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Exhibit 10.4




AMENDMENT #2

TO EMPLOYMENT AGREEMENT




     AGREEMENT made November 9, 2007, by and between SOVEREIGN BANCORP, INC., a Pennsylvania
corporation (“SBI”), and MARK R. McCOLLOM, an individual (the “Executive”).



WITNESSETH:




     WHEREAS, the parties entered into an agreement dated May 20, 2005, relating, among other
things, to the Executive’s employment by SBI (the “Employment Agreement”); and



     WHEREAS, the Parties entered into an agreement dated May 30, 2006, amending the Original
Employment Agreement to modify the definition of Change in Control in certain respects (“Amended
Employment Agreement”); and



     WHEREAS, the Parties mutually desire to further amend the Amended Employment Agreement by
executing this document (“Amendment #2”); and



     WHEREAS, the parties desire to amend the Employment Agreement to comply with Section 409A of
the Internal Revenue Code of 1986, as amended, by executing Amendment #2, effective May 20, 2005.



     NOW, THEREFORE, the parties, intending to be legally bound hereby, further agree as follows,
effective May 20, 2005:



     1. The last sentence of Section 5(a) of the Employment Agreement is amended and restated to
read as follows—




     At the option of the Executive, exercisable by the Executive within ninety (90)
days after the occurrence of the event constituting Good Reason, the Executive may
resign from employment under this Agreement by a notice in writing (the “Notice of
Termination”) delivered to SBI (or its successor) and the provisions of Section 6
shall thereupon apply, provided, however, that SBI shall have thirty (30) days from
the day it receives the Notice of Termination to remedy such event. Notwithstanding
the foregoing, any amounts payable upon termination by Executive for Good Reason
shall be paid only if the Executive actually terminates employment within two (2)
years following the initial existence of the event giving rise to such Good Reason.



     2. Section 5(a)(iv) of the Employment Agreement is amended and restated to read as follows—




     (iv) a reduction in the Executive’s base salary and/or annual target incentive
compensation below a level as in effect on the date hereof or as the same may be
increased from time to time;



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     3. Section 6(a)(i) of the Employment Agreement is amended and restated to read in its
entirety as follows—




     (i) For purposes of this section, the term “Current Compensation at
Termination” means the sum of (A) the greatest of the Executive’s base salary as of
the date of termination of employment (or prior to any reduction thereof resulting
in Good Reason for resignation) and for any of the three immediately preceding
calendar years, and (B) a dollar amount equal to the greater of (i) the target bonus
in the year of termination, or (ii) the highest of the awards Executive received as
bonuses (including deferred bonuses) in any of the three calendar years preceding
the year in which the termination of employment occurs.



     4. Section 6(a)(ii) of the Employment Agreement is amended and restated to read as follows—




     (ii) Amounts required to be paid to Executive under this Section 6(a) shall be
paid to Executive in a lump sum cash payment not later than the thirtieth
(30th) day following the date of termination of employment or the receipt
by SBI of the approval of payment of such amounts by the Office of Thrift
Supervision or such other regulatory agency to the extent such approval is required
at that time.



     5. Section 6(b) of the Employment Agreement is amended and restated to read as follows—




     (b) Benefits. For a period of three (3) years from the date of termination of
employment, Executive shall receive a continuation of all life, disability, medical
insurance and other welfare benefits in effect with respect to Executive during the
two calendar years prior to his termination of employment, or, if SBI cannot provide
such benefits (or cause them to be provided) because Executive is no longer an
employee, within thirty (30) days following Executive’s termination under this
Section, a dollar amount in a lump sum payment equal to the after-tax cost to
Executive of obtaining such benefits (or substantially similar benefits), less any
amount he was actually paying himself for such benefits immediately prior to
termination. To the extent it is determined that any benefits under this Section
are taxable to the Executive, they are intended to constitute payments made upon an
involuntary termination from service and payable pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by
said provision and to the extent the payment of such taxable benefits would exceed
the specified time period under Section 1.409A-1(b)(9)(iii), Executive shall be
paid, within 15 days of the Date of Termination, a lump sum amount in cash equal to
the present value (determined based upon 120% of the then prevailing monthly
short-term applicable federal rate) of SBI’s cost, as of the Date of Termination, of
otherwise providing such benefit beyond the specified time period under Section
1.409A-1(b)(9)(iii).



