurs a separation from service on or after attaining normal retirement age of sixty-five on a date that is not more than 12 months before the end of a performance period, the participant becomes vested at the end of the performance period pro rata based upon the number of full months that the participant was employed during the performance period and the length of the performance period. In the event of (1) a change-of-control (as defined in the plan) or (2) a termination of the participant's employment by the participant for good reason (as defined in the plan), the participant will be fully vested in any performance period award to the extent an award is applicable at the end of the corresponding performance period; provided, however that if either of these events occurred the P&C Committee may exercise its discretion under the plan to adjust awards, including a pro-rata adjustment based upon the period of time the senior executive was employed during the performance period.

In determining the goals under the Key Employee Long Term Incentive Compensation Plan, the P&C Committee considers several factors, including:

(1) the long-term strategic priorities of the Bank;

(2) the desire to ensure, as described above, that a significant portion of total compensation is performance-based;

(3) the relative importance, in any given year, of the long-term performance goals established under our strategic business plan;

(4) market comparisons as to long-term incentive compensation practices at other financial institutions within our peer group; and

(5) the target awards set, and actual awards paid, in recent years.

Performance criteria for the Key Employee Long Term Incentive Compensation Plan are developed through an iterative process between the P&C Committee and our senior management. The performance criteria are set so that the target goals are reasonably obtainable, but only with significant effort from senior management, including the NEOs.

After termination of merger discussions with the FHLB of Dallas in April 2008, the Board of Directors adopted plan criteria for 2008 to 2010 in order to align long-term incentive compensation with the Bank's new three year strategic business plan. The plan was designed to determine awards calculated as a multiple of base salary (ranging from 2 to 3 times base salary) and the achievement of performance goals. The level of potential awards were increased over prior long-term plans to compensate for the lack of a long-term plan with potential awards in 2008 or 2009, the fact that payouts under the short-term plan would not be made until the Bank was profitable and stable and to provide a retention incentive in light of the anticipated significant efforts required to remediate the Bank. The 2010 potential payout levels under this plan are not intended to be repeated in future years as the Bank completes remediation and engages in business activities in a more normalized manner.

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Federal Home Loan Bank of Chicago

In connection with determining the award payments for the 2008 to 2010 plan period, the P&C Committee evaluated the achievement of the performance period goals outlined below. 

• Income goal: generate core net income return on equity of at least 3 month LIBOR in 2010

• Market risk goal: maintain the interest rate risk within the approved policy risk framework parameters given market conditions

• Credit risk goal: experience no material credit losses with members or trading counterparties

The income goal and credit risk goals for the performance period were met. The P&C Committee also considered the fact that the Bank was in compliance with its interest rate risk limits 98% of the time and the instances of non-compliance were not deemed to be material. Mr. Ericson's award under the Key Employee Long Term Incentive Compensation Plan was based solely on the achievement of this criteria and made at the initial target level in January 2011 because his compensation was not part of the compensation review required by FHFA guidance. Mr. Feldman did not receive an award under this plan because the conditions under his contract related to Bank financial performance were not met.

With respect to the remaining NEOs, the P&C Committee also reviewed whether certain desired outcomes were met that relate to the performance goals under the plan: resolution of the Consent Cease & Desist Order; implementation of a new capital plan; attraction of new members and growth of the capital base; and increased level of member stock investment through advance growth with current members, while maintaining a high level of diversification. While the desired outcomes were not part of the performance goals of the plan, the P&C Committee decided it was appropriate to consider these items in connection with finalizing award payments under the plan. The P&C Committee focused on the fact that we added new members during the period and increased our regulatory capital base. While the Consent Cease & Desist Order has not been terminated, we have addressed many of the issues. The Committee also considered the work that we have undertaken towards implementing a new capital plan.

The P&C Committee decided that the 2008-2010 long-term incentive compensation awards for Mr. Bhasin, Mr. Lundstrom and Mr. Stocchetti should not exceed one and one half (1.5) times their respective 2011 base salaries. One third of the award is payable in 2011 and the remaining amount is deferred with one third of the award payable in 2012 and the remaining third in 2013. The deferred amounts remain at risk should events subsequent to the plan period of 2008-2010 prove that actions taken by the executive during that period prove deleterious to the Bank. The deferred amounts will continue to be subject to forfeiture should the executives no longer be employed by the Bank at the time the amounts are paid out.

Mr. Feldman was not eligible for a 2010 award under this plan because the conditions of his 2008 employment agreement were not met. In particular, in order to be eligible for an award the Bank must have (A) earned a net profit for the fiscal year and (B) paid dividends on its capital stock for at least two consecutive quarters during that fiscal year.

See Key Employee Long Term Incentive Compensation Plan on page 14 for the awards made to the NEOs under this plan.

