RESIGNATION AND RELEASE AGREEMENT
Exhibit 10.11
This Resignation and Release Agreement (the “Agreement”) is entered into by and between the
Federal Home Loan Bank Des Moines (the “Bank”) and Xxxxxx Xxxxxxx (“Xx. Xxxxxxx”) to set forth the
terms and conditions of Xx. Xxxxxxx’x employment separation from the Bank, and his resignation from
his employment and position as an officer of the Bank.
RECITALS
A. Xx. Xxxxxxx has been employed by the Bank as its Senior Vice President and Chief Accounting
Officer.
B. Xx. Xxxxxxx has agreed to resigned his position and employment with the Bank effective July
15, 2006, and he wishes to accept the severance payments and other compensation described herein,
and to release the Bank from any and all claims concerning his prior employment; and
C. The Bank is willing to continue Xx. Xxxxxxx’x employment until July 15, 2006, and to pay
Xx. Xxxxxxx the severance payments and other compensation described herein, subject to the terms
and conditions contained in this Agreement.
AGREEMENT
To secure Xx. Xxxxxxx’x employment through July 15, 2006, to provide Xx. Xxxxxxx with the
severance and retention payments described herein, and to fully and finally resolve any and all
issues Xx. Xxxxxxx may have regarding his employment with the Bank, including the separation of
that employment, Xx. Xxxxxxx and the Bank agree as follows:
1. Resignation. Upon signing this agreement, Xx. Xxxxxxx shall submit a written letter to
the Bank’s Acting President and Chief Executive Officer (prospectively dated July 15, 2006)
resigning his employment with the Bank and his position as the Bank’s Senior Vice President and
Chief Accounting Officer. Said resignation shall be effective at the close of business on July 15,
2006.
2. Retention and Severance Payments. In consideration of the releases contained herein, and
for other good and valuable consideration, it is agreed as follows:
(a) Continue Employment and Retention Payment. Xx. Xxxxxxx agrees to continue working for the
Bank through July 15, 2006, and, subject to the conditions contained in this Subsection, the Bank
agrees to employ Xx. Xxxxxxx during that same time period (hereinafter referred to as the
“Continued Employment Period”). During the Continued Employment Period, Xx. Xxxxxxx shall work
full-time through June 15, 2006 and devote his full working time and attention to his assigned
duties and responsibilities. For the remainder of the Continued Employment Period, Xx. Xxxxxxx
shall work on a part time basis without any reduction in his compensation, but shall not engage in
any outside activities that conflict or are otherwise inconsistent with his continued employment
with the Bank. Subject to the other Sections of the Agreement, the Bank agrees to pay Xx. Xxxxxxx
his existing salary during the Continued Employment Period, and to provide him with the benefit
package he is currently
receiving, including any vacation accrual as specified in Section 5 of the Agreement. The
Bank’s obligation to continue Xx. Xxxxxxx’x employment during the Continued Employment Period
shall, however, be contingent upon Xx. Xxxxxxx meeting each of the following employment
obligations: (1) competently perform assigned duties, (2) make a constructive contribution to
the Bank, (3) participate in assigned departmental and other Bank meetings, and (4) display a
professional work attitude. If Xx. Xxxxxxx fails to meet any of the employment obligations
contained in this Subsection, the Bank shall provide Xx. Xxxxxxx with written notice of the
deficiency in his work performance and Xx. Xxxxxxx shall be obligated to promptly correct the
deficiency. If Xx. Xxxxxxx does not promptly correct the deficiency in his work performance as
required herein, and said deficiency is evidenced by a gross dereliction of duty, the Bank may, in
its sole discretion, terminate Xx. Xxxxxxx’x employment without providing him with any additional
notice or warning, provided the termination occurs within two weeks after notice is given. If Xx.
