Document:

exv10w1

Exhibit 10.1

INDEMNIFICATION AGREEMENT

          AGREEMENT, dated as of                     , 200_, by and between Toll Brothers, Inc., a Delaware
corporation (the “Company”), and [                    ] (the “Indemnitee”).

          WHEREAS, it is essential to the Company to retain and attract as directors and officers the
most capable persons available;

          WHEREAS, the Indemnitee is a director and/or officer of the Company;

          WHEREAS, the Company and the Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors and officers of companies in today’s environment;

          WHEREAS, the Company’s Second Restated Certificate of Incorporation and By-Laws (together, the
“Governing Documents”) require the Company to indemnify and advance expenses to its directors and
officers to the extent provided therein, and the Indemnitee serves as a director and/or officer of
the Company, in part, in reliance on such provisions in the Company’s Certificate of Incorporation
and By-Laws; and

          WHEREAS, in recognition of the Indemnitee’s need for substantial protection against personal
liability in order to enhance the Indemnitee’s continued service to the Company in an effective
manner, and the Indemnitee’s reliance on the Company’s Governing Documents, and in part to provide
the Indemnitee with specific contractual assurance that the protection promised by the Company’s
Governing Documents will be available to the Indemnitee (regardless of, among other things, any
amendment to or revocation of the applicable provisions of the Company’s Governing Documents or
any change in the composition of the Company’s Board of Directors or acquisition transaction
relating to the Company), the Company wishes to provide in this Agreement for the indemnification
of and the advancing of expenses to the Indemnitee to the fullest extent (whether partial or
complete) permitted by law and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of the Indemnitee under the directors’ and officers’
liability insurance policy of the Company.

          NOW, THEREFORE, in consideration of the premises and of the Indemnitee continuing to serve the
Company directly or, at its request, as an officer, director, manager, member, partner, tax matters
partner, fiduciary or trustee of, or in any other capacity with, another Person (as defined below)
or any employee benefit plan, and intending to be legally bound hereby, the parties hereto agree as
follows:

     1. Certain Definitions. In addition to terms defined elsewhere herein, the following
terms have the following meanings when used in this Agreement:

 

 

          (a) Agreement: shall mean this Indemnification Agreement, as amended from time to
time hereafter.

          (b) Board of Directors: shall mean the Board of Directors of the Company.

          (c) Claim: means any threatened, asserted, pending or completed civil, criminal,
administrative, investigative or other action, suit or proceeding of any kind whatsoever, or any
appeal of any kind thereof, or any inquiry or investigation, whether instituted by the Company, any
governmental agency or any other party, that the Indemnitee in good faith believes might lead to
the institution of any such action, suit or proceeding, whether civil, criminal, administrative,
investigative or other, including any arbitration or other alternative dispute resolution
mechanism.

          (d) Indemnifiable Event: means any act or omission, whether occurring before, on or
after the date of this Agreement, arising from the performance of the Indemnitee’s duties or
obligations to the Company or any of its subsidiaries, including in connection with any civil,
criminal, administrative, investigative or other action, suit or proceeding to which the Indemnitee
may hereafter be made a party by reason of being or having been an officer, director, manager,
member, partner, tax matters partner, fiduciary or trustee of, or having served in any other
capacity with, another Person or any employee benefit plan at the request of the Company.

          (e) Indemnifiable Expenses: means (i) all expenses and liabilities, including
judgments, fines, penalties, interest, amounts paid in settlement with the approval of the Company,
and counsel fees and disbursements (including, without limitation, experts’ fees, court costs,
retainers, transcript fees, duplicating, printing and binding costs, as well as telecommunications,
postage and courier charges) paid or incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing to investigate, defend, be a
witness in or participate in, (including on appeal), any Claim relating to any Indemnifiable Event
and (ii) any liabilities which an Indemnitee incurs as a result of acting on behalf of the Company
(whether as a fiduciary or otherwise) in connection with the operation, administration or
maintenance of an employee benefit plan or any related trust or funding mechanism (whether such
liabilities are in the form of excise taxes assessed by the United States Internal Revenue Service,
penalties assessed by the Department of Labor, restitutions to such a plan or trust or other
funding mechanism or to a participant or beneficiary of such plan, trust or other funding
mechanism, or otherwise).

          (f) Person: means any individual, corporation, firm, partnership, joint venture,
limited liability company, estate, trust, business association, organization, governmental entity
or other entity.

     2. Basic Indemnification Arrangement; Advancement of Expenses.

          (a) In the event that the Indemnitee was, is or becomes subject to, a party to or witness or
other participant in, or is threatened to be made subject to, a party

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to or witness or other participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify the Indemnitee, or cause such Indemnitee to be
indemnified, consistent with the terms of this Agreement, to the fullest extent permitted by
Delaware law in effect on the date hereof and as amended from time to time; provided,
however, that no change in Delaware law shall have the effect of reducing the benefits
available to the Indemnitee hereunder based on Delaware law as in effect on the date hereof or as
such benefits may improve as a result of amendments after the date hereof. The rights of the
Indemnitee provided in this Section 2 shall include, without limitation, the rights set forth in
the other sections of this Agreement. Payments under this Section 2(a) shall be made as soon as
practicable but in no event later than thirty (30) days after written demand is received by the
Company.