The performance goals for the 2010 to 2012 performance period are as follows:

Target Value		2010 to 2012 Performance Criteria
40	%	Return on equity equal to three month LIBOR plus 0.5%. Return on equity means the difference between the 2010 to 2012 Bank quarterly return on regulatory capital after REFCORP and AHP and the average of the 2010 to 2012 quarterly three month LIBOR rate.
15	%	$300 million increase in total capital. Increase in member capital stock plus retained earnings from 12/31/2009 to 12/31/2012.
15	%	$100 million increase in member required capital stock. Increase of required member capital stock from 12/31/2009 to 12/31/2012.
10	%	10 basis points or less operating expense ratio of total net operating expenses to average assets for 2012. “Net operating expenses” means total operating expenses plus mortgage loan expense less MPF-related fee income.
10	%	$2 billion growth in member credit outstanding. Increase in the average dollar amount of member business from the average for the fourth quarter 2009 to the average for the fourth quarter 2012. Member business means advances, MPF loans outstanding (excluding on balance sheet) with Chicago members, standby bond purchase agreements and bonds purchased through the standby program.
10	%	Ratio of market value of equity to book value of equity of at least 80%. The average ratio of the Bank's market value of equity to book value of equity for the fourth quarter of 2012.

At the end of the performance period, the P&C Committee determines the extent to which the goals for that period were achieved. Attainment of each performance criterion is measured on a percentage basis (not to exceed 150%) and multiplied by the target value, with results for the individual criteria then aggregated to determine a performance percentage. However, the P&C Committee has the sole discretion to change or deny the grant of awards even if it has determined that the goals for the period were achieved.

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Federal Home Loan Bank of Chicago

Award payments under the Key Employee Long Term Incentive Plan for the President and CEO can range, on the basis of performance, from 0% to 100% of annual salary with the target amount being 60% of annual salary as further described in the table below.

President's Potential Awards
Performance Percentage	Award Payment Level a
80% or lower	No payment
Every 1% increase between 80% and 100%	An additional 3.0% of annual salary
100% (target amount)	60% of annual salary
Every 1% increase between 100% and 130%	An additional 1.33% of annual salary (to a maximum of 100% of annual salary)

Award payments for the other NEOs under the Key Employee Long Term Incentive Plan can range, on the basis of performance, from 0% to 50% of annual salary with the target amount being 25% of annual salary as further described in the table below.

Executive Team Potential Awards
Performance Percentage	Maximum Award Percentage
80% or lower	No payment
Every 1% increase between 80% and 100%	An additional 1.25% of annual salary
100% (target amount)	25% of annual salary
Every 1% increase between 100% and 130%	An additional 5/6ths of 1% of annual salary (to a maximum of 50% of annual salary)

Post-Termination Compensation

Severance Arrangements

The Bank executed employment agreements containing severance arrangements with key executives in January of 2008 in contemplation of a merger with the Federal Home Loan Bank of Dallas and all of these contracts have now expired. Mr. Lundstrom's and Mr. Stocchetti's employment agreements were effective during 2010 and expired in January of 2011.

In connection with these agreements, we presented our Board of Directors with a study conducted by McLagan Partners comparing proposed contract elements against market practices. The Board of Directors decided to structure employment agreements for then serving executive management team members that did not include a change-of-control payment because the Board of Directors wished to provide an incentive for the executive management team to remain employed with the Bank during a transition period and not give them an incentive to terminate employment upon a change-of-control.

On the other hand, the P&C Committee decided that an appropriately designed change-of-control provision would provide a retention incentive for certain key employees. Mr. Stocchetti was not yet serving on the executive management team when he entered into his employment agreement and so his agreement contains a change-of-control provision. Mr. Stocchetti was entitled to receive certain change-of-control payments until his contract terminated on January 1, 2011. His employment agreement provided for payment under the following three scenarios:

(1) In the event of a change-of-control and continued employment of the executive officer, the executive officer may be entitled to receive a minimum incentive compensation award. If the executive officer is otherwise eligible to receive an annual incentive award pursuant to the Bank's Executive Incentive Compensation Plan, or a similar or successor plan following a change-of-control, then as an incentive to remain in the employ of the Bank he will be entitled to receive an incentive award that is at least equal to the amount calculated by multiplying 0.50 times the single highest incentive bonus payment paid to him during the three-year period immediately preceding the year in which the change-of-control occurred.

(2) In the event of a change-of-control and the subsequent termination of employment either by the executive officer with good reason or by the Bank other than for cause, such officer would be entitled to receive a bonus payment in an amount equal to (i) .50 times (ii) the amount of the single highest incentive bonus payment paid to the employee during the three years immediately preceding the year in which the change-of-control occurred, times (iii) the number of years of the term of the employment agreement.

(3) In the event that the scenario described in paragraph (1) above occurs within one year of the effective date of the employment agreement and the executive officer either terminates employment with good reason or the Bank terminates employment other than for cause, the executive officer will be entitled to a payment calculated by substituting the number of years remaining under the employment agreement for the number in clause (iii) of the formula in paragraph (2) above.

Under his 2008 employment agreement, Mr. Feldman was entitled to receive termination payments consistent with that which he would have received under the Bank-wide severance plan. In the event that his employment with the Bank was terminated either by him for good reason (as defined in the agreement) or by the Bank other than for cause (as defined in the agreement) Mr. Feldman was entitled to receive the following:

(1) all accrued and unpaid salary for time worked as of the date of termination;

(2) all accrued but unutilized vacation time as of the date of termination;

(3) salary continuation (at the base salary in effect at the time of termination) for a one year period beginning on the date of termination; and

(4) continued participation in the Bank's employee health care benefit plans in accordance with the terms of the Bank's then-current severance plan that would be applicable to the executive if his employment had been terminated pursuant to such plan, provided that the Bank will

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Federal Home Loan Bank of Chicago

continue paying the employer's portion of medical and/or dental insurance premiums for one year from the date of termination.