Xxxxxxx’x employment is terminated pursuant to this Subsection, Xx. Xxxxxxx shall be entitled to
(i) a single lump sum severance payment of Forty Eight Thousand Seven Hundred and Fifty Dollars
($48,750) payable upon termination of Xx. Xxxxxxx’x employment; (ii) continued coverage under the
Bank’s group medical and dental plans on the same terms and conditions as other employees of the
Bank for a period of three months from the date of termination of Xx. Xxxxxxx’x employment; and
(iii) a portion of the retention bonus described in the following sentence prorated from March 1,
2006 through the date of termination of Xx. Xxxxxxx’x employment, which also shall be payable upon
termination of Xx. Xxxxxxx’x employment. If Xx. Xxxxxxx’x employment continues through the Period
of Continued Employment, and his employment is not terminated for one of the reasons stated in
Subsection (a) above, the Bank shall pay Xx. Xxxxxxx a retention bonus of Eighty Six Thousand
Dollars ($86,000). Said retention bonus, if earned, shall be paid to Xx. Xxxxxxx on July 15, 2006.
(b) Severance Pay. If Xx. Xxxxxxx’x employment is not terminated during the Continued
Employment Period pursuant to Subsection subparagraph (a) above, the Bank shall also pay Xx.
Xxxxxxx total gross severance pay equal to Ninety Seven Thousand Five Hundred Dollars ($97,500).
Such severance payments shall be made in the following manner: (a) a single lump sum payment of
Forty Seven Thousand Five Hundred Dollars ($47,500) made payable on the eighth day after the
Agreement is executed, or July 15, 2006, whichever date occurs later; and (b) five equal monthly
payments of Ten Thousand Dollars ($10,000), with the first payment being made on August 15, 2006
and the next four payments being made on the fifteenth day of each subsequent month thereafter (the
“Severance Period”). The Bank’s obligation to make any additional severance payments during the
Severance Period shall, however, cease if Xx. Xxxxxxx materially breaches any of the terms of the
Agreement, including, but not limited to, the obligations contained in Sections 7, 9, 10, 15, 16,
or 17 below. Xx. Xxxxxxx agrees and stipulates that the severance payments described herein are
being paid to him as a special allowance, and that he is not entitled to receive said payments
under any contract between the Bank and him, or pursuant to any Bank policy or practice.
3. Medical Insurance Coverage and Continuation. If Xx. Xxxxxxx’x employment is not terminated
during the Continued Employment Period pursuant to Section 2 (a) above, the Bank will continue Xx.
Xxxxxxx’x coverage under the Bank’s group medical and dental plans on the same terms and conditions
as other employees of the Bank through January 31, 2007. The
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Bank’s obligation to continue Xx. Xxxxxxx’x coverage pursuant to this Section shall, however,
cease if Xx. Xxxxxxx obtains other employment after July 15, 2006 that provides his dependents or
him with medical or dental insurance comparable to the coverage provided under the Bank’s group
health and dental plans, and Xx. Xxxxxxx agrees to timely notify the Bank if he obtains comparable
insurance coverage. If Xx. Xxxxxxx has not obtained other comparable group medical or dental
insurance coverage, Xx. Xxxxxxx and his eligible dependants shall have the opportunity, after
January 31, 2007, to continue group medical and dental insurance for an additional eighteen months
through the Bank, at his or their own expense, to the extent and manner required by COBRA or any
applicable state law. The Bank will provide Xx. Xxxxxxx with a separate notice summarizing his
continuation coverage rights and obligations, as well as an election form.
4. Outplacement Services. Xx. Xxxxxxx shall be provided with up to six months of career
transition services at the Bank’s expense. Career Resources Group of West Des Moines, Iowa shall
provide the career transitional services to Xx. Xxxxxxx, and the total cost of said services shall
not exceed Seven Thousand Dollars ($7,000). Xx. Xxxxxxx may elect when he shall begin receiving
the outplacement services described in this Section provided the services are commenced on or
before August 1, 2006.
