Exhibit 10.11.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT is entered into as of the 2nd day of January, 2008 (the
“Effective Date”) between the FEDERAL HOME LOAN BANK OF CHICAGO (the “Bank”) and
[NAME OF EMPLOYEE] (the “Employee”).

RECITALS:

 

A. The Bank and the Employee wish to confirm the employment of the Employee by
the Bank on the terms and conditions hereinafter set forth; and

 

B. The Bank recognizes the valuable services that the Employee has rendered and
desires to be assured that the Employee will continue his active participation
in the business of the Bank, subject to the terms of this Agreement, and desires
to assure Employee that his employment will continue subject to the terms of
this Agreement.

NOW, THEREFORE, in consideration of the promises and the mutual agreements
contained in this Agreement, it is agreed as follows:

1. DEFINITIONS.

As used in this Agreement, unless the context otherwise requires a different
meaning, the following terms shall have the following meanings (such meanings to
be equally applicable to the singular and plural forms thereof and words in the
masculine gender being deemed to be feminine as may be applicable):

Board shall mean the Board of Directors of the Bank.

Cause shall mean any of the following activities by the Employee: (i) the
conviction of the Employee for a felony, or a crime involving moral turpitude;
(ii) the commission of any act involving dishonesty, disloyalty or fraud with
respect to the Bank or any of its members; (iii) willful and continued failure
to perform material duties which are reasonably directed by the Board of
Directors and/or the President which are consistent with the terms of this
Agreement and the position specified in Section 2; (iv) gross negligence or
willful misconduct with respect to the Bank or any of its members; or (v) any
violation of Bank policies regarding sexual harassment, discrimination,
substance abuse or the Bank’s Code of Ethics to the extent such acts would
provide grounds for a termination for cause with respect to other employees; or
(vi) a material breach by the Employee of a material provision of this
Agreement.

Change of Control of the Bank shall mean the occurrence at any time of any of
the following events:

(a) any person, more than one person acting as a “group” (as defined in section
1.409A-3(i)(5) of the Treasury Regulations), acquires ownership of equity
securities of the Bank that, together with equity securities held by such person
or group, constitutes more than 50% of the total voting power of the equity
securities of the Bank; provided, however, that if any person or group, is
considered to own more than 50% of the total voting power

 

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of the equity securities of the Bank, the acquisition of additional equity
securities by the same person or group will not be considered a Change of
Control under this Agreement. An increase in the percentage of equity securities
of the Bank owned by any person or group as a result of a transaction in which
the Bank acquires its own equity securities in exchange for property will be
treated as an acquisition of equity securities of the Bank for purposes of this
paragraph; or

(b) during any period of twelve (12) consecutive months, individuals who at the
beginning of such period constituted the Board (together with (a) any new or
replacement directors whose election by the Board, or (b) whose nomination for
election by the Bank’s shareholders, was approved by a vote of at least a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors then in office; or

(c) The Bank sells or transfers 95% or more of its business and/or assets to
another bank or other entity.

Change in Control Bonus Payment has the meaning given to such term in
Section 8(c).

Disability shall mean that the Employee (a) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months as determined
under the Bank’s short- or long-term disability program; or (b) is, by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than twelve (12) months as determined under the Bank’s short- or long-term
disability program, receiving income replacement benefits for a period of not
less than three (3) months under an accident and health plan covering the Bank’s
employees.

Good Reason shall mean any of the following:

(a) FOR SANJAY K. BHASIN AND CHAD A. BRANDT: a reduction by the Bank in the
Employee’s base salary other than under the conditions specified in Section 4;
or

(a) FOR JOHN STOCCHETTI: a diminution in the Employee’s authority, duties, or
responsibilities as a Employee of the Bank

(b) the relocation of the Employee’s principal office assignment to a location
more than fifty (50) miles from its location on the date hereof; or

(c) any material breach of this Agreement by the Bank.

