EXHIBIT 10.1
WASHINGTON TRUST BANCORP, INC.
2003 STOCK INCENTIVE PLAN AS AMENDED AND RESTATED
 
Section 1:  General Purpose Of The Plan; Definitions
The name of the plan is the Washington Trust Bancorp, Inc. 2003 Stock Incentive
Plan, as amended and restated (the “Plan”).  The purpose of the Plan is to
encourage and enable the officers, employees, Non-Employee Directors and other
key persons (including consultants) of Washington Trust Bancorp, Inc. (the
“Company”) and its Subsidiaries upon whose judgment, initiative and efforts the
Company largely depends for the successful conduct of its business to acquire a
proprietary interest in the Company.  It is anticipated that providing such
persons with a direct stake in the Company’s welfare will assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company’s behalf and strengthening their desire to remain
with the Company.
 
The following terms shall be defined as set forth below:
 
“Act” means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
 
“Administrator” is defined in Section 2(a).
 
“Award” or “Awards,” except where referring to a particular category of grant
under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Deferred Stock Awards, Restricted Stock
Awards, Unrestricted Stock Awards, Dividend Equivalent Rights, Cash-Based Awards
and Performance Share Awards.
 
“Board” means the Board of Directors of the Company.
 
“Cash-Based Award” means an Award granted pursuant to Section 10 entitling the
recipient to receive a cash-denominated payment.
 
“Change of Control” is defined in Section 20.
 
“Code” means the Internal Revenue Code of 1986, as amended, and any successor
Code, and related rules, regulations and interpretations.
 
“Committee” means the Compensation and Human Resources Committee of the Board or
such other committee of not less than three members of the Board appointed by
the Board to administer the Plan, provided that members of such Committee must
be “Non-Employee Directors” within the meaning of Rule 16b-3(b) promulgated
under the Exchange Act.
 
“Covered Employee” means an employee who is a “Covered Employee” within the
meaning of Section 162(m) of the Code.
 
“Deferred Stock Award” means Awards granted pursuant to Section 8.
 
“Dividend Equivalent Right” means Awards granted pursuant to Section 13.
 
“Effective Date” means the date on which the restated Plan is approved by
stockholders as set forth in Section 22.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
 
“Fair Market Value” of the Stock on any given date means the fair market value
of the Stock determined in good faith by the Administrator; provided, however,
that if the Stock is admitted to quotation on the National Association of
Securities Dealers Automated Quotation System (“NASDAQ”), NASDAQ National System
or a national securities exchange, the determination shall be made by reference
to market quotations.  If there are no market
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quotations for such date, the determination shall be made by reference to the
last date preceding such date for which there are market quotations.
 
“Incentive Stock Option” means any Stock Option designated and qualified as an
“incentive stock option” as defined in Section 422 of the Code.
 
“Non-Employee Director” means a member of the Board who is not also an employee
of the Company or any Subsidiary.
 
“Non-Qualified Stock Option” means any Stock Option that is not an Incentive
Stock Option.
 
“Option” or “Stock Option” means any option to purchase shares of Stock granted
pursuant to Section 5.
 
“Performance-Based Award” means any Restricted Stock Award, Deferred Stock
Awards, Performance Share Award or Cash-Based Award granted to a Covered
Employee that is intended to qualify as “performance-based compensation” under
Section 162(m) of the Code and the regulations promulgated thereunder.
 
“Performance Criteria” means the criteria that the Administrator selects for
purposes of establishing the Performance Goal or Performance Goals for an
individual for a Performance Cycle.  The Performance Criteria (which shall be
applicable to the organizational level specified by the Administrator,
including, but not limited to, the Company or a unit, division, group, or
Subsidiary of the Company) that will be used to establish Performance Goals are
limited to the following:  core return on equity, return on equity, core
earnings per share, earnings per share, core earnings per share growth, earnings
per share growth, earnings before interest, taxes, depreciation and
amortization, net income (loss) (either before or after interest, taxes,
depreciation and/or amortization), changes in the market price of the Stock,
economic value-added, operating income (loss), cash flow (including, but not
limited to, operating cash flow and free cash flow), return on capital, assets,
or investment, total stockholder returns, revenues, net new assets under
management, gross or net profit levels, productivity, expense, margins, any of
which may be measured either in absolute terms or as compared to any incremental
increase or as compared to results of a peer group.
 
“Performance Cycle” means one or more periods of time, which may be of varying
and overlapping durations, as the Administrator may select, over which the
attainment of one or more Performance Criteria will be measured for the purpose
of determining a grantee’s right to and the payment of a Restricted Stock Award,
Deferred Stock Awards, Performance Share Award or Cash-Based Award.  Each such
period shall not be less than 12 months in the normal course.
 
“Performance Goals” means, for a Performance Cycle, the specific goals
established in writing by the Administrator for a Performance Cycle based upon
the Performance Criteria.
 
“Performance Share Award” means an Award granted pursuant to Section 11
entitling the recipient to acquire shares of Stock upon the attainment of
specified Performance Goals.
 
“Restricted Stock Award” means Awards granted pursuant to Section 7.
 