If Mr. Feldman's employment with the Bank was terminated by the Bank for cause, by Mr. Feldman other than for good reason or by death or disability, Mr. Feldman is entitled only to the amounts in items (1) and (2) above.

The contractual elements included in the 2008 employment agreements for our NEOs related to term, payments upon termination, tax gross-ups and medical benefits were within the market practice ranges identified in a 2008 McLagan study. The Board of Directors decided that it would not include an automatic renewal provision (except for the President and CEO) or additional credits for years-of-service under our pension benefits.

Mr. Lundstrom's and Mr. Stocchetti's employment agreements provided for termination payments in the event that the executive's employment with the Bank was terminated either by the executive for good reason (as defined in the agreement) or by the Bank other than for cause (as defined in the agreement) as follows:

(1) all accrued and unpaid salary for time worked as of the date of termination;

(2) all accrued but unutilized vacation time as of the date of termination;

(3) salary continuation (at the base salary in effect at the time of termination) for a specified period (described in the chart below) beginning on the date of termination;

(4) continued participation in any bonus plan in existence as of the date of termination, provided that all other eligibility and performance objectives are met, as if the executive had continued employment through December 31 of the year of termination (the executive will not be eligible for bonuses paid with respect to any year following the year of termination); and

(5) continued participation in the Bank's employee health care benefit plans in accordance with the terms of the Bank's then-current severance plan that would be applicable to the executive if his employment had been terminated pursuant to such plan.

If the executive's employment with the Bank was terminated by the Bank for cause, by the executive other than for good reason or by death or disability of the executive, the executive was entitled only to the amounts in items (1) and (2) above.

The right to receive the termination payments outlined above in connection with a termination for good reason or other than for cause was contingent upon the executive signing a general release of all claims against the Bank.

In 2010, Mr. Bhasin and Mr. Ericson were eligible to receive severance benefits under our Employee Severance Plan. Under the plan, if an employee covered by the plan were to be terminated other than for cause, including a constructive discharge, that employee would be entitled to receive the greater of: (1) four weeks' base salary for each full year of calendar service, but not to exceed 104 weeks; or (2) one year's base salary, subject to certain limits. In addition, we will make COBRA payments required to continue health insurance benefits for a time period equal to the number of weeks of pay such employee is entitled to receive (not to exceed the statutory COBRA continuation period).

The specified period for salary continuation payments for each NEO effective as of December 31, 2010 are as set forth below.

Matthew R. Feldman	1 year
Roger D. Lundstrom *	3 years
Sanjay K. Bhasin	1 year
Michael A. Ericson	1 year
John Stocchetti *	3 years

* Employment contracts for these executives expired in January, 2011.

The three year terms of Mr. Lundstrom's and Mr. Stocchetti's employment agreements ended in January of 2011 and the agreements were not renewed. At this time, these NEOs are covered by the Bank-wide Employee Severance Plan described above.

Under the Housing and Economic Recovery Act of 2008, the FHFA Director has the authority to prohibit or limit any golden parachute or indemnification payment by an FHLB if a payment is made in contemplation of insolvency, the FHLB is insolvent or the payment may result in the preference of one creditor over another. Golden parachute payment means any compensation payment (or any agreement to make any payment) that is (i) contingent on, or by its terms is payable on or after, the termination of the person's employment or affiliation, and (ii) is received on or after insolvency, conservatorship, or receivership of the FHLB or the Director's determination that the FHLB is in a troubled condition (subject to a cease-and-desist order, written agreement, or proceeding, or determined to be in such a condition by the Director).

For a further description of potential payments to our NEOs upon termination of employment, see Potential Payments Upon Termination Table on page 15.

Pension Plan Benefits

The P&C Committee believes that retirement plan benefits and retiree health and life insurance are an important part of our NEO compensation program which provides a competitive benefits package. The Pentegra Financial Institutions Retirement Fund (Pension Plan) and related Benefit Equalization Plan benefits serve a critically important role in the retention of our senior executives (including our NEOs), as benefits under these plans increase for each year that these executives remain employed by us and thus encourage our most senior executives to remain employed by us. We provide additional retirement and savings benefits under the Benefit Equalization Plan because we believe that it is inequitable to limit retirement benefits and the matching portion of the retirement savings plan on the basis of a limit that is established by the IRS for purposes of federal tax policy.

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Federal Home Loan Bank of Chicago

We participate in the Pentegra Financial Institutions Retirement Fund, a multiemployer, funded, tax-qualified, noncontributory defined-benefit pension plan that covers most employees, including the NEOs. Benefits under this Pension Plan are based upon the employee's years of service and the employee's highest average earnings for a five calendar-year period, and are payable after retirement in the form of an annuity or a lump sum. Earnings, for purposes of the calculation of benefits under the Pension Plan, are defined to include salary and bonuses under the applicable short-term incentive plan. The amount of annual earnings that may be considered in calculating benefits under the Pension Plan is limited by law. For 2010, the limitation on annual earnings was $245,000. In addition, benefits provided under tax-qualified plans may not exceed an annual benefit limit of $195,000 in 2010.