          (b) If so requested by the Indemnitee, the Company shall advance, or cause to be advanced
(within thirty (30) days of such request), any and all Indemnifiable Expenses incurred by the
Indemnitee (an “Expense Advance”). The Company shall, in accordance with such request (but
without duplication), either (i) pay, or cause to be paid, such Indemnifiable Expenses on behalf of
the Indemnitee, or (ii) reimburse, or cause the reimbursement of, the Indemnitee for such
Indemnifiable Expenses. The Indemnitee’s right to an Expense Advance is absolute and shall not be
subject to any condition that the Board of Directors shall not have determined that the Indemnitee
is not entitled to be indemnified under applicable law. However, the obligation of the Company to
make an Expense Advance pursuant to this Section 2(b) shall be subject to the condition that, if,
when and to the extent that a final judicial determination is made (as to which all rights of
appeal therefrom have been exhausted or lapsed) that the Indemnitee is not entitled to be so
indemnified under applicable law, the Company shall be entitled to be reimbursed by the Indemnitee
(who hereby agrees to reimburse the Company) for all such amounts theretofore paid (it being
understood and agreed that the foregoing agreement by the Indemnitee shall be deemed to satisfy any
requirement that the Indemnitee provide the Company with an undertaking, and shall in fact
constitute an unconditional, binding and enforceable undertaking, to repay any Expense Advance if
it is ultimately determined that the Indemnitee is not entitled to indemnification under applicable
law). The Indemnitee’s undertaking to repay such Expense Advances shall be unsecured and
interest-free, except as otherwise ordered in a final judicial determination (as to which all
rights of appeal therefrom have been exhausted or lapsed) that the Indemnitee is not entitled to be
so indemnified under applicable law.

          (c) Notwithstanding anything in this Agreement to the contrary, the Indemnitee shall not be
entitled to indemnification or advancement of Indemnifiable Expenses pursuant to this Agreement in
connection with any Claim initiated by the Indemnitee unless (i) the Company has joined in, or the
Board of Directors of the Company has authorized or consented to the initiation of, such Claim or
(ii) the Claim is one to enforce the Indemnitee’s rights under this Agreement (including an action
pursued by the Indemnitee to secure a determination that the Indemnitee should be indemnified under
applicable law).

          (d) The indemnification obligations of the Company under Section 2(a) shall be subject to the
condition that the Board of Directors shall not have determined (by

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majority vote of directors who are not parties to the applicable Claim) that the
indemnification of the Indemnitee is not proper in the circumstances because the Indemnitee is not
entitled to be indemnified under applicable law. If the Board of Directors determines that the
Indemnitee is not entitled to be indemnified in whole or in part under applicable law, the
Indemnitee shall have the right to commence litigation in any court in the State of Delaware
having subject matter jurisdiction thereof and in which venue is proper, seeking an initial
determination by the court or challenging any such determination by the Board of Directors or any
aspect thereof, including the legal or factual bases therefor, and the Company hereby consents to
service of process and to appear in any such proceeding. If the Indemnitee commences legal
proceedings in a court of competent jurisdiction to secure a determination that the Indemnitee
should be indemnified under applicable law, any determination made by the Board of Directors that
the Indemnitee is not entitled to be indemnified under applicable law shall not be binding, the
Indemnitee shall continue to be entitled to receive Expense Advances, and the Indemnitee shall not
be required to reimburse the Company for any Expense Advance, unless and until a final judicial
determination is made (as to which all rights of appeal therefrom have been exhausted or lapsed)
that the Indemnitee is not entitled to be so indemnified under applicable law. Any determination
by the Board of Directors otherwise shall be conclusive and binding on the Company and the
Indemnitee.

          (e) To the extent that the Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense
of any issue or matter therein, including dismissal without prejudice, the Indemnitee shall be
indemnified against all Indemnifiable Expenses actually and reasonably incurred in connection
therewith, notwithstanding an earlier determination by the Board of Directors that the Indemnitee
is not entitled to indemnification under applicable law.

     3. Indemnification for Additional Expenses. The Company shall indemnify, or cause the
indemnification of, the Indemnitee against any and all Indemnifiable Expenses (and, if requested by
the Indemnitee, shall advance such Indemnifiable Expenses to the Indemnitee subject to and in
accordance with Section 2(b)), which are incurred by the Indemnitee in connection with any
non-frivolous action brought by the Indemnitee for indemnification or an Expense Advance by the
Company under this Agreement. If a final judicial determination is made (as to which all rights of
appeal therefrom have been exhausted or lapsed) that the Indemnitee is not entitled to such
indemnification or Expense Advance, as the case may be, the Company shall be entitled to be
reimbursed by the Indemnitee (who hereby agrees to reimburse the Company) for all such amounts paid
pursuant to this Section 3. The Company shall also indemnify, or cause the indemnification of, the
Indemnitee against any and all Indemnifiable Expenses (and, if requested by the Indemnitee, shall
advance such Indemnifiable Expenses to the Indemnitee subject to and in accordance with Section
2(b)), which are incurred by the Indemnitee in connection with any non-frivolous action brought by
the Indemnitee for recovery under any “Separate Side A” directors and officers liability insurance
policy (as distinguished from “Side A” coverage provided under a directors and officers liability
insurance policy) purchased by the Company for the Indemnitee’s benefit; provided, however, that
the indemnification and advancement provided for in this sentence shall

