Document:

Federal Home Loan Bank of Chicago Management Incentive Compensation Plan

 Exhibit 10.8.2 
  
 FEDERAL HOME LOAN BANK OF CHICAGO 
 MANAGEMENT INCENTIVE COMPENSATION PLAN 
  

	I.	PURPOSE 

  
 Members of the Bank’s Management Committee (excluding the President & CEO) are eligible to participate in the Federal Home Loan Bank of Chicago
Management Incentive Compensation Plan (“Plan”). The purpose of the Plan is to give a select group of management and highly compensated employees strong incentives to make difficult decisions and to expend exceptional efforts to enhance
the financial performance of the Bank. 
  
 Incentive compensation
is to be awarded by the President & CEO with approval of the Personnel & Compensation Committee of the Board of Directors in accordance with the terms and conditions in this Plan. 
  

	II.	ELIGIBILITY FOR AWARD 

  
 To receive an award under the Plan, the following eligibility conditions must be satisfied: 
  
 A. The recipient is a member of the Bank’s Management Committee (excluding the President & CEO) during the Plan
year or is a senior officer designated by the President & CEO to participate in the Plan; and 
  
 B. The recipient displays, in the judgment of the President & CEO, a commitment to the Bank as a whole and team spirit. 
  

	III.	PLAN CRITERIA AND MAXIMUM AWARD PERCENTAGE  

  

	 	A.	Plan Criteria 

  
 The Plan criteria consist of a series of corporate goals established annually (“Bank Criteria”) based upon the approved Business Plan for the
Plan year. The Bank Criteria will be communicated at the beginning of each Plan year and will specify: 
  

	 	(i)	Bank Criteria description; 

  

	 	(ii)	Plan Year Performance Target for each of the Bank Criteria; and 

  

	 	(iii)	Target Value or weighting attributed to each of the Bank Criteria. 

  

 The Bank Criteria, Performance Targets and Target Values for a Plan year shall be established by the
Personnel & Compensation Committee. 
  

	 	B.	Plan Administration 

  
 The Maximum Award Percentage is calculated by calculating the actual Plan year performance as a percent of target for each of the Bank Criteria
separately, multiplying the results for each criterion by its associated Target Value and adding the resulting totals to calculate the Award Coefficient Factor. 
  
 The total Award Coefficient Factor is applied to the Award Formula Table to determine the Maximum Award Percentage. The
Maximum Award Percentage and the Award Formula Table are established for each Plan year and communicated as part of the Plan Worksheet for that Plan year. 
  
 Except as may be otherwise determined in Section III.C., no award may exceed the maximum percentage specified for the Plan year multiplied by the
recipient’s base salary. 
  

	 	C.	Discretionary Management Awards 

  
 In any Plan year in which the Bank’s net income performance exceeds the Plan Year Performance Target for the Bank’s net income, the President
& CEO shall have the discretion to create a discretionary bonus pool which may be used to grant individual Discretionary Management Awards as set forth in this Section III.C. The amount of such discretionary bonus pool shall be determined at the
discretion of the President & CEO up to a percentage of net income above plan as established for each Plan Year by the Personnel & Compensation Committee. 
  
 If the President & CEO has created a discretionary bonus pool for a Plan year, the President & CEO shall also have
the discretionary authority to grant an additional incentive award (“Discretionary Management Award”) to recipients who are otherwise eligible to receive an incentive award under this Plan for the Plan year. The determination of the
recipients of a Discretionary Management Award and the amount of such Discretionary Management Award for each such recipient shall be in the sole discretion of the President & CEO, provided that the aggregate amount of Discretionary Management
Awards granted in any Plan year shall not exceed the amount of the discretionary bonus pool previously determined by the President & CEO for such year. A Discretionary Management Award is made to a recipient in 

  

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addition to the incentive award made to such recipient pursuant to Section IV of this Plan and need not necessarily be related to the recipient’s base
compensation. The President shall not be required to distribute the full amount of any discretionary bonus pool. All Discretionary Management Awards shall be deemed to be an “award” for all purposes under this Plan. 
  
