Document:

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                                                                   EXHIBIT 10.18

                             SOVEREIGN BANCORP, INC.
                   NON-EMPLOYEE DIRECTORS STOCK BONUS PROGRAM

         1.       Definitions.

                  (a)      "Bank" means Sovereign Bank.

                  (b)      "Board" means the board of directors of the
         Corporation.

                  (c)      "Change in Control" has the same meaning as is
         ascribed to such term, as of the Effective Date, in the Sovereign
         Bancorp, Inc. 2001 Stock Incentive Plan.

                  (d)      "Common Stock" means the common stock (no par value)
         of the Corporation.

                  (e)      "Corporation" means Sovereign Bancorp, Inc.

                  (f)      "Effective Date" means June 19, 2002.

                  (g)      "Participant" means a non-employee director of the
         Corporation who is entitled to participate in the Program in accordance
         with the provisions of Sections 2 and 4 and who has not terminated as a
         director. Notwithstanding the preceding sentence, a Participant who
         terminates as a non-employee director of the Corporation after having
         earned an award, but before its payment, shall remain a Participant
         until payment is made.

                  (h)      "Program" means the Sovereign Bancorp, Inc.
         Non-Employee Directors Stock Bonus Program.

         2.       Participation. Each individual who is a non-employee director
of the Corporation on the Effective Date shall become a Participant in the
Program on such date. Any individual who becomes a non-employee director of the
Corporation after the Effective Date, but before January 1, 2004, shall become a
Participant on the date he or she commences serving as a director. Any
individual who becomes a non-employee director of the Corporation after December
31, 2003 may become a Participant subject to the provisions of Section 4.

         3.       Operative Terms of the Program.

                  (a)      In the event the Corporation's cash earnings,
         determined on a consolidated and fully-diluted basis, for 2004 equal or
         exceed $1.70 per share, each Participant, who remains as a non-employee
         director of the Corporation as of December 31, 2004, shall receive an
         award of 5,000 shares of Common Stock.

                  (b)      In the event the Corporation's cash earnings,
         determined on a consolidated and fully-diluted basis, for 2005 equal or
         exceed $1.95 per share, each Participant, who remains as a non-employee
         director of the Corporation as of December 31, 2005, shall receive an
         award of 5,000 shares of Common Stock.

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                  (c)      In the event the Corporation's cash earnings,
         determined on a consolidated and fully-diluted basis, for 2006 equal or
         exceed a per share amount established by the Board prior to January 1,
         2006, each Participant, who remains as a non-employee director of the
         Corporation as of December 31, 2006, shall receive an award of 5,000
         shares of Common Stock.

                  (d)      In the event the Corporation's cash earnings,
         determined on a consolidated and fully-diluted basis, for 2007 equal or
         exceed a per share amount established by the Board prior to January 1,
         2007, each Participant, who remains as a non-employee director of the
         Corporation as of December 31, 2007, shall receive an award of 5,000
         shares of Common Stock.

                  (e)      Notwithstanding the preceding provisions of this
         section, in no event shall an award be considered earned with respect
         to a relevant year, nor shall it be paid, in the event the
         Corporation's "Tier 1 capital" is less than 5.5% as of the close of
         such year (unless a different number is approved by the Board), or the
         Bank's asset quality is worse than the average of the top 25 banks in
         the United States (by asset size), which banks have commercial loans
         making up at least 25% of their total loan portfolios.

                  (f)      All shares payable pursuant to the preceding
         provisions of this section shall be distributed within 30 days
         following the filing by the Corporation of its Form 10-K for the
         relevant year in which an award is earned.

                  (g)      All financial calculations required in connection
         with this Program shall be performed by, or under the supervision of,
         the Compensation Committee of the Board; provided, however, that the
         calculation of cash earnings shall, in any event, be consistent with
         any year-end or other public financial release, describing year-end
         cash earnings, made by the Corporation with respect to the relevant
         year.

                  (h)      Except as otherwise provided herein, no award shall
         be payable to any Participant for a relevant year if he or she fails to
         remain as a director of the Corporation, for any reason, through the
         end of such year.

                  (i)      In the event of the occurrence of a stock split,
         stock dividend, reverse stock split, or similar event following the
         adoption of this Program and prior to any payment of an award earned
         with respect to a year, the number of shares payable with respect to
         any earned award shall be appropriately adjusted to take into account
         such occurrence. Fractional shares resulting from any such adjustment
         shall be handled as specified by the Board.