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not apply to Indemnifiable Expenses incurred by the Indemnitee after the Company and the
Indemnitee have received a written opinion of Independent Counsel that the Indemnitee is not
entitled to coverage under such insurance policy; and provided further that the Company shall have
the right to participate with counsel of its choosing and at its expense in such action for
insurance recovery by the Indemnitee and to cease paying Indemnifiable Expenses incurred by the
Indemnitee in such action after the earlier of (i) an offer by the issuer of such insurance policy
to the Indemnitee to settle such action which Independent Counsel advises the Company and the
Indemnitee is fair to the Indemnitee or (ii) the entry of judgment in such action from which the
issuer of such insurance policy does not appeal and from which Independent Counsel advises the
Company and the Indemnitee that there is no reasonable basis for Indemnitee to appeal. For
purposes of this Section 3, “Independent Counsel” shall mean a law firm, or a partner (or, if
applicable, member) of such a law firm, jointly selected and agreed to by Indemnitee and the
Company that is experienced in matters of Delaware corporation law and neither presently is, nor in
the past five years has been, retained to represent the Company or Indemnitee in any matter
material to such party. For purposes of this Section 3, an Independent Counsel shall be required at
such time as either the Company or the Indemnitee, or both, requests the retention of Independent
Counsel in writing. Notwithstanding the foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees
and expenses of the Independent Counsel referred to above and to fully indemnify such Independent
Counsel against any and all expenses, claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto. Except to the extent inconsistent with the other
provisions of this Section 3, Indemnifiable Expenses incurred by the Indemnitee in defending any
action by the Company, by the issuer of the insurance policy referred to above, or by any other
Person that challenges the Indemnitee’s rights to recover under this Agreement or such insurance
policy shall be treated for purposes of this Section 3 as if incurred by the Indemnitee in an
action by Indemnitee to enforce such rights.

     4. Partial Indemnity. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the Indemnifiable Expenses in
respect of a Claim but not, however, for the entire amount thereof, the Company shall nevertheless
indemnify the Indemnitee for the portion thereof to which the Indemnitee is entitled.

     5. Burden of Proof. In connection with any determination by the Board of Directors,
any court or otherwise as to whether the Indemnitee is entitled to be indemnified hereunder, the
Board of Directors or court shall presume that the Indemnitee has satisfied the applicable standard
of conduct and is entitled to indemnification, and the burden of proof shall be on the Company or
its representative to establish, by clear and convincing evidence, that the Indemnitee is not so
entitled.

     6. No Other Presumptions. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding, by judgment, order, settlement (whether with or

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without court approval) or conviction, or upon a plea of nolo contendere or its equivalent,
shall not create a presumption that the Indemnitee did not meet any particular standard of conduct
or have any particular belief or that a court has determined that indemnification is not permitted
by applicable law. In addition, neither the failure of the Board of Directors to have made a
determination as to whether the Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Board of Directors that the Indemnitee has
not met such standard of conduct or did not have such belief, prior to the commencement of legal
proceedings by the Indemnitee to secure a judicial determination that the Indemnitee should be
indemnified under applicable law shall be a defense to the Indemnitee’s claim or create a
presumption that the Indemnitee has not met any particular standard of conduct or did not have any
particular belief.

     7. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in addition
to any other rights the Indemnitee may have under the Company’s Governing Documents, the laws of
the State of Delaware, or otherwise. To the extent that a change in Delaware law or the
interpretation thereof (whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Company’s Governing Documents, it is the
intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the greater benefits
so afforded by such change.

     8. Liability Insurance. To the extent the Company maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum extent of the
coverage available for the Company directors or officers.

     9. Period of Limitations. No legal action shall be brought and no cause of action
shall be asserted by or in the right of the Company against the Indemnitee, the Indemnitee’s
spouse, heirs, executors or personal or legal representatives after the expiration of two years
from the date of discovery of such cause of action, and any claim or cause of action of the Company
shall be extinguished and deemed released unless asserted by the timely filing of a legal action
within such two-year period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action such shorter period shall govern.

     10. Amendments, Etc. No supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

     11. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who
shall execute all papers reasonably required and shall do everything that may be reasonably
necessary to secure such rights, including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.

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     12. No Duplication of Payments. The Company shall not be liable under this Agreement
to make any payment in connection with any Claim made against the Indemnitee to the extent the
Indemnitee has otherwise actually received payment (under any insurance policy, any provision of
the Company’s Governing Documents, or otherwise) of the amounts otherwise indemnifiable hereunder.

     13. Defense of Claims. The Company shall be entitled to participate in the defense of
any Claim relating to an Indemnifiable Event or to assume the defense thereof, with counsel
reasonably satisfactory to the Indemnitee; provided that if the Indemnitee believes, after
consultation with counsel selected by the Indemnitee, that (i) the use of counsel chosen by the
Company to represent the Indemnitee would present such counsel with an actual or potential conflict
of interest, (ii) the named parties in any such Claim (including any impleaded parties) include the
Company or any subsidiary of the Company and the Indemnitee, and the Indemnitee concludes that
there may be one or more viable legal defenses available to him or her that are different from or
in addition to those available to the Company or any subsidiary of the Company or (iii) any such
representation by such counsel would be precluded under the applicable standards of professional
conduct then prevailing, then the Indemnitee shall be entitled to retain separate counsel (but not
more than one law firm plus, if applicable, local counsel in respect of any particular Claim) at
the Company’s expense. The Company shall not be liable to the Indemnitee under this Agreement for
any amounts paid in settlement of any Claim relating to an Indemnifiable Event effected without the
Company’s prior written consent. The Company shall not, without the prior written consent of the
Indemnitee, effect any settlement of any Claim relating to an Indemnifiable Event which the
Indemnitee is or could have been a party unless such settlement solely involves the payment of
money and includes a complete and unconditional release of the Indemnitee from all liability on all
claims that are the subject matter of such Claim. Neither the Company nor the Indemnitee shall
unreasonably withhold its or his or her consent to any proposed settlement; provided that
the Indemnitee may withhold consent to any settlement that does not provide a complete and
unconditional release of the Indemnitee.

     14. Binding Effect, Etc. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective successors, (including any
direct or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company), assigns, spouses, heirs, executors
and personal and legal representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation, or otherwise) to all or a significant
portion of the business and/or assets of the Company and/or its subsidiaries, by written agreement
in form and substance satisfactory to the Indemnitee and his or her counsel, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform if no such succession had taken place. This Agreement shall continue
in effect regardless of whether the Indemnitee continues to serve as an officer and/or director of
the Company of any other entity or enterprise at the request of the Company. Neither this
Agreement nor any duties or responsibilities pursuant hereto may be assigned by the Company to any
other person or entity without the prior written consent of the Indemnitee.

