AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment to Employment Agreement (“Amendment”), effective as of May 12, 2016, is entered into by and among the Federal Home Loan Bank of San Francisco (the “Bank”) and John Gregory Seibly (“Executive”).

WHEREAS, Executive has entered into an agreement with the Bank to serve as President and Chief Executive Officer (“CEO”), effective May 12, 2016 (“Employment Agreement”);

WHEREAS, the Employment Agreement provides in section 3.D for reimbursement of up to $250,000 of “actual Relocation Costs,” consistent with the terms of the Employment Agreement (“Reimbursement Allowance”);

WHEREAS, the Bank wants to clarify its obligations with respect to payment of Executive’s income and/or employment tax obligations pursuant to Internal Revenue Service and any state tax guidelines resulting from the portion of Executive’s Relocation Costs that are taxable income to Executive (“Relocation Tax Obligations”).

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

Subject to the prior review and non-objection by the Federal Housing Finance Agency or any successor agency, the Bank will pay directly to the appropriate taxing authorities up to $220,000 (“Tax Payment”) for Executive’s Relocation Tax Obligations. Consistent with the terms of the Employment Agreement, Executive’s submission(s) for reimbursement of Relocation Costs from the Reimbursement Allowance must be completed by no later than May 11, 2017. The Tax Payment will be reported on Executive’s annual W-2 for the applicable tax year(s) in which payments are made, along with the amounts reimbursed for Relocation Costs included in the Reimbursement Allowance that are not excludable, non-taxable benefits under applicable tax guidelines.

WITNESS WHEREOF, the parties have executed this Agreement as of the date last set forth below.

THIS EMPLOYMENT AGREEMENT (“Agreement”), effective as of the Effective Date (as defined below), is entered into by and among the Federal Home Loan Bank of San Francisco (the “Bank”) and John Gregory Seibly (“Executive”).

WHEREAS, the Bank desires to employ Executive as President and Chief Executive Officer (“CEO”) and to enter into an agreement embodying the terms of such employment;

WHEREAS, Executive desires to accept employment as President and CEO, subject to the terms and conditions of this Agreement;

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.Position and Duties. The Executive has been retained by the Bank as its President and CEO with overall charge and responsibility for the business and affairs of the Bank. The Executive shall report directly to the Board of Directors (“Board”) and shall perform such duties as the Executive shall reasonably be directed to perform by the Board. The Executive shall devote his best efforts to the performance of his duties of his position with the Bank and shall devote substantially all his business time and attention to the performance of his duties under this Agreement, excluding any periods of vacation and sick leave to which the Executive is entitled. The Executive may: (a) serve on civic or charitable boards or committees; (b) serve on no more than two (2) for-profit company boards or committees; and (c) deliver lectures and fulfill speaking engagements, so long as such activities do not in the view of the Board interfere, in any substantive respect, with Executive’s responsibilities hereunder or conflict in any material way with the business of the Bank or the Bank’s codes of conduct.

2.    Term. Subject to the provisions for early termination hereinafter provided, Executive’s employment hereunder shall be for an initial term commencing on May 12, 2016 (the “Effective Date”), and ending three (3) years from the Effective Date (the “Initial Term”); provided, however, that the Term of the Agreement shall be automatically extended by one (1) year effective on the three-year anniversary of the Effective Date, and each year thereafter until such date as either the Bank or the Executive shall have terminated this automatic extension provision by giving written notice to the other party at least one (1) month prior to the end of the Initial Term of the Agreement or any extension thereof (any term after the Initial Term is referred to herein as “Term”). Notwithstanding the foregoing, this employment agreement is “at will” by law and may be terminated at any time, including at any time during or following the Initial Term or any Term, without cause by either party on written notice (“Termination”). No other prior or subsequent oral representations, writings, or course of conduct by anybody at the Bank may alter the “at-will” nature of the employment relationship, and nothing in this Agreement should be construed to create any relationship other than “at-will” employment as specified herein. The “at-will” nature of the employment relationship at all times may be modified only when permitted by applicable law and by a writing signed by both Executive and the Bank, specifically amending this Agreement with respect to the issue of the “at-will” employment relationship.

3.    Terms of Employment

A.    Position. Executive shall serve as President and CEO for the Bank. Executive shall independently perform such duties as are usual and customary for the position of President and CEO and such other work as the Board shall assign.

B.    Compensation.

(i)    Base Salary. Executive’s base salary during the Initial Term of Employment shall be $800,000.00 per annum (“Base Salary”). The Base Salary shall be subject to all applicable state and federal tax withholdings, payable in semi-monthly installments consistent with the Bank’s normal payroll process. The Base Salary is subject to review at the Board’s discretion and subject to prior review and non-objection by the Federal Housing Finance Agency or any successor agency (“Finance Agency”).

(ii)    Sign-On Payment. The Bank shall provide Executive with a sign-on payment in the amount of $600,000.00 (“Sign-On Payment”), subject to prior review and non-objection by the Finance Agency. The Sign-On Payment shall be subject to all applicable state and federal tax withholdings and payable as follows in two equal payments: $300,000 within thirty (30) days of the first anniversary of the Effective Date (“First Installment Date”) and $300,000 within thirty (30) days of the second anniversary of the Effective Date (“Second Installment Date”). In the event Executive’s employment terminates for Cause or Without Good Reason, as defined in Section 7, below (the “Termination Date”), and prior to the Second Installment Date, Executive agrees to pay the Bank within five (5) business days following the Termination Date the following amount: The Sign-On Payment paid as of the Termination Date multiplied by a fraction of which the numerator is the number of days between the Termination Date and the Second Installment Date, and the denominator is 365 In the event Executive’s employment terminates for Cause or Without Good Reason, as defined in Section 7, below, after the Second Installment Date and prior to the three year anniversary of the Effective Date (the “Repayment Date”), Executive agrees to pay the Bank within five (5) business days following the Termination Date the following amount: The Sign-On Payment paid as of the Termination Date multiplied by a fraction of which the numerator is the number of days between the Termination Date and the Repayment Date, and the denominator is 1,095.

(iii)    Supplemental SERP Contribution Credit. Executive shall be eligible to participate in the Bank’s Supplemental Executive Retirement Program (“SERP”), attached hereto as Exhibit A, based on the Effective Date. No Contribution Credit shall be made under the Supplemental Three Year Contribution Credit schedule set forth in Exhibit A on any date set forth therein if the Participant has a Termination prior to such date; provided, however, if the Participant has a Termination prior to the second anniversary of the Participant’s employment commencement date with the Bank solely by reason of the Participant’s death, Disability, or involuntary termination by the Bank without Cause or termination by Executive for Good Reason, then on the Participant’s date of Termination of Employment, the Participant’s Account will be credited with any unpaid Contribution Credit. Together, the Sign-On Payment and the Supplemental Three Year Contribution Credit set forth in the SERP are referred to together as the “Sign-On Benefits”.

(iv)    Incentive Compensation. In addition to Base Salary, Executive shall be eligible to participate in incentive compensation plans (“Incentive Compensation”) as provided below.

a.    Executive shall be eligible to participate in the Bank’s short-term cash incentive plan (“President’s Incentive Plan”), established annually as determined and approved by the Board and subject to prior review and non-objection by the Finance Agency. The President’s Incentive Plan is amended by the Board from year-to-year and is subject to the prior review and non-objection by the Finance Agency. Executive is eligible to participate on a pro-rata basis in the 2016 President’s Incentive Plan, attached hereto as Exhibit B, based on the Effective Date. If Executive commences employment prior to June 30, 2016, the pro-rata calculation will be determined as if the Effective Date were April 1, 2016 (“Supplemental PIP Participation”), subject to prior review and non-objection by the Finance Agency. In the event the pro-rata amount allowed is less than the Supplemental PIP Participation, the difference between the permitted amount and the Supplemental PIP Participation shall be credited to Executive’s SERP account as an Additional Discretionary Contribution Credit as referred to in Exhibit A, subject to prior review and non-objection by the Finance Agency and subject to the three year vesting schedule in the SERP.

b.    Executive shall be eligible to participate in the Bank’s long-term cash incentive plans for the Bank’s President (“Executive Performance Unit Plans” or “EPUP”), established annually as determined and approved by the Board and subject to prior review and non-objection by the Finance Agency. Executive is eligible to participate on a pro-rata basis in the 2014-2016, 2015-2017, and 2016-2018 EPUPs, attached hereto as Exhibit C, based on the Effective Date. If Executive commences employment prior to June 30, 2016, the pro-rata calculation will be determined as if the Effective Date were April 1, 2016 (“Supplemental EPUP Participation”), subject to prior review and non-objection by the Finance Agency. In the event the pro-rata amount allowed is less than the Supplemental EPUP Participation, the difference between the permitted amount and the Supplemental EPUP Participation shall be credited to Executive’s SERP account Additional Discretionary Contribution Credit as referred to in Exhibit A, subject to prior review and non-objection by the Finance Agency.