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     6. Section 6(c) of the Employment Agreement is amended and restated to read as follows—




     (c) Matters Relating to Certain Federal Excise Tax. In the event that the
amounts and benefits payable under this Agreement, when added to other amounts and
benefits which may become payable to the Executive by SBI and any affiliated
company, are such that he becomes subject to the excise tax provisions of Section
4999 of the Internal Revenue Code of 1986, as amended (the “Code”), SBI shall pay
him such additional amount or amounts as will result in his retention (after the
payment of all federal, state and local excise, employment and income taxes on such
payments and the value of such benefits) of a net amount equal to the net amount he
would have retained had the initially calculated payments and benefits been subject
only to income and employment taxation. For purposes of the preceding sentence, the
Executive shall be deemed to be subject to the highest marginal federal, relevant
state and relevant local tax rates. All calculations required to be made under this
subsection shall be made by independent public accountants retained by SBI, subject
to the right of Executive’s representative to review the same. All such amounts
required to be paid shall be paid at the time any withholding may be required under
applicable law, and any additional amounts to which the Executive may be entitled
shall be paid or reimbursed no later than 15 days following confirmation of such
amount by SBI’s accountants, but in no event later than the end of the Executive’s
taxable year next following the Executive’s taxable year in which the Executive
remits the related taxes. In the event any amounts paid hereunder are subsequently
determined to be in error because estimates were required or otherwise, the parties
agree to reimburse each other to correct such error, as appropriate, and to pay
interest thereon at the applicable federal rate (as determined under Code Section
1274 for the period of time such erroneous amount remained outstanding and
unreimbursed). The parties recognize that the actual implementation of the
provisions of this subsection are complex and agree to deal with each other in good
faith to resolve any questions or disagreements arising hereunder.



     7. Section 7(a)(ii) of the Employment Agreement is amended and restated to read as follows—



     (ii) Amounts required to be paid to Executive under Section 7(a) shall be paid to Executive
in a lump sum cash payment not later than the thirtieth (30th) day following the date of
termination of employment or the receipt by SBI of the approval of payment of such amounts by the
Office of Thrift Supervision or such other regulatory agency to the extent such approval is
required at that time.




     8. Section 7(b) of the Employment Agreement is amended and restated to read as follows—




     (b) Benefits. For a period of one (1) year from the date of termination of
employment or the remaining term of this Agreement, Executive shall receive a



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continuation of all life, disability, medical insurance and other welfare
benefits in effect with respect to Executive during the two calendar years prior to
his termination of employment, or, if SBI cannot provide such benefits (or cause
them to be provided) because Executive is no longer an employee, within thirty (30)
days following Executive’s termination under this Section, a dollar amount in a lump
sum payment equal to the after-tax cost to Executive of obtaining such benefits (or
substantially similar benefits).



     9. The Employment Agreement is amended and restated to include the following sentence as the
last sentence of Section 7(b)—




     To the extent it is determined that any benefits under this Section are
taxable to the Executive, they are intended to constitute payments made upon an
involuntary termination from service and payable pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by
said provision and to the extent the payment of such taxable benefits would exceed
the specified time period under Section 1.409A-1(b)(9)(iii), Executive shall be
paid, within 15 days of the Date of Termination, a lump sum amount in cash equal to
the present value (determined based upon 120% of the then prevailing monthly
short-term applicable federal rate) of SBI’s cost, as of the Date of Termination, of
otherwise providing such benefit beyond the specified time period under Section
1.409A-1(b)(9)(iii).



     IN WITNESS WHEREOF, the parties hereto have executed this Amendment, or caused it to be
executed, as of the date first above written.



	 	 	 	 	 	 	 
	 	 	SOVEREIGN BANCORP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Thomas J. McAuliffe	 	 
	 	 	 	 	 
	 

	 	 	 	      Thomas J. McAuliffe, Director of	 	 
	 

	 	 	 	      Human Resources	 	 
	 

	 	Date:
	 	November 9, 2007	 	 
	 
	 	 	 	 	 	 
	[CORPORATE SEAL]

	 	Attest
	 	/s/ Richard Toomey	 	 
	 	 	 	 	 
	 

	 	 	 	Richard Toomey, Secretary	 	 
	 

	 	Date:
	 	November 9, 2007	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Mark R. McCollom	 	(SEAL)
	 	 	 	 	 
	 

	 	 	 	Mark R. McCollom	 	 
	 

	 	Date:
	 	 November 9 , 2007	 	 







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