Document:

Settlement Agreement and Release with Roy M. Whitehead & Wash. Federal Savings

 Exhibit 10.11 
  
 EXECUTION VERSION 
  
 SETTLEMENT AGREEMENT AND RELEASE 
  
 This Settlement Agreement and Release (the “Agreement”), dated as of May 12, 2005, is made by and among the Federal Home Loan Bank of
Seattle, a federally chartered corporation established under the authority of the Federal Home Loan Bank Act (the “Bank”), Roy M. Whitehead (“Whitehead”) and Washington Federal Savings, a federally chartered savings
association (the “Member,” and collectively with Whitehead and the Bank, the “Parties”). 
  
 RECITALS 
  
 WHEREAS, Whitehead is Vice Chairman, President and Chief Executive Officer of the Member; and 
  
 WHEREAS, the Member is a member of the Bank; and 
  
 WHEREAS, Whitehead serves on the board of directors of the Bank; and

  
 WHEREAS, the Bank repurchased $48,000,000 of the Bank’s
Class B(1) stock (the “Class B(1) Stock”) from Member on October 25, 2004 (the “Repurchase”); and 
  
 WHEREAS, the Member purchased $834,300 of Class B(1) Stock from the Bank on April 29, 2005; and 
  
 WHEREAS, the Parties desire to resolve, settle and release all disputes
between and among them with respect to the Repurchase and the Member’s request therefor, without any admission of liability or concession as to the validity of any Party’s claims or defenses, with respect to all of their respective claims,
causes of action and defenses, known or unknown. 
  

 NOW THEREFORE, the Parties, in consideration of the foregoing premises and mutual promises set forth
below and other good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, mutually agree as follows: 
  
 1. RELEASES 
  
 1.1 The Bank, on behalf of itself and any person or entity claiming through or under it, hereby releases and forever discharges Whitehead and the Member,
and each of their respective members, directors, officers, employees, stockholders, representatives, advisors, agents, accountants and attorneys, Affiliates (defined, for purposes of this Agreement, as any person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common control with, a Party), successors, predecessors, heirs, trusts, estates and assigns (collectively, “Releasees”), of and from and with respect to any and
all legal and equitable Claims (as defined below). This full and complete release includes, without limitation, any and all demands, obligations, liabilities, indebtedness, claims or other cause or causes of action, whether known or unknown,
suspected or unsuspected, liquidated or unliquidated, at law or in equity and whether sounding in contract, tort or otherwise, arising from the beginning of time through and including the date hereof related to the Repurchase, the Member’s
request therefor and Whitehead’s role therein (each a “Claim” and, collectively, the “Claims”), except as to any Claim relating to any breach of this Agreement. The Bank agrees not to cause any of its
Affiliates to bring a Claim and not to support a Claim brought by any of its Affiliates, except, in each case, as to any Claim relating to any breach of this Agreement. 
  
 1.2 The Member, on behalf of itself and any person or entity claiming through or under it, hereby release and forever
discharge the Bank, and each of its members, directors, 

  

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officers, employees, stockholders, representatives, advisors, agents, accountants and attorneys, Affiliates, successors, predecessors, heirs, trusts, estates
and assigns (collectively, “Bank Releasees”), of and from and with respect to any and all legal and equitable Claims, except as to any Claim relating to any breach of this Agreement. The Member agrees not to cause any of its
Affiliates to bring a Claim and not to support a Claim brought by any of its Affiliates, except, in each case, as to any Claim relating to any breach of this Agreement. 
  
 1.3 Whitehead, on behalf of himself and any person or entity claiming through or under him, hereby releases and forever
discharges each Bank Releasee, of and from and with respect to any and all legal and equitable Claims, except as to any Claim relating to any breach of this Agreement. Whitehead agrees not to cause any of its Affiliates to bring a Claim and not to
support a Claim brought by any of its Affiliates, except, in each case, as to any Claim relating to any breach of this Agreement. 
  