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     15. Severability. If any provision or provisions of this Agreement shall be held to
be invalid, illegal or unenforceable for any reason whatsoever, (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby and (b) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, all portions of any paragraph of this Agreement
containing any such provision held to be invalid, illegal or unenforceable) shall be construed so
as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable
and to give effect to the terms of this Agreement.

     16. Notices. All notices, requests, consents and other communications hereunder to
any party shall be deemed to be sufficient if contained in a written document delivered in person
or sent by telecopy, nationally recognized overnight courier or personal delivery, addressed to
such party at the address set forth below or such other address as may hereafter be designated on
the signature pages of this Agreement or in writing by such party to the other parties:

	 	(a)	 	If to the Company, to:

Toll Brothers, Inc.

250 Gibraltar Road

Horsham, PA 19044

Fax: (215) 938-8255

Attn: General Counsel

	 	(b)	 	If to the Indemnitee, to the address set forth on Annex
A hereto.

     17. Counterparts. This Agreement may be executed in counterparts, each of which shall
for all purposes be deemed to be an original but all of which together shall constitute one and the
same agreement. Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.

     18. Headings. The headings of the sections and paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this Agreement or to
affect the construction or interpretation thereof.

     19. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made and to be performed
in such state without giving effect to the principles of conflicts of laws.

[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	TOLL BROTHERS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	[Name of Director]	 	 

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Annex A

	 	 	 	 	 
	Name and Business Address.	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	Attn:
	 	 	 	 
	Tel:

	 	 

	 	 
	Fax:exv10w43

Exhibit 10.43

February 11,
2009

Kirk Walters

c/o Sovereign Bancorp, Inc.

          Re:  Agreement
and General Release

Dear Kirk:

          This Agreement and General Release (“Agreement and Release”) confirms our discussions
regarding your employment with Sovereign Bancorp, Inc. (and/or its related entities, defined as
“Sovereign”).

          In consideration for your signing and returning (and not revoking) this Agreement and
Release, Sovereign will provide you with the following benefits to which you are not otherwise
entitled:

	 	(i)	 	$8,137,695 which represents an amount approximately equal to
the change in control or termination benefits set forth in your prior
employment agreement and/or change in control agreement with Sovereign (less
applicable deductions and withholdings). Sovereign will provide this payment
to you notwithstanding that you have chosen not to resign for Good Reason.
Sovereign shall make such payment no later than five (5) business days after
the expiration of the revocation period described below (provided that you
have signed and returned this Agreement and Release and have returned the
attached letter confirming that you have not revoked this Agreement and
Release); and
	 
	 	(ii)	 	an employment agreement as attached hereto as Exhibit A.

          The amount set forth above includes the “Gross-Up Payment” under Section 8(a) of your prior
employment agreement with Sovereign. If you are required to pay any additional excise tax under
Section 4999 of the Internal Revenue Code of 1986, as amended (“Excise Tax”), in respect of (i) the
above amount paid by Sovereign and/or (ii) any other amounts paid,

 

 

distributed, or treated as paid or distributed, by Sovereign or compensation earned by you in
connection with Sovereign’s recent acquisition by Banco Santander, S.A. which amounts or
compensation are treated as excess parachute payments under Section 280G of the Internal Revenue
Code of 1986, as amended, then Sovereign will promptly pay to you, or on your behalf, the amount
of the Gross-Up Payment that was not, but should have been, paid by Sovereign to you, as
determined by a nationally-recognized accounting firm chosen by Sovereign in its sole discretion.
Sovereign’s obligation to pay such amount is conditioned on your agreement to notify Sovereign
promptly in writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by Sovereign of an additional Gross-Up Payment. If Sovereign notifies you in
writing that it desires to contest such claim, you agree to cooperate with Sovereign in contesting
the claim; provided, however, that Sovereign will pay directly all reasonable costs and expenses
(including additional interest and penalties) incurred in connection with such contest and will
indemnify and hold you harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Any Gross-Up Payment or other payment pursuant to this
paragraph will be paid no later than the date the related taxes are due.

          In order to be eligible to receive the payment and other benefits described above to which
you are not otherwise entitled, you are required to agree to the terms contained in this Agreement
and Release, including the General Release provisions set forth below, indicate your agreement by
signing and returning this Agreement and Release, and not revoke this Agreement and Release as
provided below.

          In consideration for receiving the change in control or termination benefits amount described
above without your having to resign for Good Reason and for the offer of the employment agreement,
you hereby agree to release Sovereign and any and all of Sovereign’s predecessors, successors,
assigns, subsidiaries, parents, branches, divisions, affiliates, related entities and present and
former officers, directors, employees and agents (of either Sovereign or any and all of Sovereign’s
predecessors, successors, assigns, subsidiaries, parents, branches, divisions, affiliates and
related entities) (including, but not limited to, Banco Santander, S.A. and its parents,
subsidiaries, affiliates or related entities) (collectively “Sovereign Entities & Officials”),
individually and in their official capacities, of and from all causes of action, claims, damages,
judgments or agreements of any kind arising up to and including the date of your execution of this
Agreement and Release, including, but not limited to, all matters arising out of your employment
with Sovereign (or its parents, subsidiaries, affiliates or related entities), and of and from any
change in control or termination provisions. This release includes, but is not limited to, any and
all alleged claims based on Title VII of the Civil Rights Act of 1964, the Civil Rights Act of
1866, the Age Discrimination in Employment Act (including the Older Workers Benefit Protection
Act), the Americans with Disabilities Act, the New York State and New York City Human Rights Laws,
the New York Labor Law, the Pennsylvania Human Relations Act, the Pennsylvania Wage Payment and
Collection Law, the Massachusetts Fair Employment Practices Act, the Massachusetts Age
Discrimination Law, the Massachusetts Equal Rights Act, the Employee Retirement Income Security Act
of 1974, the Family and Medical Leave Act of 1993, the Worker Adjustment and Retraining
Notification Act, or any common law, public policy, contract (whether oral or written, express or
implied) or tort law, or any other local, state, federal or foreign law, regulation, ordinance or
rule having any bearing whatsoever on the terms and conditions of your employment and the cessation
thereof. By signing this Agreement and