                  (j)      Notwithstanding the preceding provisions of this
         section, in the event of the occurrence of a Change in Control, all
         potential awards for any current or future fiscal year shall be deemed
         earned as of the date of such Change in Control and shall be payable to
         the Participants, who are serving as directors of the Corporation
         immediately prior thereto, within 30 days after such Change in Control.
         Payment may be made in the form of equivalent consideration (if any)
         payable pursuant to the transaction or event constituting the Change in
         Control.

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                  (k)      Any award that may become payable hereunder shall be
         funded only with shares of Common Stock that shall have been previously
         listed with the New York Stock Exchange.

         4.       Future Participants. In the case of an individual who becomes
a non-employee director of the Corporation following December 31, 2003,
provision may be made by the Board, in its sole discretion, for his or her
participation in the Program. In the event the Board provides for the
participation of such an individual, it may establish such additional or
modified conditions on his or her participation as it may deem equitable or
appropriate under the circumstances.

         5.       Administration. Except as otherwise provided herein, this
Program shall be interpreted and administered by the Board as a whole. In
furtherance of such authority, the Board may prescribe such rules, regulations,
forms and procedures as it deems necessary or appropriate for the proper
administration of the Program.

         6.       Amendment. This Program may be amended at any time and from
time to time by the Board; provided, however, that no such amendment may be made
which adversely affects the then rights of a Participant under the Program
without his or her consent; and provided further, that no amendment may be made
solely by the Board that requires the additional approval of the Corporation's
shareholders for tax, securities law, exchange listing requirement or other
purposes.

         7.       Termination. This Program shall terminate upon the earliest to
occur of the following: (i) the distribution of earned awards (if any) for the
year 2007, (ii) the determination by the Compensation Committee of the Board
that the specified goals for the year 2007 were not met, and (iii) the
distribution of awards payable by reason of a Change in Control.

         8.       Tax Withholding. Distribution of an award shall be subject to
satisfaction by the Participant of any tax withholding requirements that may
apply at the relevant time.

         9.       Number. Words used herein in the singular form shall include
the plural form, as the context requires, and vice versa.

         10.      Headings. The headings of the several sections of this Program
document have been inserted for convenience of reference only and shall not be
used in the construction of the same.

         11.      Applicable Law. Except to the extent pre-empted by federal
law, this Program document shall be administered, construed and enforced in
accordance with the domestic internal law of the Commonwealth of Pennsylvania.

                                       3<PAGE>

                                                                   EXHIBIT 10.19

                             SOVEREIGN BANCORP, INC.
                       SENIOR OFFICERS STOCK BONUS PROGRAM

         1.       Definitions.

                  (a)      "Bank" means Sovereign Bank.

                  (b)      "Board" means the board of directors of the
         Corporation.

                  (c)      "Change in Control" has the same meaning as is
         ascribed to such term, as of the Effective Date, in the Sovereign
         Bancorp, Inc. 2001 Stock Incentive Plan.

                  (d)      "Common Stock" means the common stock (no par value)
         of the Corporation.

                  (e)      "Corporation" means Sovereign Bancorp, Inc.

                  (f)      "Effective Date" means September 18, 2002.

                  (g)      "Participant" means a Senior Officer who is entitled
         to participate in the Program in accordance with the provisions of
         Sections 2 and 4 and who has not terminated as a Senior Officer.
         Notwithstanding the preceding sentence, a Participant who terminates as
         a Senior Officer after having earned an award, but before its payment,
         shall remain a Participant until payment is made.

                  (h)      "Program" means the Sovereign Bancorp, Inc. Senior
         Officers Stock Bonus Program.

                  (i)      "Senior Officer" means a member of the Office of the
         Chairman of Sovereign Bank.

         2.       Participation. Each individual who is a Senior Officer on the
Effective Date shall become a Participant in the Program on such date. Any
individual who becomes a Senior Officer after the Effective Date, but before
January 1, 2004, shall become a Participant on the date he or she commences
serving in such capacity. Any individual who becomes a Senior Officer after
December 31, 2003 may become a Participant subject to the provisions of Section
4.

         3.       Operative Terms of the Program.

                  (a)      In the event the Corporation's cash earnings,
         determined on a consolidated and fully-diluted basis, for 2004 equal or
         exceed $1.70 per share, each Participant, who remains as a Senior
         Officer as of December 31, 2004, shall receive an award of 10,000
         shares of Common Stock.

                  (b)      In the event the Corporation's cash earnings,
         determined on a consolidated and fully-diluted basis, for 2005 equal or
         exceed $1.95 per share, each Participant, who

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         remains as a Senior Officer as of December 31, 2005, shall receive an
         award of 15,000 shares of Common Stock.

                  (c)      In the event the Corporation's cash earnings,
         determined on a consolidated and fully-diluted basis, for 2006 equal or
         exceed a per share amount established by the Board prior to January 1,
         2006, each Participant, who remains as a Senior Officer as of December
         31, 2006, shall receive an award of 15,000 shares of Common Stock.