“Sale Event” shall mean (i) the sale of all or substantially all of the assets
of the Company on a consolidated basis to an unrelated person or entity, (ii) a
merger, reorganization or consolidation in which the outstanding shares of Stock
are converted into or exchanged for securities of the successor entity and the
holders of the Company’s outstanding voting power immediately prior to such
transaction do not own a majority of the outstanding voting power of the
successor entity immediately upon completion of such transaction, or (iii) the
sale of all of the Stock of the Company to an unrelated person or entity.
 
“Section 409A” means Section 409A of the Code and the regulations and other
guidance promulgated thereunder.
 
“Stock” means the Common Stock, par value $.0625 per share, of the Company,
subject to adjustments pursuant to Section 3.
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“Stock Appreciation Right” means any Award granted pursuant to Section 6.
 
“Subsidiary” means any corporation or other entity (other than the Company) in
which the Company has a controlling interest, either directly or indirectly.
 
“Unrestricted Stock Award” means Awards granted pursuant to Section 9.
 
Section 2:  Administration Of Plan; Administrator Authority To Select Grantees
And Determine Awards
(a)
Committee.  The Plan shall be administered by either the Board or the Committee
(in either case, the “Administrator”), provided that the amount, timing and
terms of grants of Awards to Non-Employee Directors shall be determined by the
Committee.

 
 (b) 
Powers of Administrator.  The Administrator shall have the power and authority
to grant Awards consistent with the terms of the Plan, including the power and
authority:

  (i) to select the individuals to whom Awards may from time to time be granted;
        (ii) to determine the time or times of grant, and the extent, if any, of
Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Deferred Stock Awards, Unrestricted Stock Awards,
Dividend Equivalent Rights,  Cash-based Awards, Performance Share Awards and any
combination of the foregoing, granted to any one or more grantees;         (iii)
to determine the number of shares of Stock to be covered by any Award;        
(iv)
to determine and modify from time to time the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award, which
terms and conditions may differ among individual Awards and grantees, and to
approve the form of written instruments evidencing the Awards;
        (v)
to accelerate at any time the exercisability or vesting of all or any portion of
any Award provided that the Administrator generally shall not exercise such
discretion to accelerate Awards subject to Sections 7 and 8 except in the event
of the grantee’s death, disability or retirement, or a Change of Control
(including a Sale Event);
     
 
(vi)
subject to the provisions of Section 5(c), to extend at any time the period in
which Stock Options may be exercised;
        (vii)
to determine at any time whether, to what extent, and under what circumstances
distribution or the receipt of Stock and other amounts payable with respect to
an Award shall be deferred either automatically or at the election of the
grantee and whether and to what extent the Company shall pay or credit amounts
constituting interest (at rates determined by the Administrator) or dividends or
deemed dividends on such deferrals; and
        (viii)
at any time to adopt, alter and repeal such rules, guidelines and practices for
administration of the Plan and for its own acts and proceedings as it shall deem
advisable; to interpret the terms and provisions of the Plan and any Award
(including related written instruments); to make all determinations it deems
advisable for the administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the administration of the
Plan.

 
All decisions and interpretations of the Administrator shall be binding on all
persons, including the Company and Plan grantees.
 
(c) 
Delegation of Authority to Grant Awards.  The Administrator, in its discretion,
may delegate to the Chief Executive Officer of the Company all or part of the
Administrator’s authority and duties with respect to the granting of Awards at
Fair Market Value, to individuals who are not subject to the reporting and other
provisions of Section 16 of the Exchange Act or Covered Employees.  Any such
delegation by the Administrator shall include a limitation as to the amount of
Awards that may be granted during the period of the delegation and shall contain
guidelines as to the determination of the exercise price of any Stock Option or
Stock Appreciation Right, the conversion ratio or price of other Awards and the
vesting criteria.  The

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  Administrator may revoke or amend the terms of a delegation at any time but
such action shall not invalidate any prior actions of the Administrator’s
delegate or delegates that were consistent with the terms of the Plan.

 
(d) 
Indemnification.  Neither the Board nor the Committee, nor any member of either
or any delegatee thereof, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan,
and the members of the Board and the Committee (and any delegatee thereof) shall
be entitled in all cases to indemnification and reimbursement by the Company in
respect of any claim, loss, damage or expense (including, without limitation,
reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent
permitted by law and/or under any directors’ and officers’ liability insurance
coverage which may be in effect from time to time.

 
Section 3:  Stock Issuable Under The Plan; Mergers; Substitution
(a)
Stock Issuable.  The maximum number of shares of Stock reserved and available
for issuance under the Plan shall be 1,200,000, the sum of the original reserved
shares of 600,000 shares plus an additional 600,000 shares; provided that not
more than 400,000 shares shall be issued in the form of Awards other than Stock
Options or Stock Appreciation Rights.  For purposes of this limitation, the
shares of Stock underlying any Awards that are forfeited, canceled or otherwise
terminated (other than by exercise) shall be added back to the shares of Stock
available for issuance under the Plan.  Notwithstanding the foregoing, the
following shares shall not be added to the shares authorized for grant under the
Plan:  (i) shares tendered or held back upon exercise of an Option or settlement
of an Award to cover the exercise price or tax withholding, (ii) shares subject
to a Stock Appreciation Right that are not issued in connection with the stock
settlement of the Stock Appreciation Right upon exercise thereof, and (iii)
shares reacquired by the Company on the open market or otherwise using cash
proceeds from the exercise of options.  Subject to such overall limitation,
shares of Stock may be issued up to such maximum number pursuant to any type or
types of Award; provided, however, that Stock Options or Stock Appreciation
Rights with respect to no more than 100,000 shares of Stock may be granted to
any one individual grantee during any one calendar year period.  The shares
available for issuance under the Plan may be authorized but unissued shares of
Stock or shares of Stock reacquired by the Company and held in its treasury.

