2008 Executive Incentive Plan



 EXHIBIT 10.5 
 FHLBank San Francisco 
 2008 EXECUTIVE INCENTIVE PLAN 
 PLAN PURPOSE 
 To optimize individual and Bank
performance in accomplishing Board approved goals and objectives. 
 PLAN OBJECTIVES 
 To motivate Bank executives to exceed individual and Bank goals which support the business plan and long-term strategic plan. To attract and retain outstanding executives
by providing a competitive total compensation program, including annual incentive award opportunity. 
 ELIGIBILITY 
 Participants are Bank executives whose performance has a major impact on the Bank’s success. The 2008 participants are the incumbents in the Bank’s executive
officer positions, including: 
 Executive Vice President
                        Senior Vice President 
 Participants must be employed by the Bank when payment is disbursed to be eligible for an incentive award for the
current plan year. 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 1st will not be eligible to participate during the current plan year. 
 INCENTIVE
GOALS AND MEASURES 
 Incentive Goals 
 For each participant there are individual goals, discretionary goals and Bank goals, which are specifically weighted for each participant. The individual goals support the Bank-wide goals and objectives. The discretionary goals represent
achievements that were not necessarily measured or identified under the participant’s individual goals and assessed by the President and Chief Operating Officer for the Senior Vice Presidents, and by the President for the Chief Operating
Officer. 
 The three Bank goals’ target achievement levels for 2008 are: 
  

	1.	2008 Potential Dividend Spread Goal: Dividend potential spread is at least 123.0 basis points.  

  

	2.	2008 Market Share Goal: Achieve a target market share of wholesale borrowings and convert non-borrowing members into borrowing members. 

  

	 	•	 	 Market share is divided into member segments. [*], the 2008 “goal year” will begin on January 1, 2008 and will end on December 31, 2008, with
goal achievement based on the average daily balance of Bank credit for the full year. For the other member segments, the 2008 “goal year” will run from September 30, 2007 through September 30, 2008. 



 

	 	•	 	 Convert [*] non-borrowing members into borrowing members. 


  

	3.	2008 Community Investment Goal: Effectively execute community investment programs and initiatives. 

 An outline of the three Bank goal weights and measures are attached as an exhibit. 
  

	
	Actual achievement of Bank goals (1), (2), and (3) are subject to adjustment for changes resulting from movements in interest rates, changes in financial strategies or policies, any
significant change in Bank membership, as well as other factors determined by the Board.

  
  

	[*]	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the
omitted portion. 








 Incentive Goal Achievement Measures 
 The plan rewards levels of goal achievement, as follows: 
  

			
	 Achievement Level
	  	 Measure Definition

	200% of target	  	The most optimistic achievement level based on reasonable business assumptions and conditions.
		
	150% of target	  	An optimistic achievement level based on expected business.
		
	Target (100%)	  	Performance that is considered a target level of successful plan achievement.
		
	Threshold (75% of target)	  	A threshold level of performance.

 Award Determination 
 Awards will be based on success in achieving individual and Bank goals. In the case of the three Bank goals and objectives, the same achievement measures 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 will be at the discretion of the Board. 
  

					
	 Percentage of Achievement Scale
	  	 Achievement Levels
	 	 
	0% - 200%	  	200%	 	= Far Exceeds Target
		  	150%	 	= Exceeds Target
		  	100%	 	= Target
		  	75-99%	 	= Threshold

 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 award opportunity is total weighted achievement. Performance from 75-99% (threshold level) is below the target achievement level and, therefore, will result in
an award less than a target award. Performance below the threshold achievement level normally will not result in an incentive award. The President and the Board of Directors have full discretion to modify any and all incentive payments. 

Incentive Award Pool 
 The Board approves an
incentive award pool at the beginning of the plan period. Portions of the pool may be allocated by the President to plan participants at the end of the plan period based upon their overall goal achievement levels. 
 APPROVAL OF INCENTIVE AWARDS 
 All recommended incentive
awards must be approved by the President and the Board of Directors prior to payment. The Board of Directors has the discretion to approve awards for achievement below 75% total weighted achievement. Award recommendations are presented to the Board
of Directors at the January 2009 Board meeting. 
 PLAN ADMINISTRATION AND IMPLEMENTATION 
 The President is responsible for overseeing the administration and interpretation of the Plan. 







 FEDERAL HOME LOAN BANK OF SAN FRANCISCO 
 2008 Corporate Goals 
 Dividend Spread Goal for 2008 
  

									
	 Segment
 Weight
	 	 75% Goal
 Achievement
	 	 100% Goal
 Achievement
	 	 150% Goal
 Achievement
	 	 200% Goal
 Achievement

	40%	 	0.98%	 	1.23%	 	1.73%	 	2.23%

 Market Penetration, Volume and Conversion Goals for 2008 
  

												
	 Customer Segment
	  	Segment
Weight	 	 	75% Goal
Achievement	 	100% Goal
Achievement	 	150% Goal
Achievement	 	200% Goal
Achievement
	 [*]
	  	8	%	 	[*]	 	[*]	 	[*]	 	[*]
	 [*]
	  	8	%	 	[*]	 	[*]	 	[*]	 	[*]
	 [*]
	  	8	%	 	[*]	 	[*]	 	[*]	 	[*]
	 [*]
	  	8	%	 	[*]	 	[*]	 	[*]	 	[*]
	 [*]
	  	8	%	 	[*]	 	[*]	 	[*]	 	[*]
	 Total Member Business Goals
	  	40	%	 		 		 		 	

 Community Investment Goals for 2008 
  

												
	 	  	Segment
Weight	 	 	75% Goal
Achievement	 	100% Goal
Achievement	 	150% Goal
Achievement	 	200% Goal
Achievement
	 [*]
	  	6	%	 	[*]	 	[*]	 	[*]	 	[*]
	 [*]
	  	6	%	 	[*]	 	[*]	 	[*]	 	[*]
	 [*]
	  	8	%	 	[*]	 	[*]	 	[*]	 	[*]
	 Total Community Investment Goal
	  	20	%	 		 		 		 	

 [*] 
  

	[*]	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the
omitted portion.