AMENDMENT
TO EMPLOYMENT AGREEMENT
AGREEMENT made the
18 th
of September 2007, by and
between SOVEREIGN BANCORP, INC., a Pennsylvania corporation
(“SBI”), and SALVATORE J. RINALDI, an individual (the
“Officer”).
WHEREAS, the
parties entered into an agreement dated August 7, 2007,
relating, among other things, to the Officer’s employment by
SBI (the “Employment Agreement”); and
WHEREAS, the
parties desire, to amend the Employment Agreement to comply with
Section 409A of the Internal Revenue Code of 1986, as amended,
by executing this document (the “Amendment”), effective
August 7, 2007.
NOW, THEREFORE,
the parties, intending to be legally bound hereby, further agree as
follows, effective August 7, 2007:
1. Section 3(b)
of the Employment Agreement is amended and restated to read as
follows—
(b) The
Officer’s employment under this Agreement may be terminated
at any time during the Employment Period without Cause, by action
of the Chief Executive Officer of the Bank, upon giving written
notice of such termination to the Officer at least thirty
(30) days prior to the date upon which such termination shall
take effect. If the Officer’s employment is terminated under
the provisions of this Section 3(b), then the Officer shall be
entitled to receive the compensation and benefits set forth in
Section 5. For purposes of this Section 3(b), (i) a
material adverse change in the Officer’s duties or
responsibilities following a Change in Control of Sovereign, or
(ii) a violation by the Bank of the last sentence of
Section 1 hereof shall be deemed to be a termination of the
Officer’s employment without Cause. Upon the occurrence of
any of the events listed in this Section 3(b), the Officer
shall be permitted, within ninety (90) days of the occurrence
of such event, to resign from employment by a notice in writing
delivered to the Bank, whereupon he will become entitled to receive
the compensation and benefits set forth in Section 5,
provided, however, that the Bank shall be given thirty
(30) days from the day it receives the notice of termination
to remedy any such event. Notwithstanding the foregoing, any
amounts payable upon a termination under this Section 3(b) shall be
paid only if the Officer actually terminates employment within two
(2) years following the initial existence of the events listed
in this Section.
2. Section 5(b)
of the Amended Employment Agreement is amended and restated to read
as follows—
1
(b) All payments
required by Section 5(a) shall be paid in a lump sum cash payment
not later than the thirtieth (30 th )
day following the date of termination of employment.
3. Section 5A(a)(ii)
of the Amended Employment Agreement is amended to read as
immediately set forth below—
a reduction in the
Officer’s base and/or annual target incentive compensation
below a level that was in effect immediately prior to the public
announcement;
4. Section 5A(a)(v)
of the Amended Employment Agreement is amended to read as
immediately set forth below—
(v) any material
breach of this Agreement by the Officer’s employer at any
relevant time, coupled with the failure to cure the same within
thirty (30) days after receipt of written notice of such
breach from the Officer; and
5. Section 5A(a)
of the Amended Employment Agreement is amended by adding a new
subsection (vi) at the end thereof reading as immediately set
forth below —
(vi) any reduction
in title or any material reduction in Officer’s
responsibilities or authority as they exist immediately prior to
the public announcement.
6. Section 5A(b)
of the Employment Agreement is amended and restated to read as
follows—
(b) Notice of
Termination. Upon the occurrence of an event of Good Reason
subject to Section 5A(a), the Officer may, within ninety
(90) days of the
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