 
(b) 
Changes in Stock.  Subject to Section 3(c) hereof, if, as a result of any
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar change in the Company’s capital stock, the
outstanding shares of Stock are increased or decreased or are exchanged for a
different number or kind of shares or other securities of the Company, or
additional shares or new or different shares or other securities of the Company
or other non-cash assets are distributed with respect to such shares of Stock or
other securities, or, if, as a result of any merger or consolidation, sale of
all or substantially all of the assets of the Company, the outstanding shares of
Stock are converted into or exchanged for a different number or kind of
securities of the Company or any successor entity (or a parent or subsidiary
thereof), the Administrator shall make an appropriate or proportionate
adjustment in (i) the maximum number of shares reserved for issuance under the
Plan, including the maximum number of shares that may be issued in the form of
full value Awards, (ii) the number of Stock Options or Stock Appreciation Rights
that can be granted to any one individual grantee, (iii) the number and kind of
shares or other securities subject to any then outstanding Awards under the
Plan, (iv) the repurchase price per share subject to each outstanding Restricted
Stock Award, and (v) the price for each share subject to any then outstanding
Stock Options and Stock Appreciation Rights under the Plan, without changing the
aggregate exercise price (i.e., the exercise price multiplied by the number of
Stock Options and Stock Appreciation Rights) as to which such Stock Options and
Stock Appreciation Rights remain exercisable.  The Administrator shall also make
equitable or proportionate adjustments in the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration cash dividends paid other than in the ordinary course or
any other extraordinary corporate event.  The adjustment by the Administrator
shall be final, binding and conclusive.  No fractional shares of Stock shall be
issued under the Plan resulting from any such adjustment, but the Administrator
in its discretion may make a cash payment in lieu of fractional shares.

 
(c) 
Mergers and Other Transactions.  In the case of and subject to the consummation
of a Sale Event, all Options and Stock Appreciation Rights that are not
exercisable immediately prior to the effective time of the Sale Event shall
become fully exercisable as of the effective time of the Sale Event and all
other Awards with conditions and restrictions relating solely to the passage of
time and continued employment shall become fully vested and nonforfeitable as of
the effective time of the Sale Event, except as the Administrator may otherwise
specify with respect to particular Awards.  Upon the effective time of the Sale
Event, the Plan and all outstanding Awards granted hereunder shall terminate,
unless provision is made in connection with the Sale Event in the sole

 
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  discretion of the parties thereto for the assumption or continuation of Awards
theretofore granted by the successor entity, or the substitution of such Awards
with new Awards of the successor entity or parent thereof, with appropriate
adjustment as to the number and kind of shares and, if appropriate, the per
share exercise prices, as such parties shall agree (after taking into account
any acceleration hereunder).  In the event of such termination, each grantee
shall be permitted, within a specified period of time prior to the consummation
of the Sale Event as determined by the Administrator, to exercise all
outstanding Options and Stock Appreciation Rights held by such grantee,
including those that will become exercisable upon the consummation of the Sale
Event; provided, however, that the exercise of Options and Stock Appreciation
Rights not exercisable prior to the Sale Event shall be subject to the
consummation of the Sale Event.

 
Notwithstanding anything to the contrary in this Section 3(c), in the event of a
Sale Event pursuant to which holders of the Stock of the Company will receive
upon consummation thereof a cash payment for each share surrendered in the Sale
Event, the Company shall have the right, but not the obligation, to make or
provide for a cash payment to the grantees holding Options and Stock
Appreciation Rights, in exchange for the cancellation thereof, in an amount
equal to the difference between (A) the value as determined by the Administrator
of the consideration payable per share of Stock pursuant to the Sale Event (the
“Sale Price”) times the number of shares of Stock subject to outstanding Options
and Stock Appreciation Rights (to the extent then exercisable at prices not in
excess of the Sale Price) and (B) the aggregate exercise price of all such
outstanding Options and Stock Appreciation Rights.
 
(d)
Substitute Awards.  The Administrator may grant Awards under the Plan in
substitution for stock and stock based awards held by employees, directors or
other key persons of another corporation in connection with the merger or
consolidation of the employing corporation with the Company or a Subsidiary or
the acquisition by the Company or a Subsidiary of property or stock of the
employing corporation.  The Administrator may direct that the substitute awards
be granted on such terms and conditions as the Administrator considers
appropriate in the circumstances.  Any substitute Awards granted under the Plan
shall not count against the share limitation set forth in Section 3(a).

 
Section 4:  Eligibility
Grantees under the Plan will be such full or part-time officers and other
employees, Non-Employee Directors and key persons (including consultants and
prospective employees) of the Company and its Subsidiaries as are selected from
time to time by the Administrator in its sole discretion.
 
