Jan. 23--Sovereign Bancorp Inc. employees in Pennsylvania have won assurances that they will not lose their jobs for at least a year after the acquisition of the Philadelphia company by Banco Santander, Madrid.

The judgment was part of a settlement Wednesday in a consolidated, class-action shareholder suit against Sovereign.

Michael D. Donovan, founder of and lawyer with the Philadelphia firm of Donovan Searles, and lead counsel for the plaintiffs, said Thursday that the case argued that Sovereign shareholders were not due to receive full value for their shares in the acquisition, which was announced Oct. 13, and that Sovereign's board did not do enough to maximize shareholder value.

Sovereign shareholders are to receive $3.81 per share.

Donovan said Pennsylvania corporate law mandates that company boards must take into account the effect of the deal not only on shareholders, but employees, communities and other constituencies.

In the settlement, approved by Judge Mark I. Bernstein in Common Pleas Court of Philadelphia, the parties agreed that Sovereign's employees in Pennsylvania cannot be laid off within a year after the acquisition is consummated.

The settlement does not include previously announced job cuts relative to the deal: About 1,000 jobs are to be shed in the combination of the two banks, including 21 in Berks County.

Santander shareholders will vote on the deal Monday, and Sovereign's on Wednesday.

Sovereign employees in the state also would receive severance packages if terminated without cause after that year.

The severance benefits are in line with Sovereign's current policy, Donovan said, but added that Santander would have been under no requirement to continue them.

"My understanding is that they're generous severance benefits by industry standards," he said. "Sovereign had adopted them as an antitakeover measure about three four years ago."

Sovereign employees also will receive 100 shares of Santander American Depository Receipts in the settlement, he said.

Donovan said shareholders can opt out of the settlement and pursue damages, but would have to vote against the transaction.

Also, he said, the breakup fee to be paid if the transaction is not completed was reduced to $60 million from $95 million.

Donovan said: "I think it's extraordinary and also demonstrates that Santander has a commitment to the region and is going to attempt to be a good corporate citizen."

Final approval of the settlement is slated for April 2.

Sovereign released a statement saying: "All Sovereign employees will benefit from the proposed settlement agreement. ... Sovereign was born and raised in Pennsylvania and (is) currently based in Pennsylvania, so it made sense to provide some protections for Pennsylvania employees to respect both those employees and also the communities of which they are a part."

Sovereign shares closed Thursday at $2.05, down 13 cents on the New York Stock Exchange.

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