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Employment Agreement - Sovereign Bancorp Inc. and John Hamill

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                                    AGREEMENT
                                    ---------

     THIS AGREEMENT ("Agreement") made the 7th day of January, 2000, between
SOVEREIGN BANCORP, INC., a Pennsylvania corporation ("SBI"), and JOHN HAMILL, an
individual (the "Executive").

                                   WITNESSETH:
                                   -----------

     WHEREAS, Sovereign Bank, a federal savings bank (the "Bank") is a wholly
owned subsidiary of SBI; and

     WHEREAS, SBI and the Bank have agreed to purchase certain assets from Fleet
Financial Group, Inc., Fleet National Bank, Fleet Bank-NH and BankBoston, N.A.
pursuant to a Purchase and Assumption Agreement dated September 3, 1999 ("P&A
Agreement"); and

     WHEREAS, SBI and the Bank intend to operate the assets being acquired under
the P&A Agreement along with certain other assets as an unincorporated division
of the Bank to be know as Sovereign Bank New England (SBNE"); and

     WHEREAS, SBI and the Executive desire to enter in an agreement regarding,
among other things the employment of the Executive by SBI.

                                   AGREEMENT:
                                   ----------

     NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:

     1. Employment. SBI hereby employs the Executive, and the Executive hereby
        ----------
accepts employment with the SBI, on the terms and conditions set forth in this
Agreement.

     2. Duties of Employee. The Executive shall perform and discharge well and
        ------------------
faithfully such duties as an executive officer of SBI as may be assigned to the
Executive from time to time by the Chief Executive Officer of SBI. The Executive
shall be employed as Chairman and Chief Executive Officer of SBNE and Vice
Chairman of Sovereign Bank - Corporate Banking Strategy, and shall hold such
other titles as may be given to him from time to time by the Board of Directors
of SBI (or of any of its affiliated companies). The Executive shall devote his
full time, attention and energies to the business of SBNE and SBI (and its
affiliated companies) and shall not, during the Employment Period (as defined in
Section 3 hereof), be employed or involved in any other business activity,
whether or not such activity is pursued for gain, profit or other pecuniary
advantage; provided, however, that this Section 2 shall not be construed as
preventing the Executive from (a) investing the Executive's personal assets, (b)
acting as a member of the Board of Directors of any other corporation or as a
member of the Board of Trustees of any other organization, or (c) being involved
in any other activity with the prior approval of the Chairman or Chief Executive
Officer of SBI. In the event of any reduction in title or a substantial
reduction in the Executive's responsibilities or authority, including such
responsibilities and authority as the same may be increased at any time during
the

                                       1
<PAGE>

term of this Agreement, or the assignment to the Executive of duties
inconsistent with the Executive's status as Chairman and Chief Executive Officer
of SBNE and Vice Chairman of Sovereign Bank - Corporate Banking Strategy, then
the Executive may resign at any time thereafter during the term of this
Agreement, in which case Executive shall be entitled to receive the amounts and
benefits set forth in Section 7 hereof. The preceding sentence shall apply only
if such termination does not follow a Change in Control.

     3. Term of Employment. The Executive's employment under this Agreement
        ------------------
shall be for a period (the "Employment Period") commencing upon the date of this
Agreement and ending at the end of the term of this Agreement pursuant to
Section 16 hereof, unless the Executive's employment is sooner terminated in
accordance with Section 5 hereof or one of the following provisions:

        (a) The Executive's employment under this Agreement may be terminated
at any time during the Employment Period for "Cause" (as herein defined), by
action of the Board of Directors of SBI, upon giving notice of such termination
to the Executive at least fifteen (15) days prior to the date upon which such
termination shall take effect. As used in this Agreement, "Cause" means any of
the following events:

            (i) The Executive is convicted of or enters a plea of guilty or nolo
     contendere to a felony, a crime of falsehood, or a crime involving fraud or
     moral turpitude, or the actual incarceration of the Executive for a period
     of forty-five (45) consecutive days;

            (ii) The Executive willfully fails to follow the lawful instructions
     of the Chairman, Chief Executive Officer or Board of Directors of SBI after
     the Executive's receipt of written notice of such instructions, other than
     a failure resulting from the Executive's incapacity because of physical or
     mental illness; or

            (iii) Any government regulatory agency recommends or orders, in
     either case in writing, that SBI terminate the employment of the
     Executive or relieve him of his duties.