Section 5:  Stock Options
(a) 
Grant of Stock Options.  Any Stock Option granted under the Plan shall be in
such form as the Administrator may from time to time approve.

 
Stock Options granted under the Plan may be either Incentive Stock Options or
Non-Qualified Stock Options.  Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is a “subsidiary corporation”
within the meaning of Section 424(f) of the Code.  To the extent that any Option
does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option.
 
No Incentive Stock Option shall be granted under the Plan after February 19,
2019.
 
The Administrator in its discretion may grant Stock Options to eligible
employees, Non-Employee Directors and key persons of the Company or any
Subsidiary.  Stock Options granted pursuant to this Section 5 shall be subject
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of the Plan, as the
Administrator shall deem desirable.  If the Administrator so determines, Stock
Options may be granted in lieu of cash compensation at the optionee’s election,
subject to such terms and conditions as the Administrator may establish.
 
(b) 
Exercise Price.  The exercise price per share for the Stock covered by a Stock
Option granted pursuant to Section 5(a) shall be determined by the Administrator
at the time of grant but shall not be less than 100 percent of the Fair Market
Value on the date of grant in the case of Incentive Stock Options or
Non-Qualified Stock Options (other than options granted in lieu of cash
compensation).  If an employee owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10 percent of the
combined voting power of all classes of stock of the Company or any parent or
subsidiary corporation and an Incentive Stock Option is granted to such
employee, the option price of such Incentive Stock Option shall be not less than
110 percent of the Fair Market Value on the grant date.

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(c)
Option Term.  The term of each Stock Option shall be fixed by the Administrator,
but no Stock Option shall be exercisable more than 10 years after the date the
Stock Option is granted.  If an employee owns or is deemed to own (by reason of
the attribution rules of Section 424(d) of the Code) more than 10 percent of the
combined voting power of all classes of stock of the Company or any parent or
subsidiary corporation and an Incentive Stock Option is granted to such
employee, the term of such Stock Option shall be no more than five years from
the date of grant.

 
(d) 
Exercisability; Rights of a Stockholder.  Stock Options shall become exercisable
at such time or times, whether or not in installments, as shall be determined by
the Administrator at or after the grant date.  The Administrator may at any time
accelerate the exercisability of all or any portion of any Stock Option.  An
optionee shall have the rights of a stockholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised Stock Options.

 
 
(i)
Method of Exercise.  Stock Options may be exercised in whole or in part, by
giving written notice of exercise to the Company, specifying the number of
shares to be purchased.  Payment of the purchase price may be made by one or
more of the following methods to the extent provided in the Option Award
agreement:

 
 
(ii)
In cash, by certified or bank check or other instrument acceptable to the
Administrator;

 
 
(iii)
Through the delivery (or attestation to the ownership) of shares of Stock that
have been purchased by the optionee on the open market or that have been
beneficially owned by the optionee for at least six months and are not then
subject to restrictions under any Company plan.  Such surrendered shares shall
be valued at Fair Market Value on the exercise date; or

 
 
(iv)
By the optionee delivering to the Company a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the
Company cash or a check payable and acceptable to the Company for the purchase
price; provided that in the event the optionee chooses to pay the purchase price
as so provided, the optionee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as the
Administrator shall prescribe as a condition of such payment procedure.

 
Payment instruments will be received subject to collection.  The delivery of
certificates representing the shares of Stock to be purchased pursuant to the
exercise of a Stock Option will be contingent upon receipt from the optionee (or
a purchaser acting in his stead in accordance with the provisions of the Stock
Option) by the Company of the full purchase price for such shares and the
fulfillment of any other requirements contained in the Option Award agreement or
applicable provisions of laws.  In the event an optionee chooses to pay the
purchase price by previously-owned shares of Stock through the attestation
method, the number of shares of Stock transferred to the optionee upon the
exercise of the Stock Option shall be net of the number of shares attested
to.  In the event that the Company establishes, for itself or using the services
of a third party, an automated system for the exercise of Stock Options, such as
a system using an internet website or interactive voice response, then the
paperless exercise of Stock Options may be permitted through the use of such an
automated system.
 
(e) 
Annual Limit on Incentive Stock Options.  To the extent required for “incentive
stock option” treatment under Section 422 of the Code, the aggregate Fair Market
Value (determined as of the time of grant) of the shares of Stock with respect
to which Incentive Stock Options granted under this Plan and any other plan of
the Company or its parent and subsidiary corporations become exercisable for the
first time by an optionee during any calendar year shall not exceed
$100,000.  To the extent that any Stock Option exceeds this limit, it shall
constitute a Non-Qualified Stock Option.

 
Section 6:  Stock Appreciation Rights.
(a) 
Nature of Stock Appreciation Rights.  A Stock Appreciation Right is an Award
entitling the recipient to receive an amount in cash or shares of Stock or a
combination thereof having a value equal to the excess of the Fair Market Value
of the Stock on the date of exercise over the exercise price of the Stock
Appreciation Right, which price shall not be less than 100 percent of the Fair
Market Value of the Stock on the date of grant (or more than the option exercise
price per share, if the Stock Appreciation Right was granted in tandem with a
Stock Option) multiplied by the number of shares of Stock with respect to which
the Stock Appreciation Right shall have been exercised, with the Administrator
having the right to determine the form of payment.