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Release, you are providing a complete waiver of all claims that may have arisen, whether known
or unknown, up until the time that this Agreement and Release is executed by you. Notwithstanding
the foregoing, this release is not intended to release any rights: (i) to indemnification, if any,
pursuant to Sovereign policy or applicable law; and/or (ii) to any vested or unvested restricted
stock and/or restricted stock units of Sovereign, if any (your rights, if any, to indemnification
or to the stock and/or restricted stock units will be governed by the applicable policy, plan or
law).

          You acknowledge and agree that any employment agreement, offer letter and/or any agreement
regarding change in control or termination benefits, previously entered into between you and
Sovereign are immediately null and void.

          In addition, you will keep in confidence and will not, except as specifically authorized in
writing by Sovereign or as otherwise required by law, disclose to any third party or use for the
benefit of yourself or any third party any confidential or proprietary information about Sovereign
(or its parents, subsidiaries, affiliates or related entities) which you acquired, developed or
created by reason of your employment, except for information that is or becomes public other than
through your breach of this paragraph.

          You agree that you will cooperate with Sovereign (or its parents, subsidiaries, affiliates or
related entities) and its legal counsel in connection with any current or future investigation or
litigation relating to any matter with which you were involved or of which you have knowledge or
which occurred during your employment. Such assistance will include, but not be limited to,
depositions and testimony and will continue until such matters are resolved. Sovereign will
provide you with reasonable notice whenever possible of the need for your cooperation. To the
extent practicable, Sovereign will limit your cooperation to regular business hours (and, to the
extent practicable, will take into account your other personal and Business commitments). In any
event, following your employment with Sovereign, in complying with this paragraph, you will not be
required to act against the reasonable best interests of any new employer or new business venture
in which you are an employee, partner or active participant. Furthermore, Sovereign will reimburse
you for all reasonable expenses and costs you may incur as a result of providing such assistance,
including travel costs and pre-approved legal fees (which approval will not be unreasonably
withheld), provided Sovereign receives proper documentation with respect to all such expenses and
costs. Following your employment with Sovereign, you will be entitled to a reasonable hourly fee
(which fee will be mutually determined by Sovereign and you after consideration of your
compensation history) for time spent by you furnishing such cooperation (other than for time spent
by you actually providing testimony in any legal matter), including, without limitation, for time
spent travelling in connection with such cooperation. Such fee will be paid promptly following
your submission of a statement setting forth the number of hours spent by you on such cooperation.

          If you breach this Agreement and Release, in addition to any other remedies available,
Sovereign will seek restitution and/or offset of any payments or benefits provided to the extent
permitted by law.

          This Agreement and Release does not affect your entitlement to previously accrued or vested
benefits to which you may be entitled under any Sovereign savings and/or pension plans. Your rights
to benefits under any Sovereign savings and/or pension plan will be determined by law and in
accordance with the terms of the specific plan.

-3-

 

          Since your execution of this Agreement and Release releases Sovereign and any Sovereign Entities &
Officials from all claims you may have (except as otherwise set forth above), you should review
this carefully before signing it. You can take at least twenty-one (21) days from your receipt of
this Agreement and Release to consider its meaning and effect and to determine whether you wish to
enter into it. During that time, you are advised to consult with anyone of your choosing,
including an attorney, prior to executing this Agreement and Release. Any modifications to this
Agreement and Release (and the attached Exhibit A), whether material or immaterial, will not
restart the twenty-one (21) day period.

          Once you have signed this Agreement and Release, you may choose to revoke your execution
within seven (7) days. Any revocation of this Agreement and Release must be in writing and
personally delivered to Thomas J. McAuliffe, Sovereign Bancorp, Inc., 75 State Street, Boston,
Massachusetts 02109, or if mailed, postmarked within seven (7) days of the date upon which it was
signed by you.

          TO RECEIVE THE PAYMENT AND OTHER BENEFITS DESCRIBED ABOVE, YOU MUST SIGN (AND HAVE NOTARIZED)
AND RETURN THE AGREEMENT AND RELEASE NO LATER THAN MARCH 10, 2009, AND DELIVER THE ATTACHED LETTER
INDICATING THAT YOU HAVE NOT REVOKED YOUR AGREEMENT NO EARLIER THAN SEVEN (7) DAYS AFTER THE DATE
YOU SIGN THIS AGREEMENT AND RELEASE. YOU MUST ALSO SIGN AND RETURN THE EMPLOYMENT AGREEMENT
ATTACHED HERETO AS EXHIBIT A NO LATER THAN MARCH 10, 2009. This Agreement and Release should be
returned to Thomas J. McAuliffe, Sovereign Bancorp, Inc., 75 State Street, Boston, Massachusetts
02109. Sovereign will not make any payments or provide any other benefits pursuant to this
Agreement and Release until after the seven (7) day period expires and Sovereign receives the
attached letter indicating that you have not revoked your agreement.