If the Executive's employment is terminated under the provisions of this Section
3(a), then all rights of the Executive under Section 4 hereof shall cease as of
the effective date of such termination.

        (b) The Executive's employment under this Agreement may be terminated
at any time during the Employment Period without "Cause" (as defined in Section
3(a) hereof), by action of the Board of Directors of SBI, upon giving notice of
such termination to the Executive at least thirty (30) days prior to the date
upon which such termination shall take effect. If the Executive's employment is
terminated under the provisions of this Section 3(b), then the Executive shall
be entitled to receive the compensation and benefits set forth in Section 6 or
Section 7 hereof, whichever shall be applicable. To the extent the Executive
becomes entitled to and receives the payment and benefits set forth in Section 6
or 7, such payments and benefits shall constitute liquidated damages for any
possible breach of this Agreement by SBI or the Bank and shall represent the
maximum extent of liability therefore that the Executive can claim against SBI
or any of its affiliates, including the Bank.

                                       2
<PAGE>

        (c) If the Executive retires or dies, the Executive's employment under
this Agreement shall be deemed terminated as of the date of the Executive's
retirement or death, and all rights of the Executive under Section 4 hereof
shall cease as of the date of such termination and any benefits payable to the
Executive shall be determined in accordance with the retirement and insurance
programs of SBI then in effect.

        (d) If the Executive is incapacitated by accident, sickness, or
otherwise so as to render the Executive mentally or physically incapable of
performing the services required of the Executive under Section 2 of this
Agreement for a continuous period of six (6) months, then, upon the expiration
of such period or at any time thereafter, by action of the Board of Directors of
SBI, the Executive's employment under this Agreement may be terminated
immediately upon giving the Executive notice to that effect. If the Executive's
employment is terminated under the provisions of this Section 3(d), then all
rights of the Executive under Section 4 hereof shall cease as of the last
business day of the week in which such termination occurs and any benefits
payable to the Executive shall be determined in accordance with the retirement
and insurance programs of SBI then in effect.

     4. Employment Period Compensation.
        ------------------------------

        (a) Salary. For services performed by the Executive under this
            ------
Agreement, SBI shall pay (or cause to be paid to) the Executive a salary, during
the Employment Period, at the rate of Three Hundred Thousand Dollars ($300,000)
per year, payable at the same times as salaries are payable to other executive
employees of SBI. SBI may, from time to time, increase the Executive's salary
(or cause it to be increased), and any and all such increases shall be deemed to
constitute amendments to this Section 4(a) to reflect the increased amounts,
effective as of the dates established for such increases by the Board of
Directors of SBI in the resolutions authorizing such increases.

        (b) Bonus. Contingent upon SBI achieving the annual objectives
            -----
established for it by the Chief Executive Officer or Board of Directors of SBI,
the Executive, during the Employment Period, shall be eligible for a bonus to be
awarded by the Board of Directors of SBI of up to sixty percent (60%) of the
Executive's salary under this Agreement. In addition, SBI may, from time to
time, pay such other bonus or bonuses to the Executive as SBI, in its sole
discretion, deems appropriate. The payment of any such bonuses shall not reduce
or otherwise affect any other obligation of SBI to the Executive provided for in
this Agreement.

        (c) Other Benefits. SBI will provide the Executive, during the
            --------------
Employment Period, with insurance, vacation, retirement, and other fringe
benefits in the aggregate not less favorable than those received by other
comparable executive employees of SBI.