 The Personnel & Compensation Committee shall receive a report covering
Plan years where Discretionary Management Awards are granted. 
  

	IV.	INDIVIDUAL AWARD 

  
 The President & CEO shall establish one or more key goals for each eligible recipient. 
  
 The award to each eligible recipient shall be calculated by multiplying the Individual Award Percentage specified in the
Plan Worksheet (which takes into account the completion of personal goals) by the Maximum Award Percentage; and then multiplying the resulting percentage by the recipient’s actual base salary received during the Plan year. 
  

	V.	FORM OF PAYMENT 

  
 Payment shall be made as follows: 
  

	 	•	 	60% in cash 

  

	 	•	 	40% to the Stock Equivalent Account 

  

	 	A.	Cash 

  
 The cash portion of any award is payable after year-end results are reported and Personnel & Compensation Committee approval. 
  

	 	B.	Stock Equivalent Account 

  
 A Stock Equivalent Account (“SEA”) shall be established for each award recipient hereunder. Payments to the SEA shall be credited as
“shares” at $100 per share. “Shares” in the SEA shall earn interest at the same rate as the Bank’s net return on equity after REFCO during each corresponding 

  

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quarter. Interest shall be paid in the form of additional and fractional “shares” in the SEA. The interest calculation method herein shall apply to
all existing SEA balances as of January 1, 1996. 
  
 SEA
“shares” and interest thereon are vested on March 1 in the year following the year in which such “shares” were first credited to the SEA. (For example, payment of an award for performance in 1996 would be credited in February of
1997 and would vest on March 1, 1998.) 
  
 Award recipients who
resign or whose employment is terminated shall have no interest in any SEA balance not yet vested, as provided above, as of their termination date and must withdraw all “shares” that have vested by such date. 
  
 SEA “shares” may be converted to cash and withdrawn, at the option
of the award recipient, as follows: (1) 50% upon vesting and (2) the balance one year after vesting. 
  
 Notwithstanding the foregoing, 
  

	 	(1)	the entire balance in a SEA (whether or not vested) of any award recipient, who dies while still employed at the Bank, shall be payable to such decedent’s heirs or legatees as
provided by law; and 

  

	 	(2)	the entire balance in a SEA (whether or not vested) of any award recipient who (i) is age 60 or older and (ii) retires (for purposes of the Financial Institutions Retirement Fund)
from active employment at the Bank shall be available upon such retirement to the award recipient; and 

  

	 	(3)	should any income tax become due based on payments to the SEA, such amount of tax shall become immediately available for withdrawal. 

  

	 	C.	Payment Deferral 

  
 An award recipient may elect to defer the receipt of all or any amount of the cash portion and/or the SEA share portion of any award under the Plan and to
have such amount applied to the purchase of Performance Units under the Federal Home Loan Bank of Chicago Long Term Incentive Compensation Plan. An election relating to the cash portion must be made by November 1st of the Plan year for which the
award relates, and an election relating to the SEA share portion must be made by December 31st of the Plan year preceding the Plan year in which the SEA share portion will vest. 
  

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	VI.	MISCELLANEOUS 

  
 Base pay may be adjusted annually by merit increases, but is not affected by any incentive award. 
  
 The Bank shall during each plan year give the Personnel & Compensation
Committee a mid-year status report on progress toward performance targets established hereunder. 
  
 The Plan shall be maintained in accordance with and is subject to Federal Housing Finance Board regulations and policies. 
  

	VII.	OTHER TERMS AND CONDITIONS 

  

	 	A.	Discretionary Authority. 

  
 The Bank, with the approval of the Personnel & Compensation Committee, may make adjustments in the criteria established herein for any award period
whether before or after the end of the award period and, to the extent it deems appropriate in its sole discretion which shall be conclusive and binding upon all parties concerned, make awards or adjust awards to compensate for or reflect any
significant changes which may have occurred during the award period which alter the basis upon which such performance targets were determined or otherwise. The Bank, with the approval of the Personnel & Compensation Committee, may, in its
discretion, make additional awards in such amounts as it deems appropriate in consideration of extraordinary performance by the Bank. 
  