          If any portion of this Agreement and Release is found to be unenforceable but such portion
would be enforceable if some part thereof were deleted or modified, then such portion will apply
with such deletion or modification as is necessary to make it enforceable to the fullest extent
permitted by law. If any such portion cannot be modified to be enforceable, such portion will be
deemed severed from this Agreement and Release and will not affect the validity or enforceability
of the remainder of this Agreement and Release.

          This Agreement and Release will be null and void if you do not sign and return the employment
agreement attached hereto as Exhibit A within the applicable time period.

[THIS SPACE INTENTIONALLY LEFT BLANK]

-4-

 

          This Agreement and Release (including Exhibit A) contains the entire understanding of the
parties relating to the subject matter hereof. You acknowledge that no representations, oral or
written, have been made other than those expressly set forth herein, and that you have not relied
on any other representations in executing this Agreement and Release. This Agreement and Release
may be modified only in a document signed by the parties and referring specifically hereto.

          If you have any questions, please contact Tom Stypulkoski at (610) 526-6340.

Sincerely yours,

Sovereign Bancorp, Inc.

Thomas J. McAuliffe

Executive Vice President and

Managing Director of Human Resources

-5-

 

ACKNOWLEDGEMENT

          I AGREE TO THE TERMS AND CONDITIONS SPECIFIED IN THIS AGREEMENT AND RELEASE AND I INTEND TO
WAIVE AND RELEASE ALL CLAIMS THAT I MAY HAVE AGAINST SOVEREIGN AND ANY SOVEREIGN ENTITIES &
OFFICIALS. I UNDERSTAND THAT THIS WAIVER AND RELEASE CREATES A TOTAL AND UNLIMITED RELEASE OF ALL
CLAIMS, WHETHER KNOWN OR UNKNOWN, EXISTING AS OF THIS DATE THAT I MAY HAVE AGAINST SOVEREIGN AND
ANY SOVEREIGN ENTITIES & OFFICIALS, EXCEPT AS OTHERWISE SET FORTH ABOVE.

          I HAVE HAD AMPLE TIME TO REVIEW THIS AGREEMENT AND TO CONSIDER MY GENERAL RELEASE OF ALL
CLAIMS AS SET FORTH IN THIS AGREEMENT AND RELEASE. I AM SIGNING THIS AGREEMENT AND RELEASE
KNOWINGLY, VOLUNTARILY AND WITH FULL UNDERSTANDING OF ITS TERMS AND EFFECTS. I UNDERSTAND THAT I
CAN TAKE AT LEAST TWENTY-ONE (21) DAYS FROM RECEIPT OF THIS AGREEMENT AND RELEASE TO DETERMINE
WHETHER I WISH TO SIGN IT, THAT I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING
IT, AND THAT I HAVE SEVEN (7) DAYS FROM THE DATE I SIGN THIS AGREEMENT AND RELEASE TO REVOKE IT.

          I ACKNOWLEDGE THAT I HAVE NOT RELIED ON ANY REPRESENTATIONS OR STATEMENTS NOT SET FORTH
HEREIN. I WILL NOT DISCLOSE THIS AGREEMENT AND RELEASE TO ANYONE EXCEPT TO MY IMMEDIATE FAMILY AND
ANY TAX, LEGAL OR OTHER COUNSEL THAT I HAVE CONSULTED REGARDING THE MEANING OR EFFECT OF THIS
AGREEMENT, EXCEPT AS OTHERWISE REQUIRED BY LAW OR LEGAL PROCESS, OR UNLESS THE AGREEMENT AND
RELEASE HAS ENTERED THE PUBLIC DOMAIN DUE TO A DISCLOSURE BY ANY SOVEREIGN ENTITIES OR OFFICIALS.

          In witness hereof, I have executed this Agreement and General Release this
12th  day of February, 2009.

	 	 	 	 	 
	/s/ Kirk Walters
 

	 	 
	 	 
	Kirk Walters
	 	 	 	 
	 
	 	 	 	 
	STATE OF MASSACHUSETTS     )
	 	 	 	 
	:

	 	ss.:	 	 
	COUNTY OF SUFFOLK                 )
	 	 	 	 

          On
this 13th  day of February, 2009, before me, a Notary Public
of the State of Massachusetts, personally appeared KIRK WALTERS, to me known and known to
me to be the person described and who executed the foregoing Agreement and General Release and did
then and there acknowledge to me that s/he voluntarily executed the same.

	 	 	 	 	 
	 

	 	/s/ Brenda L . Page	 	 
	 

	 	 

Notary Public
	 	 

YOU MUST RETURN THE ENTIRE AGREEMENT AND GENERAL RELEASE

(INCLUDING THE ACKNOWLEDGMENT PAGE).

-6-

 

EXHIBIT A

February 11,
2009               

Kirk Walters

c/o Sovereign Bancorp, Inc.

Dear Kirk:

     It is with great pleasure that we extend an offer setting forth the following terms for your
continued employment with Sovereign Bancorp, Inc. (and/or its related entities, defined as
“Sovereign”):

	 	 	 
	Title/Function:

	 	Chief Financial Officer & Non Core Assets, reporting directly to
the Chief Executive Officer. Notwithstanding the foregoing, during
your employment with Sovereign, Sovereign reserves the right, in its
sole discretion, to modify your title, function, responsibilities
and reporting relationships. You agree to use your best efforts,
skill and ability to perform your duties and responsibilities, and
to devote all of your business time and energy to the performance of
your duties and responsibilities hereunder.
	 
	 	 
	Work Location:

	 	Your initial work location will be at the offices of Sovereign
located in Boston, Massachusetts. You will be required, however, to
travel to other locations based on business necessity.
	 
	 	 
	Compensation:

	 	For calendar year 2009 (“2009”), your salary will be paid at the
rate of $600,000 per annum (less applicable deductions and
withholdings), payable in accordance with Sovereign’s regular
payroll practices.
	 
