Document:

Exhibit

Exhibit 10.4

FHLBank San Francisco
2016 Executive Performance Unit Plan [the Long-Term Incentive Plan]
Summary Description

PLAN PURPOSE
To optimize the Bank’s performance in accomplishing Board-approved goals.
PLAN OBJECTIVES
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
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:
President
Executive Vice President
Senior Vice Presidents (excluding the Senior Vice President, Director of Internal Audit – participates in the Audit Performance Unit Plan)
PERFORMANCE PERIOD
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
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.

Actual achievement of Bank goals is subject to adjustment for changes resulting from changes in financial strategies or policies, any significant change in Bank membership, as well as other factors determined by the Board. Impacts of OTTI credit charges are excluded from the Adjusted Return on Capital Spread achievement levels, but are included in the measurement of actual Adjusted Return on Capital Spread performance. Impacts of dividend benchmark variances to plan are excluded from the measurement of Adjusted Return on Capital Spread performance.

	
	
	January 2016

FHLBank San Francisco
2016 Executive Performance Unit Plan [the Long-Term Incentive Plan]
Summary Description

EPUP ACHIEVEMENT MEASURES
The Executive Performance Unit Plan rewards four levels of performance achievement, as follows:
	
		
	Achievement Level
	Measure Definition

	Far Exceeds
	The most optimistic achievement level that far exceeds expected performance.

	Exceeds
	An optimistic achievement level that exceeds expected performance.

	Meets
	Performance that is expected under the Bank’s Plan.

	Threshold
	Minimum level of performance that must be achieved for awards to be paid.

AWARD DETERMINATION
An award is calculated and paid in whole or part at the end of the 2016 plan term (during the first quarter of 2019). Awards earned are based on the level at which the 3-year performance goals have been achieved. Final awards may be prorated for participants promoted or hired into an eligible position during the performance period, and for participants who take a leave of absence during the performance period. To be eligible for the Executive Performance Unit Plan payment, participants must be employed with the Bank through the end of the 3-year performance period, except in the case of a Retirement, (b) a qualified long-term disability or death, (c) a termination by Participant for Good Reason; (d) a termination by the Bank without Cause due to the elimination of an individual job or position; (e) the elimination of one or more jobs or positions as a result of a reduction in force or department reorganization; (f) a substantial job modification resulting in the incumbent being, in the judgment of the Bank, unqualified for or unable to perform the revised job, or (g) a Change in Control, then a pro rata portion of a Plan Award may be paid in accordance with the terms of the EPUP. Any awards will be distributed as soon as administratively possible following the effective date of Board approval in accordance with the terms of the EPUP. All compensation and incentive plans are subject to review and revision at the Bank’s discretion. Such plans are reviewed regularly to ensure they are competitive and equitable. Executive Officer compensation and benefit programs are subject to Federal Housing Finance Agency review and oversight, and payments made under such programs may not become effective until after the Agency's non-objection under applicable laws and regulations in effect from time to time. Note that the percentages of award opportunity provided below are not the award percentages of base salary. See below for award opportunities and ranges.

	
						
	Adjusted Return on Capital Spread Goal 
(3-Year Average) 1
	Risk Management Goal 
(3-Year Average) 2

	30% goal weight
	 
	% of Award 
Opportunity
	70% goal weight
	 
	% of Award Opportunity

	Threshold      (75%)
	2.44%
	22.5%
	Threshold      (75%)
	Average of 3- 
Year 
Achievement
	52.5%

	Meets              (100%)
	2.69%
	30.0%
	Meets              (100%)
	70.0%

	Exceeds           (125%)
	2.94%
	37.5%
	Exceeds           (125%)
	87.5%

	Far Exceeds    (150%)
	3.19%
	45.0%
	Far Exceeds     (150%)
	105.0%

	 

	1 Meets excludes OTTI impact, while measured performance includes OTTI impact.

	2 Measured by 3-year achievement levels of Risk Management goal under the respective STIPs.

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.

January 2016        

AWARD DETERMINATION AND OPPORTUNITY
Achievement award levels are stated below as a percentage of the February 1st base salary at the beginning of the performance period.
2016-2018 EPUP Plan Period
	
				
	Percentage of Goal Achievement Scale
	Aggregate Goal Achievement
	Award Range (Percentage of 2016 Base Salary)

	0% - 150%
	150%   
	= Far Exceeds
	50.0%

	 
	125%
	= Exceeds
	48.0%

	 
	100%
	= Meets
	40.0%

	 
	75%
	= Threshold
	20.0%

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.
To be eligible for the Executive Performance Unit Plan payment, participants must be employed with the Bank through the end of the 3-year performance period, except in the case of a voluntary normal retirement, a qualified long-term disability, or death. EPUP awards will be prorated for participants in position less than a full plan term, including participants who have a leave of absence greater than one month during the plan term. Actual achievement of Bank goals is subject to adjustment for changes resulting from changes in financial strategies or policies, any significant change in Bank membership, as well as other factors determined by the Board. Impacts of OTTI credit charges are excluded from the Adjusted Return on Capital Spread achievement levels, but are included in the measurement of actual Adjusted Return on Capital Spread performance. Impacts of dividend benchmark variances to plan are excluded from the measurement of Adjusted Return on Capital Spread performance.Actual achievement of Bank goals is subject to adjustment for changes resulting from changes in financial strategies or policies, any significant change in Bank membership, as well as other factors determined by the Board. Impacts of OTTI credit charges are excluded from the Adjusted Return on Capital Spread achievement levels, but are included in the measurement of actual Adjusted Return on Capital Spread performance. Impacts of dividend benchmark variances to plan are excluded from the measurement of Adjusted Return on Capital Spread performance.

