FHLBank San Francisco 2016 EXECUTIVE INCENTIVE PLAN

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

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

Participants are Bank executive officers whose performance has a major impact on the Bank’s success. The 2016 participants are the incumbents in the Bank’s senior officer positions, including:

Participants must be employed by the Bank through January 1, 2017 to be eligible for an incentive award under the 2016 plan. Participants hired, promoted, or who have a leave of absence during the plan year are eligible to participate on a pro-rata basis. Participants 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 each participant there are individual goals and Bank goals, which are weighted for each participant. The individual goals support the Bank-wide goals (See 2016 Short-Term Incentive Plan Goals and Measures) and objectives.

The three Bank goals for 2016 are:

1.    2016 Risk Management Goal: Continue to enhance and advance the function and approaches to the Bank’s risk management.

2.    2016 Franchise Enhancement Goal: Position the Bank and the FHLBank System to remain an integral component of the changing housing and financial services markets. Continue to meet the Bank's mission objectives within these markets as they are currently structured, but also influence and adapt to structural changes in those markets.

3.    2016 Community Investment Goal: Support and promote the Bank’s Affordable Housing Program and Community Investment Programs.

The plan levels of goal achievement are as follows:

All plan participant awards will be based on success in achieving individual and Bank goals, and on overall performance. In the case of the Bank goals, the same achievement levels apply to all participants. 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 goal weights. Each weighted achievement will then be added to determine the total weighted achievement. The basis for each participant’s award opportunity 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.

All incentive awards must be approved by the President and the Board of Directors prior to payment, including an 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 an 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 President is responsible for overseeing 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.