Document:

Board Resolution for Director's 2005 Comp. and Expense Reimbursement Policy

 EXHIBIT 10.4 
  
 FEDERAL HOME LOAN BANK OF SAN FRANCISCO 
  
 RESOLUTION 
  
 January 28, 2005 
  
 RESOLVED, that the Board of Directors of the Federal Home Loan Bank of San Francisco hereby approves the 2005 Board of Directors Compensation and Expense Reimbursement Policy attached as Exhibit F. 
  
  

	
	I certify that this is a true and correct copy of a resolution adopted by the Board of Directors of the Federal Home Loan Bank of San Francisco at its meeting on January 28,
2005.
	
	 /s/ Lisa MacMillen

	 Lisa B. MacMillen, Senior Vice President and

	     General Counsel-Corporate Secretary

 Exhibit F to 
 January 28, 2005 Board Minutes 
  
 FEDERAL HOME LOAN BANK OF SAN FRANCISCO 
  
 BOARD OF
DIRECTORS 
 COMPENSATION AND EXPENSE REIMBURSEMENT POLICY 
 2005 
  
 The Board of Directors of
the Federal Home Loan Bank of San Francisco hereby establishes the following Compensation and Expense Reimbursement Policy for 2005. 
  
 Compensation 
  
 To provide the Directors with reasonable compensation for the performance of their duties as members of the Board of Directors and the amount of time spent on official Bank business, the Bank will pay meeting fees to
the Directors as follows: 
  

						
	 Meeting

	  	Position

	  	Meeting Fee

	 Board
	  	Chairman	  	$	4,000
	 Board
	  	Vice Chairman	  	$	3,000
	 Board
	  	Director	  	$	2,000
			
	 Meeting

	  	Position

	  	 Meeting Fee
 (subject to an
 annual limit
 of $13,000)

	 Board committee
	  	Committee chairman, vice chairman, or
member	  	$	750
	 System Directors’ orientation or conference
	  	Director	  	$	750

  
 Total annual compensation for members
of the Board is limited as follows: 
  

				
	 Position

	  	Annual limit

	 Chairman
	  	$	28,364
	 Vice Chairman
	  	$	22,692
	 Director
	  	$	17,019

  
 A Board member may receive a fee for
participation in one Board meeting by telephone. No other fee will be paid for participation in meetings of the Board or committees by telephone exceeding the limits above, or participation in other Bank or Federal Home Loan Bank System
activities. Although Director participation in these activities is necessary and appropriate, they are related to the scheduled meetings of the Board and committees and are therefore covered by the scheduled meeting compensation. 

 The President of the Bank is authorized to interpret this Policy, as necessary, according to applicable statutory,
regulatory and policy limits. 
  
 Expense Reimbursement 
  
 The Bank will reimburse Directors for necessary and reasonable travel, subsistence and other
related expenses incurred in connection with the performance of their official duties, which may include participation in meetings or activities for which no fee is paid. 
  
 For expense reimbursement purposes, Directors’ “official duties” include: 
  

	1)	Meetings of the Board and Board committees 

  

	2)	Meetings requested by the Federal Housing Finance Board and Federal Home Loan Bank System committees 

  

	3)	Meetings of the Council of Federal Home Loan Banks and its committees 

  

	4)	Attendance at events on behalf of the Bank when requested by the President in consultation with the Chairman 

  

	5)	Attendance at other events on behalf of the Bank with the prior approval of the Equal Employment Opportunity-Personnel-Compensation Committee of the Board. 

 
 Each Director is responsible for making his or her own travel arrangements (including
hotel accommodations) to attend meetings for which expenses may be reimbursed. 
  
 Expenses reimbursable for Directors are the same as the expenses reimbursable for senior officers under the Bank’s Travel Expense Policy, except that Directors may not be reimbursed for gift or entertainment expenses. 
  
 To be reimbursed for allowable expenses, a Director must complete a statement itemizing the
expenses upon completion of any covered trip. The statement, prepared on the Director’s letterhead, must be submitted to the Bank’s Assistant Corporate Secretary and must include the following information: 
  

	1)	Meeting(s) or event(s) attended, with dates and locations 

  

	2)	Itemization of reimbursable expenses, with supporting receipts for any expense exceeding $50.00 

  

	3)	Boarding passes for airline travel 

  

	4)	To whom reimbursement should be made payable. 