(v)    Taxes and Withholdings. The Bank may withhold from any amounts payable under this Agreement, including any Incentive Compensation, such federal, state or local taxes as may be required to be withheld pursuant to applicable law or regulations, which amounts shall be deemed to have been paid to Executive.

C.    Benefit Programs. Executive is entitled to participate in relevant benefit plans, including currently the Bank’s health benefit plans, Savings 401(k) Plan, Cash Balance Plan, Deferred Compensation Plan, Benefit Equalization Plan and Supplemental Executive Retirement Plan, provided he meets certain eligibility requirements and shares a portion of the costs, as applicable, in accordance with each such plan, as they may be in effect from time to time. Details of such benefits are included in the Bank’s policies, benefit summaries and plan descriptions.

D.    Relocation. The Bank will reimburse Executive for reasonable temporary housing costs (up to 180 days), moving costs and non-recurring transactions costs related to the sale of his house in the Portland, OR area and the purchase of a home in the San Francisco Bay area, as provided herein (“Relocation Costs”). The Bank expects that Executive will move permanently to the San Francisco Bay area within a reasonable period, but in no event later than the first anniversary of the Effective Date. The Bank will reimburse Executive up to $250,000.00 for actual Relocation Costs supported by adequate receipts and documentation sufficient to satisfy taxing authorities and as required by Bank policy (“Reimbursement Allowance”). Executive’s submission(s) for reimbursement from the Reimbursement Allowance must be completed by no later than the first anniversary of the Effective Date, at which time any unused portion of the Reimbursement Allowance shall be forfeited. Any funds Executive receives from the Reimbursement Allowance that are not excludable, non-taxable benefits under applicable tax guidelines will be reported to taxing authorities on Executive’s annual W-2 for the applicable tax year. Executive shall be fully responsible for all employee tax consequences of any portion of the Relocation Allowance that constitutes a taxable benefit for income and/or employment tax purposes pursuant to Internal Revenue Service and any state tax guidelines.

4.    Expense Reimbursement. Executive may submit reasonable, out-of-pocket, work-related expenses to the Bank for reimbursement, including without limitation mobile phone monthly service and usage, consistent with any policies that the Bank may then have in place regarding expense reimbursements.

5.    Vacation Time. Executive shall be entitled to four (4) weeks’ vacation per year (including 2016), which shall be scheduled and taken consistent with any applicable policy of the Bank. Executive shall coordinate his vacation so that it will not provide an undue disruption.

6.    Executive Covenants.

A.    Confidentiality. During employment with the Bank, Executive may have access to various trade secrets and confidential, proprietary, or sensitive information. This may include, without limitation, financial information; information about the Bank’s systems, processes, or security; information about internal Bank discussions and deliberations concerning issues of importance either to the Bank or to its member institutions; information about the Bank’s consultants, customers, or information about the Finance Agency; or information about the Bank’s member institutions and other Federal Home Loan Banks or other, third-party financial information that is not generally known to the public and could not be discovered by someone reasonably familiar with the industry. Executive may also have access to customer files, the Bank’s personnel files, information about Bank employee compensation, or other information that is personal confidential information as described below. In addition, the Bank has a proprietary interest in maintaining sole control of its inventions, discoveries, trade secrets and improvements, software and computer models, financial information, any other information having present or potential commercial value to the Bank, and confidential information of any kind belonging to others but licensed or disclosed to the Bank for use in its business. All of this information is deemed to be “Confidential Information.” Executive agrees as a condition of employment to protect Confidential Information, to sign further agreements designed to protect Confidential Information, to abide by confidentiality requirements in the Bank’s Employee Handbook, and to comply with the Bank’s Information Security Policy and Enterprise

Information Security and Technology Standards collectively, the “Information Security Policy and Standards.”

Notwithstanding anything to the contrary contained in the foregoing limitations, Executive will not be required to keep confidential any confidential or proprietary information that: (i) is known or available through other lawful sources, not bound by a confidentiality agreement with the Bank or Finance Agency regulation, (ii) is or becomes publicly known or generally known in the industry through no fault of Executive or his agents, (iii) is required to be disclosed pursuant to any laws, regulations, subpoenas, judgment and/or orders of any governmental body (provided where applicable the Bank is provided reasonable prior written notice before Executive makes any such disclosure as set forth in (iii)), or (iv) that was known to or by Executive without restriction from a source which, to Executive’s knowledge, is free of any obligation of confidentiality prior to the execution date of this Agreement. Nothing herein shall be construed to prevent compliance with, or the exercise of, Executive’s rights under applicable laws.

B.    Nonsolicitation. While Executive is employed by the Bank and for a period of one (1) year thereafter, Executive shall not, without the prior written consent of the Bank, directly or indirectly, on Executive’s own account or on behalf of or with any other person, as an employee, agent, consultant, partner, joint venturer, owner, officer, director, member of any other firm, partnership, corporation or other entity, or in any other capacity, personally or through others: (a) use Confidential Information to solicit, induce (or attempt to induce) or cause any client or customer that has transactions or assignments pending with the Bank to discontinue or reduce their transactions or assignments with the Bank, or otherwise breach or materially disrupt a contractual relationship between the Bank and any client, customer or vendor of the Bank; or (b) solicit, induce or encourage or attempt to solicit, induce or encourage (on Executive’s own behalf or on behalf of others) any individual who at the time is an employee or consultant of the Bank to leave his or her employment or service relationship with the Bank or to commence employment or a service relationship with any other party. It is not a violation of this Agreement for Executive, following Termination, to seek from a Bank client or customer transactions or assignments that are not pending with the Bank at the time of Termination. For purposes of this paragraph, (a) the use of general non-targeted employment advertising shall not be deemed to be solicitation and (b) the foregoing restrictions on solicitation shall only apply to employees of the Bank at the time of such solicitation.

C.    Noncompetition. Executive hereby covenants that he will not, during his employment with the Bank, directly or indirectly, in any capacity, engage or participate in, or become employed by or render advisory or consulting or other services that might create a conflict of interest with the Bank (it being acknowledged that service on civic or charitable boards or committees, service on no more than two (2) for-profit company boards, and delivering lectures and fulfilling speaking engagements, as set forth in Section 1, shall not be deemed to violate this section).

D.    Work Product. Any client or customer lists, prospective client or customer lists, plans, strategies, methodologies, secrets, processes, forecasts, ideas, developments, writings, designs, documents, papers, notes, notebooks, memoranda, computer files, software and other written or electronic records or confidential proprietary information of

any kind made or developed in whole or in part by Executive during his employment with the Bank (the “Work Product”) are, and shall remain, the exclusive property of the Bank. To the extent that any of the Work Product is capable of protection by copyright, Executive acknowledges that it is created within the scope of his employment hereunder and is a “work made for hire.” Previously held knowledge, plans, contacts or other intellectual property by Executive that pre-date him rendering services to the Bank are excluded from this provision and shall be disclosed in writing to the Bank on or prior to the Effective Date.

E.    Non-Disparagement. Executive hereby covenants that during his employment and for three (3) years after Termination, he will not make any remarks disparaging the conduct or character of the Bank, its members or employees, except as required by law. Nothing in this Agreement prohibits Executive from reporting possible violations of federal law or regulation to any governmental agency, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. Nothing herein shall be construed to prevent compliance with, or the exercise of, Executive’s rights under applicable laws.

F.    Cooperation. Executive hereby covenants that at any time after Termination of his employment with the Bank, Executive will cooperate with the Bank to the extent reasonably necessary to assist in the transition of his responsibilities and in any litigation or administrative proceedings involving any matters with which Executive was involved during his employment. The Bank will reimburse Executive for reasonable expenses, if any, incurred in providing such assistance.

G.    Provisional and Equitable Remedies. If Executive should default in any of his obligations under this Section 6, Executive acknowledges that the Bank may be irreparably damaged and that it would be extremely difficult and impractical to measure such damage. Accordingly, Executive acknowledges that the Bank, in addition to any other available rights or remedies, shall be entitled to specific performance, injunctive relief and any other equitable remedy, without the obligation to post any bond or other security. Employee hereby waives the defense that a remedy at law or damages is adequate.

