CONSULTING AGREEMENT
Exhibit 10.6
This Consulting Agreement is entered into by and between the Federal Home Loan Bank Des Moines
(the “Bank”) and Xxx Xxxxxxxx (“Xxxxxxxx”) to set forth the terms and conditions through which
Xxxxxxxx will provide consulting services to the Bank.
RECITALS
WHEREAS, the Board has determined that it is in the Bank’s best interest to retain a
consultant to manage certain critical projects and to provide special assistance to the Interim
President and Chief Executive Officer; and
WHEREAS, Xxxxxxxx has specialized knowledge and expertise regarding project management and
related matters, and has specific knowledge and insight regarding the challenges the Bank currently
faces; and
WHEREAS, the Bank desires to retain Xxxxxxxx as an independent contractor to apply his
specialized knowledge and otherwise to assist the Board and the Bank’s Interim President and Chief
Executive Officer with respect to certain matters that require immediate and concentrated
attention.
NOW THEREFORE, in consideration of the mutual agreements contained herein, the Parties hereto
agree as follows:
1. DESCRIPTION OF SERVICES. Xxxxxxxx will provide the consulting services to the Bank (referred to
collectively as the “Services”) as requested by the Board and by the Bank’s Interim President and
Chief Executive Officer. The initial scope of the Services are set forth in Exhibit A hereto. It
is understood that the Board and the Bank’s Interim President and Chief Executive Officer may
expand or alter the scope of the Services from time to time as deemed necessary and in the Bank’s
best interests.
2. PERFORMANCE OF SERVICES. Xxxxxxxx shall determine the manner in which the Services are
performed, and the Bank will rely on Xxxxxxxx to work as many hours as may be reasonably necessary
to fulfill Xxxxxxxx’x obligations under this Consulting Agreement. Xxxxxxxx, however, agrees to
spend an average of three days per week at the Bank’s offices during the term of this Agreement.
3. CONSULTING FEE AND PERFORMANCE BONUS. The Bank will pay Xxxxxxxx a total consulting fee of
Ninety Thousand Dollars ($90,000) consulting fee for the Services Xxxxxxxx provides. Said
consulting fee shall be paid during the term of this Agreement in equal monthly installments. In
addition to the foregoing, Consultant shall be eligible to be considered for a performance related
bonus of up to Thirty Thousand Dollars ($30,000), to be determined in the sole discretion of the
Board. Any such bonus shall be determined by the Board within sixty days of the expiration of the
term of this Consulting Agreement.
4. INDEPENDENT CONTRACTOR, TAXES. Xxxxxxxx agrees and understands that he is being retained as an
independent contractor, and not as an employee, and that the Bank will not make any federal, state,
or local tax withholding or deductions from the consulting fee paid to him. Xxxxxxxx agrees and
understands that as an independent contractor he is solely responsible to pay any and all federal,
state or local taxes that apply to the consulting fee described herein, and that the Bank shall not
withhold taxes of any kind from the consulting fee. Xxxxxxxx agrees to indemnify and hold the Bank
harmless concerning any tax liability the Bank or Xxxxxxxx may incur as a result of the Bank’s
treatment of Xxxxxxxx as an independent contractor.
5. EXPENSE REIMBURSEMENT. The Bank shall reimburse Xxxxxxxx for all reasonable “out-of-pocket”
expenses Xxxxxxxx incurs that are reasonably associated with Xxxxxxxx’x performance of the Services
described in paragraph one of this Consulting Agreement.
6. SUPPORT SERVICES. The Bank will provide Xxxxxxxx with office space, secretarial support, and
office supplies to the extent necessary for Xxxxxxxx to perform the Services. The Bank shall have
sole discretion to determine the amount and nature of the support service, if any, that are
required under this paragraph.
7. TERM. This Consulting Agreement shall remain in force and effect from January 1, 2006 through
March 31, 2006. The Agreement may be extended for an additional two weeks, up to and including
April 14, 2006, by the mutual consent of the parties.
8. BENEFITS. The parties agree and stipulate that Xxxxxxxx is an independent contractor and not a
Bank employee and Xxxxxxxx understands that he is not entitled to any employee benefits. The Bank
will not, therefore, provide any fringe benefits to Xxxxxxxx, including, but not limited to, health
insurance benefits, paid vacations, severance, or any of the other non-wage benefits typically paid
or provided to Bank employees. In addition, the Bank shall not make any contributions to any
qualified benefit plan on Xxxxxxxx’x behalf, including contributions to the following Bank
sponsored plans: the Pentegra Defined Contribution Plan for Financial Institutions, the Pentegra
Defined Benefit Plan for Financial Institutions, and the Benefit Equalization Plan.
9. INJURIES. Xxxxxxxx acknowledges Xxxxxxxx’x obligations to obtain appropriate insurance coverage
for the benefit of Xxxxxxxx. Xxxxxxxx waives any rights to recovery from the Bank for any injuries
or damages of any kind that Xxxxxxxx may sustain while performing Services under this Consulting
Agreement. Because Xxxxxxxx is not a Bank employee, the Bank will not obtain workers’ compensation
insurance for Xxxxxxxx, and Xxxxxxxx agrees to maintain any workers’ compensation insurance that
may be required by law.
