Document:

Bank Incentive Compensation Plan

 Exhibit 10.14 
 FEDERAL HOME LOAN BANK OF SEATTLE 
 Bank Incentive Compensation Plan (BICP) – Annual Plan for Exempt Staff and Officers

 As of January 1, 2006 

 FEDERAL HOME LOAN BANK OF SEATTLE 
 Bank Incentive Compensation Plan (BICP) – Annual Plan 
 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	1.0	  	Plan Objectives	  	1
	2.0	  	Definitions	  	1
	3.0	  	Eligibility	  	2
	4.0	  	Incentive Award Opportunity	  	2
	5.0	  	Performance Measures	  	3
	6.0	  	Award Determination	  	4
	7.0	  	Award Conditions	  	5
	8.0	  	Participant Performance Reviews	  	5
	9.0	  	Plan Communication	  	5
	10.0	  	Administrative Control	  	6
	11.0	  	Miscellaneous Conditions	  	6
		
	Appendix A: 2006 Plan Year	  	8
		  	Table 1 – Incentive Award Opportunity	  	9

 FEDERAL HOME LOAN BANK OF SEATTLE 
 Incentive Compensation Plan 
 PLAN DOCUMENT 
  

	1.0	Plan Objectives 

  

	 	1.1	The purpose of the Federal Home Loan Bank of Seattle’s Incentive Compensation Plan (Plan) is to achieve four objectives: 

  

	 	1.1.1	Promote the achievement of the Bank’s business goals in accordance with the business plan; 

  

	 	1.1.2	Link compensation to specific Bankwide and individual performance measures; 

  

	 	1.1.3	Provide a competitive reward structure for officers and other exempt employees; and 

  

	 	1.1.4	Provide a vehicle for closer Board involvement and communication with management regarding Bank strategic plans. 

  

	 	1.2	The Plan is a cash-based, annual incentive plan that establishes individual award opportunities related to achievement of Bank and individual performance. 

 

	 	1.3	The award opportunity, Performance Measures, and other relevant information for a Plan Year are set forth in the attached Appendix. 

  

	2.0	Definitions 

  

	 	2.1	When used in this Plan, the following words and phrases shall have the following meaning: 

  

	 	2.1.1	Bank means the Federal Home Loan Bank of Seattle. 

  

	 	2.1.2	Base Salary is defined as the Participant’s normal rate of pay, including overtime, before any other add-ons (ie. Bonuses, incentive pay, etc.) and after any adjustments
(ie. Leave w/o pay). 

  

	 	2.1.3	Board means the Bank’s Board of Directors. 

  

	 	2.1.4	Committee means the Governance, Budget and Compensation Committee of the Board. 

  

	 	2.1.5	Disability means the Participant is receiving benefits under the Federal Home Loan Bank of Seattle’s Long Term Disability Plan. 

  

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	 	2.1.6	Participant means an employee of the Bank who, at the discretion of the Board, is eligible to take part in the Plan for a designated Plan Year, and who has been named as a
Participant for that Plan Year by the President, with the concurrence of the Committee. Student interns, temporary employees, contract employees, and part-time employees averaging less than 20 hours per week during the plan year are not eligible to
participate in the plan. 

  

	 	2.1.7	Plan means this Incentive Compensation Plan. 

  

	 	2.1.8	Plan Year means the calendar year, January 1 through December 31, over which both Bank and Participant performance is measured. 

  

	 	2.1.9	President means the President of the Bank. 

  

	3.0	Eligibility 

  

	 	3.1	All Participants must be employed by the Bank prior to October 1st in the Plan Year. Employees employed on or after October 1st will be allowed
participation in the Plan if nominated by the President and approved by the Committee. 

  

	 	3.2	Eligibility shall normally be limited to exempt level staff and officer positions. 

  

	 	3.3	Due to their unique role for the Bank and reporting relationship to the Board, the Director of Internal Audit and Auditor staff will not be included under the Plan, but will be
eligible for a similar plan administered by the Audit Committee of the Board. 

  

	 	3.4	The President (Level I – Grade 24) will not be included as an eligible participant under this Plan, but will be eligible for a separate similar plan administered by the
Committee. 