 1.4 Non-Disclosure. Except as provided by Section 2.3 of this Agreement, each of the Parties agrees that, (i) without the prior written consent of
the other Parties, it will not, and it will cause its Representatives (as defined below) not to, disclose to any person, other than to its Representatives who need to know such information or to any regulatory agency having jurisdiction over it, the
terms and provisions of this Agreement, including, without limitation, any of the matters covered hereby, any other matters relating to the non-public substantive details of the Repurchase, the Purchase (as defined in Section 2.2, below) or the
Claims addressed in Section 1 hereof; and (ii) neither such Party nor its Representatives will encourage, solicit or initiate, directly or indirectly, any administrative or governmental investigation or media inquiry regarding any of the Parties
hereto, provided, however, that a Party hereto may make disclosure if and to the 

  

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extent required by any Disclosure Requirement (as defined below). The term “person” as used herein shall be broadly interpreted to include
the media and any governmental or quasi-governmental entity or agency, corporation, partnership, limited liability company, association, group, individual or other entity. For purposes of this Agreement, “Representatives” shall
mean, with respect to each Party hereto, the directors, officers, employees, representatives, agents, advisors, accountants and attorneys of such Party who need to know such information. If a Representative of a Party violates such Party’s
non-disclosure obligation of this Section 1.4, such Party will be held responsible for such violation. For purposes of this Agreement and subject to this Section 1.4, a Party may make disclosure to the extent required by law, regulation or rule or
requested by any applicable stock exchange, the Securities and Exchange Commission or any other regulatory body or order of a court of competent jurisdiction or other tribunal (collectively, a “Disclosure Requirement”); provided,
however, that the Party requested or required to make disclosure shall provide as much advance notice as is reasonably practicable to the other Parties of the disclosure and shall provide in advance the form and content of any such disclosure to
the other Parties to the extent reasonably practicable. 
  
 1.5
Except to the extent required by any Disclosure Requirement, the Parties shall not, directly or indirectly, publish any statement or make any statement maligning the reputation of any other Party. 
  
 1.6 Notwithstanding Section 1.4 hereof, (x) any Party may make a fair and
reasonable public disclosure in response to, and limited in scope to the content of, any disclosure made by another Party pursuant to a Disclosure Requirement (a “Permitted Disclosure”); and (y) any Party may make a fair and
reasonable public disclosure in response to, and limited in scope to the content of, any Permitted Disclosure made by another Party. 
  

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 2. TERMS AND CONDITIONS 
  
 2.1 Concurrently with the execution of this Agreement, Whitehead hereby resigns as a director of the Bank and the Bank
hereby accepts such resignation. 
  
 2.2 Subject to the approval
of the Federal Housing Finance Board (the “Finance Board”), only to the extent that such approval is required, Member hereby agrees to purchase from Bank and the Bank agrees to issue and sell to the Member, on or before May 19,
2005, $47,165,700 of Class B(1) Stock (the “Purchase”); provided, however, that Bank and Member, each in their sole discretion, may agree upon an alternate structure and/or time for the Purchase; provided, further,
that if the approval of the Finance Board is required to effect the Purchase and such approval has not been obtained on or before May 18, 2005, the date of the Purchase will be extended until three (3) business days after such approval is obtained.
The Class B(1) Stock acquired in the Purchase shall have all the rights and privileges appurtenant thereto as the Class B(1) Stock owned by any other member of the Bank. 
  
 2.3 The Parties hereby agree that, upon the date hereof, the Bank shall issue the press release attached hereto as
Exhibit A. 
  
 2.4 It is further understood and agreed that
in the event any term or provision of this Agreement shall be found or adjudicated by any court to be void, invalid, illegal or unenforceable, the remaining provisions of this Agreement shall not in any way be affected or impaired. Upon
determination that any such term or provision is void, invalid, illegal or unenforceable, that term shall be read so as to effect the original intent of the Parties as nearly as practicable. 
  

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 2.5 It is further understood and agreed that the laws of the State of Washington shall govern this
Agreement, without taking into account conflicts of law principles thereof. 
  
 2.6 It is further understood and agreed that this Agreement, including the Exhibit attached hereto, contains the entire agreement of the Parties as to the matters contained herein or contemplated hereby and can be
modified or waived only in a writing signed by all Parties. 
  