H.    Survival of Covenants. The provisions of Sections 6.A, 6.B, 6.C, 6.D, 6.E, 6.F and 6.G shall survive Termination of Executive’s employment with the Bank, irrespective of the reasons therefor.

7.    Termination. Executive’s employment hereunder shall commence on the Effective Date and continue until the earlier of (i) the expiration of the Initial Term or Term, as applicable, pursuant to Section 2, or (ii) the occurrence of any of the following:

A.    Death or Disability. Executive’s employment shall terminate immediately upon his death or, subject to applicable law, in the event of his Disability (as defined herein), such termination to be effective upon ninety (90) days’ written notice following delivery of the medical certification described in the next sentence. Executive shall be deemed to have a “Disability” if a medical doctor (selected by the mutual consent of Executive and the Company) certifies that Executive has for one hundred twenty (120) consecutive days or one hundred eighty (180) non-consecutive days in any twelve (12) month period been disabled in a manner which has rendered him unable to perform the essential functions of his job duties with or without

reasonable accommodation. Executive will cooperate in submitting to a medical examination for the purpose of certifying disability under this Section 7.A, if requested by the Bank. Executive shall be entitled to have his personal physician in attendance at any such medical examination.

B.    For Cause. The Board may terminate Executive’s employment for “Cause” immediately upon written notice by the Bank to Executive. For purposes of this Agreement, “Cause” shall mean any of the following:

(i)    The commission of an act involving dishonesty, disloyalty, fraud or embezzlement by Executive that has a material adverse impact on the Bank or any successor or affiliate thereof;

(ii)    conviction of, or plea of ‘guilty” or ‘no contest” to, a felony, a crime of moral turpitude or a misdemeanor involving theft, fraud or forgery by Executive;

(iii)    Executive’s ongoing and repeated failure or refusal to perform or neglect Executive’s duties to the Bank in a material respect, which failure, refusal or neglect continues for fifteen (15) calendar days following Executive’s receipt of written notice from the Board stating with specificity the nature of such failure, refusal or neglect, or

(iv)     Executive engaging in conduct which has resulted in Executive being barred from employment by the Bank by operation of any law or regulation or by any final order of any court or regulatory authority or any agreement with any regulatory authority, including, without limitation, any removal or barring of employment of Executive pursuant to 12 USC §§ 4615, 4616, 4617 or 4636, or any of their successor sections or provisions.

(v)    The Bank shall make the determination that "Cause" exists in good faith and only if and when such determination has been approved in good faith by the Board; provided, however, that prior to a final determination that "Cause" under this Section 7.B exists, the Bank shall (y) provide to Executive in writing, in reasonable detail, the reasons for the determination that such "Cause" exists, and (z) provide the Executive with an opportunity to discuss the determination that "Cause" exists with the Board prior to the final decision to terminate the Executive's employment hereunder for such "Cause."

C.    Termination without Cause. The Board may terminate Executive’s employment without Cause at any time; provided, however, that such termination shall not be effective until written notice of such termination is provided to Executive by the Board.

D.    Termination by Executive for Good Reason or Resignation Without Good Reason. Executive may terminate his employment for Good Reason or resign Without Good Reason at any time upon thirty (30) days’ prior written notice to the Board. “Good Reason” shall mean, any of the following:

(i)    the relocation of Executive’s principal place of employment by the Bank to a location more than fifty (50) miles from Executive’s principal place of employment as of the Effective Date that also results in an increase in Executive's commute from the Executive's principal residence to Executive’s principal place of employment by the Bank of more than fifty (50) miles;

(ii)    a change in Executive’s position that materially reduces his duties or responsibilities; or

(iii)    a material reduction in the aggregate value of Executive's base salary, benefits and short-term and long-term incentive payment opportunities as an employee of the Bank taken as a whole, other than pursuant to a Bank-wide reduction of base salaries and target incentive payment opportunities for employees of the Bank generally and Executive’s reduction is not disproportionate to such Bank-wide reduction.

However, none of the foregoing events or conditions will constitute Good Reason unless: (x) Executive provides the Bank with written objection to the event or condition within ninety (90) calendar days following the occurrence thereof, (y) the Bank does not reverse or otherwise fully cure the event or condition within thirty (30) calendar days of receiving such written objection, and (z) Executive resigns his or her employment within thirty (30) calendar days following the expiration of such cure period.

8.    Rights and Remedies on Termination.

A.    Expiration. Upon the termination of this Agreement at the end of the Initial Term or Term, as applicable, in accordance with Section 2, above, Executive shall be entitled to payment for (i) any unpaid Base Salary due for the period prior and through that Term provided that Executive completes service through that Term, (ii) all other amounts and benefits earned by and owing to Executive under any applicable plans prior to and through the date of Termination, and (iii) following submission of proper expense reports by Executive, reimbursement for all expenses incurred in accordance with Section 4 of this Agreement, prior to the date of Termination (the items set forth in the foregoing clauses (i), (ii) and (iii) collectively, the “Accrued Benefits”). If Executive’s employment hereunder is terminated due to expiration of the Initial Term and the Board in its discretion decides not to extend it for any additional Term, Executive shall be entitled to receive a severance payment equal to twelve (12) months of Base Salary and a pro-rata portion of the President’s Incentive Plan, determined as follows: The actual amount as determined under the President’s Incentive Plan, multiplied by a fraction of which the numerator is the number of days worked in the calendar year when Termination occurs and the denominator is 365 or 366, if it occurs on a leap year, paid out as and when due, as provided in Section 3.B.iv.a “(Severance Payment”), paid in a lump sum as soon as administratively practicable but in any event no later than sixty (60) calendar days following the Termination, except as to the President’s Incentive Plan, which may be paid later. Any award of payment under the President’s Incentive Plan shall be determined by the Board in the year after the Termination occurs. The Bank shall also pay for and provide Executive and his dependents with healthcare and life insurance benefits which are substantially the same as the benefits provided to Executive immediately prior to the date of termination for a period of twelve (12) months thereafter (“Severance Period”); provided that Executive's right to continued healthcare and life insurance benefits following his Termination will terminate on the date on which Executive accepts employment with another employer that provides comparable benefits in terms of cost and scope of coverage. Executive acknowledges that such healthcare benefit continuation is intended, and shall be deemed, to satisfy any applicable obligations of the Bank under Section 4980B of the Internal Revenue Code of 1986, as amended, and any corresponding provisions of any applicable state law for such period and that the Bank may satisfy such

obligation by paying any applicable premiums. Notwithstanding anything to the contrary under this Agreement, if at any time the Bank cannot provide the healthcare benefits contemplated by this Section 8.A, Section 8.E or Section 8.F(ii)(b) of this Agreement without violating applicable law (including Section 2716 of the Public Health Service Act), such obligation shall be revised by the Bank to provide Executive and his family with such benefits and/or such payments in lieu thereof as may be permitted by law.

B.    Death. If Executive’s employment hereunder is terminated prior to the end of the Initial Term of this Agreement as a result of Executive’s death pursuant to Section 7.A above, Executive’s estate shall be entitled to receive an amount equal to the then remaining Base Salary through the end of the Initial Term, paid in a lump sum as soon as administratively practicable but in any event no later than sixty (60) calendar days following the Termination, as well as all Accrued Benefits and any unpaid portion of the Sign-On Benefits. If Executive’s employment hereunder is terminated by death pursuant to Section 7.A, above, after the end of the Initial Term, then Executive shall not be entitled to any severance pay and the Bank shall be required to pay only the Accrued Benefits and the unpaid Sign-On Benefits.

C.    Disability. If Executive’s employment hereunder is terminated prior to the end of the Initial Term of this Agreement based on Executive’s disability pursuant to Section 7.A above, Executive shall be entitled to receive an amount equal to the then remaining Base Salary through the end of the Initial Term, paid in a lump sum as soon as administratively practicable but in any event no later than sixty (60) calendar days following the Termination, as well as all Accrued Benefits and any unpaid portion of the Sign-On Benefits. If Executive’s employment hereunder is terminated by disability pursuant to Section 7.A, above, after the end of the Initial Term, then Executive shall not be entitled to any severance pay and the Bank shall be required to pay only the Accrued Benefits and the unpaid Sign-On Benefits.

D.    For Cause or Without Good Reason. If Executive’s employment hereunder is terminated for Cause pursuant to Section 7.B, or he resigns Without Good Reason, as defined in Section 7.D, then Executive shall not be entitled to any severance pay and the Bank shall be required to pay only the Accrued Benefits.