  

	4.0	Incentive Award Opportunity 

  

	 	4.1	Each Plan Year, the Bank will provide an award opportunity to Participants. The award opportunity shall be a percentage of each Participant’s annual base salary as described in
Appendix A Table 1 – Incentive Award Opportunity. Certain executive positions have a greater and more direct impact than others on the annual success of the Bank; therefore, these differences are recognized by varying award opportunities for
each Participant level. 

  

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	 	4.2	There will be five levels of award opportunities: 

  

			
	Level I:	  	Grade 24*
		
	Level II:	  	Grades 23
		
	Level III:	  	Grades 22
		
	Level IV:	  	Grades 18-21
		
	Level V:	  	Grades 14-17
		
	Level VI:	  	Grades 12/E-13
		
	* Level I –	  	Grade 24 is under a separate plan (see Section 3.4).

  

	5.0	Performance Measures 

  

	 	5.1	Bankwide and individual performance measures will be established with respect to each Plan Year as described in Appendix A. Three achievement levels will be set for each Bankwide
performance measure: 

  

			
	Threshold	  	The minimum achievement level accepted for the performance measure.
		
	Target	  	The planned achievement level for the performance measure.
		
	Maximum	  	The achievement level for the performance measure which substantially exceeds the planned level of achievement.

 Individual performance goal measures will include four levels: 
 More is expected – performs at basic job requirements and does not meet all line of sight goals. 
 Meets all goals – performs at or at times above basic job requirements and meets all line of sight goals. 
 Exceeds expectations – performs consistently above basic job requirements and exceeds all line of sight goals at a level surpassing
supervisor’s expectations. 
 Recognized enterprise performance – performs consistently at a high level above basic job
requirements, exceeds all line of sight goals and performs at a level exceeding supervisor’s and senior management’s expectations. 
  

	 	5.2	Bankwide measures will be established by the Committee with Board approval. 

  

	 	5.3	Participants incentive awards will be based on Bankwide performance objectives first and secondly on the individual performance goals, and will vary by Participant level.

  

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	 	5.3.1	Participants will typically have two to four major goals established that reflect the priorities of the Participant for the Plan Year. 

  

	 	5.3.2	Participants will work with their managers to develop individual goals. Individual goals must be agreed upon and approved by the manager and Human Resources in order to be eligible
to receive an incentive award based on individual performance. 

  

	 	5.3.3	All performance goals are to remain in effect for the entire Plan Year. However, in its sole discretion, the Committee with Board approval may revise Bank performance measures and
the Participant’s senior manager may revise individual performance goals for the Plan Year after the year commences subject to Human Resources approval. 

  

	6.0	Award Determination 

  

	 	6.1	The method of determining the incentive award will be according to the following sequence: 

  

	 	6.1.1	After the plan year ends determine the Participant’s base salary for the Plan Year. 

  

	 	6.1.2	Evaluate actual Bank performance against the Bankwide performance measures. Assess Bank performance as it relates to the threshold, target, and maximum awards.

  

	 	6.1.3	Evaluate actual individual Participant performance against the individual performance goals. Assess performance as it relates to “More is expected,” “Meets all
goals,” “Exceeds expectations,” and “Recognized enterprise performance”. 

  

	 	6.1.4	Locate the applicable Participant Level in the Incentive Award Opportunity table (Table 1 – Appendix A), and determine the award opportunity by relating the Bank Performance
achievement level (derived in 6.1.2) to the Individual Performance achievement level (derived in 6.1.3). 

  

	 	6.1.5	Determine the “incentive award pool” for each participation level by relating the Bank Performance achievement level (derived in 6.1.2) to the award opportunity in the
Incentive Award Opportunity table (Table 1 – Appendix A). 

  

	 	6.1.6	The President with Committee approval may recommend the Board adjust the awards of Participants. 

  

	 	6.2	Level II and Level III Participants shall not receive an award under this Plan if during the most recent examination of the Bank by the Federal Housing Finance Board (FHFB) or
successor regulator, an unsafe or unsound practice or condition with regard to the Bank was identified unless the practice or 

  

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 condition took place prior to start of employment, comes to the attention of said Participant and is not
continued. However, the Level II and III Participants may receive such award provided that the finding of an unsafe or unsound practice or condition is subsequently resolved within the Plan Year in favor of the Bank by the FHFB. The Board, in its
sole discretion may take into consideration mitigating factors to approve the award as noted in 11.11 (Miscellaneous Conditions). 
  