 2.7 This Agreement may be executed in two or more counterparts, each of which shall constitute an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 
  
 2.8 Notice. All notices and other communications hereunder shall be in
writing and shall be deemed duly given if delivered personally, mailed by registered or certified mail (return receipt requested), delivered by Federal Express or other nationally recognized overnight courier service or sent via facsimile to the
parties at the following addresses (or at such other address for a party as shall be specified by like notice): 
  

	 	(i)	if to the Bank, to 

  
 Federal Home Loan Bank of Seattle 
 1501
Fourth Avenue, Suite 1900 
 Seattle, Washington 98101-1693 
 Attention: Kevin C. Crowe 
 Facsimile Number: (206) 340-2379 
  
 with a copy to 
  
 Perkins Coie LLC 
 1201 Third Avenue, Suite 4800 
 Seattle, WA 98101-3099 
 Attention: Evelyn Cruz Sroufe 
 Facsimile Number: (206) 359-9000 
  

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	 	(ii)	if to Whitehead, to 

  
 Roy M. Whitehead 
 425 Pike Street 

Seattle, Washington 98101 
 Facsimile
Number: (206) 624-2334 
  
 and 
  

	 	(iii)	if to Member, to 

  
 Washington Federal Savings 
 425 Pike Street,
Legal Department 
 Seattle, Washington 98101 
 Attention: Paul Tyler, V.P. and Counsel 
 Facsimile Number: (206) 624-2334 
  
 with a copy in the case of a notice to Whitehead or the Member to

  
 Washington Federal Savings 
 425 Pike Street, Legal Department 
 Seattle,
Washington 98101 
 Attention: Paul Tyler, V.P. and Counsel 
 Facsimile Number: (206) 624-2334 
  
 3. REPRESENTATIONS, WARRANTIES AND COVENANTS 
  
 3.1 Further Assurances. Each Party shall use its reasonable best efforts to take, or cause to be taken, all necessary actions, and to do, or cause to be done all things necessary, proper or advisable to effectuate the terms and
provisions, and the intent and purposes, of this Agreement, including, without limitation, executing and delivering, or causing to be executed and delivered, such additional or further consents, documents and other instruments, as any Party may
reasonably request, for the purpose of effectively implementing the matters and tasks, seeking out and obtaining any required consent or approval of the Finance Board and carrying out the transactions contemplated by this Agreement. In addition,
each Party agrees to use his or its 

  

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reasonable best efforts to expedite, further, support and facilitate and to take no action to frustrate or delay actions referred to in the immediately
preceding sentence. 
  
 3.2 The Bank hereby represents and
warrants as follows on the date hereof: (a) the Bank is a federally chartered corporation established under the authority of the Federal Home Loan Bank Act, duly organized, validly existing and in good standing under the laws of the United States;
(b) subject to any approval required by the Finance Board, including for any amendment to the Bank’s Capital Plan, the Bank has full legal right, power and authority to execute, enter into and deliver this Agreement and to perform its
obligations hereunder; (c) subject to any approval required by the Finance Board, including for any amendment to the Bank’s Capital Plan, the Bank has taken all necessary action to execute, deliver and consummate this Agreement and to perform
its obligations hereunder, subject to receipt of all necessary approvals of the Finance Board; (d) this Agreement constitutes the legal, valid and binding obligation of the Bank enforceable in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors rights generally and subject to the supervisory and enforcement powers of applicable bank regulatory agencies; (e) the Bank’s
execution, delivery and performance of this Agreement will not violate or conflict with or constitute a breach of or default under any agreement or instrument to which the Bank is a party or by which it or any of its properties is bound, any
provision of the Bank’s governing documents, any law, rule or regulation applicable to the Bank or any judgment, order or decree of any court, governmental body or agency, arbitration board or other tribunal having jurisdiction over the Bank;
(f) the Bank has received a complete and accurate copy of this Agreement and the Exhibit hereto; (g) this Agreement has been negotiated at arms length between persons sophisticated and 

  

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knowledgeable in the matters dealt with herein; and (h) the Bank (or authorized persons properly acting on its behalf) has carefully read this Agreement and
the Exhibit hereto, and has been represented by experienced and knowledgeable counsel of the Bank’s own choosing in connection therewith. 
  
 3.3 Whitehead represents and warrants as of the date hereof: (a) he has full legal right, power and authority to execute, enter into and deliver this
Agreement and to perform his obligations hereunder; (b) he has taken all necessary action to execute, deliver and consummate this Agreement and to perform his obligations hereunder; (c) this Agreement constitutes the legal, valid and binding
obligations of Whitehead enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors rights generally; (d) Whitehead’s
execution, delivery and performance of this Agreement will not violate or conflict with or constitute a breach of or default under any agreement or instrument to which he is a party or by which he or any of his properties is bound, any law, rule or
regulation applicable to such individuals or any judgment, order or decree of any court, governmental body or agency, arbitration board or other tribunal having jurisdiction over Whitehead; (e) he is entering into this Agreement of his own free
will, without any duress, coercion or undue influence; (f) he has received a complete and accurate copy of this Agreement and the Exhibit hereto; (g) this Agreement has been negotiated at arms length between persons sophisticated and knowledgeable
in the matters dealt with herein; and (h) he has carefully read this Agreement and the Exhibit hereto, and has been represented by experienced and knowledgeable counsel of his own choosing in connection therewith. 
  