The formula for determining the normal retirement annual benefit for employees hired prior to January 1, 2010 is 2.25%, multiplied by the number of years of the employee's credited service, multiplied by the employee's consecutive five-year average highest earnings. An employee's retirement benefit vests 20% per year beginning after an employee has completed two years of employment, but is completely vested at age 65 regardless of completed years of employment. Normal retirement age is 65, but a reduced benefit may be elected in connection with early retirement beginning at age 45. All of the NEOs other than Mr. Bhasin and Mr. Ericson are currently eligible for the early retirement benefit. We also provide health care and life insurance benefits for retired employees of which they pay 50% of the total Bank premium for each benefit.

Savings Plan Benefits

We participate in the Pentegra Defined Contribution Plan for Financial Institutions (Savings Plan), a tax-qualified, defined-contribution savings plan. Under the Savings Plan, employees, including our NEOs, may contribute up to 50% of regular earnings on a before-tax basis to a 401(k) account or on after-tax basis to a Roth Elective Deferral Account or a regular account. In addition, under the Savings Plan and for employees who have completed one year of service, the Bank matches a portion of the employee's contribution (50% for employees with three years of service or less, 75% for employees with more than three years of service but less than five years of service, and 100% for employees with five or more years of service).

For 2010, our matching contribution was limited to $14,700 for each employee. For employees hired prior to January 1, 2010 both employee and employer Savings Plan contributions are immediately 100% vested. Pursuant to IRS rules, effective for 2010, the Savings Plan limits the annual additions that can be made to a participating employee's account to $49,000 per year. Annual additions include our matching contributions and employee contributions. Of those annual additions, the current maximum before-tax contribution to a 401(k) account is $16,500 per year. In addition, no more than $245,000 of annual compensation may be taken into account in computing benefits under the Savings Plan. Participants age 50 and over could contribute catch-up contributions of up to $5,500 per year.

Generally, Savings Plan distributions can only be made at termination of employment. However, an employee may take a withdrawal of employee and employer plan contributions while employed, but an excise tax of 10% is generally imposed on the taxable portion of withdrawals occurring prior to an employee reaching age 59 1/2. Employees may also take one loan each year from the vested portion of the Regular, Roth Elective Deferral and 401(k) Savings Plan accounts. Loan amounts may be between $1,000 and $50,000. No more than 50% of the available balance can be borrowed at any time.

Benefit Equalization Plan

We also provide supplemental retirement and savings plan benefits under our Benefit Equalization Plan, a nonqualified unfunded plan that preserves the level of benefits which were intended to be provided under our Pension Plan and Savings Plan in light of legislation limiting benefits under these tax qualified plans. The Benefit Equalization Plan was established in 1994. On December 19, 2008, our Board of Directors approved a new plan, the Federal Home Loan Bank of Chicago Post December 31, 2004 Benefit Equalization Plan, that replaces the former plan. The new plan includes updated provisions related to compliance with Section 409A of the Internal Revenue Code of 1986, but the basic benefits under the plan remain unchanged.

The Pension Plan benefit under the Benefit Equalization Plan is an amount equal to the difference between the Pension Plan formula without considering legislative limitations, and the benefits which may be provided under the Pension Plan considering such limitations. The Benefit Equalization Plan also allows employees to make additional salary reduction contributions up to the maximum percentages allowed under the Savings Plan and to receive matching contributions up to the maximum percentages under the Savings Plan, in each case without giving effect to laws limiting annual additions. Salary reduction contributions and earnings under the Benefit Equalization Plan are treated as deferred income. Savings Plan related contributions and earnings in the Benefit Equalization Plan earn interest at the ninety day Federal Home Loan Bank System discount note rate.

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Federal Home Loan Bank of Chicago

2011 Compensation Decisions

Base Salary and Employment Agreements

In December of 2010, following the recommendation of the President and CEO, the P&C Committee decided that none of the NEOs (other than the President and CEO) would receive a base salary increase for 2011 consistent with the Bank's decision to not award merit increases to Bank employees for 2011 in an effort to further control operating expenses.

The Bank entered into a new employment agreement with Mr. Feldman effective January 1, 2011 which replaces his prior agreement that was effective May 5, 2008. The new agreement provides for a four year employment term ending December 31, 2014, unless terminated earlier as provided for in the agreement. The agreement provides for automatic one-year extensions until such date as the Board of Directors or Mr. Feldman gives notice and terminates the automatic extension provision. Under this agreement, the Board of Directors set Mr. Feldman's base salary at $695,000 after considering the improvement in the Bank's financial condition, the fact that Mr. Feldman had not received salary increases or incentive compensation payments in over two years and the overall competitive market data from the 2010 FHLB System Key Position Survey.  The Board of Directors decided upon a base salary that would place Mr. Feldman near the 75^th percentile of the base salaries paid to other FHLB presidents based upon the complex nature and operations of the Bank relative to the other FHLBs and the importance of his retention.   Selecting a base salary at the 75^th percentile is consistent with the P&C Committee's target for the other members of the Bank's executive team. The P&C Committee will review Mr. Feldman's performance annually and in its discretion may recommend an increase in salary to the Board of Directors for approval.

Under the Agreement, the Bank has agreed to indemnify Mr. Feldman with respect to any tax liabilities and penalties and interest under Section 409A of the Internal Revenue Code of 1986.