	 	6.3	Any Participant receiving a written warning for performance or misconduct at any time during the Plan Year will not receive an award unless approved by the Executive Management
Committee of the Bank. 

  

	7.0	Award Conditions 

  

	 	7.1	If the Bank achieves its threshold performance measures but a Participant’s performance fails to meet all goal expectations no incentive award will be made to the Participant.
Likewise, should any individual Participant’s performance meet expectations but the Bank fails to achieve threshold performance no incentive award will be made to any Participant. However, at the Committee’s sole discretion, an incentive
award may be recommended for Bank performance below threshold subject to final approval by the Board. 

  

	8.0	Participant Performance Reviews 

  

	 	8.1	Participant performance reviews will be scheduled to occur semi-annually with a final assessment after the Plan Year ends. 

  

	 	8.2	The Participant’s performance will be appraised by their immediate manager, and reviewed by Human Resources. 

  

	9.0	Plan Communication 

  

	 	9.1	Communications with Participants regarding the Plan should be made according to the following schedule: 

  

			
	Fourth quarter of the prior year	  	Communicate next year’s Bank and department goals, and identify next year’s Plan Participants.
		
	First quarter of the Plan Year	  	Communicate Bankwide goals for the Plan Year. Set Individual goals.
		
	Semi-Annually	  	Interim assessments of progress toward achieving individual goals.
		
	End of Plan Year	  	Final assessment of Bank and individual performance.

  

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	10.0	Administrative Control 

  

	 	10.1	The Bank’s Human Resources Department will administer the Plan. 

  

	 	10.2	The Board will have ultimate authority over the structure and goals of the Plan, and any incentive payouts from the Plan. 

  

	11.0	Miscellaneous Conditions 

  

	 	11.1	Participants must be employed by the Bank until the pay period in which the payments are made – in February of the following year. 

  

	 	11.2	Employees of the Bank who are hired on or after October 1st may (i) be nominated for participation in the Plan in accordance with Section 3.1, and be eligible to
(ii) receive a prorated incentive award. 

  

	 	11.3	After the Plan Year commences, employees of the Bank who are transferred or promoted into an eligible position prior to October 1st of the Plan Year will be required to submit revised individual goals, including any manager specific goals (if applicable), within 30 days from
transfer/promotion in order to be eligible for a pro-rated incentive award. 

  

	 	11.4	The President may nominate Participants who retire, die, or become disabled during the Plan Year to be eligible to receive a prorated award. 

  

	 	11.5	Notwithstanding any Plan provision to the contrary, mere participation in the Plan will not entitle a Participant to an award. 

  

	 	11.6	The designation of an employee as a Participant in the Plan does not guarantee employment. Nothing in this Plan shall be deemed (i) to give any employee or Participant any
legal or equitable rights against the Bank, except as expressly provided herein or provided by law; or (ii) to create a contract of employment with any employee or Participant, to obligate the Bank to continue the service of any employee or
Participant, or to affect or modify any employee’s or Participant’s term of employment in any way. 

  

	 	11.7	The right of the Bank to discipline or discharge a Participant shall not be affected by any provision of this Plan. 

  

	 	11.8	In the event the Bank does not achieve threshold performance levels, the President may recommend, with the concurrence of the Committee, eligibility for incentive awards for
extraordinary individual performance. 

  

	 	11.9	All awards under the Plan will be paid out through regular payroll and will be subject to applicable payroll tax withholdings and other appropriate deductions.

  

	 	11.10	Incentive awards will be made as soon as practical following the end of the Plan Year, but no later than the last pay period in February. 

  

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	 	11.11	The Board has the right to revise, modify, or terminate the Plan in whole or in part at any time or for any reason, and the right to modify any recommended incentive award amount
(including the determination of a lesser award or no award), without the consent of any Participant. 

  

	 	11.12	Since no employee has a guaranteed right to any award under this Plan, any attempt by an employee to sell, transfer, assign, pledge, or otherwise encumber any anticipated award
shall be void, and the Bank shall not be liable in any manner for or subject to the debts, contracts, liabilities, engagements or torts of any person who might anticipate an award under this program. 

  

	 	11.13	This Plan shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating assets of the Bank for payment of any award under this
program. 

  

	 	11.14	The Plan shall be construed, regulated, and administered in accordance with the laws of the state of Washington, unless otherwise preempted by the laws of the United States.

