RESIGNATION AND RELEASE AGREEMENT
Exhibit 10.9
This Resignation and Release Agreement (the “Agreement”) is entered into by and between the
Federal Home Loan Bank Des Moines (the “Bank”) and Xxxxx Xxxxxx (“Xx. Xxxxxx”) to set forth the
terms and conditions of Xx. Xxxxxx’x employment separation from the Bank, and his resignation from
his employment and position as an officer of the Bank.
RECITALS
A. Xx. Xxxxxx has been employed by the Bank as its Senior Vice President and Chief Risk
Officer.
B. Xx. Xxxxxx has resigned his position and employment with the Bank effective March 31, 2006,
and he wishes to accept the severance payments described herein and to release the Bank from any
and all claims concerning his prior employment; and
C. The Bank is willing to provide Xx. Xxxxxx with xxxxxxxxx payments subject to the terms and
conditions contained in this Agreement.
AGREEMENT
To provide Xx. Xxxxxx with severance pay, and to fully and finally resolve any and all issues
Xx. Xxxxxx may have regarding his employment with the Bank, including the separation of that
employment, Xx. Xxxxxx and the Bank agree as follows:
1. Resignation. Xx. Xxxxxx has submitted a written letter to the Bank’s Acting President and
Chief Executive Officer resigning his employment with the Bank and his position as the Bank’s
Senior Vice President and Chief Risk Officer, and the Bank has accepted Xx. Xxxxxx’x resignation.
Xx. Xxxxxx’x last day of employment with the Bank was March 31, 2006.
2. Severance Pay. In consideration of the releases contained herein, and for other good and
valuable consideration, the Bank shall pay Xx. Xxxxxx a total gross severance pay equal to One
Hundred One Thousand Fifty Dollars ($101,050). Such severance payments shall be made in the
following manner: (a) a single lump sum payment of Twenty-Six Thousand Fifty Dollars ($26,050) made
payable on the eighth day after the Agreement is executed, or March 31, 2006, whichever occurs
later; and (b) five equal monthly payments of Fifteen Thousand Dollars ($15,000), with the first
payment being made on April 30, 2006 and the next five payments being made on the last 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. Xxxxxx 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. Xxxxxx 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. The Bank will continue Xx. Xxxxxx’x coverage
under the Bank’s group medical and dental plans on the same terms and conditions as other employees
of the Bank through September 30, 2006. The Bank’s obligation
to continue Xx. Xxxxxx’x coverage pursuant to this Section shall, however, cease if Xx. Xxxxxx
obtains other employment that provides his dependants or him with medical or dental insurance
comparable to the coverage provided under the Bank’s group health and dental plans, and Xx. Xxxxxx
agrees to timely notify the Bank if he obtains comparable insurance coverage. If Xx. Xxxxxx has
not obtained other comparable group medical or dental insurance coverage, Xx. Xxxxxx and his
eligible dependants shall have the opportunity, after September 30, 2006, 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. Xxxxxx with a separate notice summarizing his continuation coverage rights and
obligations, as well as an election form.
4. Outplacement Services. Xx. Xxxxxx 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. Xxxxxx, and the total cost of said services shall
not exceed Seven Thousand Dollars ($7,000).
5. Other Benefits. Xx. Xxxxxx 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 determined as of March 31, 2006. In
addition, Xx. Xxxxxx shall be paid for the 180.67 hours of vacation he has accrued, but not used,
through March 31, 2006.
6. No Additional Compensation. Xx. Xxxxxx and the Bank agree that, except as expressly set
forth in the Agreement, Xx. Xxxxxx 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. Xxxxxx 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 described in
Section 2 of the Agreement. For purposes of clarity, Xx. Xxxxxx 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 any payments under the Bank’s Long-Term Incentive Plan.
