EX-10.9



 





Exhibit 10.9




Letter Agreement between the Federal Home Loan Bank of Cincinnati

and Sandra E. Bell dated November 22, 2006




November 22, 2006




Ms. Sandra E. Bell

2716 Lakewood Pointe

Cincinnati, Ohio 45244




Dear Sandra:




          This letter is to confirm our discussion regarding your employment status with the Federal
Home Loan Bank of Cincinnati (the “Bank”). For the reasons set forth on October 26, 2006 by Mr.
Hehman, the Bank and you have mutually agreed to end your employment as Executive Vice President,
Chief Financial Officer effective November 30, 2006. The Bank is interested in effecting your
separation in an amicable fashion and consistent with that interest, is willing to provide you with
a package of separation benefits to which you are not otherwise entitled in exchange for your
execution of this letter agreement (the “Agreement”).




          If you agree with the understandings and commitments set forth in this letter, this Agreement
will constitute our complete agreement concerning your separation from employment and the
additional benefits which you will receive in conjunction with that separation. If you sign this
Agreement, you will receive the benefits as set forth in paragraphs A and B. If you do not sign
this Agreement, you will only receive those benefits set forth in paragraph A.




          Your employment by and your status as an officer of the Bank will end on November 30, 2006.
Until that time, you will remain an employee and officer of the Bank and you will receive your
current salary and all Bank maintained benefits for which you otherwise qualify.



A. BENEFITS TO WHICH YOU ARE ENTITLED WHETHER YOU SIGN THIS AGREEMENT OR NOT: In the event you
choose not to sign this Agreement, you shall receive only those benefits to which you are already
entitled, namely:





	 	1.	 	The Bank will provide you with the necessary information and forms in relation to your
option to purchase continued health insurance coverage (i.e., medical, dental and vision)
commencing December 1, 2006, under the Bank’s health insurance continuation program which
is consistent with the applicable provisions of the Consolidated Omnibus Budget
Reconciliation Act (COBRA).
	 
	 	2.	 	The Bank will pay you all accrued but unused vacation in the amount of $10,887.15 as of
the ending date of your employment.














 











Ms. Sandra E. Bell

November 22, 2006

Page 2





	 	3.	 	When your employment ends, you will have the option to convert your life and long term
disability insurance coverages, if applicable, to individual policies consistent with the
terms of such coverages. If you wish to convert to individual coverage policies, please
contact me as soon as possible to complete the necessary forms.
	 
	 	4.	 	You will be entitled to your account balance (through and including all voluntary and
matching contributions for the month of November) under the Bank’s Thrift Plan, subject to
the plan’s normal withdrawal and distribution rules.
	 
	 	5.	 	You will be entitled to your benefits (through and including all voluntary and matching
contributions for the month of November) under the Bank’s Benefit Equalization Plan,
subject to the plan’s normal withdrawal and distribution rules. It is anticipated this
amount should be payable to you the week of January 22, 2007. In the event of your death
prior to such date, such benefits shall be paid to your designated beneficiary.
	 
	 	6.	 	You will be entitled to the “Retirement Benefit” under the Deferred Compensation
Agreement, subject to and in accordance with the Deferred Compensation Agreement’s terms
and definitions and applicable IRS regulations. Specifically, pursuant to 3(b) of the
Deferred Compensation Agreement, you shall be fully vested in this Retirement Benefit,
which currently totals $307,629.00 as of September 30, 2006 and which amount plus all
additional accrued interest shall be paid during the week of January 22, 2007. In the
event of your death prior to such date, such Retirement Benefit shall be paid to your
designated beneficiary.




B. ADDITIONAL BENEFITS: If you sign this Agreement and it becomes effective, you will receive the
following package of separation benefits to which you are not otherwise entitled in conjunction
with the ending of your employment:





	 	1.	 	The Bank will pay you four (4) months separation pay. This separation pay would be in
the gross amount of $113,000.00. The Bank will deduct from this gross amount tax
withholdings as required by law. The separation pay will be paid to you no later than
December 15, 2006, the next regular pay date following your separation of employment.
	 