  

	 	11.15	If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provision of the Plan, and the Plan shall be construed
and enforced as if such provision had not been included herein. 

  

	 	11.16	If a Participant dies before receiving his or her award, any amounts determined to be paid under this Plan shall be paid to the Participant’s surviving spouse, if any, or if
none, to the Participant’s estate. The Bank’s determination as to the identity of the proper payee of any amount under this Plan shall be binding and conclusive and payment in accordance with such determination shall constitute a complete
discharge of all obligations on account of such amount. 

  

	 	11.17	Any agreements or representations, oral or otherwise, express or implied, with respect to the subject matter of this Plan which are not contained herein will have no effect or
enforceability. 

  

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 FEDERAL HOME LOAN BANK OF SEATTLE 
 Bank Incentive Compensation Plan (BICP) – Annual Plan 
 APPENDIX A 
 2006 Plan Year 
  

 8 

 Incentive Award Opportunity (as a percentage of base salary) 
 The incentive pool is determined based on the threshold, target, and maximum awards for the Bankwide performance measures and adjusted for individual performance as
follows: 
 Table 1 – Incentive Award Opportunity 
  

															
	  	  	 Individual
 Performance
	  	Bank Performance	 
	 Level
	  	  	No
Award	 	 	Threshold	 	 	Target	 	 	Maximum	 
	 I - Grade 24
	  	 Recognized Enterprise Performance
 Exceeds
Expectations
 Meets all Goals
 More is
Expected
	  	Separate Plan (see Section 3.4)	 
	 II - Grades 23
	  	 Recognized Enterprise Performance
 Exceeds
Expectations
 Meets all Goals
 More is
Expected
	  	0
0
0
0	%
%
%
%	 	30
20
15
0	%
%
%
%	 	40
30
20
0	%
%
%
%	 	50
40
30
0	%
%
%
%
	 III - Grades 22
	  	 Recognized Enterprise Performance
 Exceeds
Expectations
 Meets all Goals
 More is
Expected
	  	0
0
0
0	%
%
%
%	 	25
20
15
0	%
%
%
%	 	30
25
20
0	%
%
%
%	 	35
30
25
0	%
%
%
%
	 IV – Grades 18-21
	  	 Recognized Enterprise Performance
 Exceeds
Expectations
 Meets all Goals
 More is
Expected
	  	0
0
0
0	%
%
%
%	 	20
15
10
0	%
%
%
%	 	25
20
15
0	%
%
%
%	 	30
25
20
0	%
%
%
%
	 V – Grades 14-17
	  	 Recognized Enterprise Performance
 Exceeds
Expectations
 Meets all Goals
 More is
Expected
	  	0
0
0
0	%
%
%
%	 	15
10
5
0	%
%
%
%	 	20
15
10
0	%
%
%
%	 	25
20
15
0	%
%
%
%
	 VI – Grades 12/E-13
	  	 Recognized Enterprise Performance
 Exceeds
Expectations
 Meets all Goals
 More is
Expected
	  	0
0
0
0	%
%
%
%	 	7
4
1
0	%
%
%
%	 	10
7
3
0	%
%
%
%	 	12
10
5
0	%
%
%
%

  

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 Bank Performance Measures 
 There will be one Bank performance measure for the 2006 Plan Year. The achievement level for Bankwide performance measure shall be a Profitability goal based on the threshold, target, and maximum awards according to specific measurements as
adopted by the Board of Directors. 
 Individual Performance Measures 
 There will be up to four Individual performance goals for the 2006 Plan year. The Individual Performance Achievement Levels (More is expected, Meets all goals, Exceeds expectations, Enterprise Performance) is
determined by the Individuals overall goal performance. 
  