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 3.4 The Member hereby represents and warrants as follows on the date hereof: (a) the Member is a
federally chartered savings association duly organized, validly existing and in good standing under the laws of the United States; (b) the Member has full legal right, power and authority to execute, enter into and deliver this Agreement and to
perform its obligations hereunder; (c) the Member has taken all necessary action to execute, deliver and consummate this Agreement and to perform its obligations hereunder, subject to receipt of all necessary approvals of the Finance Board; (d) this
Agreement constitutes the legal, valid and binding obligation of the Member enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors rights generally and subject to the supervisory and enforcement powers of applicable bank regulatory agencies; (e) the Member’s execution, delivery and performance of this Agreement will not violate or conflict with or constitute a
breach of or default under any agreement or instrument to which the Member is a party or by which it or any of its properties is bound, any provision of the Member’s governing documents, any law, rule or regulation applicable to the Member or
any judgment, order or decree of any court, governmental body or agency, arbitration board or other tribunal having jurisdiction over the Member; (f) the Member has received a complete and accurate copy of this Agreement and the Exhibit hereto and
has read the publicly available disclosure regarding the Bank; (g) this Agreement has been negotiated at arms length between persons sophisticated and knowledgeable in the matters dealt with herein; and (h) the Member (or authorized persons properly
acting on its behalf) has carefully read this Agreement and the Exhibit hereto, and has been represented by experienced and knowledgeable counsel of the Member’s own choosing in connection therewith. 
  

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 4. REMEDIES

  
 4.1 Jurisdiction. The Parties hereto submit to the
exclusive jurisdiction of the state and federal courts of the State of Washington with respect to any Claims or actions arising under or relating to this Agreement; provided, however, that any Party may seek injunctive relief in any court of
competent jurisdiction. 
  
 4.2 Expenses. Each of the
Parties hereto shall bear all of his or its own attorneys’ fees, costs and expenses in connection with this Agreement (including in connection with the matters and transactions contemplated by this Agreement, and the investigation, discussion,
negotiation or prosecution of matters in connection herewith or therewith); provided however, that if any Party (a “Breaching Party”) is found by court order or judgment to have taken any action in violation or breach
of this Agreement, the Breaching Party shall be responsible to all of the other Parties hereto for all attorneys’ fees, costs and expenses reasonably incurred by such Parties as a result of or in connection with such violation or breach.

  
 *    *    * 

 

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 IN WITNESS WHEREOF, each of
the Parties hereto has caused this Agreement to be signed as of the date first above written. 
  

			
	 FEDERAL HOME LOAN BANK OF SEATTLE

		
	 	 	/s/    JAMES R.
FAULSTICH        
	 By:
	 	James R. Faulstich
	 Title:
	 	Interim President and
Chief Executive Officer
		
	 Address:
	 	 1501 Fourth Ave., Suite 1900
 Seattle, Washington
98101-1693

  

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	 ROY M. WHITEHEAD

		
	 	 	/s/    ROY M. WHITEHEAD        
	 Name:
	 	Roy M. Whitehead
		
	 Address:
	 	 425 Pike Street
 Seattle, Washington
98101

  

			
	WASHINGTON FEDERAL SAVINGS
		
	 	 	/s/    EDWIN C. HEDLUND        
	 By:
	 	Edwin C. Hedlund
	 Title:
	 	Executive Vice President
		
	 Address:
	 	 425 Pike Street
 Seattle, Washington
98101

  

 - 13 -Employment Agreement

 Exhibit 10.12 
  
 EMPLOYMENT AGREEMENT 
  
 Between 
  
 Federal Home Loan Bank of Seattle 
 and 
 James E. Gilleran 
  
 The purpose of this Agreement is to confirm the terms of the employment relationship between the Federal Home Loan Bank of Seattle (the “Seattle
Bank” or “Employer”) and James E. Gilleran (hereinafter referred to as the “Executive”). 
  