Mr. Feldman is entitled to participate in the President's Incentive Compensation Plan and the Key Employee Long Term Incentive Compensation Plan and the Board of Directors may award a discretionary bonus to Mr. Feldman separate from any incentive compensation earned under these plans. Mr. Feldman is also entitled to participate in our health insurance, life insurance, retirement, and other benefit plans that are generally applicable to our other senior executives.

Under the terms of the employment agreement, in the event that Mr. Feldman's employment with the Bank is terminated either by him with good reason (as defined in the agreement), by the Bank other than for cause (as defined in the agreement), by non-renewal by the Bank of the agreement, or as a result of the death or disability of Mr. Feldman, Mr. Feldman is entitled to receive the following payments:

(1) all accrued and unpaid salary for time worked as of the date of termination;

(2) all accrued but unutilized vacation time as of the date of termination;

(3) salary continuation (at the base salary in effect at the time of termination) for a one-year period beginning on the date of termination;

(4) payment in a lump sum of an amount equal to the minimum total incentive compensation that Mr. Feldman would otherwise have been entitled to receive if all performance targets for the current calendar year had been met at a 100% level;

(5) continued participation in the Bank's employee health care benefit plans in accordance with the terms of the Bank's then-current severance plan that would be applicable to him if his employment had been terminated pursuant to such plan, provided that the Bank will continue paying the employer's portion of medical and/or dental insurance premiums for one year from the date of termination, and

(6) an additional amount under the Banks Post-December 31, 2004 Benefit Equalization Plan equal to the additional annual benefit as if such benefit had been calculated as though (i) Mr. Feldman were 3 years older than his actual age and (ii) Mr. Feldman had 3 additional years of service at the same rate of annual compensation in effect for the 12-month period ending on the December 31 immediately preceding the termination of Mr. Feldman's employment. 

If Mr. Feldman's employment with the Bank is terminated by the Bank for cause or by Mr. Feldman other than for good reason, Mr. Feldman is entitled only to the amounts in items (1) and (2) above.

The employment agreement provides that Mr. Feldman will not be entitled to any other compensation, bonus or severance pay from the Bank other than those specified above and any vested rights which he has under any pension, thrift, or other benefit plan, excluding the severance plan. The right to receive termination payments outlined above in connection with a termination for good reason, other than for cause or non-renewal of the employment agreement is contingent upon, among other things, Mr. Feldman signing a general release of all claims against the Bank in such form as the Bank requires.

Short-Term Incentive Plans

Effective January 1, 2011, upon the recommendation of the P&C Committee, the Board revised the President's Incentive Compensation Plan covering short-term incentive compensation for our President and CEO to defer a portion of the awards. The P&C Committee considered both a deferral and claw-back provision and determined that a deferral provision that allows it to cancel or adjust deferred award payments as a result of material inaccuracies in financial reporting or performance metric criteria is preferential over a provision requiring the claw-back of previously paid amounts. This revised plan continues to provide for the payment of an award based upon the achievement of performance criteria and targets. The award can range from 0% to 100% of annual salary with the target bonus being 60% of annual salary. Previously, awards were paid in full after the completion of the plan year. Under the revised President's Incentive Compensation Plan, payments will be deferred as follows: 

• 50% paid in cash after the end of the plan year;

• 25% paid after the end of the second year; and

• 25% paid at the end of the third year.

Payment of deferred award amounts are conditioned upon whether or not there were material inaccuracies related to financial reporting or award performance metric criteria for the plan award year or succeeding plan year as determined by the P&C Committee. In the event of retirement, death or disability of the President and CEO, a change-of-control or termination of employment by the President and CEO for good reason,

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Federal Home Loan Bank of Chicago

deferred award amounts become payable within sixty days of such event.

Compensation Committee Report

Our Board of Directors has established the P&C Committee to assist it in matters pertaining to the employment and compensation of the President and CEO and executive officers and our employment and benefits programs in general.

The P&C Committee is responsible for making recommendations to the Board of Directors regarding the compensation of the President and CEO and approves compensation of the other executive officers, including base salary, merit increases, incentive compensation and other compensation and benefits. Its responsibilities include reviewing our compensation strategy and its relationship to our goals and objectives as well as compensation at the other FHLBs and other similar financial institutions that involve similar duties and responsibilities.

The P&C Committee has reviewed and discussed with our management the Compensation Discussion & Analysis included in this Item 11 - Executive Compensation. In reliance on such review and discussions, the P&C Committee recommended to the Board of Directors that such Compensation Discussion and Analysis be included in our Amended Annual Report on Form 10-K for the year ended December 31, 2010.

The P&C Committee:

Russell C. Weyers, Chairman

Thomas M. Goldstein, Vice Chairman

Steven F. Rosenbaum

William W. Sennholz

Thomas L. Herlache, ex officio

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Federal Home Loan Bank of Chicago

Compensation Tables

Summary Compensation Table

The table below sets forth summary compensation information for our NEOs for 2010.