        (d) Stock Options. As of the effective date of this Agreement, the
            -------------
Executive shall receive a non-qualified stock option grant of 75,000 shares of
SBI common stock at the strike price of $7.34 per share. The right to exercise
one hundred percent (100%) of such options (75,000 shares) shall vest in the
Executive upon the third anniversary of this Agreement, provided that if this
Agreement is terminated prior to such third anniversary date for any reason
other than as specified in Sections 3(a), (c) or (d), or as provided in Section
7(c) hereof, all of the

                                       3

<PAGE>

75,000 options shall immediately vest. In addition, upon a "Change in Control",
as defined in Section 5(b) hereof, all of the options not previously vested
shall immediately vest.

        (e) Automotive Allowance. The Executive shall receive a monthly
            --------------------
automobile allowance of $600.00, and shall be reimbursed at the rate of $0.12
per mile for all mileage, other than normal commuting, resulting from the
Executive's use of his vehicle in the course of discharging his duties as
Chairman and Chief Executive Officer of SBNE and Vice Chairman of Sovereign Bank
- Corporate Banking Strategy.

        (f) Parking. SBI will provide the Executive, at its cost, with a
            -------
parking space at 75 State Street, Boston, MA.

     5. Resignation of the Executive for Good Reason.
        --------------------------------------------

        (a) The Executive may resign for "Good Reason" (as herein defined) at
any time during the three year period following a "Change in Control" (as
defined in Section 5(b) hereof), as hereinafter set forth. As used in this
Agreement, "Good Reason" means any of the following:

              (i) Any reduction in title or a substantial reduction in the
          Executive's responsibilities or authority, including such
          responsibilities and authority as the same may be increased at any
          time during the term of this Agreement, or the assignment to the
          Executive of duties inconsistent with the Executive's status as
          Chairman and Chief Executive Officer of SBNE and Vice Chairman
          Sovereign Bank - Corporate Banking Strategy;

               (ii) Any reassignment of the Executive which requires the
          Executive to move his principal residence;

               (iii) Any removal of the Executive from office or any adverse
          change in the terms and conditions of the Executive's employment,
          except for any termination of the Executive's employment under the
          provisions of Section 3(a) hereof;

               (iv) Any reduction in the Executive's annual base salary as in
          effect on the date hereof or as the same may be increased from time to
          time;

               (v) Any failure of SBI to provide the Executive with benefits at
          least as favorable as those enjoyed by the Executive under any of the
          retirement, life insurance, medical, health and accident, disability
          or other employee plans of SBI in which the Executive participated at
          the time of the Change in Control, or the taking of any action that
          would materially reduce any of such benefits in effect at the time of
          the Change in Control unless such reduction is part of a reduction
          applicable to all employees;

               (vi) Any failure to obtain a satisfactory agreement from any
          successor to assume and agree to perform this Agreement, as
          contemplated in Section 15 hereof; or

                                       4
<PAGE>

              (vii) Any breach of this Agreement of any nature whatsoever on
          the part of SBI.

At the option of the Executive, exercisable by the Executive within 90 days
after the occurrence of the event constituting "Good Reason" the Executive may
resign from employment under this Agreement by a notice in writing (the "Notice
of Termination") delivered to SBI (or its successor) and the provisions of
Section 6 hereof shall thereupon apply.

        (b) As used in this Agreement, "Change in Control" means a change of
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as enacted and in force on the
date hereof, whether or not SBI is then subject to such reporting requirement;
provided, however, that, without limitation, such a Change in Control shall be
deemed to have occurred if:

              (i) Any "person" (including a group acting in concert, as the
          term "person" is defined in Section 13(d) of the Exchange Act, as
          enacted and in force on the date hereof) becomes the beneficial owner"
          (as that term is defined in Rule 13d-3, as enacted and in force on the
          date hereof, under the Exchange Act) of securities of SBI representing
          19.9% or more of the combined voting power of SBI's securities then
          outstanding;