E.    Without Cause or For Good Reason. If Executive’s employment hereunder is terminated at any time by the Bank without Cause during the Initial Term pursuant to Section 7.C above, or if during the Initial Term Executive terminates his employment hereunder for Good Reason as defined in Section 7.D above, then Executive shall be entitled to receive (a) all Accrued Benefits, (b) all unpaid Sign-On Benefits and (c) the Severance Payment, paid in a lump sum as soon as administratively practicable but in any event no later than sixty (60) calendar days following the Termination. The Bank shall also pay for and provide Executive and his dependents with healthcare and life insurance benefits which are substantially the same as the benefits provided to Executive immediately prior to the date of termination for the Severance Period; provided that Executive's right to continued healthcare and life insurance benefits following his Termination will terminate on the date on which Executive accepts employment with another employer that provides comparable benefits in terms of cost and scope of coverage. Executive acknowledges that such healthcare benefit continuation is intended, and shall be deemed, to satisfy any applicable obligations of the Bank to provide continuation of benefits under Section 4980B of the Internal Revenue Code of 1986, as amended, and any

corresponding provisions of any applicable state law for such period and that the Bank may satisfy such obligation by paying any applicable premiums. If Executive’s employment hereunder is terminated after the Initial Term expires pursuant to Sections 7.C or Executive terminates his employment hereunder for Good Reason as defined in Section 7.D, above, then Executive shall not be entitled to any severance pay except as provided in the Senior Officer’s Severance Policy, attached hereto as Exhibit D, and the Bank shall be required to pay the Accrued Benefits.

F.    Change in Control. For purposes of this Agreement, "Change in Control" means (i) the merger, reorganization or consolidation of the Bank with or into another Federal Home Loan Bank or other entity, (ii) the sale or transfer of all or substantially all of the business or assets of the Bank to another Federal Home Loan Bank or other entity, (iii) the purchase by the Bank or transfer to the Bank of all or substantially all of the business or assets of another Federal Home Loan Bank, (iv) as a result of one or a series of related transactions, the number of directors of the Bank elected by members of the Bank located in California, Arizona and Nevada cease to constitute majority of the directors of the Bank that are elected by members of the Bank (excluding, for purposes of this clause (iv), non-member independent directors), or (v) the liquidation of the Bank. Provided that the term "reorganization" contained in subparagraph (i) of the this definition shall not include any reorganization that is mandated by federal statute, rule, regulation, or directive, including 12 U.S.C. § 1421, et seq., as amended, and 12 U.S.C. § 4501 et seq., as amended, and which the Director of the Finance Agency has determined should not be a basis for making payment under this Agreement, by reason of the capital condition of the Bank or because of unsafe or unsound acts, practices, or condition ascertained in the course of the Agency's supervision of the Bank or because any of the conditions identified in 12 U.S.C. § 4617(a)(3) are met with respect to the Bank (which conditions do not result solely from the mandated reorganization itself, or from action that the Agency has required the Bank to take under 12 U.S.C. § 143l(d)).

If Executive's employment is terminated by the Bank without Cause, or by Executive for Good Reason, during the period commencing on the ninetieth (90th) calendar day prior to the earlier of (a) announcement of, (b) entry into definitive agreement for or (c) consummation of a Change in Control and ending on the first anniversary of consummation of the Change in Control, and such termination constitutes a "separation from service" with the Bank (as such term is defined in the regulations issued under Section 409A of the Code) (a "CICA Severance Termination"), Executive shall be entitled to receive, in lieu of any severance benefits to which Executive may otherwise be entitled under this Agreement and any severance plan or program of the Bank, the following:

(i)    Executive's Accrued Benefits;

(ii)    Severance pay in an amount equal to the sum of:

a.    two (2) times Executive's Base Salary, without giving effect to any reductions thereto which constitute Good Reason, paid in a lump sum as soon as administratively practicable but in any event no later than sixty (60) calendar days following CICA Severance Termination (or, in the event the CICA Severance Termination precedes the consummation of a Change in Control and payment is not administratively practicable by the

foregoing date because it is not yet known whether the Change in Control will occur within ninety (90) calendar days following the date of termination, such amount shall be paid as soon as administratively practicable but in any event no later than sixty (60) calendar days following the consummation of the Change in Control); plus

b.    an amount equal to two (2) times the Annual Incentive Amount, defined below, payable in a lump sum as soon as administratively practicable but in any event no later than sixty (60) calendar days following the CICA Severance Termination (or, if the CICA Severance Termination precedes the consummation of a Change in Control and payment is not administratively practicable by the foregoing date because it is not yet known whether a Change in Control will occur within ninety (90) calendar days following the date of termination, such amounts shall be paid as soon as administratively practicable but in any event no later than sixty (60) calendar days following the consummation of the Change in Control). For purposes of this Agreement, “Annual Incentive Amount” is defined as (i) an amount equal to the average of the aggregate annual short-term incentive amounts earned by Executive pursuant to the President’s Incentive Plan in respect of the three (3) consecutive calendar years ending on the December 31 last preceding the date of the CICA Severance Termination, or such lesser number of consecutive calendar years as Executive has been employed by the Bank following the Effective Date and (ii) an amount equal to the average of the aggregate long-term incentive amounts earned by Executive pursuant to the EPUP in respect of the three (3) consecutive calendar years ending on the December 31 last preceding the date of the CICA Severance Termination, or such lesser number of consecutive calendar years as Executive has be employed by the Bank following the Effective Date. For purposes of determining Executive’s Annual Incentive Amount, (i) if Executive received no annual short-term incentive amounts in respect of a calendar year due to a failure to meet applicable performance objectives, such calendar year will nevertheless be taken into account (using Zero (0) as the applicable amount) in calculating Executive’s Annual Incentive Amount, and (ii) if Executive was employed during a portion of a calendar year only and received a prorated short-term annual incentive amount taking into account his or her employment for only a portion of the year, the amount so received shall be annualized for purposes of calculating Executive’s Annual Incentive Amount. If any portion of the short-term annual incentive amount or long-term incentive amount earned by Executive consisted of securities or other property, the value of that portion of the incentive for purposes of this Agreement shall be the fair market value thereof determined in good faith by the Board. For the period beginning on the date of CICA Severance Termination and ending on the one hundred eightieth (180th) calendar day following the first anniversary of the date of termination (or, if earlier, the date on which Executive accepts employment with another employer that provides comparable benefits in terms of cost and scope of coverage), the Bank shall pay for and provide Executive and his or her dependents with healthcare and life insurance benefits which are substantially the same as the benefits provided to Executive immediately prior to the date of termination; provided that Executive's right to continued healthcare and life insurance benefits following his Termination will terminate on the date on which Executive accepts employment with another employer that provides comparable benefits in terms of cost and scope of coverage. Executive acknowledges that such healthcare benefit continuation is intended, and shall be deemed, to satisfy any applicable obligations of the Bank under Section 4980B of the Internal Revenue Code of 1986, as amended, and any corresponding provisions of any applicable state law for such period and that the Bank may satisfy such obligation by paying any applicable premiums; and

(iii)    executive-level outplacement services at the Bank's expense, not to exceed $25,000 provided by a firm selected by Executive from a list compiled by the Bank.

In the event of a CICA Severance Termination, Executive’s sole remedy shall be to receive the payments and benefits described in this Section 8.F, and except as otherwise expressly required by law or as specifically provided herein, all of the Executive’s other rights to salary, severance, benefits, bonuses and other amounts (if any) accruing on account of the termination of Executive's employment shall cease upon the CICA Severance Termination.

G.    Parachute Payments.

(i)    Notwithstanding any other provision of this Agreement, to the extent Executive would be subject to the excise tax under Section 4999 of the Code on the payment made under Section 8.F hereof and any other payments or benefits Executive would receive from the Bank and its affiliates required to be included in the calculation of parachute payments for purposes of Sections 280G and 4999 of the Code, the amount payable under this Agreement shall be automatically reduced to an amount ten dollars ($10.00) less than the lowest amount which, when combined with such other amounts and benefits required to be so included, would subject Executive to the excise tax under Section 4999 of the Code; provided, however, that payments made under this Agreement shall be so reduced only if the reduced amount received by Executive would be greater than the unreduced amount to be received by Executive less the excise tax payable under Section 4999 of the Code on such amount and the other amounts and benefits received by Executive and required to be included in the calculation of a parachute payment for purposes of Sections 280G and 4999 of the Code. In addition, Executive acknowledges and agrees that Executive is not entitled to any reimbursement by the Bank for any taxes payable by Executive as a result of the payments and benefits received by Executive pursuant to this Agreement, including, without limitation, any excise tax imposed by Section 4999 of the Code.