	 	2.	 	The Bank will make available to you the services of an outplacement firm, selected by
the Bank with your input, with the cost of such services to be paid by the Bank and not to
exceed $25,000. The Bank will engage such outplacement firm on your behalf as soon as
reasonably practicable with such services to begin immediately. As part of such services,
a mutually agreed statement consisting of the filed Form 8-K will be issued by the Bank.
	 
	 	3.	 	In relation to your option to purchase continued health insurance coverage for you and
your family pursuant to your rights under the Bank’s health insurance continuation














 











Ms. Sandra E. Bell

November 22, 2006

Page 3





	 	 	 	program, and provided that you timely elect to continue coverage and provided further that
you remain eligible to continue coverage under the Bank’s plan and that you not waive
coverage available to you under a subsequent employer’s health insurance program, the Bank
will pay the entire premium cost of continuing your elected health insurance coverages
(i.e., medical, dental and vision) for twelve (12) months (through November 30, 2007). You
may continue your health insurance coverage after that date under the Bank’s plan at your
own expense, provided you are eligible under the terms of the plan to do so.
	 
	 	4.	 	You shall remain eligible to receive a prorated incentive payment in accordance with
the Bank’s Executive Incentive Compensation Plan (also known as the Officer’s Incentive
Plan) for year 2006. The prorated amount shall be based on the last day of employment of
November 30, 2006, notwithstanding the provisions of Section 12 of the Officer’s Incentive
Plan. The prorated amount of your salary (91.51% of the full year amount) shall be based
on the last day of your employment being November 30, 2006. Any amount due hereunder shall
be paid to you according to the terms of the Officer’s Incentive Plan which takes into
account the Bank’s year end performance results. In the event of your death prior to such
payment (which should not be later than mid-February, 2007), any amount due hereunder shall
be paid to your beneficiary as designated under the Bank’s Benefit Equalization Plan.





     In exchange for and in consideration of these additional benefits described and set forth in
paragraph B above, you, on behalf of yourself, your successors, your assigns, your heirs, your
executors, and your administrators, release and forever discharge the Bank and its affiliates,
associated entities, predecessors, successors and assigns, and their officers, directors,
shareholders, agents, employees and representatives from all liability, claims and demands, actions
and causes of action, damages, costs, payments and expenses (the “claims”) of every kind, nature,
or description arising out of your employment relationship with the Bank, or the ending of your
employment. You agree that the claims being released and forever discharged by you include, but
are not limited to, those claims which may arise in tort, in contract, and by state or federal
statute, regulation or other law. Notwithstanding the foregoing, this release does not apply to
any rights you may have under any director’s and officer’s insurance of the Bank applicable to the
period when you served as an officer of the Bank. In the event the Bank maintains director’s and
officer’s insurance coverage in the future, it will not exclude former officers from the definition
of “Insured Person” for the express purpose of excluding Ms. Bell from eligibility thereunder. The
Bank agrees to provide Ms. Bell at her request with a copy of its director’s and officer’s
insurance coverage for subsequent policy periods ending after 7/1/07. In addition, this release
does not apply to any rights you may have as an officer of the Bank under any indemnification
provisions for third-party claims contained under the current By-Laws of the Bank as set forth on
Exhibit 1 attached hereto. In the event the Bank changes, amends, modifies, restates or otherwise
revises the indemnification provisions for third-party claims contained in













 





Ms. Sandra E. Bell

November 22, 2006

Page 4



the current By-Laws, the Bank will not make such changes, amendments, modifications, restatements
or revisions for the express purpose of excluding Ms. Bell from coverage by or eligibility under
such indemnification provisions. Nothing contained herein shall constitute a release of any rights
you have under this Agreement.




     Without releasing any rights it may have to indemnification, contribution or any other claim
it may have (of which it currently is aware of none), Bank acknowledges that it knows of no actions
taken or omitted to be taken by you which have or will expose the Bank to any liability.



     You agree not to disclose to others or to use any of the Bank’s confidential and proprietary
information concerning operational, financial, sales, trade, business, trade secrets, programs,
policies, know-how, future developments, procedures or related matters which you have learned or
obtained through and throughout your employment and association with the Bank, except as required
to do so by law or by order of a court of competent jurisdiction. Further, you agree that you have
or that you will on or before November 30, 2006 return to the Bank any and all Bank property,
including the Bank car, credit cards, telephone card, keycard, laptop computer and any other Bank
property.