              (ii) There occurs a merger, consolidation or other business
          combination or reorganization to which SBI or the Bank is a party,
          whether or not approved in advance by the Board of Directors of SBI or
          the Bank (as the case may be) in which (A) the members of the Board of
          Directors of SBI or the Bank (as the case may be) immediately
          preceding the consummation of such transaction do not constitute a
          majority of the members of the Board of Directors of the resulting
          corporation and of any parent corporation thereof immediately after
          the consummation of such transaction, and (B) the shareholders of the
          acquired corporation immediately before such transaction do not hold
          51% or more of the voting power of securities of the resulting
          corporation;

              (iii) There occurs a sale, exchange, transfer, or other
          disposition of substantially all of the assets of SBI or the Bank to
          another entity, whether or not approved in advance by the Board of
          Directors of SBI;

               (iv) A plan of liquidation or dissolution, other than pursuant to
          bankruptcy or insolvency, is adopted; or

               (v) During a period of two consecutive years, individuals who at
          the beginning of such period constitute the Board of Directors of SBI
          cease to constitute a majority of such Board (unless the election or
          nomination of each new director was approved by a vote of at least 51%
          of directors who were directors at the beginning of such period).

     6. Rights in Event of Termination of Employment After Change in Control. In
        --------------------------------------------------------------------
the event that Executive resigns from employment for Good Reason following a
Change in Control, by delivery of a Notice of Termination to SBI, or Executive's
employment is terminated

                                       5
<PAGE>

by SBI without Cause after a Change in Control, Executive shall be absolutely
entitled to receive the amounts and benefits set forth in this section.

        (a) For a period of three (3) years from the date of termination of
employment, Executive shall be paid his Current Compensation at Termination.

             (i) For purposes of this section, the term "Current Compensation
          at Termination" means the sum of (A) the greatest of the Executive's
          base salary as of the date of termination of employment (or prior to
          any reduction thereof resulting in Good Reason for resignation) and
          for any of the three (3) immediately preceding calendar years, and (B)
          a dollar amount equal to the highest of the awards Executive received
          as bonuses in any of the three (3) calendar years preceding the year
          in which the termination of employment occurs.

             (ii) Amounts required to be paid to Executive under Section 6(a)
          shall be paid in equal monthly installments, beginning thirty (30)
          days following the date of termination of employment.

        (b) For a period of three (3) years from the date of termination of
employment, Executive shall receive a continuation of all life, disability,
medical insurance and other normal welfare benefits in effect with respect to
Executive during the two (2) calendar years prior to his termination of
employment, or, if SBI cannot provide such benefits because Executive is no
longer an employee, a dollar amount equal to the cost after-tax to Executive of
obtaining such benefits (or substantially similar benefits).

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

                                       6
<PAGE>

     7. Rights in Event of Termination of Employment Without Cause in Absence of
        ------------------------------------------------------------------------
Change in Control. In the event that Executive's employment is terminated by SBI
-----------------
without Cause and no Change in Control shall have occurred at the date of such
termination, Executive shall be entitled to receive the amounts and benefits set
forth in this section.

        (a) For a period of the greater of one (1) year from the date of
termination of employment or the remaining term of this Agreement, Executive
shall be paid his Current Compensation at Termination.

            (i) For purposes of this section, the term "Current Compensation
          at Termination" means the sum of (A) Executive's base salary as of the
          date of termination of employment (or prior to any reduction thereof
          preceding termination of employment), and (B) a dollar amount equal to
          the average of the awards Executive received as bonuses for each of
          the three (3) calendar years preceding the year in which the
          termination of employment occurs.

            (ii) Amounts required to be paid to Executive under Section 7(a)
          shall be paid in equal monthly installments, beginning thirty (30)
          days following the date of termination of employment.

        (b) For a period of the greater of one (1) year from the date of
termination of employment or the remaining term of this Agreement, Executive
shall receive a continuation of all life, disability, medical insurance and
other normal welfare benefits in effect with respect to Executive during the two
(2) calendar years prior to his termination of employment, or, if SBI cannot
provide such benefits because Executive is no longer an employee, a dollar
amount equal to the cost after-tax to Executive of obtaining such benefits (or
substantially similar benefits).

