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EXHIBIT 10.2
SEPARATION AND RELEASE OF CLAIMS AGREEMENT
 
This Separation and Release of Claims Agreement ("Agreement") is entered into by and between the Federal Home Loan Bank of Seattle (the "Seattle Bank") and Richard Riccobono ("EMPLOYEE") to set forth the terms and conditions of EMPLOYEE'S separation from his employment with the Seattle Bank.
In order to provide EMPLOYEE with separation benefits to assist him in the transition to other opportunities and to fully and finally resolve any and all issues related to EMPLOYEE's employment with and termination from the Seattle Bank, the Seattle Bank and EMPLOYEE agree as follows:
		
	1.    
	Separation Date.

EMPLOYEE's employment with the Seattle Bank ended as of October 25, 2010 (Separation Date). On the next regularly scheduled pay date, EMPLOYEE will be paid his accrued, unpaid salary through October 31, 2010, as well as any accrued but unused vacation he had as of the Separation Date.
		
	2.    
	Reservation of EMPLOYEE's Rights in Certain Benefits.

Nothing contained in this Agreement will release or discharge the Seattle Bank with respect to any vested right EMPLOYEE had as of the Separation Date in any retirement plan of the Seattle Bank.
		
	3.    
	Severance Pay and Benefit.

The Seattle Bank agrees to provide EMPLOYEE with the severance pay and benefit as set forth below:
		
	a.    
	Severance Pay. Severance pay in an amount equal to EMPLOYEE's annual base salary ($524,382), less required withholdings. The severance pay under this subsection 3(a) will be paid to EMPLOYEE in  twenty-four (24) approximately equal semi-monthly installments (1/24 of $524,382), less required withholdings, in accordance with the Seattle Bank's normal payroll policies, beginning on November 15, 2010, and continuing for the next twenty-three (23) pay periods thereafter. For purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), each such installment shall be treated as a separate payment. EMPLOYEE acknowledges that this severance pay is offered solely as consideration for entering into this Agreement.

		
	b.    
	Severance Benefit. The Seattle Bank will pay the premium for continued coverage for EMPLOYEE and his eligible dependents under the Seattle Bank's group health insurance plans for a period of eighteen (18) months following the Separation Date or until EMPLOYEE is covered under another employee group health insurance plan, whichever period is shorter. Any such premium payments will be treated as taxable income to EMPLOYEE. EMPLOYEE acknowledges that this severance benefit is offered solely as consideration for entering into this Agreement.

 

 

 
		
	4.    
	Code Section 409A.

The parties intend that this Agreement and the payments and other benefits provided hereunder shall be exempt from the requirements of Code Section 409A, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-l(b)(4), the involuntary separation pay plan exception described in Treasury Regulation Section 1.409A-1 (b )(9)(iii), or otherwise (including, without limitation, pursuant to Treasury Regulation Section 1.409A-l(b)(9)(v». Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall be interpreted, operated, and administered in a manner consistent with such intentions.
		
	5.    
	No Additional Compensation or Benefits.

EMPLOYEE and the Seattle Bank agree that, except as expressly set forth in this Agreement, EMPLOYEE shall not be entitled to receive any additional compensation, bonuses, incentive compensation, employee benefits, or other consideration from the Seattle Bank. EMPLOYEE shall not be entitled to make contributions to the Seattle Bank 401(k) Savings Plan from the severance pay described in Section 3(a).
		
	6.    
	Return of Seattle Bank Property.

EMPLOYEE represents and warrants that he has returned to the Seattle Bank all the Seattle Bank property, including, without limitation, any laptop computer, keys, access cards, parking pass, credit cards, cellular telephones, books, manuals, files, computer software, disks, papers, and electronic copies of materials and documents in his possession or under his direct or indirect control relating to the Seattle Bank, including, but not limited to, its business, employees, and customers, and that he has not retained copies, in whatever form, of any such materials or documents. Notwithstanding anything to the contrary set forth herein, the Seattle Bank acknowledges and agrees that EMPLOYEE may retain, as his own property, his copies of his individual personnel documents, such as his payroll and tax records. Further, notwithstanding anything to the contrary set forth herein, the Seattle Bank will, within ten (10) business days following the effective date oft his Agreement, provide to EMPLOYEE a hard copy and an electronic copy of his contacts currently stored on the computer he used as a Seattle Bank employee, excluding those contacts who are members, directors of members, or employees of members of the Seattle Bank.
		