January 2016        

Any awards will be distributed as soon as administratively possible following the effective date of Board approval. All compensation and incentive plans are subject to review and revision at the Bank’s discretion. Such plans are reviewed regularly to ensure they are competitive and equitable. Executive Officer compensation and benefit programs are subject to Federal Housing Finance Agency review and oversight, and payments made under such programs may not become effective until after the Agency's non-objection under applicable laws and regulations in effect from time to time.

January 2016EX-10.20

 EXHIBIT 10.20 

June 7, 2016 
 PERSONAL AND CONFIDENTIAL 

Jonathan N. Potter 
 250 Putnam Road 

New Canaan, CT 06840 
 Dear Jonathan: 

We are pleased to offer you the position of Chief Marketing Officer of The Boston Beer Company, Inc., reporting directly to me. This position will be based in
Boston. The following are the parameters of our offer: 
  

	 	•	 	Title: Chief Marketing Officer 

  

	 	•	 	Anticipated Start Date: No later than mid-August 2016 

  

	 	•	 	Base Annualized Salary: $475,000, payable in bi-weekly installments, subject to applicable payroll and withholding taxes. 

 

	 	•	 	Annual Bonus Potential: 50% of paid salary each calendar year. The bonus will be tied to Company Goals that are determined annually. Bonuses are paid on calendar year performance and you must be
employed on December 31st of the applicable year to receive the bonus. Bonus multiplier of 1.5x is available for significant performance above Target. Bonus payout for 2016 performance is currently projected to be significantly below Target due to
current brand trends, thus no bonus payout should be expected for this calendar year. 

  

	 	•	 	Options Grant: You will be granted options for Class A Common Stock of The Boston Beer Company, Inc. valued at approximately $2,750,000 (accounting value of the options — estimated to be
approximately 37,500 options at current stock price). The Option will be granted on the third business day after the first release of quarterly financial results following the date on which you commenced full-time employment (our next results dates
are end of July and end of October). The number of shares will be determined based on the market price on the day prior to the date of grant and the per share exercise price will be that market price. 

 

	 	•	 	The options will vest on the following schedule: 

  

	 	•	 	20% vest on third anniversary of date of grant 

  

	 	•	 	20% vest on fourth anniversary of date of grant 

  

	 	•	 	20% vest on fifth anniversary of date of grant 

  

	 	•	 	20% vest on sixth anniversary of date of grant 

  

	 	•	 	20% vest on seventh anniversary of date of grant 

  

	 	•	 	The Option has a ten-year life but expires ninety days after the end of employment. Details are in the attached form of the Option Agreement. 

 

	 	•	 	Compensation structure is determined and additional option grants are made at the discretion of the Company’s Board of Directors based on the recommendation of the Board’s Compensation Committee, as is the
case with other Company senior officers. Discretionary option awards are generally granted effective January 1 each year and are based on Company and individual performance. Vesting of discretionary options is frequently both time- and
performance-based. Due to the size of the initial grant in this offer, you should not expect any further awards to occur prior to January 1, 2018, at the earliest. 

 Jonathan N. Potter 

June 7, 2016 
 Page 2 

Offer Letter 
  

	 	•	 	Restricted Stock: At the same time that you will receive your Option grant, you will be granted restricted stock in The Boston Beer Company, Inc. valued at $600,000. The actual number of shares to be
granted will be determined based on the market price on the day prior to the date of grant. 

  

	 	•	 	The shares will vest one-third each year on the first, second and third anniversary of your date of grant. 

 

	 	•	 	Hiring Bonus: $250,000.00, payable in a lump sum on date of the first regular payroll in March 2017, repayable on a prorated basis should you voluntarily resign or be terminated for cause within 12 months
following such payment. 

  

	 	•	 	Performance and Compensation Review: Your performance will be formally reviewed on an annual basis and any adjustment to compensation may require approval of the Compensation Committee. Adjustments
generally take effect as of January 1. 

  

	 	•	 	Relocation: Provided you agree to the Company’s Relocation Payback guidelines included with this offer and relocate to the Boston area by the end of 2017, the Company will provide you with the
following relocation assistance: 

  

	 	•	 	Sale of Current Home — Reimbursement of third party agent commission up to 6%. Legal fees will be reimbursed (maximum of $2,000). 

 

	 	•	 	If you need to sell your home in order to relocate, the Company has a program which may, in some circumstances, provide you with some tax savings related to the transaction. When the time comes to place your house
on the market, please do not contact or sign with a selling agent prior to discussing your home sale needs with Kirsten Cummings in the HR Department. 