	 	B.	Other Conditions. 

  

	 	(1)	No person shall have any claim to be granted an award under the Plan and there is no obligation for uniformity of treatment of eligible employees under the Plan. Except as otherwise
required by law, awards under the Plan may not be assigned. 

  

	 	(2)	Neither the Plan nor any action taken hereunder shall be construed as giving to any employee the right to be retained in the employ of the Bank. 

  

	 	(3)	The Bank shall have the right to deduct from any award to be paid under the Plan any Federal, state or local taxes required by law to be withheld with respect to such payment.

  

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	 	(4)	No award shall be paid to an employee for the current plan year if such employee’s employment ceases prior to the end of the plan year, whether by resignation, termination or
otherwise. 

  

	 	(5)	Any award hereunder may be reduced pro rata in the event that an award recipient (i) commences employment with the Bank during the calendar year or (ii) is absent from
the Bank (other than regular vacation) during the calendar year whether through approved leave or otherwise, including but not limited to: short or long term disability, leave under the Family and Medical Leave Act, a personal leave of absence or
military leave. 

  

	 	C.	Plan Administration 

  

	 	(1)	The Bank shall have full power to administer and interpret the Plan and to establish rules for its administration. The levels of financial and individual performance, established
pursuant to this Plan, achieved for each award period shall be conclusively determined by the Bank. The determination of financial performance achieved for any award period may, but need not, be adjusted to reflect extraordinary financial items and
adjustments or restatements of the financial statements, in the discretion of the Bank. Any such determination shall not be affected by subsequent adjustments or restatements. Any determinations or actions required or permitted to be made by the
Bank may be made by the President and Chief Executive Officer. The Bank and President and Chief Executive Officer of the Bank in making any determinations under or referred to in the Plan shall be entitled to rely on opinions, reports or statements
of officers or employees of the Bank and of counsel, public accountants and other professional or expert persons. 

  

	 	(2)	The Plan shall be governed by applicable Federal law. 

  

	 	(3)	This Plan supersedes any prior Management Incentive Compensation Plan for the plan year commencing on January 1, 2001. 

  

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	 	D.	Modification or Termination of Plan. 

  
 The Bank may modify or terminate the Plan at any time to be effective at such date as the Bank may determine. A modification may affect present and future
awards and eligible employees. 
  

	 	E.	Effective Date. 

  
 The Plan shall be effective January 1, 2001. 
  

	
	 Approved by the Board of Directors on
 March 20, 2001 and
amended on
 March 15, 2005.

	
	 /s/ Peter E. Gutzmer

	
	 Corporate Secretary

  

 - 7 -Federal Home Loan Bank of Chicago Long Term Incentive Compensation Plan

 Exhibit 10.8.3 
  
 FEDERAL HOME LOAN BANK OF CHICAGO 
 LONG TERM INCENTIVE COMPENSATION PLAN 
  

	I.	PURPOSE 

  
 The purpose of the Federal Home Loan Bank of Chicago Long Term Incentive Compensation Plan (the “Plan”) is to provide additional incentive for the required sustained efforts, decisions innovation and
discipline from certain senior officers who significantly contribute to the attainment of long-term goals of the Federal Home Loan Bank of Chicago (“Bank”), and to enhance the retention of such senior officers by providing such officers
with a competitive compensation opportunity, which aligns their interests with those of the Bank’s members. 
  

	II.	ADMINISTRATION 

  
 The Plan shall be administered by the Personnel and Compensation Committee of the Board of Directors of the Bank (the “Committee”). In addition to any authority granted from time to time to the Committee by
the Board of Directors of the Bank, the Committee shall have the authority to: (a) prescribe, amend and rescind Plan rules, regulations and procedures consistent with the Plan; (b) approve performance goals (with Board of Directors approval); (c)
determine from time to time the eligibility of employees of the Bank for participation in the Plan; (d) determine the number and monetary value of Performance Units to be allocated to each Participant for each Performance Period; (e) delegate from
time to time the performance of ministerial functions in connection with the administration of the Plan to such person or persons as it deems appropriate; (f) act upon the vote of a majority of its members; and (g) take all other action necessary or
appropriate for the administration of the Plan. All such actions by the Committee shall also be consistent with the terms and provisions of the Plan. 