	7.    
	Covenant Not to Sue.

EMPLOYEE represents that he has not filed any claim that was released in this Agreement against the Seattle Bank or the Released Parties (as defined below) with any court or government agency, and that he will not, to the extent allowed by applicable law, file any lawsuit against the Seattle Bank at any time in the future; provided, however, that this will not bar EMPLOYEE from filing a claim to enforce the terms of this Agreement. If any government agency brings any claim or conducts any investigation against the Seattle Bank, nothing in this Agreement forbids EMPLOYEE from cooperating in such proceeding(s), but by this Agreement, EMPLOYEE waives and agrees to relinquish any damages or other individual relief that may be awarded as a result of any such proceeding(s).

 

 

 
		
	8.    
	EMPLOYEE's Release of Claims Against the Seattle Bank.

In consideration of the severance pay and benefit set forth above, which are given to EMPLOYEE specifically in  exchange for this release, EMPLOYEE, on behalf of himself, his marital community, and their heirs, successors, and assigns, releases and discharges the Seattle Bank, past and present directors, officers, employees, agents, insurers, attorneys, and representatives of the Seattle Bank, and past and present employee benefit plans sponsored by the Seattle Bank, including the directors, officers, trustees, administrators, employees, attorneys, and agents of such plans, ("Released Parties") from any and all claims, charges, causes of action, and damages (including attorneys' fees and costs actually incurred), known and unknown ("Claims"), including those claims arising before the effective date of this Agreement related in any way to EMPLOYEE's employment with or termination from the Seattle Bank. It is understood  and agreed that the waivers in this Agreement are not intended to waive EMPLOYEE's rights: (a) to indemnification under any agreement with the Seattle Bank or applicable provision of the Seattle Bank's Bylaws, or pursuant to applicable law; (b) under ERISA or applicable plan documents to receive his accrued vested benefits and any benefits specifically reserved for him in this Agreement; or (c) respecting the Seattle Bank's obligations under this Agreement. 
For the  purposes of implementing a full and complete release and discharge of the Seattle Bank and the other Released Parties, EMPLOYEE expressly acknowledges that this Agreement is intended to include in its effect, without limitation, all Claims which he does not know or suspect to exist in his favor at the time he signs this Agreement, and that this Agreement is intended to resolve fully and finally any such Claims.
This release specifically includes, but is not limited to, rights and claims under the local state or federal laws prohibiting discrimination in employment, including Title VII of the 1964 Civil Rights Act, the Americans with Disabilities Act, the Washington Law Against Discrimination, the Family and Medical Leave Act, the Employee Retirement Income Security Act (except as otherwise state herein), as well as any other state or federal laws or common law theories relating to discrimination in employment, termination of employment, or personal injury, including, without limitation, all claims for breach of contract, fraud, defamation, loss of consortium, and emotional distress. 
		
	9.    
	Voluntary Agreement; Full Understanding; Advice of Counsel.

EMPLOYEE understands and acknowledges the significance of this Agreement and acknowledges that this Agreement is voluntary and has not been given as a result of any coercion. EMPLOYEE understands and agrees that, by signing this Agreement, he is giving up any right to file legal proceedings against the Seattle Bank based on rights or claims that existed before the date he signs this Agreement. EMPLOYEE is not giving up rights or claims that may arise after the date the Agreement is executed. EMPLOYEE also acknowledges that he has been given a full opportunity to review and negotiate this Agreement, that by this document he has been specifically advised in writing to consult with legal counsel prior to signing, and that he executes this Agreement only after full reflection and analysis.

 

 

 
		
	10.    
	No Representations.

EMPLOYEE acknowledges that, except as expressly set forth herein, no representations of any kind or character have been made to him by the Seattle Bank or by any of the Seattle Bank's agents, representatives, or attorneys to induce him to sign this Agreement. 
		
	11.    
	Non-admission.

This Agreement shall not be construed as an admission of wrongdoing or evidence of noncompliance with or  violation of any statute or law by the Seattle Bank or EMPLOYEE.
		
