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     (a) The Officer’s employment under this Agreement may be terminated at anytime during the Employment Period for “Cause,” by action of the President and ChiefExecutive Officer of the Bank. As used in this Agreement, “Cause” means any of thefollowing events:     (i) the Officer is convicted of or enters a plea of guilty or nolocontendereto a felony or a crime involving fraud or moral turpitude;     (ii) the Officer repeatedly fails to follow the lawful instructions of the Presidentand Chief Executive Officer of the Bank;     (iii) the Officer violates the Bank’s Code of Conduct;     (iv) a government regulatory agency recommends that the Bank relieve the Officer ofhis duties;     (v) the Officer willfully violates any material statute or regulation (other thantraffic violations or similar offenses), or any final cease and desist order applicable toSovereign or the Bank;     (vi) the Officer engages in an activity that results in a breach of fiduciary dutyinvolving receipt of personal profit by the Officer at the expense of the Bank;     (vii) the Officer commits an act of willful misconduct, intentionally fails to performstated lawful duties, or performs his duties under this Agreement in an incompetent manner;     (viii) the Officer materially breaches any material provision of this Agreement;or     (ix) concurrent with or following the public announcement of a transaction involvingan actual or potential Change in Control (as defined in Section 5A(c)), the Officer’srefusal to accept a Reasonable Job Offer (as defined in Section 3(f)).If the Officer’s employment is terminated under the provisions of this Section 3(a), then allrights of the Officer under Section 4 shall cease as of the effective date of such termination.     (b) The Officer’s employment under this Agreement may be terminated at anytime during the Employment Period without Cause, by action of the Chief ExecutiveOfficer of the Bank, upon giving written notice of such termination to the Officer at leastthirty (30) days prior to the date upon which such termination shall take effect. If theOfficer’s employment is terminated under the provisions of this Section 3(b), then theOfficer shall be entitled to receive the compensation and benefits set forth in Section 5.For purposes of this Section 3(b), (i) a material adverse change in the Officer’s duties orresponsibilities following a Change in Control of Sovereign, or (ii) a violation by theBank of the last sentence of Section 1 hereof shall be deemed to be a termination of the
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Officer’s employment without Cause. Upon the occurrence of any of the events listed in thisSection 3(b), the Officer shall be permitted, within ninety (90) days of the occurrence ofsuch event, to resign from employment by a notice in writing delivered to the Bank,whereupon he will become entitled to receive the compensation and benefits set forth inSection 5, provided, however, that the Bank shall be given thirty (30) days from the day itreceives the notice of termination to remedy any such event. Notwithstanding the foregoing,any amounts payable upon a termination under this Section 3(b) shall be paid only if theOfficer actually terminates employment within two (2) years following the initial existenceof the events listed in this Section.     (c) If the Officer retires or dies, the Officer’s employment under this Agreement shallbe deemed terminated as of the date of the Officer’s retirement or death, and all rights ofthe Officer under Section 4 shall cease and any other amounts or benefits payable to theOfficer shall be determined in accordance with the retirement and insurance programs of theBank then in effect. For purposes of this Agreement, the term “retirement” shall meanvoluntary termination on or after age sixty-five (65).     (d) If the Officer is incapacitated by accident, sickness, or otherwise so as to renderthe Officer mentally or physically incapable of performing the services required under thisAgreement, notwithstanding reasonable accommodation, for a continuous period of six (6)months, then, upon the expiration of such period or at any time thereafter, by action of theChief Executive Officer of the Bank, the Officer’s employment under this Agreement may beterminated immediately. If the Officer’s employment is terminated under the provisions ofthis Section 3(d), then all rights of the Officer under Section 4 shall cease as of the lastbusiness day of the week in which such termination occurs and any other amounts or benefitspayable to the Officer shall be determined in accordance with the retirement and insuranceprograms of the Bank then in affect.     (e) The Officer’s employment under this Agreement may be terminated by the Officer atany time during the Employment Period for any or no reason, by giving written notice of suchtermination to the Chief Executive Officer of the Bank at least thirty (30) days prior tothe date upon which such termination is to take effect. If the Officer terminates hisemployment under the provisions of this Section 3(e), then all rights of the Officer underSection 4 hereof shall cease as of the effective date of such termination.     (f) For purposes of this Agreement, the term “Reasonable Job Offer” means a good faithoffer of employment made or directly facilitated by Sovereign, the Bank, an affiliate ofeither, an entity proposing to acquire the business of Sovereign or the Bank, or anaffiliate of such entity, which offer (i) would not give the Officer the right to terminateemployment for Good Reason under Section 5A(a), and (ii) does not require an employmentbackground and skill set materially different than required for his then position.     4. Employment Period Compensation. The Officer shall be entitled to allbenefits offered by the Bank to executives holding comparable positions to those of theOfficer, including, but not limited to, the following:
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     (a) Salary. The Bank shall pay the Officer a salary, during the EmploymentPeriod, at the rate of $350,000 per year, payable bi-weekly (or in such manner as other Bankofficers are paid). The Bank may, from time to time, increase but not decrease the Officer’ssalary, and any and all such increases shall be deemed to constitute amendments to thisSection 4(a) to reflect the increased amounts, effective as of the dates established forsuch increases. The Bank shall undertake a performance review of the salary payable pursuantto this Section 4(a) not less frequently than annually.     (b) Bonus. The Bank shall set bonus targets as a percent of salary for theOfficer based on the assigned job salary grade, and pay the Officer bonuses during theEmployment Period in such amounts and at such times as may be approved by the Board ofDirectors of the Bank in its discretion based on both individual and company performanceagainst specified objectives. Notwithstanding the foregoing, all bonus payments, if any,shall be made no later than March 15 of the year next following the year to which such bonusrelates.     (c) Other Benefits. The Officer shall be entitled to participate in the Bank’stax-qualified employee benefit plans and the Bank shall provide the Officer, during theEmployment Period, with insurance, vacation, pension, and other fringe benefits in theaggregate not less favorable than those received by other comparable officers of the Bank.     5. Rights in Event of Certain Termination of Employment Before Change in ControlAnnouncement.     (a) In the event that the Officer’s employment is terminated by the Bankwithout Cause during the Employment Period, before the occurrence of theannouncement of a transaction involving an actual or potential Change in Control, theOfficer shall be entitled to receive the amounts and benefits set forth in this Section 5:     (i) annual salary otherwise accrued or payable through the date oftermination of employment; and     (ii) the greater of (A) continued payments of base salary then in effectthrough the end of the Employment Period or a period of twenty four (24) months,whichever is longer, or (B) a lump sum severance payment equal to the severancepayment due under Sovereign’s or the Bank’s Severance Pay Plan applicable to theOfficer at the time of termination; provided, in either case, that the Officerexecutes Sovereign’s standard form of release and waiver.     (b) All payments required by Section 5(a) shall be paid in a lump sum cash paymentnot later than the thirtieth (30th) day following the date of termination ofemployment.     (c) The Officer shall not be required to mitigate the amount of any payment providedfor in this section by seeking employment or otherwise nor shall the amount of any paymentprovided for in this section be reduced or offset by the Officer’s subsequent employment.