Notwithstanding any other provision of this Agreement to the contrary, any payments made to Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. § 4518(e) and any regulations promulgated thereunder, including 12 C.F.R. Part 1231.

H.    No Mitigation. Executive shall not be required to mitigate the amount of any payment provided for in Sections 8.E or 8.F by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 8 be reduced by any compensation earned by Executive as the result of employment by another employer or self-employment or by retirement benefits; provided, however, that loans, advances or other amounts owed by Executive to the Bank may be offset by the Bank against amounts payable to Executive under this Section 8.

I.    Senior Corporate Officer Severance Policy. Notwithstanding anything contained in this Agreement to the contrary, in the event Executive receives any severance benefits pursuant to the Bank's Senior Corporate Officer Severance Policy, or any other

severance policy or plan now or hereafter maintained by the Bank, the amount of the severance benefits payable pursuant to Section 8 of this Agreement shall be automatically reduced by the benefits and payments received by Executive pursuant to such Senior Corporate Officer Severance Policy or other plan or policy.

J.    Release. As a condition to the Executive's receipt of any post-termination benefits described in Section 8, Executive shall execute a Release (the "Release") in a form reasonably acceptable to the Bank within fifty (50) calendar days following the Termination and shall not subsequently revoke such Release within the time as may be specified therein as required by law. Such Release shall be provided to Executive within five (5) calendar days following Termination and shall specifically relate to all of Executive’s rights and claims in existence at the time of such execution, including any claims related to Executive's employment by the Bank and his or her termination of employment, and shall exclude any obligations the Bank may have to Executive under this Agreement or any other agreement providing for obligations that survive Executive's termination of employment.

K.    Section 409A Compliance.

(i)    Notwithstanding anything herein to the contrary, the intent of the parties is that payments and benefits under this Agreement comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (“Section 409A”) and, accordingly, to the maximum extent permitted this Agreement shall be interpreted to be in compliance therewith or exempt therefrom. The Bank shall not be liable for any additional tax, interest or penalty that may be imposed on Executive by Section 409A or damages for failing to comply with Section 409A.

(ii)    Termination of Executive’s employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

(iii)    All expenses or other reimbursements under this Agreement that would constitute nonqualified deferred compensation subject to Section 409A, (A) shall be paid on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive, (B) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect Executive’s right to reimbursement of any other expenses eligible for reimbursement in any other taxable year, and (C) Executive’s right to reimbursement shall not be subject to liquidation in exchange for any other benefit.

(iv)    For purposes of Section 409A, Executive’s right to receive any installment payment pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

(v)    Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days

following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Bank in order to comply with Section 409A.

(vi)    Notwithstanding any other provision under this Agreement, solely to the extent that a delay in payment is required in order to avoid the imposition of any tax under Section 409A, if a payment obligation under this Agreement arises on account of Executive’s “separation from service” (within the meaning of Section 409A) in good faith by the Bank’s Board, then payment of any amount or benefit provided under this Agreement that is considered to be non-qualified deferred compensation for purposes of Section 409A and that is scheduled to be paid within six (6) months after such separation from service shall be paid without interest on the first business day after the date that is six (6) months following Executive’s separation from service.

(vii)    Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” subject to Section 409A be subject to offset, counterclaim or recoupment by any other amount payable to Executive unless otherwise permitted by Section 409A.

(viii)    Executive hereby acknowledges that he has been advised to seek and has sought the advice of a tax advisor with respect to the tax consequences to Executive of all payments pursuant to this Agreement, including any adverse tax consequences or penalty taxes under Section 409A and corresponding provisions of applicable state tax law. Executive hereby acknowledges and agrees that no representations have been made to Executive relating to the tax treatment of any payment pursuant to this Agreement under Section 409A and the corresponding provisions of any applicable state income tax laws.

9.    Outside Employment. In addition to being prohibited from being employed or serving as an officer, investor or board member for any entity that will potentially create a conflict of interest, Executive shall not be employed in any paid position because the compensation paid to Executive envisions his exclusive services. In addition, except as required to fulfill the requirements of Executive’s position, Executive shall not serve on any board, participate as an active owner in any entity, or serve in any other capacity for another entity or business if such participation will in any way impinge or potentially adversely affect Executive’s ability to provide the quality and quantity of services envisioned by this Agreement, it being acknowledged that service on civic or charitable boards or committees, service on no more than two (2) for-profit company boards, and delivering lectures and fulfilling speaking engagements, as set forth in Section 1, shall not be deemed to violate this section.

10.    Regulatory Approval. Notwithstanding any other provision of this Agreement to the contrary, any payments made to Executive pursuant to this Agreement or otherwise, are subject to prior review and non-objection by the Finance Agency, and are subject to and conditioned upon compliance with 12 U.S. C. section 4518(e), and any applicable laws and regulations, including 12 C.F.R. Part 1231.

11.    Representations. As a distinct and separate representation and warranty, Executive hereby represents and warrants to the Bank that (a) the execution, delivery and

performance of this Agreement by Executive does not and will not conflict with, breach, violate or cause a default under any contract, agreement (including any confidentiality agreement), restrictive covenant, instrument, court order, judgment or decree to which Executive is a party or by which Executive is bound, (b) Executive has no obligations or commitments of any kind that would prevent, restrict, hinder or interfere with his acceptance of full-time employment or the performance of all duties and services contemplated under the Agreement to the fullest extent of his ability, and (c) that Executive has not used, and will not use, confidential or proprietary information of any past employer in connection with service provided pursuant to this Agreement.

12.    Choice of Law. This Agreement shall be governed and construed by the laws of the United States, and to the extent state law maybe applicable, by the laws of the State of California applicable to contracts made and to be performed wholly within California without regard to the conflicts of laws principles thereof.

13.    Entire Agreement. This Agreement constitutes Executive’s entire offer of employment. Nobody at the Bank has been authorized to enter into any other agreement with Executive or make any promises or representations to Executive that are not a part of this Agreement.

14.    Arbitration and Waiver of Jury Trial, Attorneys’ Fees. Any and all disputes which may arise from or relate to this Agreement or Executive’s employment with the Bank or his Termination, whether initiated by Executive or the Bank, shall be subject to final and binding arbitration. Claims for workers’ compensation or unemployment compensation benefits are not covered by this Section 13. Also not covered are claims by Executive or the Bank for provisional remedies, including temporary restraining orders or preliminary injunctions (“Temporary Equitable Relief”) in situations in which such Temporary Equitable Relief would be otherwise authorized by Federal law or state law, where applicable, including California Code of Civil Procedure section 1281.8 or other applicable state or federal laws. Except as provided herein, all disputes shall be arbitrated under JAMS located in the County of San Francisco, before an arbitrator with that organization with expertise and arbitration experience in executive employment agreements and executive compensation and benefit plans. Discovery shall be adequate and limited by the arbitrator consistent with JAMS Employment Arbitration Rules and Procedures Rules effective at that time, available at http://www.jamsadr.com/rules-employment-arbitration/ and attached hereto as Exhibit E. The arbitrator(s) shall have the authority only to enforce the legal and contractual rights of the parties and shall not add to, modify, disregard or refuse to enforce any contractual provision. Executive and the Bank each recognize and agree that by entering into this agreement, they each are waiving any and all rights to a trial by jury. The prevailing party shall be entitled to recover reasonable attorneys’ fees and costs in accordance with applicable law. The parties agree the Bank shall bear arbitration fees and arbitrator compensation and expenses pursuant to JAMS rules and consistent with applicable law.

15.    Notices. All notices, requests and other communications hereunder shall be in writing and shall be delivered by courier or other means of personal service (including by means of a nationally recognized courier service or professional messenger service), or mailed first class, postage prepaid, by certified mail, return receipt requested, in all cases, addressed to:

If to the Bank or the Board:

Federal Home Loan Bank of San Francisco
600 California Streets
San Francisco, CA 94108
Attention: Legal Department

If to Executive:

At the residence address on file with the Bank

All notices, requests and other communications shall be deemed given on the date of actual receipt or delivery as evidenced by written receipt, acknowledgement or other evidence of actual receipt or delivery to the address. In case of service by telecopy, a copy of such notice shall be personally delivered or sent by registered or certified mail, in the manner set forth above, within three business days thereafter. Any party hereto may from time to time by notice in writing served as set forth above designate a different address or a different or additional person to which all such notices or communications thereafter are to be given.