	12.    
	Confidential Information.

		
	a.    
	Acknowledgment of Receipt of Confidential Information. EMPLOYEE acknowledges that he has occupied a position of trust and confidence with the Seattle Bank, and during EMPLOYEE's employment with the Seattle Bank, he has become familiar with the Seattle Bank's trade secrets, business plans and strategies, and with other proprietary and confidential information regarding the Seattle Bank and its business, employees, and members. EMPLOYEE agrees that (a) the agreements and covenants contained in this section are essential to protect the Seattle Bank and the goodwill of its business; (b) the Seattle Bank would be irreparably damaged if EMPLOYEE were to disclose confidential information in violation of this provision or Section 8 of EMPLOYEE's employment agreement; and (c) the severance pay and benefit provided him under this Agreement are given to him in part in exchange for his agreement to the restrictions set forth herein and in Section 8 of his employment agreement. As used in this Agreement, "Confidential Information" shall, in addition to having the meaning set forth in Section 8 of EMPLOYEE's employment agreement, mean any information relating to the business or affairs of the Seattle Bank or its customers, including, but not limited to, information relating to financial statements, identities of members and potential members, employees, suppliers, software tools, business methods, business plans, equipment, programs, methodologies, strategies and information, analyses, reports, models, calculations, profit margins, examination reports, or other proprietary information used by the Seattle Bank in connection with its business; provided, however, that Confidential Information shall not include any information which is in the public domain or becomes known in the industry through no wrongful act on the part of EMPLOYEE. EMPLOYEE acknowledges that Confidential Information is vital, sensitive, confidential, and proprietary to the Seattle Bank.

		
	b.    
	Agreement to Maintain Confidentiality of Seattle Bank Information. EMPLOYEE shall keep secret and retain in strictest confidence, and shall not, without the prior written consent of the Seattle Bank, furnish, make available, or disclose to any third party or use for the benefit of himself or any third party, any Confidential Information.

		
	c.    
	Remedies. EMPLOYEE acknowledges and agrees that the covenants set forth in this Section 12 are reasonable and necessary for the protection of the Seattle Bank's business interests, that irreparable injury will result to the Seattle Bank if EMPLOYEE breaches any of his confidentiality obligations under this Agreement, and that in the event of EMPLOYEE's actual or threatened breach of such confidentiality obligations, the Seattle Bank will have no adequate remedy at law. EMPLOYEE accordingly agrees that in the event of any actual or

 

 

 
threatened breach by him or any of his confidentiality obligations under this section, the Seattle Bank shall be entitled to immediate temporary injunctive and other relief, without bond and without the necessity of showing actual monetary damages, subject to hearing as soon thereafter as possible. Nothing contained herein shall be construed as prohibiting the Seattle Bank from pursuing any remedies available to it for such breach or threatened breach, including the recovery of any damages which it is able to prove.
		
	d.    
	Advice of Counsel. Nothing in this Agreement shall limit EMPLOYEE's ability to share information with legal counsel which counsel is under an agreement or duty to maintain the confidentiality of that information. 

		
	13.    
	Mutual Confidentiality of Agreement.

EMPLOYEE and the Seattle Bank may acknowledge to third parties that their parting was on mutually  satisfactory terms. EMPLOYEE agrees that he will keep the circumstances that led to the creation and execution of this Agreement completely confidential and will not publicize or disclose those circumstances in any manner, in writing or orally, to any person, directly or indirectly, or by or through an agent, representative, attorney, or any other person unless required by law, regulation, or court order. EMPLOYEE may, however, disclose the terms of this Agreement to his spouse, his attorney, or to his tax advisors and accountants, as necessary. The Seattle Bank likewise agrees to keep the circumstances that led to the creation and execution of this Agreement confidential and will not publicize or disclose those circumstances in any manner, in writing or orally, to any persons, directly or indirectly, or by or through an agent, representative, attorney, or any other person unless required by law, regulation, or court order and it being understood that the Seattle Bank will describe and file this Agreement in a filing with the Securities and Exchange Commission. Further, the Seattle Bank may disclose the circumstances that led to the creation and execution of this Agreement to its senior management, Board of Directors, regulators, attorneys, and accountants.
		
	14.    
	Non-Disparagement Obligation.

EMPLOYEE agrees not to disparage the Seattle Bank or its directors, officers, employees, agents, and representatives. The Board of Directors and senior management of the Seattle Bank agree not to disparage EMPLOYEE. 
		