5. Other Benefits. Xx. Xxxxxxx shall receive appropriate payments pursuant to the Pentegra
Defined Contribution Plan for Financial Institutions, the Pentegra Defined Benefit Plan for
Financial Institutions, and the Benefit Equalization Plan due or required as of July 15, 2006. In
addition, Xx. Xxxxxxx shall be paid for the vacation hours he has accrued, but not used, through
July 15, 2006. Said vacation accrual shall equal the prorated portion of the total vacation days
Xx. Xxxxxxx was eligible to take during 2006, plus any vacation days he was permitted to carried
over from 2005, less any vacation days Xx. Xxxxxxx took, or will take, from January 1, 2006 through
July 15, 2006. As of March 31, 2006, Xx. Xxxxxxx’x accrued, but unused vacation, equaled 372
hours. The Bank approves Xx. Xxxxxxx’x vacation request from June 9 through June 16, 2006, and it
is agreed and understood that Xx. Xxxxxxx shall be away from the Bank on vacation during those
days.
6. No Additional Compensation. Xx. Xxxxxxx and the Bank agree that, except as expressly set
forth in the Agreement, Xx. Xxxxxxx shall not be entitled to receive any additional compensation,
bonuses, incentive compensation, employee benefits, vacation pay, or other consideration from the
Bank in connection with, or in any way related to his resignation from, or prior employment by, the
Bank. More particularly, Xx. Xxxxxxx shall not be entitled to make contributions to the Pentegra
Defined Contribution Plan for Financial Institutions, the Pentegra Defined Benefit Plan for
Financial Institutions, and the Benefit Equalization Plan from the severance payments or retention
bonus described in Section 2 of the Agreement. For purposes of clarity, Xx. Xxxxxxx agrees to
forfeit any bonus payments that were, or may be, due him under the Bank’s Gainsharing Plan based on
his, or the Bank’s, performance during 2005 or 2006, or any payments under the Bank’s Long-Term
Incentive Plan.
7. Return of Bank Property. Xx. Xxxxxxx represents and warrants that he will, upon the
termination of his employment with the Bank, immediately return to the Bank all Bank property
including, without limitation, any, keys, access cards, parking pass, credit cards, books, manuals,
files, computer software, disks and the like, as well as all paper and electronic copies of
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materials and documents in his possession or under his direct or indirect control relating to
the 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 Bank hereby acknowledges and agrees that Xx. Xxxxxxx may retain, as his own property,
his copies of his individual personnel documents, such as his payroll and tax records, and similar
personal records.
8. Complete Release of Claims by Xx. Xxxxxxx. In consideration of the severance payments and
retention bonus described in Section 2 of the Agreement, and other good and valuable consideration,
which are given to Xx. Xxxxxxx specifically in exchange for the release as a result of negotiations
between the Bank and him, Xx. Xxxxxxx, on behalf of himself, his spouse, and his and their heirs,
successors and assigns, hereby releases and discharges the Federal Home Loan Bank of Des Moines,
its employee benefit plans, its current or former directors, officers, employees, agents, insurers,
attorneys, consultants, and auditors, and 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 Xx. Xxxxxxx’x employment with the Bank, or the termination of
his employment relationship or position as an officer of the Bank, arising on or prior to the
effective date of the Agreement. It is understood and agreed that the waivers in the Agreement are
not intended to waive Xx. Xxxxxxx’x rights: (a) to indemnification from the Bank or its insurers
pursuant to any applicable provision of the Bank’s bylaws or policies, or pursuant to applicable
law; (b) under ERISA to receive his accrued vested benefits and the benefits specifically reserved
for him in the Agreement; or (c) respecting the Bank’s obligations under the Agreement.
For the purposes of implementing a full and complete release and discharge of the Bank and the
other Released Parties, and each of them, Xx. Xxxxxxx expressly acknowledges that the Agreement is
intended to include in its affect, without limitation, all Claims which he does not know or suspect
to exist in his favor at the time he signs the Agreement, and that the Agreement is intended to
fully and finally resolve any such Claim or Claims.