10. CONFIDENTIALITY. Xxxxxxxx agrees and understands that during the term of this Consulting
Agreement, Xxxxxxxx may learn, or otherwise be given access to, Confidential Information concerning
the Bank. To the extent Xxxxxxxx learns, or obtains access to, Confidential Information of the
Bank, Xxxxxxxx agrees to follow, and shall be governed by, all
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existing laws, regulations, and Bank
policies regarding the disclosure or dissemination of Confidential Information. Xxxxxxxx
acknowledges that the existing laws, regulations and Bank policies on regarding the unauthorized
disclosure or dissemination of Confidential Information may change and, to the extent they do
change, Xxxxxxxx agrees to follow and be governed by such changed laws, regulations and policies.
As used in this Section, “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
Xxxxxxxx. Xxxxxxxx acknowledges that the Confidential Information is vital, sensitive,
confidential and proprietary to the Bank.
10. INTELLECTUAL PROPERTY. Xxxxxxxx agrees that he will not personally obtain any right, title, or
interest in any intellectual property he or anyone else develops during the performance of the
Services, and that the Bank shall maintain all ownership interest in all such intellectual
property. For purposes of this Consulting Agreement, intellectual property shall include all
copyrightable works and all ideas, discoveries, inventions, applications for patents, and patents.
11. RETURN OF RECORDS. Upon termination of this Consulting Agreement, Xxxxxxxx shall deliver to
the Bank, all records, notes, data, memoranda, models, and equipment of any nature that are in
Xxxxxxxx’x possession or under Xxxxxxxx’x control that are the Bank’s property or relate to the
Bank’s business.
12. NO AUTHORITY TO BIND THE BANK. Xxxxxxxx has no authority to enter into contracts or agreements
on behalf of the Bank during the term of the Consulting Agreement, and this Consulting Agreement
shall not be construed as creating any type of partnership between the parties.
14. ENTIRE AGREEMENT. This Consulting Agreement contains the entire agreement of the parties and
there are no other promises or conditions in any other agreement whether oral or written. This
Consulting Agreement supersedes any prior written or oral agreements between the parties concerning
the Services described herein
15. AMENDMENT. This Consulting Agreement may be modified, amended, or extended if the amendment is
made in writing and is signed by both parties.
16. SEVERABILITY. If any provision of this Consulting Agreement shall be held to be invalid or
unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable.
If a court finds that any provision of this Consulting Agreement is invalid or unenforceable, but
that by limiting such provision it would become valid and enforceable, then such provision shall be
deemed to be written, construed, and enforced as so limited.
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17. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this
Consulting Agreement shall not be construed as a waiver or limitation of that party’s right to
subsequently enforce and compel strict compliance with every provision of this Consulting
Agreement.
18. APPLICABLE LAW. This Consulting Agreement shall be governed by the laws of the State of Iowa.
Venue for any action to enforce this Agreement shall be in the Iowa District Court for Polk County,
or the United States District Court for the Southern District of Iowa if federal jurisdiction
exists.
19. EXECUTION. This Consulting 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.
FEDERAL HOME LOAN BANK DES MOINES
By:
|
/s/ Xxxxx X. Xxxxxx | Date: | 1-12-06 | |||||
Xxx Xxxxxxxx
By:
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/s/ Xxx X. Xxxxxxxx | Date: | 1-12-06 | |||||
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EXHIBIT A
This Exhibit A to the Consulting Agreement (the “Agreement”) by and between the Federal Home
Loan Bank of Des Moines (the “Bank”) and Xxx Xxxxxxxx (“Xxxxxxxx”) sets forth the scope of services
Xxxxxxxx will provide the Bank during the term of the Agreement and supplements the more general
description contained in the Agreement’s recitals and in paragraph 1 of the Agreement.
| 1. | Engagement Management |
| a. | Special Assistant to Chief Executive Officer (CEO) |
| i. | Internal Review Committee (IRC) Continuity | ||
| ii. | On-Site Regulator Liaison | ||
| iii. | Adjunct Legislative Liaison |
| b. | Engagement/Project Setup |
| i. | Administration, monitoring and reporting protocol | ||
| ii. | Span of control and reporting structure | ||
| iii. | Issue and resolution management | ||
| iv. | Transitional Realignment Coordination |
| 1. | Human Resources | ||
| 2. | General Counsel | ||
| 3. | Operations |
| c. | Operational Project Management |
| i. | Management exam findings and responses | ||
| ii. | Management SEC registration and related activities | ||
| iii. | Management restatement of financial | ||
| iv. | Management MPF/MPP | ||
| v. | Senior Leadership Team (SLT) Operation Support | ||
| vi. | Transition Management (Needs Assessment) |
| 1. | SLT Relationship Management |
| d. | Secura Internal Project Management |
| i. | Internal coordination, support and reporting |
| 2. | Engagement Wrap-up |
| a. | CEO transition | ||
| b. | Date certain |
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