 10Bank Incentive Compensation Plan

 Exhibit 10.15 
 FEDERAL HOME LOAN BANK OF SEATTLE 
 Bank Incentive Compensation Plan (BICP) - Long-Term Incentive Plan 
 As of January 1, 2006 

 FEDERAL HOME LOAN BANK OF SEATTLE 
 Executive Long-Term Incentive Plan 
 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	1.0	  	Plan Objectives	  	1
	2.0	  	Definitions	  	1
	3.0	  	Eligibility	  	3
	4.0	  	Base Award Opportunity	  	3
	5.0	  	Performance Measures	  	4
	6.0	  	Final Award Determination	  	4
	7.0	  	Administrative Control	  	5
	8.0	  	Miscellaneous Conditions	  	5
		
	Appendix A: 2006 – 2008 Performance Period	  	9
		  	Performance Period	  	10
		  	Base Award Opportunity	  	10
		  	Value of Performance Unit	  	10
		  	Value of Performance Unit at Interim & End of Performance Period	  	10
		  	Goals & Performance Measures	  	11

 FEDERAL HOME LOAN BANK OF SEATTLE 
 Executive Long-Term Incentive Plan 
 PLAN DOCUMENT 
  

	1.0	Plan Objectives 

  

	 	1.1	The purpose of the Federal Home Loan Bank of Seattle Executive Long-Term Incentive Plan is to achieve five objectives: 

  

	 	1.1.1	Promote the achievement of the Bank’s business goals; 

  

	 	1.1.2	Link executive compensation to specific long-term performance measures; 

  

	 	1.1.3	Provide a competitive reward structure for senior officers and other key employees; 

  

	 	1.1.4	Provide a vehicle for closer Board involvement and communication with management regarding the Bank’s long-term strategic plans; and 

  

	 	1.1.5	Promote loyalty and dedication to the Bank and its objectives. 

  

	 	1.2	The Plan is a cash-based, long-term incentive plan that establishes individual Base Award Opportunities related to achievement of Bank performance over certain three-year
Performance Periods. 

  

	 	1.3	The Base Award Opportunity, Performance Measures, value of a Performance Unit at the beginning and end of a Performance Period, and other relevant information are set forth in the
attached Appendices. 

  

	2.0	Definitions 

  

	 	2.1	When used in this Plan, the words and phrases below shall have the following meanings: 

  

	 	2.1.1	Bank means the Federal Home Loan Bank of Seattle. 

  

	 	2.1.2	Base Award Opportunity means the award that may be earned during a Performance Period for achieving target performance levels under each Performance Measure.

  

	 	2.1.3	Base Salary is defined as the Participant’s normal rate of pay before any other add-ons (ie. Bonuses, incentive pay, etc.). 

  

	 	2.1.4	Board means the Bank’s Board of Directors. 

  

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	 	2.1.5	Committee means the Governance, Budget and Compensation Committee of the Board. 

  

	 	2.1.6	Disabled means the Participant is receiving benefits under the Federal Home Loan Bank of Seattle’s Long Term Disability Plan. 

  

	 	2.1.7	Extraordinary Occurrences means those events that, in the opinion and discretion of the Board, are outside the significant influence of the Participants or the Bank and are
likely to have a significant unanticipated effect, whether positive or negative, on the Bank’s operating and/or financial results, including, without limit changes in financial strategies or policies, or significant change in Bank membership.

  

	 	2.1.8	Final Award means the amount ultimately paid to a Participant under the Plan for a Performance Period. 

  

	 	2.1.9	Interim Performance Period means a single 12 month calendar year period of which three make up a Performance Period (see Section 2.1.13). 

  

	 	2.1.10	Performance Measure means each performance factor that is taken into consideration under the Plan in determining the value of the Final Award. 

  

	 	2.1.11	Participant means an employee who participates in the Plan pursuant to Section 3.1. 

  

	 	2.1.12	Periodic Plan Award means an amount that is provisionally determined at the end of the Interim Performance Period. 

  

	 	2.1.13	Performance Period means a certain three-year period over which Bank performance is measured. 

  

	 	2.1.14	Performance Unit means a unit, the value of which shall be determined in accordance with the Appendix – Initial Value of Performance Unit. 

  

	 	2.1.15	Plan means this Executive Long-Term Incentive Plan. 

  

	 	2.1.16	Plan Award means an amount that is provisionally determined at the end of the Performance Period subject to adjustment as provided in Section 6.

  

	 	2.1.17	President means the President of the Bank. 

  

	 	2.1.18	Termination for cause means the participants malfeasance, including the commission of any fraud or felony, or the Participant’s material breach of his or her employment
obligations, as determined by the Board. 