 
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(b)
Grant and Exercise of Stock Appreciation Rights.  Stock Appreciation Rights may
be granted by the Administrator in tandem with, or independently of, any Stock
Option granted pursuant to Section 5 of the Plan.  In the case of a Stock
Appreciation Right granted in tandem with a Non-Qualified Stock Option, such
Stock Appreciation Right may be granted either at or after the time of the grant
of such Option.  In the case of a Stock Appreciation Right granted in tandem
with an Incentive Stock Option, such Stock Appreciation Right may be granted
only at the time of the grant of the Option.

 
A Stock Appreciation Right or applicable portion thereof granted in tandem with
a Stock Option shall terminate and no longer be exercisable upon the termination
or exercise of the related Option.
 
(c) 
Terms and Conditions of Stock Appreciation Rights.  Stock Appreciation Rights
shall be subject to such terms and conditions as shall be determined from time
to time by the Administrator, subject to the following:

 
 
(i)
Stock Appreciation Rights granted in tandem with Options shall be exercisable at
such time or times and to the extent that the related Stock Options shall be
exercisable.

 
 
(ii)
Upon exercise of a Stock Appreciation Right, the applicable portion of any
related Option shall be surrendered.

 
 
(iii)
All Stock Appreciation Rights shall be exercisable during the grantee’s lifetime
only by the grantee or the grantee’s legal representative.

 
 
(iv)
The term of a Stock Appreciation Right may not exceed ten years.

 
Section 7:  Restricted Stock Awards
(a) 
Nature of Restricted Stock Awards.  A Restricted Stock Award is an Award
entitling the recipient to acquire, at such purchase price as determined by the
Administrator, shares of Stock subject to such restrictions and conditions as
the Administrator may determine at the time of grant (“Restricted
Stock”).  Conditions may be based on continuing employment (or other service
relationship) and/or achievement of pre-established performance goals and
objectives.  The grant of a Restricted Stock Award is contingent on the grantee
executing the Restricted Stock Award agreement.  The terms and conditions of
each such agreement shall be determined by the Administrator, and such terms and
conditions may differ among individual Awards and grantees.

 
(b) 
Rights as a Stockholder.  Upon execution of a written instrument setting forth
the Restricted Stock Award and payment of any applicable purchase price, a
grantee shall have the rights of a stockholder with respect to the voting of the
Restricted Stock, subject to such conditions contained in the written instrument
evidencing the Restricted Stock Award.  Unless the Administrator shall otherwise
determine, certificates evidencing the Restricted Stock shall remain in the
possession of the Company until such Restricted Stock is vested as provided in
Section 7(d) below, and the grantee shall be required, as a condition of the
grant, to deliver to the Company a stock power endorsed in blank.

 
(c) 
Restrictions.  Restricted Stock may not be sold, assigned, transferred, pledged
or otherwise encumbered or disposed of except as specifically provided herein or
in the Restricted Stock Award agreement.  If a grantee’s employment (or other
service relationship) with the Company and its Subsidiaries terminates for any
reason, the Company shall have the right to repurchase Restricted Stock that has
not vested at the time of termination at its original purchase price, from the
grantee or the grantee’s legal representative.

 
(d) 
Vesting of Restricted Stock.  The Administrator at the time of grant shall
specify the date or dates and/or the attainment of pre-established performance
goals, objectives and other conditions on which the non-transferability of the
Restricted Stock and the Company’s right of repurchase or forfeiture shall
lapse.  Notwithstanding the foregoing, in the event that any such Restricted
Stock granted to employees shall have a performance based goal, the restriction
period with respect to such shares shall not be less than one year and in the
event that any such Restricted Stock granted to employees shall have a time
based restriction, the restriction period with respect to such shares shall not
be less than three years; provided, however, that Restricted Stock with a
time-based restriction may become vested incrementally over such three-year
period.  Subsequent to such date or dates and/or the attainment of such
pre-established performance goals, objectives and other conditions, the shares
on which all restrictions have lapsed shall no longer be Restricted Stock and
shall be deemed “vested.”  Except as may otherwise be provided by the
Administrator either in the Award agreement or, subject to Section 18 below, in
writing after the Award agreement is issued, a grantee’s rights in any shares of

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  Restricted Stock that have not vested shall automatically terminate upon the
grantee’s termination of employment (or other service relationship) with the
Company and its Subsidiaries and such shares shall be subject to the Company’s
right of repurchase as provided in Section 7(c) above.

 
Section 8:  Deferred Stock Awards
(a) 
Nature of Deferred Stock Awards.   A Deferred Stock Award is an Award of phantom
stock units to a grantee, subject to the restrictions and conditions as the
Administrator may determine at the time of grant.  Conditions may be based on
continuing employment (or other service relationship) and/or achievement of
pre-established performance goals and objectives.  The terms and conditions of
each such Award shall be determined by the Administrator, and such terms and
conditions may differ among individual Awards and grantees.  Notwithstanding the
foregoing, in the event that any such Deferred Stock Award granted to employees
shall have a performance-based goal, the restriction period with respect to such
Award shall not be less than one year, and in the event any such Deferred Stock
Award granted to employees shall have a time-based restriction, the total
restriction period with respect to such Award shall not be less than three
years; provided, however, that any Deferred Stock Award with a time-based
restriction may become vested incrementally over such three-year period.  At the
end of the vesting or deferral period, whichever is applicable, the Deferred
Stock Award, to the extent vested, shall be settled in the form of shares of
Stock.  To the extent that a Deferred Stock Award is subject to Section 409A, it
may contain such additional terms and conditions as the Administrator shall
determine in its sole discretion in order for such Award to comply with the
requirements of Section 409A.