 1. Term. The Seattle Bank and Executive agree that Executive will be employed by the Seattle Bank for a term of two (2) years and seven (7) months
beginning June 1, 2005 (the “Effective Date”), unless employment is sooner terminated as provided herein (the “Term”). Upon expiration of the Term, this Agreement may be renewed for successive one (1) year periods, as mutually
agreed to by the parties. Notwithstanding this Agreement, the parties agree that Executive is an employee-at-will. 
  
 2. Position and Duties. The Seattle Bank and Executive agree that Executive will be employed as President and Chief Executive Officer of Employer,
and shall report to the Board of Directors. Executive’s responsibilities and duties shall include general and active management and control of the affairs and business of the Seattle Bank, and shall further include such other managerial
responsibilities and executive duties as may be assigned to him from time to time by the Board of Directors of the Seattle Bank. Executive covenants to render such services to the best of his skill and ability during his employment under this
Agreement. 
  
 2.1 Executive agrees to devote his
full-time efforts to his duties with the Seattle Bank and further agrees that he will not directly or indirectly engage or participate in any activities while employed by the Seattle Bank that would conflict with the performance of his duties or
obligations to the Seattle Bank or the best interests of the Seattle Bank, or which would directly or indirectly compete with the Seattle Bank. The foregoing shall not preclude Executive from accepting service as a board or committee member of
industry trade groups and as a trustee or director of any nonprofit or community organization where such service will be beneficial to the Seattle Bank. 
  
 2.2 All policies published by the Seattle Bank or delivered to Executive prior to or following this Agreement regarding employment,
required behavior by employees and other similar matters (collectively referred to as the “Seattle Bank Policies”) are incorporated within this Agreement as though fully set forth in this Agreement. Executive agrees to be bound by and
adhere to all such Seattle Bank Policies as presently exist or as may be hereafter issued or modified by the Seattle Bank. Without limiting the foregoing, Executive agrees to conduct business on behalf of the Seattle Bank in a manner consistent with
proper and ethical business practices and consistent with the best interests of the Seattle Bank. To the extent that any of the Seattle Bank Policies are inconsistent with or contrary to the provisions of this Agreement, this Agreement shall
prevail. 
  

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 3. Base Compensation. For all services rendered by Executive during the Term of this Agreement,
the Seattle Bank shall pay Executive a gross base salary of Five Hundred Twenty-five Thousand Dollars ($525,000.00) per annum. Executive shall be paid this salary on the same basis applicable to executive employees of the Seattle Bank generally,
minus all lawful and agreed upon payroll deductions. Executive’s compensation shall be reviewed annually at the end of each calendar year by the Executive Committee of the Board of Directors in accordance with normal Seattle Bank salary review
procedures, but may not be decreased during the term of this Agreement. Executive’s salary for any partial year of employment shall be reduced to cover the term of actual employment on a pro-rata basis. 
  
 4. Business Expenses. The Seattle Bank agrees to reimburse Executive
for all reasonable business expenses incurred by Executive while on Seattle Bank business, subject to the Seattle Bank’s normal business expense and documentation policies, and subject to applicable laws and regulations. 
  
 5. Bonuses and Incentives: During the Term, Executive will be entitled
to participate in the following incentive programs: 
  
 5.1 Short-Term Incentive Compensation Program. Short-term incentive compensation for Executive will have a minimum threshold of 20% of annual base pay ($525,000 for 2005), a target of 35%, and a maximum of 60%. For 2005,
Executive’s short-term incentive compensation will be prorated for seven months of service during 2005. The short-term incentive will consist of two components: 
  

	 	•	 	The first component is equivalent to the Bank Incentive Compensation Program (BICP) that is applicable to other members of the Seattle Bank’s senior leadership team. This
component has three measurable objectives (risk profile, market penetration and profitability), equally weighted. These three measures collectively will determine whether the threshold level has been attained and, if so, the percentage achievement
level between 20% (minimum) and 60% (maximum). 

  

	 	•	 	The second component is a “line of sight” set of performance objectives, to be established by mutual agreement between Executive and the Executive Committee of the Board,
which would modify the achievement level determined by the first component. 

  
 The Executive Committee of the Board, with the advice and counsel of the Organizational Development Committee of the Board, will determine the multiplier values of the “line of sight” component modifier for
each level of achievement. It will be the responsibility of the Executive Committee to determine, as part of Executive’s annual performance review, the achievement level for the “line of sight” modifiers. 
  

