SEPARATION AND RELEASE AGREEMENT

EXHIBIT 10.1

SEPARATION AND RELEASE AGREEMENT

This Separation and Release Agreement is entered into by and between the Federal Home Loan Bank of Seattle (the "Seattle Bank") and John W. Blizzard ("Mr. Blizzard") to set forth the terms and conditions of Mr. Blizzard's separation from his employment with the Seattle Bank.

In order to provide Mr. Blizzard with separation benefits to assist him in the transition to other opportunities and to fully and finally resolve any and all issues regarding Mr. Blizzard's employment with the Seattle Bank and the termination of that employment, Mr. Blizzard and the Seattle Bank agree as follows:

1. Separation Date. Mr. Blizzard's employment with the Seattle Bank ended as of April 30, 2009. He has received his regular base salary through that date and has received all of his accrued but unused vacation as of May 15, 2009.
2. Severance Benefits. Provided that the Federal Housing Finance Agency ("FHFA") does not object thereto, the Seattle Bank agrees to provide Mr. Blizzard with severance benefits as set forth in this paragraph 2 and in paragraph 3 below:
3. 1. Severance Pay. Within ten (10) business days after the Effective Date of this Agreement, the Seattle Bank will pay Mr. Blizzard an amount equal to eight (8) months of his base monthly salary of $20,600 for a total of $164,800, less required withholding and deductions ("Separation Pay").

(b) Bonus. Mr. Blizzard will not be eligible for a bonus or other incentive compensation for the 2009 or 2010 incentive periods.

(c)        Additional Separation Compensation. Within ten (10) business days after the Effective Date of this Agreement, the Seattle Bank agrees to also pay Mr. Blizzard additional separation compensation of $25,000 less required withholding and deductions.

(d) Retirement Benefits. Mr. Blizzard will be entitled to any vested retirement benefits that he has accrued as of April 30, 2009 under the Pentegra Defined Benefit Plan and the Retirement Benefit Equalization Plan pursuant to the terms of those plans. Mr. Blizzard shall also maintain the vested retirement benefits he has accrued as of April 30, 2009, under the Seattle Bank Thrift Benefit Equalization Plan and the Seattle Bank 401(k) Thrift Plan, pursuant to the terms of those plans. The Seattle Bank will have no obligation with respect to any federal income tax consequences of these retirement benefits to Mr. Blizzard.

(e) Outplacement Benefits. To assist Mr. Blizzard in finding other suitable employment, the Seattle Bank will provide Mr. Blizzard with reasonable outplacement assistance through the Seattle Bank's outplacement counseling service of up to six (6) months to begin ten (10) business days after the Effective Date of this Agreement.

6. 1. Unemployment Compensation. The Seattle Bank agrees not to contest any application for unemployment compensation benefits that Mr. Blizzard may make due to his separation from the Seattle Bank; provided that the Seattle Bank reserves the right to correct any false or misleading information which may be filed in connection with such application regarding the Seattle Bank and the circumstances of Mr. Blizzard's separation.

3. Medical Insurance. Mr. Blizzard and his eligible dependents have the opportunity to continue group health insurance through the Seattle Bank's Continuation of Health Care Coverage program for a period of up to eighteen (18) months following the date of his group health care coverage termination, April 30, 2009. Beginning on the Effective Date of this Agreement and continuing until December 31, 2009, the Seattle Bank will pay the premiums for Mr. Blizzard's continued group medical, dental and vision plan insurance on the same terms and conditions as employees of the Seattle Bank and their eligible dependents. Beginning on January 1, 2010, Mr. Blizzard and his eligible dependents may continue group insurance at his or their expense for the balance of the eighteen (18) month period which began on May 1, 2009. ADP CobraServ, the Seattle Bank's administrator, will supply Mr. Blizzard with a separate notice summarizing his continuation coverage rights and obligations. Mr. Blizzards' benefits under this paragraph 3 shall terminate when Mr. Blizzard becomes eligible for coverage under a new employer's medical plan.
4. No Additional Compensation. Mr. Blizzard and the Seattle Bank agree that, except as expressly set forth in this Agreement, and subject to Mr. Blizzard's rights, if any, in the Seattle Bank retirement plans described in 2(d) above, Mr. Blizzard shall not be entitled to receive any additional compensation, bonuses, incentive compensation, employee benefits or other consideration from the Seattle Bank. Mr. Blizzard shall not be entitled to make contributions to the Seattle Bank 401(k) Savings Plan from the Separation Pay or the Additional Separation Compensation.
5. Return of Seattle Bank Property. Mr. Blizzard 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 and the like, as well as all paper and electronic copies of materials and documents in his possession or under his direct or indirect control relating to the Seattle Bank, 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 hereby acknowledges and agrees that Mr. Blizzard may retain, as his own property, his copies of his individual personnel documents, such as his payroll and tax records, and similar personal records. Further, notwithstanding anything to the contrary set forth herein, the Seattle Bank will within ten (10) business days following Mr. Blizzard's execution of this Agreement provide to Mr. Blizzard 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 which are members or employees of members of the Seattle Bank.
6. Covenant Not to Sue. Mr. Blizzard 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 limit Mr. Blizzard 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 Mr. Blizzard from cooperating in such proceedings, but by this Agreement, Mr. Blizzard waives and agrees to relinquish any damages or other individual relief that may be awarded as a result of any such proceedings.
7. Complete Release of Claims by Mr. Blizzard Against the Seattle Bank. In consideration of the separation benefits set forth above, which are given to Mr. Blizzard specifically in exchange for this release as a result of negotiations between himself and the Seattle Bank and which are separation benefits substantially in excess of those which he would otherwise be entitled to, Mr. Blizzard, on behalf of himself, his marital community, and their heirs, successors and assigns, releases and discharges the Federal Home Loan Bank of Seattle, its employee benefit plans and/or their current or former directors, officers, agents, insurers, employees and attorneys, any and each of their successors and assigns and predecessors ("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 related in any way to Mr. Blizzard's employment with the Seattle Bank, or the termination of his employment relationship with the Seattle Bank, arising prior to the effective date of this Agreement. It is understood and agreed that the waivers in this Agreement are not intended to waive Mr. Blizzard's rights: (a) to indemnification pursuant to any applicable provision of the Seattle Bank's Bylaws, or pursuant to applicable law; (b) under ERISA to receive his accrue