For purposes of this Agreement, Good Reason shall not be deemed to exist unless
the Employee’s termination of employment for Good Reason occurs within two
(2) years following the initial existence of one of the conditions specified in
clauses (a) through (c) above, the

 

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Employee provide the Bank with written notice of the existence of such condition
within ninety (90) days after the initial existence of the condition, and the
Bank fails to remedy the condition within thirty (30) days after the receipt of
such notice by the Bank.

Notwithstanding the foregoing, Good Reason will not exist if the Employee
voluntarily agrees in writing to any of the changes listed above giving rise to
Good Reason

Retirement shall mean the planned and voluntary termination by the Employee of
his employment on or after reaching the earliest retirement age permitted by the
Financial Institutions Retirement Fund.

FOR SANJAY K. BHASIN AND CHAD A. BRANDT: Term of the Agreement means (2) two
years.

FOR JOHN STOCCHETTI: Term of the Agreement means two (2) years; provided,
however, that if at any time during the Term of the Agreement any then-current
member of the Bank’s Management Committee is offered an employment agreement
having a three-year term, then the Bank agrees that it will enter into an
amendment to this Agreement to amend the original Term of the Agreement of this
Agreement to be three (3) years. For purposes of clarity, in the event of such
an amendment, the entire Term of the Agreement will not exceed three (3) years,
regardless of when such amendment is entered into.

2. DUTIES OF EMPLOYEE.

The Employee has been retained by the Bank as a [EMPLOYEE JOB TITLE] or in such
other or further capacities as may be assigned by the Bank. The Employee shall
devote his best efforts to the performance of his duties of his position with
the Bank and shall devote substantially all of his business time and attention
to the performance of his duties under this Agreement.

3. TERM OF EMPLOYMENT.

Unless terminated earlier as provided in Section 6, the Bank’s employment of
Employee under this Agreement will continue from the Effective Date for a period
equal to the Term of the Agreement.

4. COMPENSATION.

 

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The Employee’s initial base salary for fiscal year [YEAR] is $[BASE SALARY],
payable in accordance with Bank’s payroll payment dates. The Bank will review
the performance of the Employee and the compensation paid to the Employee
according to its existing policies. If the Employee’s base salary is increased
as a result of a merit increase or promotion at any time during the term of this
Agreement, then such increased amount shall thereafter constitute the Employee’s
“base salary” for all purposes under this Agreement. The Bank reserves the right
to reduce the compensation of its Employees when such reduction is associated
with a “General Reduction” in compensation among employees in the same job grade
or employees who are similarly situated and such reduction is in response to
adverse or declining economic conditions. Any such reduction shall not exceed 5%
of the Employee’s base salary amount in effect at the time of the reduction. The
Employee will also be eligible for such incentive compensation plans as are
adopted by the Board of Directors.

5. EMPLOYEE BENEFITS.

The Employee shall be eligible to participate in or receive benefits that are
provided to employees under the Bank’s various employee benefit plans, including
applicable bonus plans, if any. The terms of those plans are set forth in the
respective plan documents, and are subject to change based on the terms set
forth therein.

6. TERMINATION.

The Employee’s employment under this Agreement may be terminated under the
following circumstances:

 

  (a) Death. Upon the Employee’s death, in which case Employee’s employment will
terminate on the date of death;

 

  (b) Disability. Upon the Employee’s Disability, in which case the Employee may
be eligible for leave under one or more of the Bank’s medical leave and/or
disability plans. If the Employee’s Disability results in the Employee’s
inability to perform, with or without reasonable accommodation (as defined under
the Americans with Disabilities Act), the Employee’s duties under this
Agreement, after the initial ninety- (90-) day period of Disability, the Bank
may give the Employee thirty (30) days’ written notice of termination of this
Agreement. If the Employee does not return to the performance of the Employee’s
duties hereunder on a full-time basis by the end of the thirty day notice
period, then the Bank may terminate the Employee’s employment hereunder
effective on the thirty-first (31st) day following the giving by the Bank of
such written notice of termination. Although employment under the terms of this
Agreement will end, the termination of this Agreement will not affect the
Employee’s employment and benefits under the Bank’s medical leave and/or
disability plans, if applicable;