                  (d)      In the event the Corporation's cash earnings,
         determined on a consolidated and fully-diluted basis, for 2007 equal or
         exceed a per share amount established by the Board prior to January 1,
         2007, each Participant, who remains as a Senior Officer as of December
         31, 2007, shall receive an award of 15,000 shares of Common Stock.

                  (e)      In the event the Corporation's cash earnings,
         determined on a consolidated and fully-diluted basis, for 2008 equal or
         exceed a per share amount established by the Board prior to January 1,
         2008, each Participant, who remains as a Senior Officer as of December
         31, 2008, shall receive an award of 15,000 shares of Common Stock.

                  (f)      Notwithstanding the preceding provisions of this
         section, in no event shall an award be considered earned with respect
         to a relevant year, nor shall it be paid, in the event the
         Corporation's "Tier 1 capital" is less than 5.5% as of the close of
         such year (unless a different number is approved by the Board), or the
         Bank's asset quality is worse than the average of the top 25 banks in
         the United States (by asset size), which banks have commercial loans
         making up at least 25% of their total loan portfolios.

                  (g)      All shares payable pursuant to the preceding
         provisions of this section shall be distributed within 30 days
         following the filing by the Corporation of its Form 10-K for the
         relevant year in which an award is earned.

                  (h)      All financial calculations required in connection
         with this Program shall be performed by, or under the supervision of,
         the Compensation Committee of the Board; provided, however, that the
         calculation of cash earnings shall, in any event, be consistent with
         any year-end or other public financial release, describing year-end
         cash earnings, made by the Corporation with respect to the relevant
         year.

                  (i)      Except as otherwise provided herein, no award shall
         be payable to any Participant for a relevant year if he or she fails to
         remain as a Senior Officer, for any reason, through the end of such
         year.

                  (j)      In the event of the occurrence of a stock split,
         stock dividend, reverse stock split, or similar event following the
         adoption of this Program and prior to any payment of an award earned
         with respect to a year, the number of shares payable with respect to
         any earned award shall be appropriately adjusted to take into account
         such occurrence. Fractional shares resulting from any such adjustment
         shall be handled as specified by the Board.

                  (k)      Notwithstanding the preceding provisions of this
         section, in the event of the occurrence of a Change in Control, all
         potential awards for any current or future fiscal

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         year shall be deemed earned as of the date of such Change in Control
         and shall be payable to the Participants, who are serving as Senior
         Officers immediately prior thereto, within 30 days after such Change in
         Control. Payment may be made in the form of equivalent consideration
         (if any) payable pursuant to the transaction or event constituting the
         Change in Control.

                  (l)      Any award that may become payable hereunder shall be
         funded only with shares of Common Stock that shall have been previously
         listed with the New York Stock Exchange.

         4.       Future Participants. In the case of an individual who becomes
a Senior Officer following December 31, 2003, provision may be made by the
Board, in its sole discretion, for his or her participation in the Program. In
the event the Board provides for the participation of such an individual, it may
establish such additional or modified conditions on his or her participation as
it may deem equitable or appropriate under the circumstances.

         5.       Administration. Except as otherwise provided herein, this
Program shall be interpreted and administered by the Board as a whole. In
furtherance of such authority, the Board may prescribe such rules, regulations,
forms and procedures as it deems necessary or appropriate for the proper
administration of the Program.

         6.       Amendment. This Program may be amended at any time and from
time to time by the Board; provided, however, that no such amendment may be made
which adversely affects the then rights of a Participant under the Program
without his or her consent; and provided further, that no amendment may be made
solely by the Board that requires the additional approval of the Corporation's
shareholders for tax, securities law, exchange listing requirement or other
purposes.

         7.       Termination. This Program shall terminate upon the earliest to
occur of the following: (i) the distribution of earned awards (if any) for the
year 2008, (ii) the determination by the Compensation Committee of the Board
that the specified goals for the year 2008 were not met, and (iii) the
distribution of awards payable by reason of a Change in Control.

         8.       Tax Withholding. Distribution of an award shall be subject to
satisfaction by the Participant of any tax withholding requirements that may
apply at the relevant time.

         9.       Number. Words used herein in the singular form shall include
the plural form, as the context requires, and vice versa.

         10.      Headings. The headings of the several sections of this Program
document have been inserted for convenience of reference only and shall not be
used in the construction of the same.

         11.      Applicable Law. Except to the extent pre-empted by federal
law, this Program document shall be administered, construed and enforced in
accordance with the domestic internal law of the Commonwealth of Pennsylvania.

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