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     (d) The Officer agrees that the amounts set forth in this Section 5 constitute theOfficer’s sole and exclusive remedy, contractual or otherwise, in the event of a terminationby the Bank of the Officer’s employment without Cause before the announcement of atransaction involving an actual or potential Change in Control.     5A. Rights in Event of Certain Terminations of Employment on or After the Occurrence ofa Change in Control Announcement.     (a) Events Giving Right to Terminate for Good Reason. Ifa public announcement of a transaction involving an actual or potentialChange in Control occurs, and concurrently therewith or during a period oftwenty-four (24) months thereafter, an event constituting Good Reason alsooccurs with respect to the Officer, he may terminate his employment inaccordance with the provisions of Section 5A(b) and, thereupon, will becomeentitled to the payments and benefits described in Sections 5A(e) and5A(f). As used in this Agreement, the term “Good Reason” means any of thefollowing events:(i) the involuntary termination of the Officer’s employment, otherthan an involuntary termination permitted in Sections 3(a) and (d);(ii) a material reduction in the Officer’s base and/or annual targetincentive compensation below a level that was in effect immediatelyprior to the public announcement;(iii) the failure to provide the Officer with a total compensationpackage (salary, welfare and pension benefits, stock options and abonus plan evaluated on the basis of bonus potential) reasonablycomparable to the compensation package provided to the Officerimmediately prior to the public announcement;(iv) the reassignment for longer than sixty (60) days of the Officerto a principal office which is more than thirty (30) miles from hisor her primary residence as of the date of the public announcement oran additional ten (10) miles from the Officer’s primary residence inthe event the Officer’s one-way driving commute prior to the publicannouncement was in excess of thirty (30) miles; and(v) any material breach of this Agreement by the Officer’s employerat any relevant time, coupled with the failure to cure the samewithin thirty (30) days after receipt of written notice of suchbreach from the Officer; and(vi) any reduction in title or any material reduction in Officer’sresponsibilities or authority as they exist immediately prior to thepublic announcement.
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     (b) Notice of Termination. Upon the occurrence of an event of Good Reason subject toSection 5A(a), the Officer may, within ninety (90) days of the occurrence of any such event, resignfrom employment by a notice in writing (“Notice of Termination”) delivered to Sovereign, whereuponhe will become entitled to the payments and benefits described in Sections 5A(e) and 5A(f),provided, however, that Sovereign shall be given thirty (30) days from the date it receives theNotice of Termination to remedy such event. Notwithstanding the foregoing, any amounts payable upona termination for Good Reason shall be paid only if the Officer actually terminates employmentwithin two (2) years following the initial existence of the event constituting Good Reason. In thecase of a termination described in Section 5 A(a)(i), the Officer shall confirm his involuntarytermination, in writing, within ninety (90) days of the date of such termination, and suchconfirmation will be deemed a Notice of Termination.     (c) Change in Control Defined. As used in this Agreement, the term “Change in Control”means any of the following:(i) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the SecuritiesExchange Act of 1934 (the “Exchange Act”)), other than Sovereign, a subsidiary ofSovereign, or an employee benefit plan of Sovereign or a subsidiary of Sovereign(including a related trust), becomes the beneficial owner (as determined pursuant to Rule13d-3 under the Exchange Act), directly or indirectly of securities of Sovereignrepresenting more than 19.9% of (A) the combined voting power of Sovereign’s thenoutstanding stock and securities or (B) the aggregate number of shares of Sovereign’s thenoutstanding common stock;(ii) the occurrence of a sale of all or substantially all of the assets of Sovereign orthe Bank to an entity which is not a direct or indirect subsidiary of Sovereign;(iii) the occurrence of a reorganization, merger, consolidation or similar transactioninvolving Sovereign, unless (A) the shareholders of Sovereign immediately prior to theconsummation of any such transaction initially thereafter own securities representing amajority of the voting power of the surviving or resulting corporation, and (B) thedirectors of Sovereign immediately prior to the consummation of such transaction initiallythereafter represent a majority of the directors of the surviving or resultingcorporation;(iv) a plan of liquidation or dissolution, other than pursuant to bankruptcy orinsolvency, is adopted for Sovereign or the Bank;