16.    Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. In the event any provision or term hereof is deemed to have exceeded applicable legal authority or shall be in conflict with applicable legal limitations, such provision shall be reformed and rewritten as necessary to achieve consistency and compliance with such applicable law.

17.    No Waiver. Executive’s or the Bank’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right Executive or the Bank may have hereunder, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

18.    Assignment; Assumption by Successor. The rights of the Bank under this Agreement may, without the consent of Executive, be assigned by the Bank, in its sole and unfettered discretion, to any person, fin, corporation or other business entity which at any time, whether by purchase, merger, consolidation or otherwise, directly or indirectly, acquires all or substantially all of the assets or business of the Bank. The Bank will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Bank expressly to assume and to agree to perform this Agreement in the same manner and to the same extent that the Bank would be required to perform it if no such succession had taken place; provided, however, that no such “Bank" shall mean the Bank as hereinbefore defined and any successor to its business or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.

19.    Entire Agreement. As of the Effective Date, this Agreement constitutes the final, complete and exclusive agreement between Executive and the Bank with respect to the subject matter hereof and replaces and supersedes any and all other agreements, offers or promises, whether oral or written, made to Executive by the Bank. In the event that the Effective Date

does not occur, this Agreement (including, without limitation, the immediately preceding sentence) shall have no force or effect.

20.    Consultation With Counsel. Executive acknowledges that he has had a full and complete opportunity to consult with counsel and other advisors of his own choosing concerning the terms, enforceability and implications of this Agreement, and the Bank has not made any representations or warranties to Executive concerning the terms, enforceability or implications of this Agreement other than as reflected in this Agreement.

WITNESS WHEREOF, the parties have executed this Agreement as of the date last set forth below.

 

EX-10.7 4 ex 1072016presidentsincenti.htm 2016 PRESIDENT'S INCENTIVE PLAN

To optimize individual and Bank performance in accomplishing Board-approved goals and objectives.

To motivate the Bank President to exceed individual and Bank goals that support the Bank’s mission and strategic plan. To attract and retain an outstanding executive by providing a competitive total compensation program, including an annual incentive award opportunity.

The 2016 participant is the Bank President.

The Bank President must be employed by the Bank through January 1, 2017 to be eligible for an incentive award under the 2016 plan. A Bank President hired, promoted, or who takes a leave of absence during the plan year is eligible to participate on a pro-rata basis. A Bank President hired or promoted on or after October 1^st may be eligible to participate during the current plan year at the discretion of the Board.

For the Bank President there are individual and Bank goals, which are weighted. The individual goal(s) support the Bank-wide goals (See 2016 Short-Term Incentive Plan Goals and Measures) and objectives.

The three Bank goals for 2016 are:

The plan levels of goal achievement are as follows:

January 2016

Any award will be based on success in achieving the individual and Bank goals, and on the overall performance. At yearend, accomplishments will be assessed and a percentage of achievement will be determined for each goal and any award determination shall be approved by the Board.

For each goal, the percentage of achievement will be multiplied by the applicable weights. Each weighted achievement will then be added to determine the total weighted achievement. The basis for any award opportunity for the participant is total weighted achievement. Total weighted achievement from Threshold achievement level (75-99%) is below the Meets achievement level and, therefore, results in an award less than one granted for achieving the Meets achievement level. Total weighted achievement below the Threshold achievement level normally will not result in an incentive award. The Board of Directors has full discretion to modify any and all goals, achievement levels, and incentive payments to account for matters not specifically addressed in the plan, subject to review by the Federal Housing Finance Agency, as required. Incentive compensation reductions may be made, but are not limited to the following circumstances: (i) if errors or omissions result in material revisions to the Bank’s financial results, information submitted to a regulatory or a reporting agency, or information used to determine incentive compensation payouts; (ii) if information submitted to a regulatory or a reporting agency is untimely; or, (iii) if the Bank does not make appropriate progress in the timely remediation of examination, monitoring, or other supervisory findings and matters requiring attention.

The amount of the incentive award, if any, under this plan shall be approved by the Board of Directors, including any award for achievement below Threshold. Awards will be considered by the Board of Directors at the January 2017 Board meeting, or as soon thereafter as reasonably practicable.

Payment of the incentive award, if any, will be paid in the taxable year immediately following the end of the performance period and no later than 60 days after the date that the Board of Directors’ approval of such award becomes effective.

The Board of Directors oversees the administration and interpretation of the plan.

The plan is intended to be exempt from Section 409A of the Internal Revenue Code and the provisions of the plan shall be construed and interpreted consistent with such intent.

January 2016

EX-10.3 ex1032014executiveperforma.htm 2014 EXECUTIVE PERFORMANCE UNIT PLAN

To optimize the Bank’s performance in accomplishing Board-approved goals.

To motivate key executives to position the Bank to exceed specified long-term Bank goals that directly support the Bank’s mission and strategic plan. To attract and retain outstanding executives by providing a competitive total compensation program, including a cash-based long-term incentive reward opportunity tied to the performance of the Bank against specified performance measures.

Participants are key executives whose performance has a major impact on the Bank’s success. Participants are the incumbents in the Bank’s senior officer positions, including:

The Executive Performance Unit Plan (EPUP) pays incentive awards related to the achievement of Bank performance over a three-year performance period. The 2014 EPUP is effective January 1, 2014, and is based on performance from January 1, 2014 through December 31, 2016.

Performance metrics balance financial and risk management objectives, focusing on achievement of Adjusted Return on Capital Spread and Risk Management goals. Adjusted Return on Capital Spread will be weighted 30% and Risk Management will be weighted 70%. The Meets performance level reflects long-term performance expectations. Unlike the President’s Incentive Plan (PIP) and Executive Incentive Plan (EIP), participants do not have an individual goal under the EPUP.

The Executive Performance Unit Plan rewards four levels of performance achievement, as follows:

Performance below the Threshold achievement level for either measure normally will not result in an incentive award. The Board of Directors has full discretion to modify any and all goals, achievement levels, and incentive payments to account for matters not specifically addressed in the plan, subject to review by the Federal Housing Finance Agency, as required. Incentive compensation reductions may be made, but are not limited to the following circumstances: (i) if errors or omissions result in material revisions to the Bank’s financial results, information submitted to a regulatory or a reporting agency, or information used to determine incentive compensation payouts; (ii) if information submitted to a regulatory or a reporting agency is untimely; or, (iii) if the Bank does not make appropriate progress in the timely remediation of examination, monitoring, or other supervisory findings and matters requiring attention.

Achievement award levels are stated below as a percentage of the February 1^st base salary at the beginning of the performance period.

Awards will be considered by the Board of Directors at the end of the 3-year performance period (during the first quarter of 2017). The amount of an award, if any, shall be approved by the Board of Directors.

All incentive awards are governed by the terms and conditions of the 2014 Executive Performance Unit Plan. In the event there is any conflict between the terms of this summary description and the terms of the plan document, the plan document shall govern.

EX-10.3 4 ex 1032015executiveperforma.htm 2015 EXECUTIVE PERFORMANCE UNIT PLAN

To optimize the Bank’s performance in accomplishing Board-approved goals.

To motivate key executives to position the Bank to exceed specified long-term Bank goals that directly support the Bank’s mission and strategic plan. To attract and retain outstanding executives by providing a competitive total compensation program, including a cash-based long-term incentive reward opportunity tied to the performance of the Bank against specified performance measures.

Participants are key executives whose performance has a major impact on the Bank’s success. Participants are the incumbents in the Bank’s senior officer positions, including:

The Executive Performance Unit Plan (EPUP) pays incentive awards related to the achievement of Bank performance over a three-year performance period. The 2015 EPUP is effective January 1, 2015, and is based on performance from January 1, 2015 through December 31, 2017.

Performance metrics balance financial and risk management objectives, focusing on achievement of Adjusted Return on Capital Spread and Risk Management goals. Adjusted Return on Capital Spread will be weighted 30% and Risk Management will be weighted 70%. The Meets performance level reflects long-term performance expectations. Unlike the President’s Incentive Plan (PIP) and Executive Incentive Plan (EIP), participants do not have an individual goal under the EPUP.

January 2015

The Executive Performance Unit Plan rewards four levels of performance achievement, as follows:

Performance below the Threshold achievement level for either measure normally will not result in an incentive award. The Board of Directors has full discretion to modify any and all goals, achievement levels, and incentive payments to account for matters not specifically addressed in the plan, subject to review by the Federal Housing Finance Agency, as required. Incentive compensation reductions may be made, but are not limited to the following circumstances: (i) if errors or omissions result in material revisions to the Bank’s financial results, information submitted to a regulatory or a reporting agency, or information used to determine incentive compensation payouts; (ii) if information submitted to a regulatory or a reporting agency is untimely; or, (iii) if the Bank does not make appropriate progress in the timely remediation of examination, monitoring, or other supervisory findings and matters requiring attention.