	III.	ELIGIBILITY 

  
 Participants in the Plan for each Performance Period shall be those senior officers of the Bank who are designated by the Committee in its sole discretion. 
  
 Before the beginning of each Performance Period, the Committee shall designate those senior officers who shall be eligible to participate in
the Plan for that Performance Period and shall allocate to them Performance Units for that Performance Period. Each such person eligible to participate in the Plan for a Performance Period is referred to as a “Participant”. The continued
eligibility of any Participant for any Performance Period is at all times determined in the sole discretion of the Committee and may be subject to such restrictions as the Committee may in its sole discretion from time to time determine.
Restrictions on one Participant’s eligibility need not be applicable or the same as restrictions applicable to any other Participant’s eligibility. 
  

	IV.	PERFORMANCE UNITS 

  
 Performance Units shall be allocated by the Committee to Participants before each Performance Period. A Participant may elect to purchase from twenty percent (20%) to one hundred percent (100%) of the Performance
Units allocated to him and eligible for purchase. The purchase price for a Performance Unit shall be as designated by the Committee on the Performance Period Worksheet. The purchase price may be paid in cash, by personal check, by electing to forego
payments under the Federal Home Loan Bank of Chicago Management Incentive Compensation Plan or other similar incentive plan, or in any combination thereof. The number of Performance Units elected and the purchase price payment or direction must be
received by April 15th of the first year of the applicable Performance Period, or for the first Performance Period (2001-2003) 

  

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hereunder, by June 1, 2001. Participants who become employed during a Performance Period may purchase their Performance Units for such Performance Period at
the time of employment. 
  
 The President & CEO of the Bank shall have the
authority to allocate additional Purchased Performance Units to any Participant other than the President & CEO. Any such Performance Units so allocated shall not exceed, in the aggregate, ten percent (10%) of the total number of Performance
Units available for purchase by all Participants for the applicable Performance Period. 
  

	V.	GRANTED PERFORMANCE UNITS 

  
 A Participant shall receive three (3) additional Performance Units for each Performance Unit purchased. The Participant will not be required to pay for these additional
Performance Units. 
  

	VI.	PERFORMANCE PERIODS AND GOALS 

  
 Each year shall begin a new three (3) year Performance Period. 
  
 As of the beginning of each Performance Period, the Committee, with the approval of the Board of Directors, shall establish one or more performance goals and Performance
Unit values (“Performance Goals”) consistent with the purposes of the Plan, as determined in the sole discretion of the Committee, for that Performance Period, and if appropriate, the weight to be given to each such Performance Goal for
that period. The Committee may, from time to time thereafter, make appropriate adjustments in Performance Goals to reflect major unforeseen transactions, events or circumstances which in the Committees opinion alter or affect such goals or the basis
or assumptions upon which such goals were determined. 
  

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 At the beginning of each Performance Period, the Bank’s Human Resources Department shall send a letter
(“Notification Letter”) to each Participant who has been allocated Performance Units for that period. The Notification Letter shall indicate for that Performance Period: (a) the number of purchased and granted Performance Units available
to that Participant; (b) the Performance Goals applicable for such Performance Period; and (3) such other information relevant to such Performance Period. 
  
 As soon as practicable after the end of each Performance Period, the Committee shall determine the extent to which the Performance Goals for that period were achieved.

  

	VII.	VESTING 

  
 Except as provided below, if a Participant is actively employed by the Bank at the end of the Performance Period he shall be vested at the end of such Performance Period in the Performance Units allocated to him for
that Performance Period. 
  