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 5.2 Long-Term Incentive Compensation Program. Executive will also be eligible for
participation in the Seattle Bank’s long-term incentive bonus program, as it may be implemented or amended from time to time. Long-term incentive compensation will be paid, if earned, in 2008 based on performance over the period 2005, 2006 and
2007. If the threshold level is achieved under the plan, the plan for Executive will have a minimum threshold incentive payment of 15% of 2005 base pay ($525,000), a target of 30%, and a maximum of 45%. The long-term incentive will have the same
three measurable objectives as applicable to other members of the Seattle Bank’s senior leadership (risk profile, market penetration and profitability, which would be equally weighted). Executive will receive full credit for 2005 in the
long-term incentive plan, even though he will be employed for only seven months during 2005. It is anticipated that a new three-year long-term incentive plan will be extended to Executive in 2006 and each subsequent year of employment. 

 
 6. Employee Benefits. The Seattle Bank and Executive agree that
during the term of this Agreement, Executive will be eligible to participate in the Seattle Bank’s employee benefit plans available to other executives of the Seattle Bank, including without limitation, those plans covering medical, disability
and life insurance, and applicable retirement savings plans, in accordance with the eligibility and other terms and conditions established for individual participation in any such plan and under applicable law, as such terms may be changed from time
to time. 
  
 7. Vacation. Executive shall be entitled to
three (3) weeks’ paid vacation per year. Vacation shall be scheduled by Executive at a time that is consistent with the Seattle Bank’s business needs. Upon the termination of this Agreement, Executive shall be paid for all previously
accrued and unused vacation time. 
  
 8. Relocation
Expenses. The Seattle Bank will reimburse Executive for his reasonable relocation expenses in accordance with the Seattle Bank’s relocation policy, up to an aggregate maximum amount of $125,000 (with that amount to be grossed up to adjust
for applicable income taxes). Subject to the foregoing aggregate maximum, the Seattle Bank and Executive agree that the reimbursable relocation expenses may include up to three (3) house-hunting trips and that the $25,000 limit on reimbursable real
estate expenses contained in the relocation policy shall not apply. 
  
 9. Confidential Information. It is understood and agreed that as a result of Executive’s employment with the Seattle Bank, Executive has acquired and will continue to acquire and make use of confidential information about the
Seattle Bank and its business, and information relating to the Seattle Bank’s customers, such information constituting trade secrets. During the course of his employment with the Seattle Bank and thereafter, Executive shall keep secret and
retain in strictest confidence, and shall not, without the prior written consent of the Employer, furnish, make available or disclose to any third party (except in furtherance of the Seattle Bank’s business activities and for the sole benefit
of the Employer) or use for the benefit of himself or any third party, any Confidential Information. As used in this Agreement, “Confidential Information” shall mean any information relating to the business or affairs of the Seattle Bank
or its 

  

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business, including but not limited to information relating to financial statements, reports, models, data, business plans, operations, systems, regulatory
matters, customer identities, potential customers, employees, suppliers, servicing methods, assets, programs, strategies and information, analyses, profit margins, or other proprietary information used by the Seattle 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 outside the Seattle Bank by persons who are not associated with the Seattle Bank and do not have an
obligation of confidentiality to the Seattle Bank with respect to such information through no wrongful act on the part of Executive. Executive acknowledges that the Confidential Information is vital, sensitive, confidential and proprietary to the
Seattle Bank. Executive further agrees that on termination of this Agreement, or at any time on request by the Employer, he shall deliver possession to the Seattle Bank of all Confidential Information and all documents, writings, and other things of
every kind and description prepared or acquired in connection with the Seattle Bank business or at the Seattle Bank expense or in the course of Employee’s employment or that contain the Seattle Bank proprietary information, including all copies
of the same. 
  
 10. Termination. This Agreement shall be
terminated upon the occurrence of any one of the following events: 
  
 10.1 Death of Executive. 
  
 10.2 If Executive shall have been incapacitated from illness, accident or other disability and unable to perform his normal duties hereunder for a period of ninety (90) consecutive days, upon the Seattle Bank or
Executive giving the other party not less than thirty (30) days’ written notice.  
  