	15.    
	Future Cooperation. 

EMPLOYEE agrees, at the Seattle Bank's reasonable request, to cooperate with the Seattle Bank and any of its directors, officers, agents, employees, attorneys and advisors in Seattle Banks' investigation of, preparation for, and prosecution or defense of any matter(s) brought by or against the Seattle Bank or any Released Party, including, without limitation, litigation regarding: (a) circumstances about which EMPLOYEE has any actual or alleged knowledge or expertise that was obtained during EMPLOYEE's employment with the Seattle Bank or (b) any of EMPLOYEE's acts or omissions, actual or alleged, during EMPLOYEE's employment with the Seattle Bank. EMPLOYEE agrees that, upon reasonable notice, EMPLOYEE will appear and provide full and truthful testimony in proceedings associated with 

 

 

 
the above-referenced matters, provided that the Seattle Bank agrees to reimburse EMPLOYEE for all  reasonable travel expenses associated with the giving of testimony and works with EMPLOYEE as reasonably practicable to schedule the activities contemplated by this Section 15 so as not to unreasonably interfere with EMPLOYEE's other commitments. 
		
	16.    
	Applicable Law; Venue; Attorneys' Fees; Interpretation.

This Agreement will be interpreted in accordance with the laws of the State of Washington, without regard to its conflict of laws. Any lawsuit between the parties arising out of this Agreement shall be brought in state or federal court in King County, Washington. The prevailing party in such action shall be awarded attorneys' fees and costs (whether or not taxable under any applicable statute), including fees and costs incurred prior to suit in any administrative proceeding or on appeal. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against either party.
		
	17.    
	Entire Agreement.

This Agreement represents and contains the entire understanding between the parties in connection with the subject matter of this Agreement. This Agreement shall not be modified or varied except by a written instrument signed by EMPLOYEE and an authorized representative of the Seattle Bank.
		
	18.    
	Severability.

It is understood and agreed that if any provisions of this Agreement are held to be invalid or unenforceable, the remaining provisions of the Agreement shall continue to be fully valid and enforceable.
		
	19.    
	Execution.

This Agreement may be executed with duplicate original counterparts with faxed signatures, each of which shall constitute an original and which together shall constitute one and the same document.
BY SIGNING THIS AGREEMENT, YOU STATE THAT:
(a) YOU HAVE READ THIS AGREEMENT AND HAVE HAD SUFFICIENT TIME TO
CONSIDER ITS TERMS;
(b) YOU UNDERSTAND ALL OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS;
(c) YOU AGREE WITH EVERYTHING IN THIS AGREEMENT;
(d) YOU ARE AWARE OF YOUR RIGHT TO CONSULT WITH AN ATTORNEY
BEFORE SIGNING THIS AGREEMENT AND HAVE BEEN ADVISED TO DO SO;

 

 

 
(e) YOU HAVE SIGNED THIS AGREEMENT KNOWINGLY AND VOLUNTARILY;
AND
(f) YOU UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE BY YOU
OF ALL KNOWN AND UNKNOWN CLAIMS.
 
 
FEDERAL HOME LOAN BANK
OF SEATTLE
/s/ William V. Humphreys
William V. Humphreys
Title: Chairman
Date: October 25,2010
 
/s/ Richard M. Riccobono
Richard Riccobono
Date: October 25, 2010WebFilings | EDGAR view

 

 
EXHIBIT 10.7
 
 
 
 
 
 
 
 
FEDERAL HOME LOAN BANK OF SEATTLE
 
 
Bank Incentive Compensation Plan (BICP) - Annual Plan for Exempt Staff (excluding Executive Officers SVP and above)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of January 1, 2010

 

 

 
FEDERAL HOME LOAN BANK OF SEATTLE
Bank Incentive Compensation Plan - Annual Plan
 
 
TABLE OF CONTENTS
    
			
	 
	Page

	1.0    Plan Objectives 
	2
	 

	2.0    Definitions
	2
	 

	3.0    Eligibility
	3
	 

	4.0    Incentive Award Opportunity
	3
	 

	5.0    Performance Measures
	4
	 

	6.0    Award Determination
	5
	 

	7.0    Award Conditions
	6
	 

	8.0    Participant Performance Reviews 
	6
	 

	9.0    Plan Communication 
	6
	 

	10.0    Administrative Control
	7
	 

	11.0    Miscellaneous Conditions
	7
	 

	Appendix A: 2010 Plan Year
	10
	 

	Table 1 - Incentive Award Opportunity
	11
	 

 
    