 If a Participant dies, becomes totally and
permanently disabled, or retires under the qualified defined benefit retirement plan sponsored by the Bank before the end of a Performance Period, such Participant shall be vested at the end of the corresponding Performance Period in the number of
Performance Units he would have received had his employment with the Bank continued to the end of the Performance Period, multiplied by a fraction, the numerator of which is the number of full months he was employed by the Bank during the
Performance Period (excluding any period of disability in excess of three months), and the denominator of which is the total number of months in the Performance Period. 
  

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 The balance of a Participant’s Performance Units for any Performance Period that are not vested as provided above
shall automatically be forfeited by the Participant as of the last day of that Performance Period. The Participant shall receive the purchase price paid for any nonvested Performance Units forfeited, subject to downward adjustment by the Committee,
in its sole discretion. 
  
 Any award or Performance Unit allocation hereunder may
be reduced pro rata in the event that a Participant (i) commences employment with the Bank during a Performance Period or (ii) is absent from the Bank (other than regular vacation) during a Performance Period whether through approved
leave or otherwise, disability, leave under the Family and Medical Leave Act, a personal leave of absence or military leave. 
  

	VIII.	BENEFITS 

  

	 	a.	Benefit Value. The benefits to a Participant under the Plan will be the cash value of Performance Units based upon the achievement of the Performance Goals as established and
determined by the Committee in which such Participant becomes vested and adjusted for interest accruals as provided below for deferred payments. 

  

	 	b.	 Time of Payment. Except as otherwise provided for herein, payments due hereunder for vested Performance Units will be made within ninety (90) days of the end
of the Performance Period in which such Performance Units vested. If the Participant will own at least three hundred (300) Performance Units at the end of the Performance Period, he may elect, not less than one (1) year prior to the end of any
Performance Period, by a writing filed with and accepted by the Bank, to 

  

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defer distribution of Plan benefits (or any portion thereof) in which he becomes vested at the end of such Performance Period. Such deferral shall be for a
period of not less than two (2) years from the otherwise applicable time of payment. Such deferral election may be changed thereafter as long as such change is made at least one (1) year prior to the then current distribution date, and the new
distribution date is at least two (2) years from the new election date. In the event the Participant’s employment is terminated for any reason other than death, total and permanent disability or retirement under the qualified defined benefit
retirement plan sponsored by the Bank, all deferred distributions shall be paid in a lump sum within ninety (90) days of such termination. Interest shall accrue on deferred payments from the end of the applicable Performance Period to the date of
payment at a rate equal to the 90 day FHLB note rate (or such successor reference rate designated by the Committee) for each calendar quarter thereafter. The Bank may, in its sole discretion, choose at any time and from time to time to accelerate
the payment of any Plan benefits of a Participant after the Participant’s death, total and permanent disability or retirement. 

  

	 	c.	 Financial Emergency Withdrawal. If the Participant experiences a financial emergency as defined below, the Participant may petition the Committee to receive
a partial or full payment from the Plan. The payout shall not exceed the lesser of the Participant’s benefit under the Plan, or the amount reasonably needed to satisfy the financial emergency. If, subject to the sole discretion of the
Committee, the petition for payout is approved, payout shall be made as soon as practical after the date of approval. A financial emergency is an unanticipated 

  

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emergency that is caused by an event beyond the control of the Participant that would result in severe financial hardship to the Participant resulting from
(i) a sudden and unexpected illness or accident of the Participant or dependent of the Participant, (ii) a loss of the Participant’s property due to casualty, or (iii) such other extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant, all as determined in the sole discretion of the Committee. 

  

	 	d.	Form of Payment. A Participant may elect to receive a distribution from the Plan in the form of a lump sum or installments. In the event of the termination of the
Participant’s employment for other than death, total and permanent disability or retirement, all vested amounts shall be distributed in a lump sum within ninety (90) days of such termination. In the event of the termination of the
Participant’s employment for death, total and permanent disability or retirement, vested amounts shall be distributed on the date or dates otherwise elected by the Participant. The Committee may prescribe such rules as it deems necessary
regarding the payment of benefits. The Bank may, in its sole discretion, choose at any time and from time to time, to accelerate the payment of any Plan benefits of a Participant after the Participant’s death, total and permanent disability or
retirement. 