Achievement award levels are stated below as a percentage of the February 1^st base salary at the beginning of the performance period.

Awards will be considered by the Board of Directors at the end of the 3-year performance period (during the first quarter of 2018). The amount of an award, if any, shall be approved by the Board of Directors. All incentive awards are governed

by the terms and conditions of the 2015 Executive Performance Unit Plan. In the event there is any conflict between the terms of this summary description and the terms of the plan document, the plan document shall govern.

January 2015

EX-10.11 6 ex10112016executiveperfrom.htm 2016 EXECUTIVE PERFORMANCE UNIT PLAN

To optimize the Bank’s performance in accomplishing Board-approved goals.

To motivate key executives to position the Bank to exceed specified long-term Bank goals that directly support the Bank’s mission and strategic plan. To attract and retain outstanding executives by providing a competitive total compensation program, including a cash-based long-term incentive reward opportunity tied to the performance of the Bank against specified performance measures.

Participants are key executives whose performance has a major impact on the Bank’s success. Participants are the incumbents in the Bank’s senior officer positions, including:

The Executive Performance Unit Plan (EPUP) pays incentive awards related to the achievement of Bank performance over a three-year performance period. The 2016 EPUP is effective January 1, 2016, and is based on performance from January 1, 2016 through December 31, 2018.

Performance metrics balance financial and risk management objectives, focusing on achievement of Adjusted Return on Capital Spread and Risk Management goals. Adjusted Return on Capital Spread will be weighted 30% and Risk Management will be weighted 70%. The Meets performance level reflects long-term performance expectations. Unlike the President’s Incentive Plan (PIP) and Executive Incentive Plan (EIP), participants do not have an individual goal under the EPUP.

1.3-Year Average Adjusted Return on Capital Spread: Adjusted Return on Capital Spread (AROCS) is the primary measure the Bank uses to determine total rate of return to shareholders. The Meets AROCS achievement level has been set at 2.69% and represents the projected average for the performance period (January 1, 2016 through December 31, 2018). The Meets AROCS achievement level is consistent with the Bank’s Strategic Plan forecast and reflects the Bank’s continued mission-consistent focus on member’s mortgage finance business. Threshold AROCS has been set at 2.44%, Exceeds achievement level has been set at 2.94% and Far Exceeds achievement level has been set at 3.19%.

2.3-Year Average Risk Management: Risk Management is based on the 3-year average of the actual Risk Management goal achievement levels under the 2016, 2017, and 2018 annual incentive plans, and will be set at the end of the performance period.

January 2016

The Executive Performance Unit Plan rewards four levels of performance achievement, as follows:

Performance below the Threshold achievement level for either measure normally will not result in an incentive award. The Board of Directors has full discretion to modify any and all goals, achievement levels, and incentive payments to account for matters not specifically addressed in the plan, subject to review by the Federal Housing Finance Agency, as required. Incentive compensation reductions may be made, but are not limited to the following circumstances: (i) if errors or omissions result in material revisions to the Bank’s financial results, information submitted to a regulatory or a reporting agency, or information used to determine incentive compensation payouts; (ii) if information submitted to a regulatory or a reporting agency is untimely; or, (iii) if the Bank does not make appropriate progress in the timely remediation of examination, monitoring, or other supervisory findings and matters requiring attention.

Achievement award levels are stated below as a percentage of the February 1^st base salary at the beginning of the performance period.

Awards will be considered by the Board of Directors at the end of the 3-year performance period (during the first quarter of 2019). The amount of an award, if any, shall be approved by the Board of Directors. All incentive awards are governed by the terms and conditions of the 2016 Executive Performance Unit Plan. In the event there is any conflict between the terms of this summary description and the terms of the plan document, the plan document shall govern.

January 2016

EX-10.16 ex10116corporatesenioroffic.htm CORPORATE SENIOR OFFICER SEVERANCE POLICY

¹For purposes of this Corporate Senior Officer Severance Policy, a “Corporate Senior Officer” is defined as an officer at or above the level of Senior Vice President.

For purposes of this Policy, a “Separation from Service” means a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and U.S. Department of Treasury regulations and other interpretive guidance thereunder (“Section 409A”), and will generally occur upon the termination of a Corporate Senior Officer’s employment as a common-law employee of the Bank.

Payments and benefits provided under this Policy are intended to be exempt from Section 409A of the Code, provided that, if any payment provided at any time hereunder involves non-qualified deferred compensation within the meaning of Section 409A of the Code, the Policy is intended to comply with Section 409A of Code, and the Department of Treasury Regulations and other interpretive guidance issued thereunder (“Section 409A”) and the Policy shall be interpreted and construed as necessary to comply with such intent. To the maximum extent permitted by law, payments under the Policy shall be treated as payments under the short-term deferral rule under Treasury Regulation Section 1.409A-1(b)(4), then as payments or benefits provided as separation pay under Treasury Regulation Section 1.409A-1(b)(9)(iii) or as nontaxable benefits. For purposes of Section 409A of the Code, any right under this Policy to receive any installment payments shall be treated as a right to receive a series of separate and distinct payments. To the extent applicable, if a Corporate Senior Officer is a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B) on his or her date of termination of employment, then with regard to any payment that is considered non-qualified deferred compensation under Code Section 409A payable on account of a Separation from Service, such payment or benefit shall be made or commence at the date which is the earlier of (A) the first day of the seventh month after the date of the Corporate Senior Officer’s Separation from Service or (B) the date of the Corporate Senior Officer’s death. Notwithstanding any provision of this Policy to the contrary, in the event that the Bank determines that any compensation or benefits payable or provided hereunder may be subject to Section 409A, the Bank reserves the right (without any obligation to do so or to indemnify the Corporate Senior

Officer for failure to do so) to adopt such limited amendments to this Policy and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Bank reasonably determines are necessary or appropriate to (a) exempt the compensation and benefits payable under this Policy from Section 409A and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Policy or (b) comply with the requirements of Section 409A. In no event may a Corporate Senior Officer, directly or indirectly, designate the calendar year of any payment to be made under this Policy that is considered non-qualified deferred compensation. In the event the time period for both considering any general release and the general release becoming irrevocable as a condition to receiving a severance payment or taxable benefit will overlap two calendar years, then no amount of such severance payment or taxable benefit shall be paid or provided in the earlier calendar year. The Bank does not guarantee the tax treatment of any payment or benefits made under this Policy, and the Corporate Senior Officer shall be responsible in any event for any taxes or penalties due under federal or state tax laws due to payments or benefits provided hereunder.

Severance Benefits upon Involuntary Termination Not In Connection with a Change in Control.

In the event an eligible Senior Vice President experiences a Qualifying Termination other than in connection with a Change in Control, as provided for below, upon the Bank’s receipt of an executed Severance Agreement and Release that has become irrevocable in accordance with its terms and Applicable Laws (but in any event not earlier than the Effective Date of Separation), the Senior Vice President will be entitled to receive a lump sum severance payment in an amount equal to the greater of: (a) twelve weeks of his/her base salary, or (b) the sum of (i) three weeks of his/her base salary, plus (ii) three weeks of his/her base salary for each full year of service at the Bank, and (iii) three weeks of his/her base salary prorated for each partial year of service. Notwithstanding the foregoing, the total severance pay for any Senior Vice President (excluding the one week notice pay or pay in lieu of notice, if applicable) will not exceed twelve months base salary; provided, however, that the severance pay will in no event be paid later than 2-1/2 months after the end of the calendar year in which the Effective Date of Separation occurs.

To the extent permitted by the insurance carrier that provides life insurance to the Bank’s employees, the Bank will continue life insurance coverage for the Senior Vice President for one month after the end of the month in which the Effective Date of Separation occurs. The value of the life insurance benefits provided may be taxable income to the Senior Vice President.

In addition, the Senior Vice President will be entitled to continued health insurance coverage under the Bank’s health insurance policies for the first month immediately following the Effective Date of Separation, with the Bank paying one month’s premium directly to the health insurance company.

Severance Benefits upon Involuntary Termination In Connection with a Change in Control.