        (c) In the event the Executive's employment is terminated by SBI as a
result of the purchase of assets by SBI under the P&A Agreement not being
completed, the period of payment to the Executive under Section 7(a) and the
period of benefits continuation under Section 7(b) shall be limited to twelve
(12) months following the date of termination of employment. In addition, the
stock option grant pursuant to Section 4(d) shall become null and void.

        (d) In the event that the amounts and benefits payable under this
Agreement, when added to other amounts and benefits which may become payable to
the Executive by SBI and any affiliated company, are such that he becomes
subject to the excise tax provisions of Code Section 4999, SBI shall pay him
such additional amount or amounts as will result in his retention (after the
payment of all federal, state and local excise, employment and income taxes on
such payments and the value of such benefits) of a net amount equal to the net
amount he would have retained had the initially calculated payments and benefits
been subject only to income and employment taxation. For purposes of the
preceding sentence, the Executive shall be deemed to be subject to the highest
marginal federal, relevant state and relevant local tax rates. All calculations
required to be made under this subsection shall be made by SBI's independent
public accountants, subject to the right of Executive's representative to review
the same. All such amounts required to be paid shall be paid at the time any
withholding may be required under applicable law, and any additional amounts to
which the Executive may be

                                       7

<PAGE>

entitled shall be paid or reimbursed no later than fifteen (15) days following
confirmation of such amount by SBI's accountants. In the event any amounts paid
hereunder are subsequently determined to be in error because estimates were
required or otherwise, the parties agree to reimburse each other to correct such
error, as appropriate, and to pay interest thereon at the applicable federal
rate (as determined under Code Section 1274 for the period of time such
erroneous amount remained outstanding and unreimbursed). The parties recognize
that the actual implementation of the provisions of this subsection are complex
and agree to deal with each other in good faith to resolve any questions or
disagreements arising hereunder.

        (e) Executive shall not be required to mitigate the amount of any
payment provided for in this section by seeking employment or otherwise.

     8. Covenant Not to Compete; Non-Solicitation of Customers and Employees. If
        --------------------------------------------------------------------
Executive voluntarily leaves employment hereunder during the term of this
Agreement, Executive agrees that, for a period of twelve (12) months following
the date of the termination of his employment, Executive shall not work directly
or indirectly for or on behalf of another bank that offers products or services
similar or equivalent to those offered by SBNE in the geographic area in which
SBI or its affiliates, including the Bank, are conducting such business at the
date of termination of Executive's employment. Nor during such period shall
Executive solicit customers or employees of SBI or any of its affiliates,
including the Bank, to cease doing business, in whole or in part, or cease
employment with SBI, or any of its affiliates, including the Bank.

     9. Arbitration. SBI and the Executive recognize that in the event a dispute
        -----------
should arise between them concerning the interpretation or implementation of
this Agreement, lengthy and expensive litigation will not afford a practical
resolution of the issues within a reasonable period of time. Consequently, each
party agrees that all disputes, disagreements and questions of interpretation
concerning this Agreement are to be submitted for resolution to the American
Arbitration Association (the "Association") in Philadelphia, Pennsylvania. SBI,
or the Executive, may initiate an arbitration proceeding at any time by giving
notice to the others in accordance with the rules of the Association. The
Association shall designate a single arbitrator to conduct the proceeding, but
SBI, and the Executive, may, as a matter of right, require the substitution of a
different arbitrator chosen by the Association. Each such right of substitution
may be exercised only once. The arbitrator shall not be bound by the rules of
evidence and procedure of the courts of the Commonwealth of Pennsylvania but
shall be bound by the substantive law applicable to this Agreement. The decision
of the arbitrator, absent fraud, duress, incompetence or gross and obvious error
of fact, shall be final and binding upon the parties and shall be enforceable in
courts of proper jurisdiction. Following written notice of a request for
arbitration, SBI, and the Executive, shall be entitled to an injunction
restraining all further proceedings in any pending or subsequently filed
litigation concerning this Agreement, except as otherwise provided herein.

