Document:

WebFilings | EDGAR view

 

EXHIBIT 10.8
 
EMPLOYMENT AGREEMENT
 
THIS AGREEMENT is entered into as of the 29th 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 1; (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.
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)    a reduction by the Bank in the Employee's base salary other than under the conditions specified in Section 4; or
(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; 
(c)    any material breach of this Agreement by the Bank;
(d)    a material diminution in the Employee's authority, duties, or responsibilities as an Employee of the Bank; or
(e)    FOR GENE MCFERRIN ONLY:  [Employee] no longer has, or is prevented from fulfilling the responsibilities of, the title and position of [EMPLOYEE TITLE].
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 (e) above, the 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.
Term of the Agreement means three (3) years.
2.  DUTIES OF EMPLOYEE.
 
The Employee has been retained by the Bank as an [EMPLOYEE TITLE].  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.  
 
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 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 curable.  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 as further described in the definition of “Good Reason” in Section 1.  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:
		
	(g)    
	Termination Under Certain Circumstances.  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]

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.
		
	(h)    
	Termination Under Other Circumstances.  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 three (3) years;

		
	(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.  (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 benefit 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 plan. 

 
(c)    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.
These payments are contingent upon the Employee complying with Sections 10, 11, and 12 of this Agreement and signing a general release of all claims against the Bank in such form as the Bank shall reasonably require.  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(b) shall affect any vested rights which the Employee has under any pension, thrift, or other benefit plan, excluding severance.
8.  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.
 
9.  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, 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.  The term “Confidential Information” does not include information that is or becomes publicly known or enters the public domain.
 
10.  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.  
 
11.  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.
 
12.  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 employee of Bank who was employed by the Bank within six (6) months of the termination of the Employee's employment with Bank.  
 
13.  FEDERAL BENEFITS RULES.   
 
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 thereunder, 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 of the Code and (ii) notify and consult with the Employee regarding such amendments or modifications prior to the effective date of any change.

 

 

14.  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 10, 11, and 12, as written.  If the Employee challenges the enforceability of Sections 10, 11, or 12, 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).  
 
15.  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.  
 
16.  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.
 
17.  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.  
 
18.  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:  President and CEO
 
 
Employee
 
[EMPLOYEE ADDRESS]
[EMPLOYEE ADDRESS]

 

 

 
    
 
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            EMPLOYEE
  OF CHICAGO
 
 
 
 
By:  _______________________________        By: ________________________________
Name:  [PRESIDENT]                Name:    
Title:    President and CEO    Title:WebFilings | EDGAR view

 

EXHIBIT 10.18
 
FEDERAL HOME LOAN BANK OF CHICAGO
2011 BOARD OF DIRECTORS COMPENSATION POLICY 
 
 
GENERAL
 
The Board of Directors of the Federal Home Loan Bank of Chicago (“Bank”) hereby adopts this directors' compensation policy for 2011 (“Policy”).
 
COMPENSATION POLICY METHODOLOGY
 
The goal of the Policy is to appropriately compensate the Directors for actual attendance and participation at the meetings of the Board of Directors and the committees of the Board and also for work performed on behalf of the Board of Directors and the Bank apart from such meetings.  Under this policy, compensation consists of an annual fee for each Director.  The fees are intended to compensate Directors for: (1) their time spent reviewing the material sent to them on a periodic basis by the Bank; (2) making themselves available and participating in any necessary telephonic meetings and for chairing meetings; (3) actual time spent attending the meetings; and (4) fulfilling the responsibilities of directors.
 
The compensation provided in this Policy was determined after a review of comparative compensation studies by third parties with expertise in the compensation of directors and the compensation paid to directors of other Federal Home Loan Banks.
 
PAYMENT AND FEE STRUCTURE
 
The Chairman of the Board of Directors will receive $60,000 per year for presiding at the meetings of the Board of Directors and the Executive & Governance Committee and for attending other committee meetings.
 
The Vice Chairman will receive $55,000 per year for attending meetings of the Board and other committee meetings, as well as chairing meetings of the Board in the Chairman's absence.
 
The Chairman of the Audit Committee will receive $55,000 per year for attending meetings of the Board and other committee meetings, as well as chairing meetings of the Audit Committee.
 
The Chairmen of Board Committees other than the Audit Committee will each receive $50,000 per year for attending meetings of the Board and other committee meetings, as well as chairing meetings of their respective committees.
 
Each Director, other than those holding any of the positions listed above, will receive $45,000 per year for attending meetings of the Board and meetings of committees to which such Director is appointed.
 
No additional meeting fees will be paid to any Director for their participation in any other special meetings or events on behalf of the Board of Directors and the Bank at the request of the Federal Housing Finance Agency or at other events approved by the Board of Directors.
 
Fees will be payable monthly in arrears to each Director.

 

 

 
COMPLIANCE WITH LEGAL REQUIREMENTS
 
This Policy shall be in compliance with Section 7(i) of the Federal Home Loan Bank Act (12 U.S.C. §1427(i)), as amended, and any regulations issued by the Federal Housing Finance Agency, including 12 C.F.R. Part 1261.
 
EXPENSES
 
Each Director will be reimbursed for necessary and reasonable travel, subsistence and other related expenses incurred in connection with the performance of their official duties (including telephonic meetings or meetings called at the request of the Federal Housing Finance Agency or other FHLB System body) as are payable to senior officers of the Bank under the Bank's Employee Reimbursement Policy.
 
ATTENDANCE STANDARD
 
Each director shall fulfill his or her responsibilities by regularly and consistently attending meetings of the Board of Directors and any assigned committees.  The Board's attendance standard shall be to attend in person at least 80% of the total meetings of the Board and assigned committees, measured annually.
The Board of Directors shall have the authority, in its sole discretion, to reduce the annual compensation of the Chairman, Vice Chairman, any Committee Chairman, or any Director who does not fulfill his or her responsibilities by regularly and consistently attending meetings of the Board of Directors and any assigned committees.
 
 
 
 
APPROVED BY THE BOARD
OF DIRECTORS
            
Dated:  December 16, 2010
 
 
/s/ Peter E. Gutzmer
 
                    
Its Corporate Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00186-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00186-of-00352.parquet"}]]