Summary Compensation Table

Name and Principal Position	Year	Salary		Retention Bonus		Non-Equity Incentive Plan Compensation  a					Change in Pension Value		All Other Compensation b		Total
						Short-Term		Long-Term
Matthew R. Feldman c	2010	$	650,000	$	—	$	—	$	—	—	$	248,000	$	14,700	$	912,700
President and Chief Executive Officer	2009	650,000		—		—		—		—	169,000		14,700		833,700
	2008	576,903		—		—		—		—	136,000		10,530		723,433
Roger D. Lundstrom	2010	295,000		—		125,000		442,500		—	217,000		14,700		1,094,200
Executive Vice President and Chief Financial Officer	2009	292,917		—		—		—		—	170,000		14,700		477,617
	2008	270,000		—		—		—		—	201,000		13,800		484,800
Sanjay K. Bhasin	2010	400,000		—		180,000		600,000		—	72,000		14,700		1,266,700
Executive Vice President and Group Head, Members and Markets	2009	396,667		—		—		—		—	45,000		12,750		454,417
	2008	347,935		90,000		—		—		—	40,000		10,350		488,285
Michael A. Ericson d	2010	270,000		—		150,000		540,000		—	36,000		14,700		1,010,700
Executive Vice President and Group Head, Risk Management
John Stocchetti	2010	400,000		—		180,000		600,000		—	83,000		11,025		1,274,025
Executive Vice President and Group Head, Products, Operations and Technology	2009	396,667		—		—		—		—	65,000		7,350		469,017
	2008	333,939		—		—		—		—	56,000		7,028		396,967

^a  Mr. Feldman was not eligible for an award in 2010 under the President's Incentive Compensation Plan or Key Employee Long Term Incentive Compensation Plan because the conditions under his employment agreement were not met. Short and long-term incentive compensation performance criteria achievement and awards for 2010 for the remaining NEOs are currently under review by the FHFA and have not yet been finalized.

^b  Amounts reported for all other compensation consist of Bank contributions to employee 401(k) and BEP plans.

^c  Mr. Feldman was named President and CEO effective May 5, 2008 and served as Acting President from April 14, 2008 through May 4, 2008 and served as Executive Vice President, Operations & Administration Group through April 11, 2008.

^d  Mr. Ericson was not a named executive officer for 2008 and 2009.

Narrative to Summary Compensation Table

Compensation under the heading Short-Term in the Summary Compensation Table is comprised of awards under our President's Incentive Compensation Plan and Executive Incentive Compensation Plan (formerly the Management Incentive Compensation Plan). Compensation under the heading Long Term in the Summary Compensation table is comprised of awards under our Key Employee Long Term Compensation Plan.

Executive Incentive Compensation Plan

Amounts awarded to the NEOs for 2010 under the Executive Incentive Compensation Plan are set forth below. For a description of how these awards were calculated see Executive Incentive Compensation Plan on page 5.

Name	Salary		Short Term Award as a % of Salary		Short Term Award		Amount Deferred
Roger D. Lundstrom	$	295,000	42.37	%	$	125,000	$	62,500
Sanjay K. Bhasin	400,000		45.00	%	180,000		90,000
Michael A. Ericson	270,000		56.00	%	150,000		75,000
John Stocchetti	400,000		45.00	%	180,000		90,000

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Federal Home Loan Bank of Chicago

Key Employee Long Term Incentive Compensation Plan

The table below sets forth the potential and actual awards under 2008 to 2010 plan. For a description of how these awards were calculated see Key Employee Long Term Incentive Compensation Plan on page 6.

Name	Base Salary Multiplier for Potential Awards	Potential Award		Actual Award		Amount Deferred
Matthew R. Feldman a	3	$	1,950,000	$	—	$	—
Roger D. Lundstrom	2	590,000		442,500		295,000
Sanjay K. Bhasin	2.5	1,000,000		600,000		400,000
Michael A. Ericson	2	540,000		540,000		—
John Stocchetti	2.5	1,000,000		600,000		400,000

^a As a condition of Mr. Feldman's 2008 employment agreement that was effective for 2010, awards for Mr. Feldman under this plan were subject to the further condition that the Bank has (A) earned a net profit for the fiscal year and (B) has paid dividends on its capital stock for at least two consecutive quarters during that fiscal year.

Grants of Plan-Based Awards

The table below describes the potential NEO awards under the President's Incentive Compensation Plan and the Executive Incentive Compensation Plan for the plan period covering January 1, 2010 through December 31, 2010 and the Key Employee Long Term Incentive Compensation Plan for the plan period covering January 1, 2010 through December 31, 2012. See Short-Term Incentive Plans on page 4 and Key Employee Long Term Incentive Compensation Plan on page 6 for a description of the performance criteria under these plans.

	Short-Term 2010  Estimated Future Payouts				Long-Term 2010 - 2012  Estimated Future Payouts
Name	Target		Maximum		Target b		Maximum
Matthew R. Feldman a	$	390,000	$	650,000	$	390,000	$	650,000
Roger D. Lundstrom	73,750		147,500		73,750		147,500
Sanjay K. Bhasin	100,000		200,000		100,000		200,000
Michael A. Ericson	67,500		135,000		67,500		135,000
John Stocchetti	100,000		200,000		100,000		200,000

^a   As a condition of Mr. Feldman's 2008 employment agreement that was effective for 2010, awards for Mr. Feldman under the President's Incentive Compensation Plan were subject to the further condition that the Bank has (A) earned a net profit for the fiscal year and (B) has paid dividends on its capital stock for at least two consecutive quarters during that fiscal year.

^b   In estimating the maximum payout, we have utilized current base salaries for 2011. The actual payout will be based upon base salaries in effect at the end of the performance period which is December 31, 2012.