The release contained in this Section 8 specifically includes, but is not limited to, rights
and claims under the local, state or federal laws prohibiting discrimination in employment,
including the Civil Rights Acts, the Americans with Disabilities Act, the Age Discrimination in
Employment Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act
(except as otherwise stated herein), the employee protection provisions of the Federal Deposit
Insurance Act (12 U.S.C. § 1831j), Title VII of the Civil Rights Act of 1964, the Xxxxxxxx-Xxxxx
Act of 2002, Iowa’s Wage Payment Collection Act, as well as any other state or federal laws or
common law theories relating to discrimination in employment, the termination of employment, or
personal injury, including without limitation all claims for wrongful discharge, breach of
contract, fraud, defamation, loss of consortium, infliction of emotional distress, additional
compensation, back pay or benefits (other than as provided for in the Agreement), or any claim that
the termination of Xx. Xxxxxxx’x employment violated a public policy or policies of Iowa or the
United States. The release contained in this Section 8 does not include any claims Xx. Xxxxxxx has,
or may have, pertaining to Xx. Xxxxxxx’x right or entitlement to vested benefits under the Pentegra
Defined Contribution Plan for Financial Institutions, the Pentegra Defined Benefit Plan for
Financial Institutions, and the Benefit
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Equalization Plan, or any workers compensation benefits to which he may be entitled under Iowa
Code Chapter 85.
9. Covenant Not to Xxx. Xx. Xxxxxxx represents that he has not filed any Claim that was
released in the Agreement against the Bank or its Released Parties with any court or government
agency, and that he will not, to the extent allowed by applicable law, do so at any time in the
future; provided, however, that the covenants contained in this Section will not prevent Xx.
Xxxxxxx from filing a claim to enforce the terms of the Agreement. If any government agency brings
any claim or conducts any investigation against the Bank, nothing in the Agreement forbids Xx.
Xxxxxxx from cooperating in such proceedings, but by the Agreement, Xx. Xxxxxxx waives and agrees
to relinquish any damages or other individual relief that may be awarded as a result of any such
proceedings.
10. Future Cooperation. Xx. Xxxxxxx further agrees that during the Severance Period he will
make himself reasonably accessible to the Bank to answer questions and otherwise assist the Bank
regarding the proper transition of the uncompleted projects and assignments contained on the list
he compiles, and regarding any other issues and matters for which he was responsible as the Bank’s
Senior Vice President and Chief Accounting Officer; provided, however, that the Bank shall not
require Xx. Xxxxxxx to spend more than a total of 20 hours performing such work. Xx. Xxxxxxx
further agrees to provide said assistance at no additional cost or expense to the Bank. During the
Severance Period and thereafter, Xx. Xxxxxxx agrees to make himself reasonably available to the
Bank in connection with any claims, disputes, investigations, regulatory examinations, or actions,
lawsuits, or administrative proceedings relating to matters in which he was substantially involved
during the period he was employed by the Bank, and to provide information, give depositions or
testimony, and otherwise cooperate in the investigation, defense, or prosecution of such actions.
Upon submission of appropriate documentation, the Bank will pay for any reasonable expenses Xx.
Xxxxxxx incurs in connection with any such efforts, including lost salary, wages, fees, or vacation
pay.
11. Voluntary Agreement; Full Understanding; Advice of Counsel. Xx. Xxxxxxx understands and
acknowledges the significance of the Agreement and acknowledges that the Agreement is voluntary and
has not been given as a result of any coercion. Xx. Xxxxxxx also acknowledges that he has been
given full opportunity to review and negotiate the Agreement, that he has been specifically advised
to consult with legal counsel prior to signing it, that he has, in fact, carefully reviewed it with
his attorney before signing it, and that he executes the Agreement only after full reflection and
analysis.
12. No Representations. Xx. Xxxxxxx acknowledges that, except as expressly set forth herein,
no representations of any kind or character have been made to him by the Bank or by any of the
Bank’ agents, representatives or attorneys to induce the execution of the Agreement.