7. Return of Bank Property. Xx. Xxxxxx represents and warrants that he will 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 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. Xxxxxx
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. Xxxxxx. In consideration of the severance payments
described in Section 2 of the Agreement, and other good and valuable consideration, which are given
to Xx. Xxxxxx specifically in exchange for the release as a result of negotiations
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between the Bank and him, Xx. Xxxxxx, 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. Xxxxxx’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. Xxxxxx’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. Xxxxxx 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. Xxxxxx’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. Xxxxxx has,
or may have, pertaining to Xx. Xxxxxx’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 Equalization Plan, or any workers compensation benefits to
which he may be entitled under Iowa Code Chapter 85.
9. Covenant Not to Xxx. Xx. Xxxxxx 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. Xxxxxx
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. Xxxxxx
from cooperating in such proceedings, but by the Agreement,
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Xx. Xxxxxx 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. Xxxxxx 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 Risk Officer; provided, however, that the Bank shall not require
Xx. Xxxxxx to spend more than a total of twenty (20) hours performing such work. Xx. Xxxxxx
further agrees to provide said assistance at no additional cost or expense to the Bank. During the
Severance Period and thereafter, Xx. Xxxxxx 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.
Xxxxxx incurs in connection with any such efforts, including lost salary, wages, fees, or vacation
pay.
11. Voluntary Agreement; Full Understanding; Advice of Counsel. Xx. Xxxxxx 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. Xxxxxx 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. Xxxxxx 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. Xxxxxx has 21 days to consider the Agreement before
signing it. Xx. Xxxxxx may use as much or as little of the 21-day period as he wishes before
signing. To accept the Agreement, Xx. Xxxxxx must return the signed Agreement to Mr. L. Xxxxx
Xxxxx Xx., General Counsel, on or before that day and time. Xx. Xxxxxx understands and
acknowledges that he has seven (7) days after signing the Agreement to revoke it. To revoke the
Agreement, Xx. Xxxxxx 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.
Xxxxxx 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.
Xxxxxx.
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15. Confidential Information.
(a) Acknowledgement of Receipt of Confidential Information. Xx. Xxxxxx acknowledges that he
has occupied a position of the highest trust and confidence with the Bank, and during Xx. Xxxxxx’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. Xxxxxx 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. Xxxxxx
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. Xxxxxx 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. Xxxxxx. Xx. Xxxxxx acknowledges that the Confidential
Information is vital, sensitive, confidential and proprietary to the Bank.
(b) Agreement to Maintain Confidentiality of Bank Information. Xx. Xxxxxx 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. Xxxxxx 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. Xxxxxx’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.
Xxxxxx 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. Xxxxxx, or has offered Xx. Xxxxxx 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. Xxxxxx.
(d) Remedies. Xx. Xxxxxx 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. Xxxxxx breaches any of his confidentiality
obligations under the Agreement, and that in the event of Xx. Xxxxxx’x actual or threatened breach
of such confidentiality obligations, the Bank will have no adequate remedy at law. Xx. Xxxxxx
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
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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. Xxxxxx 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. Xxxxxx may, however, disclose the terms of this Agreement to
his spouse, his attorney, or to his tax advisors and accountants as necessary; however, Xx. Xxxxxx
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.
Xxxxxx. In addition, Xx. Xxxxxx may disclose information described in this paragraph pursuant to a
duly authorized subpoena provided Xx. Xxxxxx 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. 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.
18. Applicable Law; Venue; Interpretation. The Agreement shall be interpreted in accordance
with the laws of the State of Iowa, without regard to its conflict of laws. Any lawsuit 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. Xxxxxx and the Chairman of
the Board 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.
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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 OF DES MOINES |
Xxxxx Xxxxxx | |||||||||
By
|
/s/ Xxxx X. Xxxxxxxx | By | /s/ F. Xxxxx Xxxxxx | |||||||
| Xxxx Xxxxxxxx | Xxxxx Xxxxxx | |||||||||
| Acting President and CEO | ||||||||||
Date
|
4-7-06 | Date | April 5, 2006 | |||||||
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