	 	 
	 

	 	In addition, for 2009, you will be eligible to receive a
discretionary bonus, payable in accordance with Sovereign policy with
respect to the payment of bonuses (as amended from time to time). The
amount of the discretionary bonus, if any, will be determined by
Sovereign in its sole discretion based on, among other things, your
performance and the performance of Sovereign. Your discretionary
bonus for 2009 will be in a target amount of $650,000

 

 

	 	 	 
	 

	 	(“Discretionary Target Bonus”). Notwithstanding the foregoing, all
bonus payments for 2009, if any, will be made no later than March
15, 2010. In order to receive the Discretionary Target Bonus, if
any, you must be in an “active working status” at the time of bonus
payment (except as otherwise set forth below in the “Termination
Other Than for Cause” paragraph).
	 
	 	 
	 

	 	Subsequent to 2009, if you are still employed by Sovereign and in
“active working status” at the time of bonus payments for 2010 or
subsequent years, Sovereign, in its sole discretion, may (but is not
obligated to) pay a discretionary bonus to you for 2010 or
subsequent years. The amount of any discretionary bonus, if any, may
vary from year to year. Discretionary bonuses payable after 2009, if
any, and will be payable in accordance with Sovereign policy with
respect to the payment of bonuses, as amended from time to time.
	 
	 	 
	 

	 	If Sovereign’s parent company establishes or maintains a long-term
incentive plan to which executives of Sovereign are eligible to
participate, you will be recommended for approval to participate in
such plan, if any, in accordance with the terms and conditions of
any such plan.
	 
	 	 
	 

	 	For purposes of this letter, “active working status” means that you
have not resigned (or given notice of your intention to resign) and
have not been terminated (or been given notice of your termination).
	 
	 	 
	Expenses:

	 	Sovereign will reimburse you for all reasonable business expenses
actually incurred by you in connection with the performance of your
duties hereunder, in accordance with policies established by
Sovereign from time to time and subject to receipt by Sovereign of
appropriate documentation.
	 
	 	 
	Compliance With

Policies And Procedures:

	 	

You agree to continue to be bound by and to comply fully with all
policies and procedures for employees, including but not limited to,
all terms and conditions set forth in any employee handbook,
compliance manual and any other memoranda and communications
pertaining to policies, procedures, rules and regulations, as
currently in effect and as may be amended or established from time
to time. These policies and procedures include, among other things
and without limitation, your obligations to comply with Sovereign’s
rules regarding confidential and proprietary information, trade
secrets and intellectual property. Failure to comply with all such
policies and

-2-

 

	 	 	 
	 

	 	procedures shall be grounds for disciplinary action by Sovereign,
up to and including termination.
	 
	 	 
	Termination Other Than

for Cause:

	 	

If your employment is terminated by Sovereign other than for
cause prior to the date that Sovereign makes its regular payment of
2009 bonuses to its employees, you will receive (less applicable
deductions and withholdings): (i) any salary that has been earned
but unpaid up to the date of your termination; and (ii) a pro-rated
portion of the Discretionary Target Bonus amount of $650,000, based
on the number of full months that you worked for Sovereign in 2009,
which will be payable in accordance with Sovereign policy with
respect to the payment of bonuses. You will not receive any
additional payments other than those set forth above in this
paragraph (whether a discretionary or guaranteed bonus, any
additional salary, severance, or otherwise) whatsoever.
	 
	 	 
	 

	 	Notwithstanding the foregoing, if your employment is terminated by
Sovereign other than for cause at any time, you will receive
continued coverage under Sovereign’s group health insurance plan
(without charging you premium co-payments) for three (3) years
following the last day of your employment. Notwithstanding the
foregoing, nothing in this paragraph is intended to alter the at
will status of your employment or extend the term of this agreement.
	 
	 	 
	Resignation/Termination

for Cause:

	 	

In the event that you resign or your employment is terminated by
Sovereign for cause, you will not be entitled to any bonus
(discretionary, guaranteed or otherwise), any severance or any
termination payments referred to in the above paragraph (other than
any Discretionary Target Bonus already paid to you as of the date of
your resignation or termination), except that you will be entitled
to salary earned prior to your resignation or termination.
	 
	 	 
	 

	 	Notwithstanding the foregoing, in the event that you resign,
Sovereign will provide you with continued coverage under Sovereign’s
group health insurance plan (without charging you premium
co-payments) for three (3) years following the last day of your
employment. If you are terminated for cause, however, you will not
receive such continued coverage. Notwithstanding the foregoing,
nothing in this paragraph is intended to alter the at will status of
your employment or extend the term of this agreement.
	 
	 	 
	 

	 	For purposes hereof, “cause” shall mean that: (i) you committed an
act constituting a misdemeanor involving moral turpitude, fraud or
misrepresentation or a felony under the laws of the United States or
any state or political subdivision thereof; (ii) you violated laws,

-3-

 

	 	 	 
	 

	 	rules or regulations applicable to banks, investment banks,
broker-dealers, investment advisors or the banking, commodities,
futures or securities industries generally; (iii) you committed an
act constituting a breach of fiduciary duty, gross negligence or
willful misconduct; (iv) you engaged in conduct that violated
Sovereign’s internal policies or procedures and which is detrimental
to the business, reputation, character or standing of Sovereign or
any of its related entities; (v) you committed an act of fraud,
dishonesty or misrepresentation that is detrimental to the business,
reputation, character or standing of Sovereign or any of its related
entities; (vi) you engaged in a conflict of interest or
self-dealing; or (vii) after notice by Sovereign and a reasonable
opportunity to cure, you materially breached your obligations as set
forth in this agreement or you failed to perform your duties as an
employee of Sovereign.
	 