13. Review and Revocation Periods. Xx. Xxxxxxx has 21 days to consider the Agreement before
signing it. Xx. Xxxxxxx may use as much or as little of the 21-day period as he wishes before
signing. To accept the Agreement, Xx. Xxxxxxx must return the signed Agreement to Mr. L. Xxxxx
Xxxxx Xx., General Counsel, on or before that day and time. Xx. Xxxxxxx understands and
acknowledges that he has seven (7) days after signing the Agreement to
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revoke it. To revoke the Agreement, Xx. Xxxxxxx must deliver a written notice of revocation
to Xx. Xxxxx at the Bank no later than 5:00 pm, Central Standard Time, on the seventh day after the
Agreement is executed. If Xx. Xxxxxxx revokes the Agreement, he will not receive any of the
benefits described in the Agreement.
14. Nonadmission. The Agreement shall not be construed as an admission of wrongdoing or
evidence of any noncompliance with, or violation of, any statute or law by the Bank or by Xx.
Xxxxxxx.
15. Confidential Information.
(a) Acknowledgement of Receipt of Confidential Information. Xx. Xxxxxxx acknowledges that he
has occupied a position of the highest trust and confidence with the Bank, and during Xx. Xxxxxxx’x
employment with the Bank he has become familiar with the Bank’s trade secrets, business plans and
strategies, and with other proprietary and confidential information concerning the Bank, its
business, employees and members. Xx. Xxxxxxx also understands that he may have access to such
information if he is called upon to provide services under Section 10 of the Agreement. Xx.
Xxxxxxx agrees that (a) the agreements and covenants contained in this Section are essential to
protect the Bank and the goodwill of its business; (b) the Bank would be irreparably damaged if Xx.
Xxxxxxx were to disclose confidential information in violation of these provisions of the
Agreement; and (c) the severance payments provided him under Section 2 the Agreement are given to
him in part in exchange for his agreement to the restrictions set forth below. As used in the
Agreement, “Confidential Information” shall mean any information relating to the business or
affairs of the 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, equipment, programs, methodologies, strategies and information, analyses,
reports, models, calculations, profit margins, exam findings, Board of Directors matters, or other
proprietary information used by the 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 Xx. Xxxxxxx. Xx. Xxxxxxx acknowledges
that the Confidential Information is vital, sensitive, confidential and proprietary to the Bank.
(b) Agreement to Maintain Confidentiality of Bank Information. Xx. Xxxxxxx shall keep secret
and retain in strictest confidence, and shall not, without the prior written consent of the Bank,
furnish, make available or disclose to any third party (except in furtherance of the Bank’s
business activities and for the sole benefit of the Bank) or use for the benefit of himself or any
third party, any Confidential Information.
(c) Non-Solicitation of Employees. Xx. Xxxxxxx understands and agrees that the relationship
between the Bank and its employees constitutes a valuable asset of the Bank that may not be
converted to Xx. Xxxxxxx’x use without causing irreparable damage to the Bank. Accordingly, and
in further consideration of the severance payments described in Section 2 of this Agreement, Xx.
Xxxxxxx agrees that for one year after his employment with the Bank ends, he will not directly, or
indirectly, on his own behalf, or the behalf of any person, corporation, or other entity, solicit
or entice any Bank employee to terminate his or her employment with the Bank to accept employment
with any employer that also employs Xx. Xxxxxxx, or has offered
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Xx. Xxxxxxx employment. The non-solicitation prohibitions contained in this subsection (c)
shall not, however, apply to any communications initiated by Bank employees, and not by Xx.
Xxxxxxx.
(d) Remedies. Xx. Xxxxxxx acknowledges and agrees that the covenants set forth in this
Section 15 are reasonable and necessary for the protection of the Bank’s business interests, that
irreparable injury will result to the Bank if Xx. Xxxxxxx breaches any of his confidentiality
obligations under the Agreement, and that in the event of Xx. Xxxxxxx’x actual or threatened breach
of such confidentiality obligations, the Bank will have no adequate remedy at law. Xx. Xxxxxxx
accordingly agrees that in the event of any actual or threatened breach by him of any of his
confidentiality obligations under this Section, the Bank shall be entitled to immediate temporary
injunctive and other equitable 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 Bank from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of any damages which it is able to prove.
