Exhibit 10.1*
December 29, 2006
Mr. José Ramón González
Santander BanCorp
Puerto Rico
Dear Mr. González:
We hereby confirm the terms and conditions with regards to your employment
agreement as President and Chief Executive Officer of Santander BanCorp and
Banco Santander Puerto Rico (hereafter “the Group”):

  1.   The employment agreement dated March 23, 2005 between the Group and you
will expire on January 1, 2007. As agreed upon, the Group and you have decided
to enter in a new employment agreement which shall be effective from January 1,
2007.     2.   In your position, you shall be responsible for and will supervise
all of the operations of the Group in Puerto Rico.     3.   The conditions set
forth herein shall be in full force and effect for two years commencing on
January 1, 2007 and ending, therefore, on January 1, 2009.     4.   During the
period whereby these conditions are in full force and effect, the Group may
terminate your employment if there is just cause, without any compensation
whatsoever. The Group may also terminate your employment without just cause. In
this latter case, you shall receive as indemnity the greater of the following
amounts:

  a.   The pending gross amount due from the time of termination of employment
until the date of expiration of this Agreement (January 1, 2009) in accordance
to the annual salary set forth in Section 5; or     b.   $1,250,000 gross

      If by the term of expiration of this Agreement the parties have not
renewed the same, the Group shall pay, unless you have been offered an extension
to this Agreement under the same terms and conditions hereby established and the
extension was rejected by you, the gross amount of $1,250,000 as the final
compensation for your separation from the Group, as so thereby liberating you
from any additional responsibility under this Agreement, with exception to the
temporary non-competition clause under Section 7.

 

  * This is an English translation of the original Employment Agreement entered
into between Santander BanCorp, Banco Santander Puerto Rico and José R.
González. Pursuant to Rule 306 of Regulation S-T, a signed original of the
original Employment Agreement has been retained by the Company and furnished to
the Securities and Exchange Commission upon request.

 

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José Ramón González
Page 2

      In the case of a change in control of the Group in Puerto Rico, the Group
shall compensate you the gross amount of $1,250,000 if the Group does not
maintain you in your present position and classification, or if there is a
separation from your position, or if any of the terms set forth herein that give
you such right shall occur. Consequently this indemnity shall not be cumulative.
As to the effects of this Agreement, “change in control” shall be defined as any
circumstance that will cause Banco Santander Central Hispano, S.A. to decrease
its beneficial ownership to less than 50% of the common stock in circulation.

  5.   Your gross annual salary for the year 2007 shall be $650,000.00. For the
year 2008 this annual gross salary shall be $700,000.00. This salary shall be
distributed in the payment installments that the Group has established.        
You will remain under the bonus policy of the Group. In that regard, this policy
shall be determined with each bonus period that will take place under the
following terms:

  a.   Three quarters (3/4) of its amount shall be determined by reaching the
annual budget of the Group and the conditions established by the Group’s
Compensation Committee.     b.   The remaining one-quarter will be based on the
Santander BanCorp stock in regard to other competitors of reference in
accordance to the agreed schedule, of which the Santander BanCorp Compensation
Committee shall inform you.

      Also, you may be eligible to participate in other compensations schemes
that may be established by the Compensation Committee.

  6.   The remainder of conditions and benefits shall be governed in accordance
to the applicable policies of officers and employees of your position at the
Bank and other terms and conditions agreed upon by you and so established in
your July 19, 2001 contract.     7.   You acknowledge that the functions and
duties that you will perform under this agreement are of an essentially
confidential nature, and as so you will privy of facts, matters, plans and
strategies, as well as confidential financial information of the Group and its
clients. Therefore, you agree to maintain in absolute confidentiality and
abstain to disclose this information during and after the term of this
agreement.     8.   In the supposed termination given under the circumstances
contemplated in the before the last paragraph of the fourth section, in
consideration of the benefits granted thereunder and the specific compensation
recognized under such section, you shall refrain from performing similar
services to those performed or will perform for the Group to any of its direct
competitors of the Group within the jurisdiction of Puerto Rico, until twelve
months have elapsed from your date of last employment with the Group.

 

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José Ramón González
Page 3

  9.   Should any dispute arise with regards to the interpretation, validity,
compliance, or early termination of this agreement that shall not be solved by
the parties, you hereby agree to submit to compulsory arbitration in the City of
San Juan, Puerto Rico, in accordance to the American Arbitration Association
rules. The party that requests the arbitration must notify the other party, no
later than ten (10) days. The Bank shall pay the arbitration costs, including
the arbiter fees. Each party shall be responsible for its own attorney’s fees as
well as the preparation and presentation of evidence.

Please execute this agreement as a sign of your approval.
Sincerely,
/s/ María Calero
María Calero
Executive Vice President
/s/ Ivonna Pacheco
Ivonna Pacheco
First Senior Vice President
Signature of approval:

      /s/ José Ramón González   José Ramón González