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(v) during any period of two (2) consecutive years, individuals who,at the beginning of such period, constituted the Board of Directors ofSovereign cease to constitute the majority of such Board (unless theelection of each new director was expressly or by implication approved bya majority of the Board members who were still in office and who weredirectors at the beginning of such period); and(vi) the occurrence of any other event which is irrevocably designated asa “change in control” for purposes of this Agreement by resolution adoptedby a majority of the then non-employee directors of Sovereign.     Notwithstanding the foregoing, a Change in Control will not be deemed to have occurred if aperson becomes the beneficial owner, directly or indirectly, of stock and securities representingmore than 19.9% of the combined voting power of Sovereign’s then outstanding stock and securitiesor the aggregate number of shares of Sovereign’s then outstanding common stock solely as a resultof an acquisition by Sovereign of its stock or securities which, by reducing the number ofsecurities or stock outstanding, increases the proportionate number of securities or stockbeneficially owned by such person; provided, however, that if a person becomes the beneficial ownerof more than 19.9% of the combined voting power of stock and securities or the aggregate number ofshares of common stock by reason of such acquisition and thereafter becomes the beneficial owner,directly or indirectly of any additional voting stock securities or common stock (other than byreason of a stock split, stock dividend or similar transaction), then a Change in Control willthereupon be deemed to have occurred.     (d) Termination of Proposed Change in Control Transaction. If,following a public announcement described in Subsection (a), a proposed transactionis terminated without completion, this Agreement shall thereafter be construed asthough no such announcement had ever been made; provided, however, that the rightsassociated with any termination of employment or the giving of a Notice ofTermination during the interim period shall be determined without regard to thissubsection.     (e) Rights Under This Section. In the event the Officer validly andtimely delivers a Notice of Termination to Sovereign, he will be entitled toreceive the following payments and benefits:(i) Basic Payments. The Officer will be paid an amount equal to two(2) times the sum of (A) the highest annualized base salary paid to himduring the year of termination or the immediately preceding two (2)calendar years, and (B) the greater of (i) the target bonus in the year oftermination or (ii) the highest bonus paid to him with respect to one ofthe three (3) calendar years immediately preceding the year of termination.Such amount will
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be paid to the Officer in a lump sum cash payment not later than thethirtieth (30th) day following the date of termination ofemployment. For purposes of this Paragraph (i), to the extentnecessary, base salary and bonuses with any predecessor of Sovereignor an affiliate thereof shall be taken into account.(ii) Health and Medical Benefits. For a period of two (2)years from the day of termination of employment, the Officer shallbe provided, at no charge, with a continuation of health and medicalbenefits substantially similar to the most favorable of suchbenefits provided to him at his employer’s cost during the two yearperiod immediately preceding such termination. To the extent suchbenefits cannot be provided under a plan because the Officer is nolonger an employee of the employer, a lump sum payment in cash equalto the present value (determined based upon 120% of the thenprevailing monthly short-term applicable federal rate), after taxcost (estimated in good faith by the Bank) of obtaining suchbenefits, or substantially similar benefits, shall be made to theOfficer within fifteen (15) days of his termination of employment.     (f) Legal Expenses. The Officer shall be paid all reasonablelegal fees and expenses when incurred by the Officer in seeking to obtain orenforce any right or benefit provided by this Section 5A, provided he actsin good faith with respect to issues raised.     (g) No Mitigation or Offset. The provisions of Section 5(c)shall apply to payments made and benefits provided under Section 5A.     (h) Exclusive Remedy. The Officer agrees that thepayments made and benefits provided under Section 5A shall constitute theOfficer’s sole and exclusive remedy, contractual or otherwise, in the eventof a termination for Good Reason under this section.     (i) Notwithstanding anything herein to the contrary, Section 3 ofthis Agreement shall be construed as though the Employment Period were athree-year renewable agreement, instead of a two-year renewable agreement,solely with respect to the rights and benefits potentially provided underthis Section 5A.     6. No Disclosure of Confidential Information. The Officer agrees that all customerlists, dealer lists, files and records now or hereafter used by the Bank are the property of theBank and are its trade secrets. Accordingly, the Officer acknowledges that the Bank’s trade secretsas they may exist from time to time and other confidential information concerning the Bank’sbusiness, products, promotion, pricing techniques, business plans, customer lists and credit andfinancial data concerning customers are valuable, special and unique assets of the Bank, access toand knowledge of which are essential to the performance of the Officer’s duties under thisAgreement. The Officer further agrees that all knowledge and information described