In the event an eligible Senior Vice President is involuntarily terminated without “Cause” or voluntarily terminates employment with “Good Reason” within ninety (90) calendar days prior to a “Change in Control” or during a one-year period following a Change in Control, upon the Bank’s timely receipt of an executed Severance Agreement and Release that has become irrevocable in accordance with its terms and Applicable Laws (but in any event not earlier than the Effective Date of Separation or the Change in Control event), the Senior Vice President will receive severance pay in a lump sum equal to one year of base salary. Notwithstanding the foregoing, the severance pay will not be paid later than 2-1/2 months after the end of the calendar year in which the Effective Date of Separation occurs.

To the extent permitted by the insurance carrier that provides life insurance to the Bank’s employees, the Bank will continue life insurance coverage for the Senior Vice President for 12 months after the end of the month in which the Effective Date of Separation occurs. However, the Bank will immediately cease paying such premiums prior to the end of the 12-month period if the Senior Vice President accepts employment with another employer that provides a comparable benefit in terms of cost and scope of coverage during the 12-month period.

In addition, the Senior Vice President will be entitled to continued health insurance coverage under the Bank’s health insurance policies at the Bank’s expense for a period of 12 months beginning the first month immediately following the Effective Date of Separation, with the Bank paying premiums directly to the health insurance company. However, the Bank will immediately cease paying such premiums prior to the end of the 12-month period if the Senior Vice President accepts employment with another employer that provides comparable benefits in terms of cost and scope of coverage during the 12-month period. Notwithstanding the foregoing, in the event that providing such health insurance coverage would be discriminatory pursuant to Section 105(h) of the Code or Section 2716 to the Public Health Service Act, then the Bank will provide such healthcare benefits, or a payment in lieu of such healthcare benefits, in a manner as determined in the Bank’s sole discretion that would comply with applicable laws.

The value of the monthly health and life insurance benefits provided may be taxable income to the Senior Vice President.

The Bank has no obligation to pay any severance payments or benefits if the Senior Vice President’s employment is terminated by the Bank with Cause or by the Senior Vice President without Good Reason or the Senior Vice President’s termination is due to death or Disability. If the Change in Control severance payments or benefits are made to a Senior Vice President, he or she will not be eligible for the regular termination severance payments or benefits described above.

If a Senior Vice President becomes entitled to receive any severance payments or benefits pursuant to a Change in Control Agreement entered into by and between the Bank and such Senior Vice President, such Senior Vice President will not be eligible to receive any severance payments or benefits pursuant to the Policy. No provisions of any such Change in Control Agreements will be superseded by this Policy, and any such Change in Control Agreements will otherwise remain in full force and effect.

Notwithstanding the foregoing, in the event the Senior Vice President receives regular termination severance payments or benefits with respect to a Qualifying Termination, and subsequently becomes entitled to receive severance payments or benefits as a result of the occurrence of a Change in Control or pursuant to a Change in Control Agreement, the amount of the severance payments or benefits payable as a result of the termination occurring in connection with a Change in Control will be automatically reduced by the benefits and payments already received by the Senior Vice President as severance pursuant to this Policy.

Definitions.

“Cause” means (i) the commission of an act of fraud or embezzlement by the Senior Vice President that has a material adverse impact on the Bank or any successor or affiliate thereof, (ii) a conviction of, or plea of “guilty” or “no contest” to, a felony by the Senior Vice President, (iii) the Senior Vice President’s ongoing and repeated failure or refusal to perform or neglect of his or her duties to the Bank in a material respect, which failure, refusal, or neglect continues for fifteen (15) calendar days following the Senior Vice President’s receipt of written notice from the Bank’s Board of Directors stating with specificity the nature of such failure, refusal, or neglect, or (iv) the Senior Vice President engaging in conduct that has resulted in the Senior Vice President being barred from employment by the Bank by operation of any law or regulation, or by any final order of any court or regulatory authority or any agreement with any regulatory authority, including, without limitation, any removal or barring of employment of the Senior Vice President pursuant to 12 USC §§ 4615, 4616, 4617 or 4636a, or any of their successor sections or provisions. The Bank shall make the determination that “Cause” exists in good faith and only if and when the determination has been approved in good faith by the Bank’s Board of Directors; provided, however, that prior to a final determination that Cause exists, the Bank will (y) provide to the Senior Vice President in writing, in reasonable detail, the reasons for the determination that such “Cause” exists, and (z) provide the Senior Vice President with an opportunity to discuss the determination that “Cause” exists with the Board prior to the final decision to terminate the Senior Vice President’s employment hereunder for such “Cause.”

“Change in Control” means (i) the merger, reorganization, or consolidation of the Bank with or into another Federal Home Loan Bank or other entity, (ii) the sale or transfer of all or substantially all of the business or assets of the Bank to another Federal Home Loan Bank or other entity, (iii) the purchase by the Bank or transfer to the Bank of all or substantially all of the business or assets of another Federal Home Loan Bank, (iv) a change in the composition of the Board of Directors, as a result of one or a series of related transactions, that causes the number of directors of the Bank elected by members of the Bank located in California, Arizona, and Nevada to cease to constitute a majority of the directors of the Bank that are elected by members of the Bank (excluding, for purposes of this clause (iv), non-member independent directors), or (v) the liquidation of the Bank. Provided that the term "reorganization" contained in this definition shall not include any reorganization that is mandated by federal statute, rule, regulation, or directive, including 12 U.S.C. § 1421, et seq., as amended, and 12 U.S.C. § 4501 et seq., as amended, and which the Director of the Federal Housing Finance Agency (or successor agency, “Agency”) has determined should not be a basis for making payment under this Policy, by reason of the capital condition of the Bank or because of unsafe or unsound acts, practices, or condition ascertained in the course of the Agency's supervision of the Bank or because any of the conditions identified in 12 U.S.C. § 4617(a)(3) are met with respect to the Bank (which conditions do not result solely from the mandated reorganization itself, or from action that the Agency has required the Bank to take under 12 U.S. C. § 1431(d)).

Severance Benefits upon Involuntary Termination Not In Connection with a Change in Control.

In the event the President or Executive Vice President experiences a Qualifying Termination other than in connection with a Change in Control, as provided for below, upon the Bank’s receipt of an executed Severance Agreement and Release that has become irrevocable in accordance with its terms and Applicable Laws (but in any event not earlier than the Effective Date of Separation), the President or the Executive Vice President will be entitled to receive a lump sum severance payment in an amount equal to the greater of: (a) twelve weeks of his/her base salary, or (b) the sum of (i) three weeks of his/her base salary, plus (ii) three weeks of his/her base salary for each full year of service at the Bank, and (iii) three weeks of his/her base salary prorated for each partial year of service. Notwithstanding the foregoing, the total severance pay for the President or the Executive Vice President (excluding the one week notice pay or pay in lieu of notice, if applicable) will not exceed twelve months base salary; provided, however, that the severance pay will in no event be paid later than 2-1/2 months after the end of the calendar year in which the Effective Date of Separation occurs.

To the extent permitted by the insurance carrier that provides life insurance to the Bank’s employees, the Bank will continue life insurance coverage for the President or the Executive Vice President for one month after the end of the month in which the Effective Date of Separation occurs. The value of the life insurance benefits provided may be taxable income to the President or the Executive Vice President.

In addition, the President or the Executive Vice President will be entitled to continued health insurance coverage under the Bank’s health insurance policies for the first month immediately following the Effective Date of Separation, with the Bank paying one month’s premium directly to the health insurance company.

Severance Benefits upon Involuntary Termination In Connection with a Change in Control.

In the event the President or the Executive Vice President experiences a termination of employment within the period commencing on the ninetieth (90th) calendar day prior to a Change in Control and ending on the first anniversary of the Change in Control, severance and benefits will be payable pursuant to the Change in Control Agreement entered into by and between the Bank and each of the President and the Executive Vice President. No provisions of the Change in Control Agreement are superseded by this Policy, and the Change in Control Agreement will otherwise remain in full force and effect.

If the President or the Executive Vice President becomes entitled to receive any severance benefits pursuant to the Change in Control Agreement, they will not be eligible to receive any severance benefits pursuant to the Policy.

Notwithstanding the foregoing, in the event the President or the Executive Vice President receives regular termination severance payments or benefits with respect to a Qualifying Termination, and subsequently becomes entitled to receive severance payments or benefits as a result of the occurrence of a Change in Control or pursuant to a Change in Control Agreement, the amount of the severance payments or benefits payable as a result of the termination occurring in connection with a Change in Control will be automatically reduced by the benefits and payments already received by the President or the Executive Vice President as severance pursuant to this Policy.