  
 Records 
  
 The Bank will maintain records of (i) Directors’ attendance at meetings of the Board and Board committees; (ii) total compensation paid; and (iii) expenses reimbursed.2005 Executive Incentive Plan

 EXHIBIT 10.5 
  
 FHLBank San Francisco 
 2005 EXECUTIVE INCENTIVE PLAN 
  
 PLAN PURPOSE 
  
 To optimize the Bank’s
performance in accomplishing Board approved goals and objectives. 
  
 PLAN OBJECTIVES 
  
 To motivate key executives to
exceed Bank and individual goals and objectives which directly support the business plan and long-term strategic plan. Attract and retain outstanding executives by providing a competitive total compensation program, including incentive award
opportunity. 
  
 ELIGIBILITY 
  
 Participants are key executives whose performance has a major impact on the Bank’s
success. 2005 Participants are the incumbents in the Bank’s officer positions, including: 
  
 Executive Vice President 
 Senior Vice President 
 Vice President 
 Assistant Vice President 
  
 Participants must be employed by the Bank when payment is disbursed to be eligible for an incentive award for the current plan year.
Employees who participate in other incentive plans are not eligible to participate in this plan. Participants hired, promoted, or who have a leave of absence during the plan year are eligible to participate on a pro-rata basis. Participants hired or
promoted on or after October 1st will not be eligible to participate during the current plan year. 
  
 INCENTIVE GOALS, WEIGHTS, AND MEASURES 
  
 Incentive Goals 
  
 The incentive goals are based on the primary objectives set forth in the Bank’s 2005
plan. For each participant there are two Bank goals, and one to three individual goals. The individual goals directly support the Bank-wide goals. 
  
 The two Bank goals for 2005 are as follows: 
  

	1.	2005 Dividend Potential: Dividend potential before any provision for retained earnings or accounting impacts of FAS 133 is at least 172.0 basis points over the
benchmark yield on invested capital. 

  

	2.	2005 Market Penetration: Achieve a target market penetration of wholesale borrowings and convert non-borrowing members into borrowing members. 

  

	 	•	 	Market penetration is divided into sub-categories of members found on the following page. 

  
 [*] 
  

	 	•	 	Convert [*] non-borrowing member institutions into borrowing members. This is consistent with the Bank’s strategic objective to increase diversification of its core credit
business and maximize the value of membership among all members. 

  
 The Board of Directors will also determine whether or not to allocate a discretionary amount/pool of dollars to the incentive compensation payouts. 
  
 Actual achievement of Bank goals one (1) and two (2) are subject to adjustment for changes resulting from movements in interest rates,
changes in financial strategies or policies, any significant change in Bank membership, as well as other factors determined by the Board. 
  

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

  

 1 

 Incentive Goal Weights 
  
 The Bank and individual goals are weighted. For the Executive Vice President and Senior Vice Presidents, greater weight is given to the Bank
goals, since these officers have a greater impact on total Bank performance. 
  
 Incentive Goal Achievement Measures 
  
 The plan
rewards levels of goal achievement, as follows: 
  

			
	 Achievement Level

	    	 Measure Definition

	200% of target	    	The most optimistic achievement level based on reasonable business assumptions and conditions.
		
	150% of target	    	An optimistic achievement level based on expected business.
		
	Target (100%)	    	Performance that is considered a target level of successful plan achievement. Incentive payments are made at the target (100%) level found in the award ranges scale on the following
page.
		
	Threshold (75% of target)	    	A threshold level of performance.

  
 The 2005 goals/discretionary
pool weights and measures are: 
  
  

																							
	 Weights

	 	 	Measures

	 2005
 Bank Goals
 &
 BOD Discretion

	  	EVP

	 	 	SVP

	 	 	VP

	 	 	AVP

	 	 	 	 	 (75%)
 Threshold

	 	 (100%)
 Target

	 	 (150%)
 Exceeds
 Target

	 	 (200%)
 Far
 Exceeds
 Target

	 Dividend Potential
	  	32	%	 	28	%	 	20	%	 	16	%	 	 	 	Benchmark
+ 147.0 bps	 	Benchmark
+ 172.0 bps	 	Benchmark
+ 222.0 bps	 	Benchmark
+ 272.0 bps
	 
	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
										
	 Market Penetration
	  	28	%	 	25	%	 	18	%	 	14	%	 	Customer
Segment	 	% of
Wholesale
Borrowings	 	% of
Wholesale
Borrowings	 	% of
Wholesale
Borrowings	 	% of
Wholesale
Borrowings
										