     Under state and federal law, you have a right not to be discriminated against on the basis of
various characteristics including but not limited to race, age, sex, national origin, religion or
disability. This Agreement between you and the Bank includes, but is not limited to, a voluntary
waiver of all claims of discrimination. Specifically, this Agreement includes a voluntary waiver
of all claims under the Age Discrimination in Employment Act of 1967, 29 U.S.C. §621. You are
advised to consult an attorney regarding this Agreement and you acknowledge and agree that you
consulted with an attorney, James H. Smith III, Lindhorst & Dreidame, who has represented you in
discussions with the Bank’s counsel, David G. Holcombe, Baker & Hostetler LLP, 312 Walnut Street,
Suite 3200, Cincinnati, Ohio 45202-4074, (513) 929-3402.



     It is understood and agreed that this Agreement is a compromise of any alleged claims and that
the making of this offer, the entering into of this Agreement, and the benefits paid to you are not
to be construed as an admission of liability on the part of the Bank, and that all liability is
expressly denied by the Bank.



     The terms of this Agreement shall remain confidential, and each party agrees that it will not
publish or publicize the terms of this Agreement in any manner unless required to do so by law.
The parties agree that they will not discuss or reveal the terms of this Agreement to any persons,
other than Ms. Bell may discuss or reveal the terms to her immediate family, her attorney, and her
financial advisors and the Bank may discuss or reveal the terms to appropriate regulatory bodies,
its external auditors, and Bank management personnel and directors. You will not, or cause others
to, disparage the Bank, its affiliates, associated entities, predecessors,













 





Ms. Sandra E. Bell

November 22, 2006

Page 5



successors and assigns, or their officers, directors, shareholders, agents, employers or
representatives. The Bank’s President & CEO, the Bank’s VP, HR & Administration, and any other
Bank designated spokesperson(s) agree not to make disparaging remarks about you, your services,
management, capabilities, or activities based on the experiences of the Bank while Bank employed
you.




     The parties agree that all inquires from prospective employers of Ms. Bell shall be directed
to Richard T. Fitzpatric, whose title is VP, HR & Administration, or his successor, that the only
information to be divulged to such prospective employer(s) is (1) the date of Ms. Bell’s employment
by the Bank; and (2) her job title. The parties further agree that Ms. Bell’s personnel file shall
be sealed and retained by the VP, HR & Administration. Nothing herein contained shall preclude any
employee or director of the Bank requested by Ms. Bell from providing a personal reference for Ms.
Bell. If provided, Ms. Bell authorizes such employees and directors to release any and all
information relating to her employment with the Bank and waives all claims against, and releases
from any and all liability, the Bank and such employees and directors with respect to any and all
information provided by such employees and directors.



     This Agreement is made and entered into in the State of Ohio and will be in all respects
interpreted, enforced and governed under the laws of said State. The language of all parts of this
Agreement will in all cases be construed as a whole, according to its fair meaning, and not
strictly for or against any of the parties.



     If the terms of this Agreement are acceptable to you, please so indicate by signing on the
appropriate line below and then return this Agreement to me. You will, of course, be provided with
a copy of this Agreement. You agree that you have read this Agreement completely and understand
its terms; that you have had an opportunity to consider the terms of this Agreement; that you have
been advised to consult with and you have in fact consulted with personal advisors, including an
attorney of your choosing. You have twenty-one (21) days within which to consider the terms of
this Agreement. This Agreement does not become effective or enforceable until seven (7) days after
you have executed this Agreement. During the seven-day period following the execution of this
Agreement, you may revoke this Agreement in its entirety by providing written revocation to me.



	 	 	 
	 

	 	Cordially yours,
	 
	 	 
	 
	 	 
	 

	 	Richard T. Fitzpatric, SPHR
	 

	 	Vice President
	 

	 	Human Resources & Administration
















 






Ms. Sandra E. Bell

November 22, 2006

Page 6




	 
	I have carefully read and fully understand all the terms of this Agreement.







	 	 	 
	/s/ Sandra E. Bell

	 	 
	 	 	 
	Sandra E. Bell
	 	 
	
November 22, 2006
	 	 
	 	 	 
	Date