 
(b)
Election to Receive Deferred Stock Awards in Lieu of Compensation.  The
Administrator may, in its sole discretion, permit a grantee to elect to receive
a portion of future cash compensation otherwise due to such grantee in the form
of Deferred Stock Award.  Any such election shall be made in writing and shall
be delivered to the Company no later than the date specified by the
Administrator and in accordance with Section 409A and such other rules and
procedures established by the Administrator.  Any such future cash compensation
that the grantee elects to defer shall be converted to a fixed number of phantom
stock units underlying the Deferred Stock Award based on the Fair Market Value
of Stock on the date the compensation would otherwise have been paid to the
grantee if such payment had not been deferred as provided herein.  The
Administrator shall have the sole right to determine whether and under what
circumstances to permit such elections and to impose such limitations and other
terms and conditions thereon as the Administrator deems appropriate.  Any
Deferred Stock Awards that are elected to be received in lieu of cash
compensation shall be fully vested, unless otherwise provided in the Award
agreement.

 
(c)
Rights as a Stockholder.  A grantee shall have the rights as a stockholder only
as to shares of Stock acquired by the grantee upon settlement of Deferred Stock
Awards; provided, however, that the grantee may be credited with Dividend
Equivalent Rights with respect to the phantom stock units underlying his
Deferred Stock Awards, subject to such terms and conditions as the Administrator
may determine.

 
(d)  
Termination.  Except as may otherwise be provided by the Administrator either in
the Award agreement or, subject to Section 18 below, in writing after the Award
is issued, a grantee’s right in all Deferred Stock Awards that have not vested
shall automatically terminate upon the grantee’s termination of employment (or
cessation of service relationship) with the Company and its Subsidiaries for any
reason.

 
Section 9:  Unrestricted Stock Awards
Grant or Sale of Unrestricted Stock.  The Administrator may, in its sole
discretion, grant (or sell at par value or such higher purchase price determined
by the Administrator) an Unrestricted Stock Award to any grantee pursuant to
which such grantee may receive shares of Stock free of any restrictions
(“Unrestricted Stock”) under the Plan.  Unrestricted Stock Awards may be granted
in respect of past services or other valid consideration, or in lieu of cash
compensation due to such grantee.
 
Section 10:  Cash-Based Awards
Grant of Cash-Based Awards.  The Administrator may, in its sole discretion,
grant Cash-Based Awards to any grantee in such number or amount and upon such
terms, and subject to such conditions, as the Administrator shall determine at
the time of grant.  The Administrator shall determine the maximum duration of
the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains,
the conditions upon which the Cash-Based Award shall become vested or payable,
and such other provisions as the Administrator shall determine.  Each Cash-Based
Award shall specify a cash-denominated payment amount, formula or payment ranges
as determined by the
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Administrator.  Payment, if any, with respect to a Cash-Based Award shall be
made in accordance with the terms of the Award and may be made in cash or in
shares of Stock, as the Administrator determines.
 
Section 11:  Performance Share Awards
(a) 
Nature of Performance Share Awards.  The Administrator may, in its sole
discretion, grant Performance Share Awards independent of, or in connection
with, the granting of any other Award under the Plan.  The Administrator shall
determine whether and to whom Performance Share Awards shall be granted, the
Performance Goals, the periods during which performance is to be measured, which
may not be less than one year, and such other limitations and conditions as the
Administrator shall determine.

 
(b) 
Rights as a Stockholder.  A grantee receiving a Performance Share Award shall
have the rights of a stockholder only as to shares actually received by the
grantee under the Plan and not with respect to shares subject to the Award but
not actually received by the grantee.  A grantee shall be entitled to receive
shares of Stock under a Performance Share Award only upon satisfaction of all
conditions specified in the Performance Share Award agreement (or in a
performance plan adopted by the Administrator).

 
(c) 
Termination.  Except as may otherwise be provided by the Administrator either in
the Award agreement or, subject to Section 18 below, in writing after the Award
is issued, a grantee’s rights in all Performance Share Awards shall
automatically terminate upon the grantee’s termination of employment (or
cessation of service relationship) with the Company and its Subsidiaries for any
reason.