 

	 	•	 	Boston Beer will not assume any liability or risk with respect to the sale of your home, including but not limited to, covering a negative equity position, guaranteed buy-out of
property, etc. 

  

	 	•	 	Assistance in Purchasing New Residence — Purchase closing costs normally paid by the purchaser up to a maximum of 1% of the value of the loan. Mortgage loan points are not reimbursed.

  

	 	•	 	Boston Beer will not assume any liability or risk in reference to the purchase of a new home, including but not limited to equity loans, advanced pay, etc. 

 

	 	•	 	Home Finding — reasonable number of trips for you and your spouse including food, lodging and transportation (utilizing the Company’s travel agency to the extent practicable). 

 

	 	•	 	Transportation to New Location — actual expenses incurred by using the most direct route for one trip (utilizing the Company’s travel agency to the extent practicable). 

 

	 	•	 	Temporary Housing and Commuting Support — lodging and reasonable commuting expenses for roundtrip travel to the Boston office from your home in Connecticut through June 30, 2017.

  

	 	•	 	Movement of Household Goods — moving company will pack and move ordinary household goods, and two (2) vehicles. 

 

	 	•	 	Storage — storage of household goods up to 60 days. 

  

	 	•	 	Settling-in Allowance — reimbursement of actual out of pocket expenses incurred during your move, including but not limited to application fees, driver’s
license fee, car registration fees and utility hook-up fees. 

 Jonathan N. Potter 

June 7, 2016 
 Page 3 

Offer Letter 
  

	 	•	 	Paid Time Off (PTO): During the first two (2) years of your employment, in addition to 10 company holidays, you will be eligible for seventeen (17) PTO days per year, accruing at 2.62 hours /
week, which will be pro-rated during your first year of employment. On your second anniversary, you will be eligible for twenty-two (22) PTO days per year, accruing
at 3.38 hours / week. You will begin accruing PTO immediately, and we encourage you to take all of this time within the calendar year in which accrued. 

  

	 	•	 	Benefits: You will be eligible to participate in the Company’s medical and dental programs upon your first day of employment with us. You will be eligible to participate in our 401(k) plan at the
beginning of the month following your start date. Enclosed you will find a more detailed description of our benefits package and payroll information. You should complete the enclosed forms and send them to
Ai-Li Lim, VP of Human Resources, at the above address prior to your first day of employment with us. If you have specific questions regarding your benefits, you may contact
Ai-Li directly at (617) 368-5186. Please note — it is imperative that you provide I-9 documentation to Ai-Li on or before your first day so we are able to add you to our payroll system. Failure to do so may delay your first paycheck. 

 

	 	•	 	Employment Agreement: Enclosed are two (2) copies of an Employment Agreement, which includes, among other provisions, an agreement to protect the Company’s proprietary and confidential
information and a covenant not to compete. This offer is contingent on your signing the Employment Agreement prior to your start date. Please sign both copies and send to Ai-Li Lim. You will receive a
fully-executed copy of the agreement for your files after your start date. 

  

	 	•	 	At-Will Employment: Your employment is, and will at all times remain, at will, meaning that you or the Company may terminate your employment at any time, with or
without cause, for any reason or for no reason. It also means that, if your employment is terminated by the Company, you have no legal entitlement to severance pay. By accepting our offer of employment you confirm that you understand your at-will status. 

 Please note that at this level, your compensation, equity grants, and biographical
information may be disclosed publicly in our proxy statement and other public documents filed with the Securities and Exchange Commission. Also, all aspects of your compensation may be subject to Compensation Committee review and approval from time
to time. The Company has also established claw-back provisions to recover executive compensation not earned. 
 All employees are expected to abide by our
Code of Business Conduct and Ethics and Insider Trading Policy (copies of which are enclosed), and such other policies as are in place or may be adopted from time to time by the Company. 

Please indicate your acceptance of this offer by signing one copy of this letter and returning it to Ai-Li Lim by
email at ai-li.lim@bostonbeer.com, by fax at 617-368-5386 or by mail at the above address. This offer is valid until June 15th 2016 and is contingent upon our receipt of satisfactory background and reference checks, as well as your signing the Employment Agreement in the form enclosed with this letter. 

Jonathan, we are delighted to extend this offer and hope you decide to join us. I look forward to working with you as together we grow this company. 

Best regards, 
 /s/ Martin F. Roper 

Martin Roper 
 President and CEO 

 Jonathan N. Potter 

June 7, 2016 
 Page 4 

Offer Letter 
  

	Enc.	Form of Option Agreement 

 Form of Restricted Stock Agreement 

Employee Equity Incentive Plan (EEIP) Disclosure Statement 

Employment Agreement (2 copies) 

Code of Business Conduct and Ethics 

Insider Trading Policy 

Benefits Guide 

Relocation Approval Payback Form 

Relocation Survey Form 
  

	cc:	Jim Koch 

 Ai-Li Lim 

Accepted and agreed to: 
  

					
	 /s/ Jonathan N Potter
	  		  	 June 15, 2016

	Jonathan N Potter	  		  	Date

 This document should not be misconstrued as a contract. 

This is an offer for employment at will.

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