Retirement and Other Post-Employment Compensation Table and Narrative

Name	Plan Name	Years Credited Service	Present Value of Accumulated Benefit
Matthew R. Feldman	Pension	6.75	$	303,000
	BEP	6.75	421,000
Roger D. Lundstrom	Pension	26.33	829,000
	BEP	26.33	363,000
Sanjay K. Bhasin	Pension	6.08	119,000
	BEP	6.08	78,000
Michael A. Ericson	Pension	5.4	91,000
	BEP	5.4	15,000
John Stocchetti	Pension	3.75	140,000
	BEP	3.75	85,000

Our NEOs are entitled to receive retirement benefits through the Pension Plan and the Benefit Equalization Plan. See Post-Termination Compensation on page 8. The present value of the current accumulated benefit, with respect to each NEO under both the Pension Plan and the Benefit Equalization Plan, described in the table above is based on certain assumptions described below.

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Federal Home Loan Bank of Chicago

The participant's accumulated benefit is calculated as of December 31, 2010 and 2009. Under the Pension Plan, which is a qualified pension plan, the participant's accumulated benefit amount as of these calculation dates is based on the plan formula, ignoring future service periods and future salary increases during the pre-retirement period. Beginning with the postretirement period, which is assumed to be age 65, the amount to be paid each year of retirement is allocated to each subsequent year. The allocated amounts are then adjusted by 50% of the qualified Pension Plan benefit valued using the 2000 RP Mortality table (static mortality table for lump sums) and 50% of the qualified Pension Plan benefit is valued using the 2000 RP Mortality table (generational mortality table for annuities) valued at an interest rate of 5.54% as of December 31, 2010 and a 5.96% interest rate as of December 31, 2009.

The present value amount discounted back to the reporting period does not factor in the mortality table. The difference between the present value of the December 31, 2010 accumulated benefit and the present value of the December 31, 2010 accumulated benefit is the change in pension value for the qualified plan presented in the Summary Compensation Table.

Benefits provided under the qualified plan are limited under the Employee Retirement Income Security Act (ERISA). As a result, the Benefit Equalization Plan, which is a nonqualified plan, is designed to provide benefits above the amount allowed under ERISA. The benefits provided under the Benefit Equalization Plan are initially calculated on a gross basis to include benefits provided by the qualified plan. The benefits under the qualified plan are than deducted from the initially calculated gross amount to arrive at the amount of benefits provided by the Benefit Equalization Plan. The participant's accumulated benefit amounts as of these calculation dates are based on plan formula, ignoring future service periods and future salary increases. Beginning with the postretirement period, which is assumed to be age 65, the amount to be paid each year of retirement is allocated to each subsequent year. The nonqualified Benefit Equalization Plan benefit is valued using the 2000 RP Mortality table (uses generational mortality table only) at an interest rate of 5.50% as of December 31, 2010 and an interest rate of 6.0% as of December 31, 2009.

The difference between the present value of the December 31, 2010 accumulated benefit and the present value of the December 31, 2009 accumulated benefit is the change in pension value for the nonqualified plan presented in the Summary Compensation Table.

The difference in the interest rates used for the assumptions under the Pension Plan and the Benefit Equalization Plan is due to the Pension Plan being a multi-employer plan and the experience/assumptions under that plan versus our Benefit Equalization Plan being a single employer plan.

Nonqualified Deferred Compensation Table

Name	Plan Name a	Executive Contributions in Last FY b		Registrant Contributions in Last FY b		Aggregate Earnings in Last FY c		Aggregate Balance of All Plans at Last FYE
Matthew R. Feldman	BEP	$	24,300	$	—	$	144	$	89,515
Roger D. Lundstrom	BEP	30,700		213		492		271,333
Sanjay K. Bhasin	BEP	9,300		—		165		91,526
Michael A. Ericson	BEP	2,400		525		29		17,230
John Stocchetti	BEP	9,300		—		203		111,164

^a  The table above includes salary reduction contributions by our NEOs and matching Registrant Contributions by the Bank under the Benefit Equalization Plan. For a description of the Benefit Equalization Plan, see Benefit Equalization Plan on page 10.

^b  Included in 2010 amounts in Summary Compensation Table on page 13.

^c  Not included in 2010 compensation as rate paid was not above a market rate.

Potential Payments Upon Termination Table

Name	Severance		Short-Term Incentive Plan a		Long-Term Incentive Plan Payment a		Health Care		Total
Matthew R. Feldman b	$	650,000	$	—	$	—	$	9,170	$	659,170
Roger D. Lundstrom c	885,000		—		—		21,608		906,608
Sanjay K. Bhasin	400,000		—		—		14,402		414,402
Michael A. Ericson	270,000		—		—		14,402		284,402
John Stocchetti c	1,200,000		—		—		14,402		1,214,402

^a  Payments under the short and long-term incentive compensation plans are not estimable at this time as performance criteria achievement and award payments under these plans are currently under review with the FHFA and are still being finalized.

^b  Mr. Feldman was not eligible for an award under the President's Incentive Compensation Plan or Key-Employee Long Term Incentive Compensation Plan because the conditions under his employment agreement were not met.

^c  Mr. Lundstrom's and Mr. Stocchetti's employment agreements expired in January 2011 and they are no longer entitled to receive severance benefits under the terms of their employment agreements, but may be eligible for severance benefits under our Employee Severance Plan as described under Severance Arrangements on page 8.