  

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	3.0	Eligibility 

  

	 	3.1	A Bank employee who is a grade 19 or above during the Performance Period shall participate in the Plan. 

  

	 	3.2	Eligibility shall generally be limited to officers (i) whose functional responsibilities encompass the establishment of strategic direction and tactical action plans for the
Bank, and (ii) who have received at least “meets all goals” rankings on annual performance reviews over a Performance Period. 

  

	 	3.3	Due to its unique role for the Bank and reporting relationship to the Board, the Director of Internal Audit (and any qualified auditor staff) will not be included as an eligible
position under the Plan, but will be eligible for a similar plan administered by the Audit Committee of the Board. 

  

	4.0	Base Award Opportunity 

  

	 	4.1	At the beginning of each Performance Period, the Bank will provide a Base Award Opportunity to Participants. The Base Award Opportunity is equal to a percentage of each
Participant’s annual base salary at the beginning of the Performance Period as described in Appendix A. Certain executive positions have a greater and more direct impact than others on the annual success of the Bank; therefore, these
differences are recognized by varying award opportunities for each Participant level. 

  

	 	4.2	Each Participant in a Performance Period shall be granted a number of Performance Units for that Performance Period determined by dividing the Base Award Opportunity by the value of
a Performance Unit at the beginning of a Performance Period as described in the applicable Appendix. 

  

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	 	4.3	There will be four levels of award opportunities: 

  

			
	Level I:	  	Grade 24
		
	Level II:	  	Grades 22-23
		
	Level III:	  	Grades 20-21
		
	Level IV:	  	Grade 19

  

	5.0	Performance Measures 

  

	 	5.1	Three achievement levels will be established for each Performance Measure: 

  

			
	Threshold	  	The minimum achievement level accepted for the Performance Measure.
		
	Target	  	The planned achievement level for the Performance Measure.
		
	Maximum	  	The achievement level for the Performance Measure that substantially exceeds the planned level of achievement.

  

	 	5.2	At the beginning of each Performance Period, Performance Measures for the Performance Period, Performance Units, and the Performance Unit initial values will be established by the
Committee with Board approval. 

  

	6.0	Award Determination 

  

	 	6.1	Periodic Plan Award determinations will be performed annually (Interim Performance Period) during the three-year Performance Period cycle and will be based on the achievement level
for each annual Bank Performance Measure(s). However, if the Bank fails to achieve the Threshold level for a Performance Measure, no award will be made for that Interim Performance Period of the three-year Performance Period.

 Final Plan Awards will be determined after the end of the three-year Performance Period and will equal the sum of the
Periodic Plan Awards for each Interim Perfomance Period of the three-year Performance Period. 
  

	 	6.2	A Participant’s Periodic Plan Award for an Interim Performance Period equals one third of the number of his or her Performance Units for the three-year Performance Period
multiplied by the value of a Performance Unit at the end of the Performance Period as determined in accordance with Table 1 - Appendix A. 

  

	 	6.3	If a Federal Housing Finance Board (FHFB) (or successor entity) examination identifies an unsafe or unsound practice or condition in a Participant’s area of responsibility, the
Participant will not be eligible for an award under the Plan for 

  

 4 

	 	  	the Performance Period in which the unsafe and unsound condition existed unless the practice or condition took place prior to start of employment, comes to the attention of said
Participant and is not continued. However, the Participant may receive an award under the Plan in the Board’s sole discretion provided that the finding of an unsafe or unsound practice or condition is subsequently resolved within the
Performance Period in favor of the Bank by the FHFB. The Board, in its sole discretion may take into consideration mitigating factors to approve the award as noted in Section 8.12 (Miscellaneous Conditions). 

  

	 	6.4	Any Participant receiving a written warning for performance or misconduct at any time during the Performance Period will not receive an award unless approved by the President.

  

	 	6.5	After a Performance Period, Plan Awards for the Performance Period shall be determined by the Board in its sole discretion based upon the Plan Award under Section 6.1.

  

	 	6.6	A Participant’s Final Award will consist of his or her Plan Award as determined by the Board in its sole discretion promptly after the Performance Period. The Board in its sole
discretion may consider Extraordinary Occurrences when assessing performance results and determining Final Awards and may adjust the Performance Measures to ensure that the purpose of the Plan is served. 

  

	7.0	Administrative Control 

  

	 	7.1	The Bank’s Human Resources Department will administer the Plan, and the Board will have ultimate authority over the structure and goals of the plan, and any incentive payouts
from the Plan. 