 10.3 Expiration of the Term of this Agreement or any renewal or extension thereof. 
  
 10.4 For Cause, which shall be defined as the occurrence of
one or more of the following: 
  
 (a)
Executive’s material breach of the provisions of this Agreement; or 
  
 (b) Executive’s willful, wanton or grossly negligent non-performance or misfeasance of Executive’s duties (other than as a result of total or partial incapacity due to physical or mental illness), including
Executive’s repeated insubordination or refusal to comply in any material respect with the directives of the Seattle Bank’s Board of Directors so long as such directives are not inconsistent with Executive’s position and duties;
or 
  
 (c) Dishonest or fraudulent
conduct, a deliberate attempt to do an injury to the Seattle Bank, or conduct that materially discredits the Seattle Bank, including conviction of or plea of nolo contendere to a felony or any crime involving dishonesty or fraud. 
  

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 10.5 By the Seattle Bank without cause upon notice to Executive, which
determination may be made by the Seattle Bank at any time at the Seattle Bank’s sole discretion, for any or no reason. 
  
 11. Severance. If Executive’s employment with the Bank terminates pursuant to Section 10.5 above, and Executive signs and does not revoke a
release of claims against the Bank, then, subject to Executive’s compliance with Section 9, and in lieu of any benefits to which Executive may be entitled under the Seattle Bank’s Severance Policy, Executive shall be entitled to receive
continuing payments of severance pay (less applicable withholding taxes) at a rate equal to his then current base salary, for a period of twelve (12) months from the date of such termination, to be paid periodically in accordance with the
Bank’s normal payroll policies. If Executive’s employment with the Bank terminates as the result of a change in control (as defined below), and Executive signs and does not revoke a release of claims against the Bank, then, subject to
Executive’s compliance with Section 9, and in lieu of any benefits to which Executive may be entitled under the Seattle Bank’s Severance Policy, Executive shall be entitled to receive a lump sum payment of severance pay (less applicable
withholding taxes) in an amount equal to twenty-four (24) months of his then current base salary. For purposes of this Section 11, “change of control” shall mean (i) the merger or consolidation of the Seattle Bank with or into another
Federal Home Loan Bank, or (ii) the liquidation of the Seattle Bank. In addition, the Seattle Bank shall pay Executive’s premiums for continued group health insurance benefits for a period of eighteen (18) months. 
  
 12. Effect of Termination. Upon termination of Executive’s
employment with Employer for any reason, the Seattle Bank agrees to pay Executive all salary which is due and owing to Executive as of the date of termination, less legal deductions or offsets Executive may owe to the Seattle Bank for such items as
salary advances or loans. Executive agrees that his signature on this Agreement constitutes his authorization for all such deductions. Except as otherwise provided pursuant to Section 10.5 with respect to a termination without cause, Executive shall
not be entitled to any other or additional compensation upon termination. In the event of termination of this Agreement, the terms and provisions of this Agreement shall also terminate, with the exception of the confidentiality covenant contained in
Section 9 and any other provisions that expressly address post-termination issues. Such provisions shall continue in full force and effect according to their terms. 
  
 13. Responsibilities of Executive Upon Termination. Upon the termination of Executive’s employment with the
Seattle Bank, irrespective of the reasons for such termination, Executive shall deliver all property of the Seattle Bank to the Seattle Bank, together with all notes and memoranda, whether in written or digital form. The property of the Seattle Bank
that must be returned upon termination of Executive’s employment shall include, but shall not be limited to, all written data concerning the financial performance, products, plans, projections, or products of the Seattle Bank and all other data
which would constitute Confidential Information pursuant to Section 9. The property to be delivered to the Seattle Bank shall include the originals and all copies of all such property and all data contained on computer disks and other means of
storing electronic data. 
  

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 14. Representations of Executive. Executive represents and warrants to the Seattle Bank that he is
free to enter into this Agreement and that he has no commitment, arrangement or understanding to or with any party which restrains or is in conflict with his performance of the covenants, services and duties provided for in this Agreement. Executive
agrees to indemnify the Seattle Bank and to hold it harmless against any and all liabilities or claims arising out of any unauthorized act or acts by Executive which, the foregoing representation and warranty to the contrary notwithstanding, shall
be in violation, or shall constitute a breach, of any such commitment, arrangement or understanding. 
  