 

  (c)

Termination by the Bank for Cause. The Bank may terminate the Employee’s
employment at any time for Cause, such termination to be effective as of the
date stated in a written notice of termination delivered to the Employee. Before

 

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proceeding with termination under subparts (iii) through (vi) of the definition
of “Cause”, the Bank will give the Employee written notice of the grounds for
termination and thirty (30) days to cure. If the Employee fails or is unable to
cure, the Employee’s employment will terminate immediately;

 

  (d) Resignation by the Employee Other Than for Good Reason. The Employee may
voluntarily resign his position with the Bank at any time for any reason or for
no reason, other than under circumstances constituting Good Reason, upon thirty
(30) days’ prior written notice to the Bank. Such resignation will be effective
as of the date stated in such written notice, unless otherwise mutually agreed
by the parties.

 

  (e) Termination by the Bank Other Than for Cause. The Bank may terminate
Employee’s employment for any reason or for no reason upon sixty (60) days’
prior written notice to Employee. Such termination will be effective as of the
date stated in a written notice of termination; or

 

  (f) Termination by Employee With Good Reason. The Employee may terminate the
Employee’s employment hereunder at any time for Good Reason. The Employee must
give the Bank written notice explaining the reasoning for the Employee’s
determination that an event giving rise to Good Reason for termination has
occurred and allow the Bank thirty (30) days to cure. If the Bank fails to cure,
the Employee’s employment under this Agreement will end on the date stated in
the notice by the Employee (or such earlier date after the delivery of such
notice as the Bank may elect).

In no event will the termination of the Employee’s employment affect the rights
and obligations of the parties set forth in this Agreement, except as expressly
set forth herein. Any termination of the Employee’s employment pursuant to this
Section 6 will be deemed to be a termination of all of the Employee’s positions
with the Bank.

7. TERMINATION PAYMENTS.

The Employee will be entitled to receive the following payments upon termination
of the Employee’s employment hereunder:

 

  (a) In the event of the termination of the Employee’s employment pursuant to
any of the following provisions:

 

•        Section 6(a)

  

[Death]

•        Section 6(b)

  

[Disability]

•        Section 6(c)

  

[By the Bank for Cause]

•        Section 6(d)

  

[By the Employee Other Than for Good Reason]

 

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the Bank will pay to the Employee (or the Employee’s estate, as the case may be)
immediately following such termination all accrued unutilized vacation time as
of such date, and as soon as practicable, but in any event within 90 days, all
accrued and unpaid salary for time worked as of the date of termination. The
Employee will not be entitled to any other compensation, bonus or severance pay
from the Bank; provided, however, that nothing in this Section 7(a) shall affect
any vested rights which the Employee has under any pension, thrift, or other
benefit plan, excluding severance.

 

  (b) In the event of termination of the Employee’s employment pursuant to any
of the following provisions:

 

•        Section 6(e)

  

[By the Bank Other Than for Cause]

•        Section 6(f)

  

[By the Employee for Good Reason]

the Employee will be entitled to receive the following payments and benefits:

 

  (i) pursuant to the Bank’s normal payroll schedule, all accrued and unpaid
salary for time worked as of the date of termination;

 

  (ii) pursuant to the Bank’s normal payroll schedule and procedures, all
accrued but unutilized vacation time as of the date of termination;

 

  (iii) salary continuation (at the base salary level in effect at the time of
termination) pursuant to the Bank’s normal payroll schedule for a period of time
beginning on the date of termination and continuing for a period equal to the
Term of the Agreement;

 

  (iv) continued participation in any bonus plan in existence as of the date of
termination, provided that all other eligibility and performance objectives are
met, as if the Employee had continued employment through December 31 of the year
of termination. The bonus will be paid according to the normal payment schedule
according to the plan then in effect, but not later than March 15th of the year
following the year of termination. (The Employee will not be eligible for
bonuses paid with respect to any year following the year of termination); and

 

  (v) continued participation in the Bank’s employee health care benefits plans
in accordance with the terms of the Bank’s then-current Severance Plan that
would be applicable to the Employee if his employment had been terminated
pursuant to such Policy.