  

	 	7.2	In addition to the authority expressly provided in the Plan, the Board shall have such authority in its sole discretion to control and manage the operation of the Plan and shall
have all authority necessary to accomplish these purposes, including, but not limited to, the authority to interpret the terms of the Plan, and to decide questions regarding the Plan and the eligibility of any person to participate in the Plan and
to receive benefits under the Plan. The Board’s determinations and interpretations regarding the Plan shall be final, binding, and conclusive. 

  

	8.0	Miscellaneous Conditions 

  

	 	8.1	Except as provided in Section 8.4, a Participant will not become vested in an award under this Plan unless the Participant is employed by the Bank on the date the Board
determines and authorizes the payment of the Participant’s Final Award, and such payment will be no later than 2 1/2 months after the three-year Performance Period ends, except as provided under Section 8.4 below. 

  

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	 	8.2	If a Participant voluntarily or involuntarily terminates employment prior to the date the Board determines and authorizes the payment of the Participants final award, no award will
be made to the Participant, except as provided in Section 8.4 below. 

  

	 	8.3	Employees of the Bank who are hired, transferred, or promoted into an eligible position during a Performance Period may (i) be nominated for participation in the Plan in
accordance with Section 3.1, and (ii) be eligible to receive a prorated Base Award Opportunity upon vesting in accordance with Section 8.1 or 8.4. 

  

	 	8.4	A Participant who retires on or after age 65 or achieving Rule of 70, dies or becomes Disabled while still employed by the bank, or is involuntarily terminated without cause during
the Performance Period may receive a prorated Plan Award (paid in cash, lump-sum), but only if the President nominates and the Board approves such action at the end of the Interim Performance Period during which such event occurs. If the President
does not make such a recommendation or the Board does not approve such action, the Participant will not be entitled to an award. If a Participant becomes entitled to receive a prorated award under this section, the prorated Final Award will be paid
to the Participant no later than 2 1/2 months following the end of the calendar year in which such event occurred
(see also Section 8.1). If a Participant terminates service with the Bank for any reason other than retirement on or after age 65 or achieving Rule of 70, death or Disability while still employed by the bank, or involuntary termination without
cause during the Performance Period, the Participant will not be eligible to receive an award under the Plan. 

  

	 	8.5	The amount of any prorated award will be determined by dividing the number of months that an employee was a Participant in the Plan during the Performance Period by thirty-six and
multiplying such quotient by the Plan Award. 

  

	 	8.6	Notwithstanding any Plan provision to the contrary, mere participation in the Plan will not entitle a Participant to an award. 

  

	 	8.7	The designation of an employee as a Participant in the Plan does not guarantee employment. Nothing in this Plan shall be deemed (i) to give any employee or Participant any
legal or equitable rights against the Bank, except as expressly provided herein or provided by law; or (ii) to create a contract of employment with any employee or Participant, to obligate the Bank to continue the service of any employee or
Participant, or to affect or modify any employee’s or Participant’s term of employment in any way. 

  

	 	8.8	The right of the Bank to discipline or discharge a Participant shall not be affected by any provision of this Plan. 

  

 6 

	 	8.9	All Final Awards will be paid out in a lump sum in cash through regular payroll and will be subject to applicable payroll tax withholdings and other appropriate deductions.

  

	 	8.10	No Final Award received by a Participant shall be considered as compensation under any employee benefit plan of the Bank, except as otherwise determined by the Bank.

  

	 	8.11	Final Awards will be made as soon as practical following the end of the Performance Period, but no later than 2 1/2 months following the calendar year that the Participant became entitled to the Final Award pursuant to Section 8.1, except as otherwise provided in Section 8.4.

  

	 	8.12	The Board has the right to revise, modify, or terminate the Plan in whole or in part at any time or for any reason, and the right to modify any recommended award amount (including
the determination of a lesser award or no award), for any reason, without the consent of any Participant. 

  

	 	8.13	Since no employee has a guaranteed right to any award under this Plan, any attempt by an employee to sell, transfer, assign, pledge, or otherwise encumber any anticipated award
shall be void, and the Bank shall not be liable in any manner for or subject to the debts, contracts, liabilities, engagements or torts of any person who might anticipate an award under this program. 

  

	 	8.14	This Plan shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating assets of the Bank for payment of any award under this
program. 