  

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	IX.	DESIGNATION OF BENEFICIARY 

  
 In the event of the death of a Participant, all benefits to which that Participant is entitled but which are unpaid at the time of his death shall be paid to the
beneficiary or beneficiaries of that Participant who are designated in writing by the Participant on a form provided by, filed with and accepted by the Bank, or in the absence of any such designation, to the beneficiary or beneficiaries of that
Participant who are entitled to receive the benefits of that Participant which are payable under the qualified defined benefit plan sponsored by the Bank or its successor plan. 
  

	X.	AMENDMENT OR TERMINATION OF PLAN 

  
 The Bank may terminate, amend or modify this Plan at any time and from time to time; provided however, any such termination, amendment or modification may not divest any
Participant of any of his benefits under this Plan which are granted as of the date of such termination amendment or modification. 
  

	XI.	GENERAL PROVISIONS 

  

	 	a.	No Right of Continued Employment. Nothing contained in the Plan shall give any Participant the right to be retained in the employment of the Bank or affect the right of the
Bank to dismiss any Participant. 

  

	 	b.	No Right to Continued Payments. The allocation of any Performance Units, the vesting therein or the payment of any Plan benefits for any Performance Period shall not
guarantee a Participant the right to receive any such allocation, vesting or payment for any subsequent Performance Period. 

  

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	 	c.	No Right of Transfer. The interests of persons entitled to benefits under the Plan are not subject to their debts or other obligations and, except for tax withholding
requirements or as otherwise specifically provided herein, may not be voluntarily or involuntarily sold, transferred, alienated, assigned or encumbered. 

  

	 	d.	Withholding for Taxes. The Bank shall have the right to deduct from all amounts paid under this Plan any taxes required by federal, state or local law to be withheld with
respect to such payments. 

  

	 	e.	Special Compensation. Except as otherwise provided by law, benefits received under the Plan shall not be included or taken into account in determining benefits under pension,
retirement, profit sharing, group insurance, or any other benefit plan maintained by the Bank, unless so provided in such plan. Neither the Bank nor the Committee guarantee in any way the deferral of tax liability if a Participant defers the payment
of Plan benefits. 

  

	 	f.	Law to Govern. All questions pertaining to the construction, regulation, validity and effect of the provisions of the Plan shall be determined in accordance with applicable
Federal law. 

  

	 	g.	Funding of Benefits. Benefits payable hereunder to or on account of any Participant shall be paid directly by the Bank from its general assets. The Bank shall not be required
to segregate on its books or otherwise set aside any amount to be used for the payment of benefits under this Plan. 

  

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	 	h.	Interpretation. The Committee shall have the sole and complete authority to interpret the provisions of and decide all disputes arising under the Plan, which interpretations
and decisions shall be final and binding on all parties having any interests arising under or by virtue of the Plan. 

  

	 	i.	Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and
the singular shall include the plural. 

  

	 	j.	Litigation. If any Participant, former Participant or beneficiary shall bring a suit or proceeding against the Committee or the Bank, or if any dispute shall arise as to the
person or persons to whom payment or delivery of any funds shall be made by the Bank, the costs (including attorneys’ fees) to the Bank of defending the action, where the result is adverse to the complainant, or pursuant to the authorization of
the court or other forum in which the suit or proceeding is brought, shall be charged against the Plan benefits of the applicable Participant, former Participant or beneficiary, and only the excess of such Plan benefits, if any, over the amount of
such costs shall be payable by the Bank. 

  

	 	k.	Effective Date. The Plan shall be effective beginning January 1, 2001 until modified or revoked by the Bank. 

  

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	 	l.	Federal Housing Finance Board. This Plan shall be maintained in accordance with and is subject to Federal Housing Finance Board regulations and policies.

  

	
	 Approved by the Board of Directors
 this 20th day of March, 2001, as
 amended on July 15, 2003.

	
	 /s/ Peter E. Gutzmer

	
	 Corporate Secretary

  

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