These payments are contingent upon the Employee complying with Sections 11, 12,
and 13 of this Agreement and signing a general release of all claims against the
Bank in such form as the Bank shall require. The Employee will not be entitled
to any other compensation, bonus, or

 

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severance pay from the Bank; provided, however, that nothing in this
Section 7(b) shall affect any vested rights which the Employee has under any
pension, thrift, or other benefit plan, excluding severance.

8. CHANGE IN CONTROL PAYMENTS.

 

  (a) Change in Control. If a Change in Control occurs while the Employee is
employed by the Bank during the term of this Agreement (whether the Employee is
then employed by the Bank or a successor to the Bank as a result of a Change in
Control), the Employee shall be entitled to the payments provided in this
Section 8.

 

  (b) Minimum Bonus – Employment Continues. In the event of the occurrence of
(i) a Change in Control under Section 8(a) and (ii) the continued employment of
the Employee with the Bank, the Employee may be entitled to receive the minimum
incentive compensation pursuant to this Section 8(b). During the term of this
Agreement, if the Employee is otherwise eligible to receive an annual incentive
award pursuant to the Bank’s Incentive Compensation Plan or Management Incentive
Compensation Plan, as applicable, or a similar or successor plan following a
Change in Control, then as an incentive to remain in the employ of the Bank the
Employee shall be entitled to receive an incentive award that is at least equal
to the amount calculated by multiplying 0.50 times the single highest incentive
bonus payment paid to the Employee during the three-year period immediately
preceding the year in which the Change in Control occurred. The benefits under
this Section 8(b) shall apply to each annual incentive period that occurs during
the Term of the Agreement.

Any conditions that are otherwise applicable to the Employee’s eligibility for
an annual incentive award under the then-current incentive bonus plan, such as
receiving a performance rating of “Meets Expectations” or higher and/or
employment on the date of payment or similar conditions, shall be applicable to
the Employee’s receipt of the minimum guaranteed amount hereunder.

 

  (c) Change in Control – Employment Terminates. In the event of the occurrence
of (i) a Change in Control under Section 8(a) and (ii) the subsequent
termination of the Employee’s employment with the Bank pursuant to Section 6(e)
or 6(f), the Employee shall be entitled to receive a Change in Control Bonus
Payment in an amount equal to (i) 0.50 times (ii) the amount of the single
highest incentive bonus payment paid to the Employee during the three years
immediately preceding the year in which the Change in Control occurred times
(iii) the number of years in the Term of the Agreement.

Any Change in Control Bonus payable hereunder shall be payable by the Bank on
the same day that the annual incentive award is payable to the Employee, but no
later than March 15th of the year following the year of termination. Any
conditions that are otherwise applicable to the Employee’s eligibility for the

 

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annual incentive award, such as receiving a performance rating of “Meets
Expectations” or higher or similar conditions (other than employment on the date
of payment), shall be deemed to have been fulfilled by the Employee.

 

  (d) Applicability of Both Sections 8(b) and 8(c) to the Employee. If
Section 8(b) is applicable to the Employee in one year and then Section 8(c)
becomes applicable, then the Change in Control Bonus Payment that the Employee
would be entitled to receive shall be calculated by substituting the number of
years remaining under the Agreement for the number in clause (iii) of the
formula set forth in the preceding paragraph.