	 	 
	Confidential Information:

	 	In addition to any other applicable policies regarding Sovereign’s
confidential or proprietary information, you agree that during and
at any time after your employment with Sovereign, you will keep in
confidence and will not, except as specifically authorized in
writing by Sovereign or as otherwise required by law, disclose to
any third party or use for the benefit of any third party or
yourself any confidential or proprietary information about Sovereign
(or its related entities) which you acquired, developed or created
by reason of your employment, except for information that is or
becomes public other than through your breach of this paragraph.
	 
	 	 
	 

	 	You agree not to disclose the terms of this agreement to anyone
except your immediate family and your tax advisors or legal counsel,
except as otherwise required by law. You further agree to instruct
your immediate family and any tax advisors or legal counsel not to
disclose this agreement, except as otherwise required by law.
	 
	 	 
	 

	 	You further agree to deliver promptly to Sovereign upon the
termination of your employment for any reason or at any other time
upon the request of Sovereign all documents, materials and computer
media in any form (and all copies thereof) and all other property of
Sovereign (or its related entities).
	 
	 	 
	Notice Period:

	 	In the event that you resign from Sovereign, you agree to provide
Sovereign with 30 days notice of your resignation. Sovereign reserves
the right, in its sole discretion, to designate this period as either
a paid working or non-working notice period, or to reduce or waive
the notice period, in whole or in part.

-4-

 

	 	 	 
	Restrictive Covenants:

	 	In consideration of your continued employment, you agree that
beginning on the date that you execute this agreement and continuing
through 12 months after the last date of your employment, you will
not directly or indirectly solicit or induce, or cause others to
solicit or induce, any person who is employed or engaged by
Sovereign (or its related entities) (or any person who was employed
or engaged by Sovereign or its related entities within the last 12
months of your employment) to terminate his or her employment or
engagement with Sovereign (or its related entities) or to accept
employment with anyone or any entity other than Sovereign (or its
related entities). This restrictive covenant will apply in full
force and effect even in the event that you resign from or are
terminated, with or without cause as defined above, by Sovereign.
	 
	 	 
	Benefits:

	 	You will continue to be eligible to participate in Sovereign’s
benefits plans (e.g., health, dental, life and disability) and like
benefits (e.g., parking, car allowance, club dues) in which you are
currently participating and/or in which other senior management of
Sovereign generally are eligible to participate from time to time,
subject to their exclusions and limitations, as such plans and
benefits may be amended, terminated or replaced by Sovereign from
time to time in its sole discretion (provided that Sovereign will
provide prior notice where required by the applicable plan
documents).
	 
	 	 
	Temporary Housing:

	 	Sovereign will pay for the cost of temporary housing in the Greater
Boston Metropolitan Area for you in a two-bedroom furnished apartment
at Devonshire (or comparable arrangement) up to the later of (i)
December 31, 2010 or (ii) the date that you relocate your family to a
residence in Boston, provided that you remain an active employee of
Sovereign. If you choose to relocate your family permanently to
Boston, you will be eligible for relocation assistance in accordance
with Sovereign’s policies (except that any condition in such policies
that you must relocate within 12 months of hire will not apply).
Sovereign will provide you with “tax assistance” (within the meaning
of Sovereign’s Executive Relocation Policy) with respect to relocation
benefits that constitute taxable income and are eligible for such “tax
assistance” as provided for in its relocation policies for so long as
Sovereign is providing you such temporary housing. In addition,
regardless of whether you relocate, Sovereign will provide to you a
one-time “Miscellaneous Expense Allowance” in accordance with
Sovereign’s relocation policies (except that any condition in such
policies that you must relocate within 12 months of hire will not
apply), which will be payable prior to December 31, 2009.
Notwithstanding the foregoing, nothing in this paragraph is

-5-

 

	 	 	 
	 

	 	intended to alter the at will status of your employment or extend
the term of this agreement.
	 
	 	 
	No Mitigation:

	 	You shall not be required to seek other employment or to reduce
any benefit payable to you hereunder, and no benefit shall be
reduced by any compensation received by you from other employment.
	 
	 	 
	Modification:

	 	This agreement contains the entire understanding of the parties
regarding the subject matter hereof and no terms may be modified
except by a document signed by the parties and referring explicitly
hereto. You acknowledge that you have not relied on any oral or
written representations or understandings not explicitly contained
herein in executing this agreement.
	 
	 	 
	Governing Law:

	 	This agreement will be governed by and construed in accordance
with the laws of the State of Massachusetts (without regard to its
conflicts of law principles). If any portion of this agreement is
found to be unenforceable but such portion would be enforceable if
some part thereof were deleted or modified, then such portion will
apply with such deletion or modification as is necessary to make it
enforceable to the fullest extent permitted by law. If any such
portion cannot be modified to be enforceable, such portion will be
deemed severed from this agreement and will not affect the validity
or enforceability of the remainder of this agreement.

     Nothing in this agreement is intended to create a fixed term of employment at Sovereign. Your
employment at Sovereign is on an at will basis, meaning that Sovereign will be free to terminate
your employment at any time, with or without cause, and that you will be free to resign from your
employment with Sovereign at any time.

     If you accept this offer, please sign and date this letter in the space provided below and,
by no later than March 10, 2009, return a copy to me at Sovereign Bancorp, Inc., 75 State Street,
Boston, Massachusetts 02109.

Sincerely yours,

Sovereign Bancorp, Inc.

Thomas J. McAuliffe

Executive Vice President and Managing Director of Human Resources

	 	 	 	 	 	 	 	 	 	 	 
	Accepted:

	 	   /s/ Kirk Walters
 

 Kirk Walters
	 	 
	 	Date:
	 	2/12/09
 

	 	 

-6-

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