     10. Legal Expenses. SBI shall pay to the Executive all reasonable legal
         --------------
fees and expenses when incurred by the Executive in successfully obtaining or
enforcing any right or benefit provided by this Agreement.

     11. Notices. Any notice required or permitted to be given under this
         -------
Agreement shall be deemed properly given if in writing and if mailed by
registered or certified

                                       8

<PAGE>

mail, postage prepaid with return receipt requested, to the residence of the
Executive, in the case of notices to the Executive, and to the principal office
of SBI, in the case of notices to SBI.

     12. Waiver. No provision of this Agreement may be modified, waived, or
         ------
discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by the Executive and an executive officer of SBI specifically
designated by the Board of Directors of SBI. No waiver by any party hereto at
any time of any breach by any other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.

     13. Assignment. This Agreement shall not be assignable by either party
         ----------
hereto, except by SBI to any successor in interest to the business of SBI.

     14. Entire Agreement. This Agreement contains the entire agreement of the
         ----------------
parties relating to the subject matter of this Agreement and supersedes any
prior agreement of the parties.

     15. Successors, Binding Agreement.
         -----------------------------
        (a) SBI will require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business and/or assets of SBI to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that SBI would be required
to perform it if no such succession had taken place. Failure by SBI to obtain
such assumption and agreement prior to the effectiveness of any such succession
shall constitute a breach of this Agreement and the provisions of Section 6
hereof shall apply. As used in this Agreement, "SBI" shall mean SBI as
hereinbefore defined and any successor to the respective business and/or assets
of SBI as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

        (b) This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
heirs, distributees, devisees, and legatees. If the Executive should die while
any amount is payable to the Executive under this Agreement if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee, or, if there is no such designee, to the Executive's
estate.

     16. Termination.
         -----------
        (a) Unless the Executive's employment is terminated pursuant to the
provisions of Section 3 or Section 5 hereof, the term of this Agreement shall:

             (i) Initially be a term commencing on January 7, 2000, and ending
          on January 6, 2003; and

             (ii) Thereafter for such term as the parties mutually agree.

        (b) Any termination of the Executive's employment under this Agreement
or of this Agreement shall not affect the provisions of Sections 6, 7 or 8
hereof which

                                       9

<PAGE>

shall survive any such termination and remain in full force and effect in
accordance with their respective terms.

     17. Validity. The invalidity or unenforceability of any provision of this
         --------
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

     18. Applicable Law. This Agreement shall be governed by and construed in
         --------------
accordance with the domestic laws (but not the law of conflict of laws) of the
Commonwealth of Pennsylvania.

     19. Headings. The headings of the Sections of this Agreement are for
         --------
convenience only and shall not control or affect the meaning or construction or
limit the scope or intent of any of the provisions of this Agreement.

     20. Effective Date; Termination of Prior Agreement. This Agreement shall
         ----------------------------------------------
become effective immediately, upon the execution and delivery of this Agreement
by the parties hereto. Upon the execution and delivery of this Agreement by the
parties hereto, any prior agreement relating to the subject matter hereof, shall
be automatically terminated and be of no further force or effect.

     21. Guaranty and SBI and Bank Representation. The Bank hereby irrevocably
         ----------------------------------------
and unconditionally guarantees to the Executive the full and timely performance
by SBI of each and every obligation of SBI set forth in this Agreement. SBI and
the Bank represent to the Executive that this Agreement has been fully
authorized by all necessary corporate action and is fully enforceable in
accordance with its terms.

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

                                                     /S/ SOVEREIGN BANCORP, INC.

                                                     /s/ JOHN HAMILL

Agreed to as of the date of this Agreement.

/S/ SOVEREIGN BANK