 
Section 12:  Performance-Based Awards To Covered Employees
(a) 
Performance-Based Awards.  Any employee or other key person providing services
to the Company and who is selected by the Administrator may be granted one or
more Performance-Based Awards in the form of a Restricted Stock Award, Deferred
Stock Awards, Performance Share Awards or Cash-Based Award payable upon the
attainment of Performance Goals that are established by the Administrator and
relate to one or more of the Performance Criteria, in each case on a specified
date or dates or over any period or periods determined by the
Administrator.  The Administrator shall define in an objective fashion the
manner of calculating the Performance Criteria it selects to use for any
Performance Cycle.  Depending on the Performance Criteria used to establish such
Performance Goals, the Performance Goals may be expressed in terms of overall
Company performance or the performance of a division, business unit, or an
individual.  The Administrator, in its discretion, may adjust or modify the
calculation of Performance Goals for such Performance Cycle in order to prevent
the dilution or enlargement of the rights of an individual (i) in the event of,
or in anticipation of, any unusual or extraordinary corporate item, transaction,
event or development, (ii) in recognition of, or in anticipation of, any other
unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or (iii) in response to, or in anticipation of,
changes in applicable laws, regulations, accounting principles, or business
conditions provided however, that the Administrator may not exercise such
discretion in a manner that would increase the Performance-Based Award granted
to a Covered Employee.  Each Performance-Based Award shall comply with the
provisions set forth below.

 
(b) 
Grant of Performance-Based Awards.  With respect to each Performance-Based Award
granted to a Covered Employee, the Administrator shall select, within the first
90 days of a Performance Cycle (or, if shorter, within the maximum period
allowed under Section 162(m) of the Code) the Performance Criteria for such
grant, and the Performance Goals with respect to each Performance Criterion
(including a threshold level of performance below which no amount will become
payable with respect to such Award).  Each Performance-Based Award will specify
the amount payable, or the formula for determining the amount payable, upon
achievement of the various applicable performance targets.  The Performance
Criteria established by the Administrator may be (but need not be) different for
each Performance Cycle and different Performance Goals may be applicable to
Performance-Based Awards to different Covered Employees.

 
(c)
Payment of Performance-Based Awards.  Following the completion of a Performance
Cycle, the Administrator shall meet to review and certify in writing whether,
and to what extent, the Performance Goals for the Performance Cycle have been
achieved and, if so, to also calculate and certify in writing the amount of the
Performance-Based Awards earned for the Performance Cycle.  The Administrator
shall then determine the actual size of each Covered Employee’s
Performance-Based Award, and, in doing so, may reduce or eliminate the amount of
the Performance-Based Award for a Covered Employee if, in its sole judgment,
such reduction or elimination is appropriate.

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(d) 
Maximum Award Payable.  The maximum Performance-Based Award payable to any one
Covered Employee under the Plan for a Performance Cycle is 50,000 Shares
(subject to adjustment as provided in Section 3(b) hereof) or $1,000,000 in the
case of a Performance-Based Award that is a Cash-Based Award.

 
Section 13:  Dividend Equivalent Rights
(a) 
Dividend Equivalent Rights.  A Dividend Equivalent Right is an Award entitling
the grantee to receive credits based on cash dividends that would have been paid
on the shares of Stock specified in the Dividend Equivalent Right (or other
award to which it relates) if such shares had been issued to and held by the
grantee.  A Dividend Equivalent Right may be granted hereunder to any grantee as
a component of another Award or as a freestanding award.  The terms and
conditions of Dividend Equivalent Rights shall be specified in the Award
agreement.  Dividend equivalents credited to the holder of a Dividend Equivalent
Right may be paid currently or may be deemed to be reinvested in additional
shares of Stock, which may thereafter accrue additional equivalents.  Any such
reinvestment shall be at Fair Market Value on the date of reinvestment or such
other price as may then apply under a dividend reinvestment plan sponsored by
the Company, if any.  Dividend Equivalent Rights may be settled in cash or
shares of Stock or a combination thereof, in a single installment or
installments.  A Dividend Equivalent Right granted as a component of another
Award may provide that such Dividend Equivalent Right shall be settled upon
exercise, settlement, or payment of, or lapse of restrictions on, such other
award, and that such Dividend Equivalent Right shall expire or be forfeited or
annulled under the same conditions as such other award.  A Dividend Equivalent
Right granted as a component of another Award may also contain terms and
conditions different from such other award.

 
 (b) 
Interest Equivalents.  Any Award under this Plan that is settled in whole or in
part in cash on a deferred basis may provide in the grant for interest
equivalents to be credited with respect to such cash payment.  Interest
equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.

 
(c) 
Termination.  Except as may otherwise be provided by the Administrator either in
the Award agreement or, subject to Section 18 below, in writing after the Award
agreement is issued, a grantee’s rights in all Dividend Equivalent Rights or
interest equivalents shall automatically terminate upon the grantee’s
termination of employment (or cessation of service relationship) with the
Company and its Subsidiaries for any reason.

 
Section 14:  Transferability Of Awards
(a) 
Transferability.  Except as provided in Section 14(b) below, during a grantee’s
lifetime, his or her Awards shall be exercisable only by the grantee, or by the
grantee’s legal representative or guardian in the event of the grantee’s
incapacity.  No Awards shall be sold, assigned, transferred or otherwise
encumbered or disposed of by a grantee other than by will or by the laws of
descent and distribution or pursuant to a domestic relations order.  No Awards
shall be subject, in whole or in part, to attachment, execution, or levy of any
kind, and any purported transfer in violation hereof shall be null and void.

 
(b)
Administrator Action.  Notwithstanding Section 14(a), the Administrator, in its
discretion, may provide either in the Award Certificate regarding a given Award
or by subsequent written approval that the grantee (who is an employee or
director) may transfer his or her Awards (other than any Incentive Stock Options
or Deferred Stock Awards) to his or her immediate family members, to trusts for
the benefit of such family members, or to partnerships in which such family
members are the only partners, provided that the transferee agrees in writing
with the Company to be bound by all of the terms and conditions of this Plan and
the applicable Award.