	 	  	 	 	 	 	 	 	 	 	 	 	 	 	[*]	 	[*]	 	[*]	 	[*]	 	[*]
										
	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Average Balance	 	Average Balance	 	Average Balance	 	Average Balance
										
	 	  	 	 	 	 	 	 	 	 	 	 	 	 	[*]	 	[*]	 	[*]	 	[*]	 	[*]
										
	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Average Balance	 	Average Balance	 	Average Balance	 	Average Balance
										
	 	  	 	 	 	 	 	 	 	 	 	 	 	 	[*]	 	[*]	 	[*]	 	[*]	 	[*]
	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Discretionary
	  	20	%	 	17	%	 	12	%	 	10	%	 	 	 	BOD Determines	 	BOD Determines	 	BOD Determines	 	BOD Determines
	 Individual Goals
	  	20	%	 	30	%	 	50	%	 	60	%	 	 	 	 	 	 	 	 	 	 
	 	  	
	
	 	
	
	 	
	
	 	
	
	 	 	 	 	 	 	 	 	 	 
	 Total
	  	100	%	 	100	%	 	100	%	 	100	%	 	 	 	 	 	 	 	 	 	 

  
 Achievement levels can not
exceed 250% for each market penetration goal segment or for the participant’s individual goals. And, the aggregate achievement levels for each plan goal/objective (dividend potential, market penetration, overall bank-wide performance, and
individual goals) can not exceed 200%. 
  

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

  

 2 

 Award Determination 
  
 Awards will be based on success in achieving the key business goals. In the case of the three Bank goals and objectives, the same
achievement measures apply to all participants. At yearend, accomplishments will be assessed and a percent of achievement will be determined for each goal and objective. 
  

							
	 Percent of Achievement Scale

	  	Achievement Levels

	     0% - 200%
	  	200%	 	=	  	Far Exceeds Target
	 	  	150%	 	=	  	Exceeds Target
	 	  	100%	 	=	  	Target
	 	  	75-99%	 	=	  	Threshold

  
 For each goal and objective, the
percent of achievement (subject to limits) will be multiplied by the appropriate weights. The weighted achievements will then be added to determine the total weighted achievement. The basis for award opportunity is total weighted achievement
that can not exceed 200%. Performance from 75-99% (threshold level) is below the target achievement level and therefore will result in an award less than the target award. No awards will be paid for performance between 0-74%. 
  
 Award Opportunity 
  
 The Board of Directors has the discretion to approve awards for achievement below 75% total
weighted achievement. And, the President and the Board of Directors have full discretion to modify any and all incentive payments. 
  
 Award Ranges as a Percent of Base Salary 
  

									
	 Total Weighted
 Achievement

	 	 EVP

	 	 SVP

	 	 VP

	 	 AVP

	 200%
	 	55%	 	50%	 	35%	 	20%
	 150-199%
	 	40-54%	 	37-49%	 	27-34%	 	15-19%
	 100-149%
	 	27-39%	 	25-36%	 	18-26%	 	10-14%
	 75-99%
	 	14-26%	 	12-24%	 	9-17%	 	5-9%
	 0-74%
	 	Award at the discretion of the Board of Directors	 	 	 	 

  
 Example of how
award is calculated for a Vice President 
  

							
	 Goal

	  	 Goal
 Weight

	  	 Percent of
 Achievement

	  	Total
Weighted
Achievement

	 2005 Dividend Potential
	  	20% X	  	175%     =	  	35.0%
	 2005 Market Penetration
	  	18% X	  	125%     =	  	22.5%
	 Board Discretionary Award
	  	12% X	  	150%     =	  	18.0%
	 Individual Goal(s)
	  	50% X	  	145%     =	  	72.5%
	 	  	
	  	 	  	

	 	  	100%	  	 	  	148.0%
				
	 	  	Total
Weighted
Achievement

	  	 Award as a
 % of 2005 Base Salary

	  	 
	 	  	148%	  	26.6%	  	 

  
 APPROVAL OF INCENTIVE AWARDS

  
 All recommended incentive awards must be approved by the
President and the Board of Directors prior to payment. Award recommendations are presented to the Board of Directors at the January 2006 Board meeting. 
  
 PLAN ADMINISTRATION AND IMPLEMENTATION 
  
 The President is responsible for administration and interpretation of the Plan. 
  

 3

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