16. Confidentiality of Agreement. Xx. Xxxxxxx agrees that he will keep the facts, terms,
conditions, and contents of this Agreement completely confidential and he will not publicize or
disclose the facts, terms, conditions, or contents of this Agreement 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. Xx. Xxxxxxx may, however, disclose the terms of this Agreement to
his spouse, his attorney, or to his tax advisors and accountants as necessary; however, Xx. Xxxxxxx
shall specifically advise that or those individuals of the confidential nature of the information
being disclosed and, any subsequent disclosure by any of them shall be deemed a disclosure by Xx.
Xxxxxxx. In addition, Xx. Xxxxxxx may disclose information described in this paragraph pursuant to
a duly authorized subpoena provided Xx. Xxxxxxx provides the Bank with prior notice of the subpoena
and with a meaningful opportunity to take, if the Bank chooses to do so, whatever actions necessary
to quash said subpoena.
17. Non-disparagement, Letter of Reference. Except for any Required Disclosures by the Bank
(defined below), the parties shall not, directly or indirectly, publish or make any statements to
third parties that are critical of, or in anyway disparage, the other party, which shall include
the Bank’s current or former directors, officers, employees agents, attorneys, consultants, or
auditors. For purposes of this Section, Required Disclosures shall mean any disclosures made by
the Bank (1) to its senior management, Board of Directors, attorneys, accountants, or to any other
employees, agents, and advisors who have a need to know such information; (2) to any applicable
stock exchange, the Securities and Exchange Commission (the “SEC”), the Federal Housing Finance
Board, or any other regulatory body or governmental authority; (3) to the extent appropriate under
applicable law, rule or regulation, including filing a copy of this Agreement in any public SEC
filing; or (4) pursuant to an order issued by a court or other tribunal or agency or authority of
competent jurisdiction. Provided Xx. Xxxxxxx’x employment is not terminated during the Continued
Employment Period pursuant to Section 1(a) of the Agreement, the Bank shall provide Xx. Xxxxxxx
with a letter of reference in the form attached as Exhibit A to this Agreement.
18. Applicable Law; Venue; Interprétation. The Agreement shall be interpreted in accordance
with the laws of the State of Iowa, without regard to its conflict of laws. Any lawsuit
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between the parties arising out of the Agreement shall be brought in the Iowa District Court
in and for Polk County, or in the United States District Court, Southern District of Iowa, Central
Division, if appropriate federal jurisdiction exists. The language of the Agreement shall be
construed as a whole according to its fair meaning.
19. Tax Withholdings and Deductions. All payments described herein shall be subject to
applicable federal, state, and local tax withholdings and deductions.
20. Complete Agreement. The Agreement represents and contains the entire understanding
between the parties in connection with the subject matter of the Agreement. The Agreement shall
not be modified or varied except by a written instrument signed by Xx. Xxxxxxx and the Acting
President and Chief Executive Officer of the Bank. It is expressly acknowledged and recognized by
all parties that all prior written or oral agreements, understandings or representations between
the parties are merged into the Agreement.
21. Invalidity. It is understood and agreed that if any provisions of the Agreement are held
to be invalid or unenforceable, the remaining provisions of the Agreement shall nevertheless
continue to be fully valid and enforceable.
22. Execution. The 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.
PLEASE READ CAREFULLY. THE AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
| FEDERAL HOME LOAN BANK | Xxxxxx Xxxxxxx | |||||||||
| OF DES MOINES | ||||||||||
By
|
/s/ Xxxx X. Xxxxxxxx | By | /s/ Xxxxxx X. Xxxxxxx | |||||||
| Xxxx Xxxxxxxx | Xxxxxx Xxxxxxx | |||||||||
| Acting President and CEO | ||||||||||
Date
|
5-31-06 | Date | June 6, 2006 | |||||||
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