 

  (e) FOR JOHN STOCCHETTI ONLY: Taxes. The Employee shall be responsible for the
payment of all federal, state, and local income and other taxes which may be due
with respect to any payments made to the Employee pursuant to this Agreement,
other than any excise tax, tax penalties, or alternative federal tax assessed,
which the Employee will receive from the Bank as an additional payment
sufficient to provide him with the same after-tax benefits as he would have
received had such taxes not been imposed.

 

  (e) Taxes. The Employee shall be responsible for the payment of all federal,
state, and local income and other taxes which may be due with respect to any
payments made to the Employee pursuant to this Agreement, including any excise
tax, tax penalties, or alternative federal tax assessed.

9. CONFLICT OF INTEREST.

The Employee may not use his position, influence, knowledge of confidential
information, or the Bank’s assets for personal gain. A direct or indirect
financial interest, including joint ventures in or with a competitor, supplier,
vendor, customer or prospective customer without disclosure and written approval
from the Board of Directors is strictly prohibited and could be grounds for
dismissal for Cause. The Employee shall at all times comply with the Bank’s Code
of Ethics.

10. CONFIDENTIAL INFORMATION.

The term “Confidential Information” means: (a) financial information, including
but not limited to earnings, assets, debts, prices, fee structures, volumes of
purchases or sales, or other financial data, whether relating to the Bank
generally, or to particular products or services offered by the Bank;
(b) customer or member information, including but not limited to information
concerning the products or services utilized or purchased by members, the names
and addresses of members, terms of funding or loan agreements, or of particular
transactions, or related information about potential members; (c) marketing
information, including but not limited to details about ongoing or proposed
marketing programs or agreements by or on behalf of the Bank, marketing
forecasts, results of marketing efforts or information about impending
transactions, and pricing strategies; (d) personnel information, including but
not limited to employees’ personal or medical histories, employment agreements,
commission and bonus plans,

 

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compensation or other terms of employment, actual or proposed promotions,
hiring, resignations, disciplinary actions, terminations, training methods,
performance or other employee information; (e) information contained in any
computer files, including, but not limited to reports of examination issued by
the Bank’s regulator, current and historical information regarding the Bank’s
borrowing and other relationships with its members and other borrowers, and to
the results of the Bank’s internal ratings of its members and other borrowers,
confidential information of third parties provided to the Bank under an
agreement requiring the Bank to maintain the confidentiality of such information
except for specified permitted uses, or other proprietary operating software
systems, and any associated passwords; (f) procedures manuals, policy manuals,
sales training materials, brochures, funding agreements, license agreements,
minutes of board meetings, minutes of manager’s meetings, sales meetings; and
(g) contacts, including but not limited to any compilations of past, existing or
prospective sources of business, proposals or agreements between members and the
Bank, any sales or borrowing histories or other revenue information by member or
customer, status of member or customer accounts or credit, or related
information about actual or prospective members or contacts.

11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.

The Bank agrees to provide the Employee with access to Confidential Information
necessary to perform the Employee’s job with the Bank. The Employee agrees,
except as specifically required in the performance of the Employee’s duties for
the Bank, the Employee will not, during the course of Employee’s employment by
Bank and after the Employee leaves the employment of the Bank, directly or
indirectly use, disclose or disseminate to any other person, organization or
entity or otherwise employ any Confidential Information.

12. RETURN OF PROPERTY.

The Employee agrees to deliver to the Bank upon the cessation of the Employee’s
employment, and at any other time upon the Bank’s request: (a) all documents and
other materials, whether made or compiled by the Employee alone or with others
or made available to the Employee while employed by the Bank, pertaining to
Confidential Information or other inventions and works of Bank; (b) all
Confidential Information, other inventions or any other property of Bank in the
Employee’s possession, custody or control, and (c) all cellular telephones, data
storage devices, and personal digital assistants paid for or issued by the Bank.
This includes Confidential Information contained on Personal Digital Assistants,
mobile phones, external hard drives, USB “flash” drives, other USB storage
devices, FireWire storage devices, digital music players, digital tapes, floppy
disks, CD’s, DVD’s, personal e-mail accounts (including web-based e-mail
accounts such as Hotmail, gmail, or Yahoo), memory cards, Zip disks or drives,
and all other similar mediums which can be used to store electronic data.