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in the preceding sentence not in the public domain and heretofore or in the future obtained by theOfficer as a result of employment by the Bank shall be considered confidential information andshall not be disclosed without the Bank’s consent. The provisions of the preceding sentence shallapply during the Officer’s employment and following the termination thereof for any reason. Theprovisions of this section may be enforced in the same manner as described in Section 19. Nothingcontained herein shall be deemed to preclude the Officer from responding to requests forinformation or inquiries from the Office of Thrift Supervision or the Federal Deposit InsuranceCorporation.     6A. Covenant Not to Compete, Non-Solicitation of Customers and Employees — InGeneral.     (a) If the Officer voluntarily leaves employment hereunder during the term of thisAgreement, but before the announcement of a transaction involving an actual or potentialChange in Control, or in the event of his termination under circumstances not qualifying forpayments and benefits under Section 5A, he agrees that, for a period of twelve (12) monthsfollowing the date of the termination of his employment, he shall not work directly orindirectly for or on behalf of another bank that offers products or services similar orequivalent to those offered by the Bank within fifty (50) miles of any county in whichSovereign or its affiliates, including the Bank, are conducting such business at the date oftermination of his employment. Nor during such period shall the Officer solicit customers oremployees of Sovereign or any of its affiliates, including the Bank, to cease doingbusiness, in whole or in part, or cease employment with Sovereign or any of its affiliates,including the Bank. To the extent the restrictions in this Section 6A are legally held to beunreasonable, they shall not be void, but shall be modified to the extent necessary to makesuch restrictions reasonable. The provisions of this section may be enforced in the samemanner as described in Section 19.     (b) Notwithstanding the foregoing, in the event the Officer (1) is provided writtennotice of the Excise Tax Reduction pursuant to Section 10(a) and quantification of thereasonable additional payment offered in exchange for this non-competition restriction,pursuant to Section 10(b); and (2) provides written notice to Sovereign or the Bank of theOfficer’s intention to be bound by the terms of this non-competition restriction, asprovided in Section 10(b), in exchange for receipt of the reasonable additional paymentdescribed in Section 10(b) and the written notice, the Officer hereby agrees and covenantsthat for a period of twelve (12) months from the Officer’s effective date of termination ofemployment, he or she shall not work directly or indirectly for or on behalf of another bankthat offers products or services similar or equivalent to those offered by the Bank in thegeographic area in which Sovereign or its affiliates, including the Bank, are conductingsuch business as of the date of termination of Officer’s employment. The Officer herebyacknowledges and agrees that the covenants and restrictions in Sections 6A and 19 of thisAgreement are necessary to protect the legitimate business interests of Sovereign,including, without limitation, customer information and goodwill, and considers therestrictions to be reasonable for such purpose. The Officer acknowledges that any breach bythe Officer of the obligations set forth in Sections 6A and/or 19 would substantially andmaterially impair and irreparably harm Sovereign’s business and good will; that suchimpairment and harm would be
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     10. (a) All payments made to the Officer pursuant to this Employment Agreementor otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. §1828(k) and any regulations promulgated thereunder. In addition, in the event that anypayments and benefits pursuant to this Agreement would, when taken together withpayments and benefits provided to him under any other plans, contracts or arrangementswith Sovereign, the Bank or an affiliate of either, result in the imposition of an excisetaxunder Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), theamounts and benefits payable hereunder shall be reduced to such extent as may benecessary to avoid such imposition (the “Excise Tax Reduction”). The Officer shall havethe right, within 30 days of receipt of written notice from Sovereign or the Bank, tospecify which amounts and benefits shall be reduced to satisfy the requirements of thissubsection. All calculations required to be made under this subsection will be made bySovereign’s or the Bank’s independent public accountants, subject to the right ofOfficer’s representative to review the same. The parties recognize that the actualimplementation of the provisions of this subsection are complex and agree to deal witheach other in good faith to resolve any questions or disagreements arising hereunder.     (b) In the event the Officer is provided written notice of the Excise TaxReduction as described in Section 10(a), the Officer may elect to be bound by thenon-competition restriction contained in Section 6A, in exchange for a reasonable additionalpayment in an amount to be determined by Sovereign or the Bank and communicated to theOfficer in the written notice of the Excise Tax Reduction. Under no circumstances will thereasonable additional payment exceed the total amount of the Excise Tax Reduction requiredin Section 10(a). The written notice from Sovereign or the Bank shall further contain a formfor execution by the Officer and return to Sovereign or the Bank in the event the Officerelects the reasonable additional payment and accepts the non-competition restriction.     11. Notices. Any notice required or permitted to be given under this Agreement shallbe deemed properly given if in writing and if mailed by registered or certified mail, postageprepaid with return receipt requested, to the residence of the Officer, in the case of notices tothe Officer, and to the principal office of the Bank, in the case of notices to the Bank.     12. Waiver. No provisions of this Agreement may be modified, waived, or dischargedunless such waiver, modification, or discharge is agreed to in writing and signed by the Officerand an executive officer of the Bank specifically designated by the Board of Directors of the Bank.No waiver by any party hereto at any time of any breach by any other party hereto of, or Compliancewith, any condition or provision of this Agreement to be performed by such other party shall bedeemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior orsubsequent time.     13. Assignment. This Agreement shall not be assignable by either party hereto, exceptby the Bank to any successor in interest to the business of the Bank, provided that the Bank (if itremains a separate entity) shall remain fully liable under this Agreement for all obligations,payments and otherwise.
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     14. Entire Agreement; Other Arrangements Superseded. This Agreement contains theentire agreement of the parties relating to the subject matter of this Agreement and supersedes anyprior agreement of the parties.     15. Validity. The invalidity or unenforceability of any provision of thisAgreement shall not affect the validity or enforceability of any other provision of thisAgreement, which shall remain in full force and effect.     16. Applicable Law. This Agreement shall be governed by and construed in accordancewith the domestic laws of the Commonwealth of Massachusetts without regard to its conflicts of lawsprinciples, unless and to the extent preempted by the laws of the United States of America.     17. Headings. The headings of the sections of this Agreement are for convenience onlyand shall not control or affect the meaning or construction or limit the scope or intent of any ofthe provisions of this Agreement.     18. Other Rights. Except as otherwise provided herein, nothing herein shall beconstrued as limiting, restricting or eliminating any rights the Officer may have under any plan,contract or arrangement to which he is a party or in which he is a vested participant; provided,however, that no severance benefits shall be paid to him under any severance benefit plan ofSovereign or the Bank unless they become payable under Section 5(a)(ii).     19. Nonsolicitation of Employees and Customers — Section 5 A Applicable. In the eventthe Officer becomes entitled to benefits under Section 5A, rather than Section 5, he shall refrainfrom directly or indirectly soliciting, for employment or business relationship purposes, employeesand customers of Sovereign, the Bank or any affiliate of either as of the date of his terminationof employment. In the event of a breach of this section, the Officer’s right to payments andbenefits under Section 5A shall immediately terminate. The Bank shall be entitled to recover anypayments or benefits made following commencement of the prohibited conduct, but before discovery ofthe same, and may commence an action in any court of competent jurisdiction for such additionallegal and equitable relief as it may deem necessary or appropriate to recover damages incurred byreason of such conduct and to precluded continued violation of this section.
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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first abovewritten.      SOVEREIGN BANK