  

	 	8.15	The Plan shall be construed, regulated, and administered in accordance with the laws of the state of Washington, unless otherwise preempted by the laws of the United States.

  

	 	8.16	If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provision of the Plan, and the Plan shall be construed
and enforced as if such provision had not been included herein. 

  

	 	8.17	If a Participant dies before receiving his or her award, any amounts determined to be paid under this Plan shall be paid to the Participant’s surviving spouse, if any, or if
none, to the Participant’s estate. The Bank’s determination as to the identity of the proper payee of any amount under this Plan shall be binding and conclusive and payment in accordance with such determination shall constitute a complete
discharge of all obligations on account of such amount. 

  

	 	8.18	Claims and Appeals Procedures. A Participant (such Participant being referred to below as a “Claimant”) may deliver to the Committee a written claim
for a determination with respect to any claim as to which the Committee has jurisdiction under this Plan. If such a claim relates to the contents of a notice 

  

 7 

	 	  	received by the Claimant, the claim must be made within sixty days after such notice was received by the Claimant. The claim must state with particularity the determination desired
by the Claimant. 

  

	 	  	The Committee shall consider a Claimant’s claim within a reasonable time, but no later than ninety days after receiving the claim. If the Committee determines that special
circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial ninety-day period. Upon reaching its decision, the Committee shall notify
the Claimant in writing. 

  

	 	  	On or before sixty days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized
representative) may file with the Committee a written request for a review of the denial of the claim. The Committee shall render its decision on review promptly, in writing, and deliver it to the Claimant no later than sixty days after it receives
the Claimant’s written request for a review of the denial of the claim. 

  

	 	8.19	Any agreements or representations, oral or otherwise, express or implied, with respect to the subject matter of this Plan which are not contained herein will have no effect or
enforceability. 

  

 8 

 FEDERAL HOME LOAN BANK OF SEATTLE 
 Executive Long-Term Incentive Plan 
 APPENDIX A 
 2006 – 2008 Performance Period 
  

 9 

 Performance Period 
 The Performance Period described in this Appendix shall be January 1, 2006 through December 31, 2008. 
 Base Award Opportunity

 The Base Award Opportunity (as a percentage of January 1, 2006 base salary) for Levels I, II, III, and IV are: 
  

													
	 	  	Bank Performance	 
	 Level
	  	No Award	 	 	Threshold	 	 	Target	 	 	Maximum	 
	 I - Grade 24
	  	0	%	 	15	%	 	30	%	 	45	%
	 II – Grades 22-23
	  	0	%	 	12.5	%	 	25	%	 	37.5	%
	 III – Grades 20-21
	  	0	%	 	10	%	 	20	%	 	30	%
	 IV – Grade 19
	  	0	%	 	7.5	%	 	15	%	 	22.5	%

 Value of Performance Unit 
 The value of a Performance Unit at the beginning of this Performance Period equals $100. 
 Value of Performance Unit at
the Interim and End of Performance Period 
  

	 	1.	After each Interim Performance Period ends, evaluate the actual Bank performance against the Bank Performance Measure stated below. 

  

	 	2.	The value of the Performance Unit at the end of the Interim Performance Period equals the dollar value determined by the Profitability goal based on the threshold, target, and
maximum awards according to the following table: 

 Table 1 – Bank Performance Measure and Performance Unit Values 
  

													
	 Bank Performance
 Measure
	  	No Award	  	Threshold	  	Target	  	Maximum
	 Profitability
	  	0%	  	As
determined
by the
Committee	  	As
determined
by the
Committee	  	As
determined
by the
Committee
	 Dollar Value at Hurdles
	  	$	0	  	$	50	  	$	100	  	$	150
	 Total Value
	  	$	0	  	$	50	  	$	100	  	$	150

  

	3.	At the end of the Performance Period determine the Final Award by summing the Periodic Plan Awards for each Interim Perfomance Period. 

  

 10 

 Goals & Performance Measures 
 The Bank Performance Measure for each Interim Performance Period of the overall Performance Period will mirror the Annual BICP Bank Performance Measure. 
 For the 2006 Interim Performance Period, the achievement level for the Bankwide performance measure shall be a Profitability goal based on the threshold, target, and maximum awards according to specific measurements
as adopted by the Board of Directors. 
  

 11

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