13. NON-SOLICITATION OF EMPLOYEES.

For a period of one year after the Employee’s employment with the Bank ends, the
Employee will not recruit, hire or attempt to recruit or hire, directly or by
assisting others, any other employee of Bank during the Employee’s employment
with Bank.

14. FEDERAL BENEFITS RULES.

 

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If any provision of this Agreement (or any award of compensation) would cause
the Employee to incur any additional tax or interest under Section 409A of the
Internal Revenue Code (the “Code”) or any regulations or Treasury guidance
promulgated there under, the Bank may reform such provision provided that it
will (i) maintain, to the maximum extent practical, the original intent of the
applicable provision without violating the provisions of Section 409A or the
Code and (ii) notify and consult with the Employee regarding such amendments or
modifications prior to the effective date of any change

15. SEVERABILITY.

If any provision, restriction or section in this Agreement is determined to be
in violation of any law, rule or regulation or otherwise unenforceable, such
determination shall not affect the validity of any other provision, restriction
or section of this Agreement, but such other provisions, restrictions or
sections shall remain in full force and effect. Each provision, restriction or
section of this Agreement is severable from every other provision, restriction
or section and constitutes a separate and distinct covenant. In the event that a
court of competent jurisdiction determines that any provision of this Agreement
is overly broad or unenforceable, the Bank and the Employee specifically request
that such court sever it or reform such provision so that it is enforceable to
the maximum extent permitted by law; provided that the Bank’s obligation to pay
the Termination Payments set forth in Section 7(b) are contingent upon the
Employee complying with Sections 11, 12, and 13, as written. If the Employee
challenges the enforceability of Sections 11, 12, or 13, or if a court finds any
of these sections to be unenforceable, the Employee will not be entitled to the
separation payments set forth in Section 7(b).

16. SUCCESSORS.

This Agreement shall be binding upon and inure to the benefit of the Bank and
its successors and assigns, and the Employee, the Employee’s heirs, executors
and administrators. The Bank may assign this Agreement in any Change in Control,
and the Employee hereby consents to the assignment.

17. ENTIRE AGREEMENT; MODIFICATION.

This Agreement constitutes the entire Agreement between the parties hereto, and
fully supersedes any prior agreements or understandings between the parties. The
parties acknowledge that they have not relied on any representations, promises,
or agreements of any kind made in connection with the decision to sign this
Agreement, except for those set forth in this Agreement. This Agreement may not
be altered or amended except in writing, signed by the Employee and an
authorized representative of the Bank.

18. CHOICE OF LAW AND VENUE.

The parties agree that this Agreement is to be governed by and construed under
the law of the State of Illinois without regard to its conflicts of law
provisions. The parties further agree that all disputes shall be resolved
exclusively in state or federal court in Cook County, Illinois.

 

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19. NOTICES.

Any notice required or permitted hereunder shall be in writing, and shall be
deemed duly given when hand delivered, or when mailed, first class mail, postage
prepaid, registered or certified, return receipt requested, to the addresses set
forth below:

Bank

111 E. Wacker Dr., Suite 800

Chicago, IL 60601

Attention: Mary Jane Brown

Employee

Employee’s home address as shown in the Bank’s records

The foregoing addresses may be changed at any time, or from time to time, by
written notice given in accordance with the provisions of this section.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.

 

FEDERAL HOME LOAN BANK OF
CHICAGO

  EMPLOYEE By:  

 

  By:  

 

Name:   [PRESIDENT]   Name:   [NAME OF EMPLOYEE] Title:   President and CEO  
Title:   [TITLE OF EMPLOYEE]

 

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