 15. Construction of Agreement. 
  
 15.1 Essential Terms and Modification of Agreement. It is understood and agreed that the terms and conditions described in this
Agreement constitute the essential terms and conditions of the employment arrangement between the Seattle Bank and Executive, all of which have been voluntarily agreed upon. The Seattle Bank and Executive agree that there are no other essential
terms or conditions of the employment relationship that are not described within this Agreement, and that any change in the essential terms and conditions of this Agreement will not be effective until it is written down in a supplemental agreement
which shall be signed by both a representative of the Board of Directors, pursuant to authorization of the Board, and Executive. 
  
 15.2 Severability. If any term, covenant, condition or provision of this Agreement or the application thereof to any person or
circumstance shall, at any time, or to any extent, be determined invalid or unenforceable, the remaining provisions hereof shall not be affected thereby and shall be deemed valid and fully enforceable to the extent permitted by law. 
  
 15.3 Notices. Any notice hereunder shall be
sufficient if in writing and delivered to the party or sent by certified mail, return receipt requested and addressed as follows: 
  

					
	 a.
	  	To the Seattle Bank:	  	 Chairman of the Board
 Federal Home Loan Bank of
Seattle
 1501 Fourth Ave, Suite 1900
 Seattle, WA
98101

			
	 	  	With a copy to:	  	 Kevin F. Crowe
 Senior Vice President & General
Counsel
 Federal Home Loan Bank of Seattle
 1501 Fourth Ave,
Suite 1900
 Seattle, WA 98101

			
	 b.
	  	If to Executive:	  	 James E. Gilleran
 1443 Broadmoor Ave. E
 Seattle, WA 98112

  

 6 

 Either party may change the address herein specified by giving to the other, written notice of such change as provided in
this Section 15.3. 
  
 15.4 Governing Law and
Jurisdiction. This Agreement is made and shall be construed and performed under the laws of the State of Washington without reference to its choice of law rules. In the event of any litigation or other legal action relating to this Agreement,
the prevailing party will be entitled to recover from the other party, in addition to all other relief, all reasonable costs and attorneys’ fees incurred by the prevailing party in connection with such action (including, but not limited to, any
appeal thereof). Any such action may be maintained in any state or federal court located in King County, Washington, having subject matter jurisdiction over such dispute. Both parties consent in advance to the exclusive jurisdiction over them of any
such court. 
  
 15.5 Waiver of Agreement.
The failure of either party to insist upon or enforce strict performance by the other of any provision of this Agreement or to exercise any right, remedy or provision of this Agreement will not be interpreted or construed as a waiver or
relinquishment to any extent of such party’s right to consent or rely upon the same in that or any other instance; rather, the same will be and remain in full force and effect. 
  
 15.6 Captions. The captions and headings of the sections and subsections of this Agreement are for
convenience and reference only and are not to be used to interpret or define the provisions hereof. 
  
 15.7 Assignment and Successors. The rights and obligations of the Seattle Bank under this Agreement shall inure to the benefit of
and be binding upon the successors and assigns of Employer. The rights and obligations of Executive hereunder are non-assignable. The Seattle Bank may assign its rights and obligations to any entity in which the Seattle Bank or an entity affiliated
with the Seattle Bank has a majority ownership interest. 
  
 15.8 Applicable Federal Law. This Agreement is subject to applicable provisions of the Federal Home Loan Bank Act and regulations of the Federal Housing Finance Board. 
  
 15.9 Entire Agreement. This Agreement sets forth the
entire agreement between the parties related to Executive’s employment by the Seattle Bank, and supersedes any and all prior representations, proposals, discussions, communications or agreements, written or otherwise, between the parties with
respect thereto. No amendment of any provision of this Agreement will be effective unless set forth in a written instrument signed by both parties. 
  
 15.10 Counterparts. This Agreement may be executed in counterparts. 
  

 7 

 15.11 Advice of Counsel. Executive acknowledges that he has read and understands
this Agreement and all of the provisions hereof, and that adequate opportunity has been afforded Executive to consult with his own legal counsel before signing this Agreement. 
  

 8 

  
 Executed this 31st day of
May, 2005, effective as of June 1, 2005. 
  

									
	 EXECUTIVE
	 	 	 	 FEDERAL HOME LOAN BANK OF SEATTLE

				
	/s/    JAMES E.
GILLERAN        	 	 	 	By	 	/s/    MIKE C. DALY        
	JAMES E. GILLERAN	 	 	 	 Its
	 	Chairman

  

 9

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