The table above outlines payments that our NEOs would be entitled to receive in connection with their termination of employment as of December 31, 2010 under certain conditions. For purposes of calculating the severance benefit outlined in the table, we have assumed that Mr. Feldman, Mr. Lundstrom and Mr. Stocchetti were terminated by us other than for cause or that the NEO terminated his employment for good reason and he would receive the termination payments outlined in his employment agreement and continued Bank-subsidized health care coverage. With respect to Mr. Bhasin and Mr. Ericson, we have assumed that their employment was terminated by us other than for cause, including a constructive discharge, and these NEOs would receive the termination payments outlined in the Employee Severance Plan and

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Federal Home Loan Bank of Chicago

continued Bank-subsidized health care coverage. See Severance Arrangements on page 8. If a change-of-control event were to occur under Mr. Stocchetti's employment agreement, as of December 31, 2010, he would have been entitled to receive a change-of-control payment of $129,000.

In addition to the amounts indicated above, our NEOs are entitled to receive benefits under the Benefit Equalization Plan and the Pension Plan in accordance with the terms of those plans.

Director Compensation

The goal of our policy governing compensation and travel reimbursement for our Board of Directors is to compensate members of the Board of Directors for work performed on our behalf and to make them whole for out-of-pocket travel expenses incurred while working for the Bank. The fees compensate Directors for time spent reviewing Bank materials, preparing for meetings, participating in other Bank activities and actual time spent attending the meetings of the Board of Directors and its committees. Directors are also reimbursed for reasonable Bank-related travel expenses. Director compensation levels are established at the discretion of each FHLB's Board of Directors, provided that the fees are reasonable. In connection with setting director compensation, each year we participate in an FHLB System review of director compensation which includes a director compensation study prepared by McLagan Partners. The McLagan study includes separate analysis of director compensation for small asset size commercial banks, Farm Credit Banks, and S&P 1500 firms.

Our Board of Directors decided that director compensation levels for 2010 should remain at the same level as 2009 based upon the 2009 financial performance of the Bank. The 2009 McLagan study recommended setting a straight annual retainer at the lower-end of the annual retainer for commercial banks included in the study with additional retainer amounts for the chairman, vice-chairman, and committee chair positions. Our Board considered this study in establishing our 2009 director fees and our 2009 director fees were consistent with those at the other FHLBs.

	2010 Compensation
Chairman of the Board	$	60,000
Vice-chairman of the Board	55,000
Chairman of the Audit Committee	55,000
Other Committee Chairman	50,000
All other Directors	45,000

No additional meeting fees are payable to any Director for their participation in any other special meetings or events on behalf of the Board of Directors and the Bank at the request of the FHFA or at other events approved by the Board of Directors. Our Board of Directors has discretion to reduce the annual compensation of any director who does not fulfill his or her responsibility by regularly and consistently attending Board and assigned committee meetings. The Board standard for meeting attendance is set at 80% of the total meetings of the Board and assigned committees on an annual basis.

The table below sets forth Director Compensation for 2010.

Name	2010 Total Fees Earned or Paid in     Cash
P. David Kuhl - Chair	$	60,000
Thomas L. Herlache - Vice Chair	55,000
Diane M. Aigotti	55,000
Edward P. Brady	45,000
William R. Dodds, Jr.	50,000
Janice C. Eberly	45,000
James D. Ericson a	18,750
Thomas M. Goldstein	45,000
Arthur E. Greenbank a	11,250
Roger L. Lehmann	50,000
E. David Locke	47,083
Kathleen E. Marinangel	50,000
Richard K. McCord a	33,333
Leo J. Ries	45,000
Steven F. Rosenbaum	50,000
William W. Sennholz	45,000
Gregory A. White	45,000
Russell C. Weyers	45,000
Total	$	795,416

^a  partial year

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Federal Home Loan Bank of Chicago

In connection with setting Director compensation for 2011, our Board of Directors considered the increasing Director compensation trends within the FHLB System and decided to maintain compensation levels at the same amounts as 2009 and 2010 because the Directors believe further improvement of the Bank should occur prior to increasing director compensation.

We are a cooperative and our capital stock may only be held by current and former member institutions, so we do not provide compensation to our directors in the form of stock or stock options. In addition, our directors do not participate in any of our incentive, pension, or deferred compensation plans.

FHLB Director compensation is subject to FHFA regulations that permit an FHLB to pay its directors reasonable compensation and expenses, subject to the authority of the FHFA Director to object to, and to prohibit prospectively, compensation and other expenses that the Director determines are not reasonable.

Compensation Committee Interlocks and Insider Participation

No member of our P&C Committee has at any time been an officer or employee of the Bank. None of our executive officers has served or is serving on the Board of Directors or the compensation committee of any entity whose executive officers served on our P&C Committee or Board of Directors.

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Federal Home Loan Bank of Chicago

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Federal Home Loan Bank of Chicago
Date: October 13, 2011	/s/    Matthew R. Feldman
	By: Matthew R. Feldman
	Title: President and Chief Executive Officer

Index Exhibit to Form 10-K/A
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Principal Executive Officer (Amendment No. 1, Form 10-K/A)
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Principal Financial Officer (Amendment No. 1, Form 10-K/A)

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