        
     
     
        
 

 

 

FEDERAL HOME LOAN BANK OF SEATTLE
Bank Incentive Compensation Plan (BICP) - Annual 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 Seattle 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 Seattle Bank strategic plans.
1.2    The Plan is a cash-based, annual incentive plan that establishes individual award opportunities related to achievement of Seattle Bank and individual performance. 
1.3    The award opportunity, Performance Measures, and other relevant information for a Plan Year are set forth in Appendix A.
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 (i.e. Bonuses, incentive pay, etc.) and after any adjustments (i.e. Leave w/o pay).
2.1.3    Board means the Seattle 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. 

 

 

 
2.1.6     Participant means an employee of the Seattle 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 are not eligible to participate in the plan. 
2.1.7    Plan means the Bank Incentive Compensation Plan - Annual Plan.
2.1.8    Plan Year means the calendar year, January 1 through December 31, over which both Seattle Bank and Participant performance is measured.
2.1.9    President means the President of the Seattle Bank. 
3.0    Eligibility
		
	1.    
	All Participants must be employed by the Seattle 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 (grade 12 and above) and officer positions below SVP level.
3.3    Employees that are participants in the Sales Incentive Compensation Plan, the Bank Incentive Compensation Plan - Internal Audit Department or any other Incentive Compensation Plan of the Seattle Bank (excluding the Executive Long Term Incentive Plan) will not be eligible to participate in this Plan.
3.4    The President (Level I) and Senior Executive Officers (Level II) will not be included as eligible participants under this Plan, but will be eligible for a separate similar plan.
4.0    Incentive Award Opportunity
4.1    Each Plan Year, the Seattle Bank will determine an award opportunity for 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 positions have a greater and more direct impact than others on the annual success of the Seattle Bank; therefore, these differences are recognized by varying award opportunities for each Participant level.  
4.2    Subject to Committee approval, the President may recommend a separate add-on incentive plan for certain key positions.  The participating key positions, specific criteria and award opportunity will be identified in Appendix 3 - Table 3.

 

 

 
4.3    There are six levels of award opportunities:
Level I:    President and Chief Executive Officer*
Level II:    Senior Executive Officers (SVP and above)*
Level III:    Grades 22 
Level IV:    Grades 18-21 
Level V:    Grades 14-17
Level VI:    Grades 12/E-13
 
*Level I and II are 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 and Appendix B. Three achievement levels will be set for each bankwide performance measure:
Threshold    The minimum achievement level accepted for the performance measure.
Target    The achievement level for the performance measure.
Maximum    The achievement level for the performance measure which substantially exceeds the target 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. 
Recognized enterprise performance - performs consistently at a high level above basic job requirements, exceeding supervisor's and senior management's expectations, and exceeds all line of sight goals. 
5.2    Bankwide measures will be reviewed by the Committee and approved by the Board. 

 

 

 
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. 
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 Seattle Bank performance measures and the Participant's senior manager, subject to Human Resources approval, may revise individual performance goals for the Plan Year after the year commences.
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    Using a linear approach, evaluate actual Seattle Bank performance against the bankwide performance at or between threshold and target, or target and maximum as identified in Appendix B - Table 2.  
6.1.3    Evaluate actual overall individual Participant performance at “More is expected,” “Meets all goals,” “Exceeds expectations,” and “Recognized enterprise performance”.  If the individual goal ratings do not line up specifically as outlined in Section 5.1, then the Participants overall performance rating will be at the discretion of the manager.
6.1.4    Subject to the provisions of Sections 6.1.6 and 11.11, locate the applicable Participant Level in the Incentive Award Opportunity table (Table 1 - Appendix A), and determine the interpolated award opportunity by relating the Seattle 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 Seattle 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    Depending upon the Board's assessment of severity, Level III Participants may receive anywhere from no award up to a maximum of 50% of their otherwise earned award if during the most recent examination of the Seattle Bank by the Federal Housing Finance Agency (FHFA) or successor regulator, an unsafe or unsound practice or condition with regard to the Seattle Bank was identified, unless the practice or condition took place prior to start of employment, comes to the attention of said Participant prior to examination and is not continued. However, the Level II and III Participants may receive their earned award provided that the finding of an unsafe or unsound practice or condition is subsequently resolved within the Plan Year in favor of the Seattle Bank by the FHFA.  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 Senior Management Team of the Seattle Bank.
7.0    Award Conditions
7.1    If the Seattle 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 Seattle 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 Seattle 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:

 

 

 
		
	First quarter of Plan Year
	Communicate Bank Incentive Compensation Plan document and material changes.
Communicate bankwide goals.
Set individual goals.

	Semi-annual - June and November of Plan Year
	Review of progress toward achieving individual goals.

	After end of Plan Year
	Final assessment of Seattle Bank and individual goals.

 
10.0    Administrative Control
10.1    The Seattle 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 Seattle Bank until the pay period in which the payments are made - in February of the following year.
11.2    Employees of the Seattle 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 Seattle Bank who are transferred or promoted into an eligible position from an ineligible 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.  Employees transferred or promoted into an eligible position from an ineligible position on or after October 1st will not be eligible to receive an 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 Seattle 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 Seattle 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 Seattle Bank to discipline or discharge a Participant shall not be affected by any provision of this Plan.
11.8    In the event the Seattle 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.
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 Seattle 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 Seattle 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  In accordance with 11.4, 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 Seattle 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.

 

 

 
FEDERAL HOME LOAN BANK OF SEATTLE
Bank Incentive Compensation Plan (BICP) - Annual Plan
APPENDIX A
2010 Plan Year
Incentive Award Opportunity (as a percentage of base salary)
The interpolated incentive award is determined based on a linear approach against bankwide measures at or between threshold and target, or target and maximum, and adjusted for individual performance as follows:
Table 1 - Incentive Award Opportunity
										
	 
	Individual
	Bank Performance

	Level
	Performance
	No Award
	Threshold
	Target
	Maximum

	I -  President & CEO
	Separate Plan (see Section 3.4)

	II - Sr. Executive Officers
	Separate Plan (see Section 3.4)

	III - Grades 22
	Recognized Enterprise Performance
	—
	%
	25
	%
	30
	%
	35
	%

	 
	Exceeds Expectations
	—
	%
	20
	%
	25
	%
	30
	%

	 
	Meets all Goals
	—
	%
	15
	%
	20
	%
	25
	%

	 
	More is Expected
	—
	%
	—
	%
	—
	%
	—
	%

	IV - Grades 18-21
	Recognized Enterprise Performance
	—
	%
	20
	%
	25
	%
	30
	%

	 
	Exceeds Expectations
	—
	%
	15
	%
	20
	%
	25
	%

	 
	Meets all Goals
	—
	%
	10
	%
	15
	%
	20
	%

	 
	More is Expected
	—
	%
	—
	%
	—
	%
	—
	%

	V - Grades 14-17
	Recognized Enterprise Performance
	—
	%
	15
	%
	20
	%
	25
	%

	 
	Exceeds Expectations
	—
	%
	10
	%
	15
	%
	20
	%

	 
	Meets all Goals
	—
	%
	5
	%
	10
	%
	15
	%

	 
	More is Expected
	—
	%
	—
	%
	—
	%
	—
	%

	VI - Grades 12/E-13
	Recognized Enterprise Performance
	—
	%
	7
	%
	10
	%
	12
	%

	 
	Exceeds Expectations
	—
	%
	4
	%
	7
	%
	10
	%

	 
	Meets all Goals
	—
	%
	1
	%
	3
	%
	5
	%

	 
	More is Expected
	—
	%
	—
	%
	—
	%
	—
	%

 

 

Bank Performance Measures
There will be one or more Seattle Bank performance measures for the 2010 Plan Year. (See Appendix B Table 2 - Bankwide Performance Measures) The achievement level for bankwide performance shall be according to specific measurements as reviewed by the Committee and adopted by the Board.
Individual Performance Measures
There will be two to four Individual performance goals for the 2010 Plan year.  The Individual Performance Achievement Level is determined by the Individuals overall goal performance at More is expected, Meets all goals, Exceeds expectations, and Enterprise Performance

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