 
(c) 
Family Member.  For purposes of Section 14(b), “family member” shall mean a
grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the grantee’s household (other than a tenant
of the grantee), a trust in which these persons (or the grantee) have more than
50 percent of the beneficial interest, a foundation in which these persons (or
the grantee) control the management of assets, and any other entity in which
these persons (or the grantee) own more than 50 percent of the voting interests.

 
(d) 
Designation of Beneficiary.  Each grantee to whom an Award has been made under
the Plan may designate a beneficiary or beneficiaries to exercise any Award or
receive any payment under any Award payable on or after the grantee’s
death.  Any such designation shall be on a form provided for that purpose by the
Administrator and shall not be effective until received by the
Administrator.  If no beneficiary has been designated by a

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  deceased grantee, or if the designated beneficiaries have predeceased the
grantee, the beneficiary shall be the grantee’s estate.

 
Section 15:  Tax Withholding
(a) 
Payment by Grantee.  Each grantee shall, no later than the date as of which the
value of an Award or of any Stock or other amounts received thereunder first
becomes includable in the gross income of the grantee for Federal income tax
purposes, pay to the Company, or make arrangements satisfactory to the
Administrator regarding payment of, any Federal, state, or local taxes of any
kind required by law to be withheld with respect to such income.  The Company
and its Subsidiaries shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the
grantee.  The Company’s obligation to deliver stock certificates to any grantee
is subject to and conditioned on tax obligations being satisfied by the grantee.

 
(b) 
Payment in Stock.  Subject to approval by the Administrator, a grantee may elect
to have the minimum required tax withholding obligation satisfied, in whole or
in part, by (i) authorizing the Company to withhold from shares of Stock to be
issued pursuant to any Award a number of shares with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
withholding amount due, or (ii) transferring to the Company shares of Stock
owned by the grantee with an aggregate Fair Market Value (as of the date the
withholding is effected) that would satisfy the withholding amount due.

 
Section 16:  Section 409A Awards
To the extent that any Award is determined to constitute “nonqualified deferred
compensation” within the meaning of Section 409A (a “409A Award”), the Award
shall be subject to such additional rules and requirements as specified by the
Administrator from time to time in order to comply with Section 409A.  In this
regard, if any amount under a 409A Award is payable upon a “separation from
service” (within the meaning of Section 409A) to a grantee who is then
considered a “specified employee” (within the meaning of Section 409A), then no
such payment shall be made prior to the date that is the earlier of (i) six
months and one day after the grantee’s separation from service, or (ii) the
grantee’s death, but only to the extent such delay is necessary to prevent such
payment from being subject to interest, penalties and/or additional tax imposed
pursuant to Section 409A.  Further, the settlement of any such Award may not be
accelerated except to the extent permitted by Section 409A.
 
Section 17:  Transfer, Leave Of Absence, Etc.
For purposes of the Plan, the following events shall not be deemed a termination
of employment:
 
(a) 
a transfer to the employment of the Company from a Subsidiary or from the
Company to a Subsidiary, or from one Subsidiary to another; or

 
(b) 
an approved leave of absence for military service or sickness, or for any other
purpose approved by the Company, if the employee’s right to re-employment is
guaranteed either by a statute or by contract or under the policy pursuant to
which the leave of absence was granted or if the Administrator otherwise so
provides in writing.

 
Section 18:  Amendments And Termination
The Board may, at any time, amend or discontinue the Plan and the Administrator
may, at any time, amend or cancel any outstanding Award for the purpose of
satisfying changes in law or for any other lawful purpose, but no such action
shall adversely affect rights under any outstanding Award without the holder’s
consent.  Except as provided in Section 3(b) or 3(c), without prior stockholder
approval, in no event may the Administrator exercise its discretion to reduce
the exercise price of outstanding Stock Options or Stock Appreciation Rights or
effect repricing through cancellation and re-grants.  If and to the extent
determined by the Administrator to be required by the relevant securities
exchange or by the Code to ensure that Incentive Stock Options granted under the
Plan are qualified under Section 422 of the Code or to ensure that compensation
earned under Awards qualifies as performance-based compensation under
Section 162(m) of the Code, if and to the extent intended to so qualify, Plan
amendments shall be subject to approval by the Company stockholders entitled to
vote at a meeting of stockholders.  All Material Plan Amendments shall be
subject to approval by the Company’s stockholders entitled to vote at a meeting
of the stockholders.  For purposes of this Section 18, a Material Plan Amendment
shall mean any Plan amendment which would require stockholder approval pursuant
to the rules of the national securities exchange or NASDAQ, on which the
Company’s stock is listed at the time of such amendment.  Material Plan
Amendments shall be approved by the stockholders in accordance with the rules of
NASDAQ or the appropriate national securities exchange, as the case
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may be.  Nothing in this Section 18 shall limit the Administrator’s authority to
take any action permitted pursuant to Section 3(c).
 
Section 19:  Status Of Plan
With respect to the portion of any Award that has not been exercised and any
payments in cash, Stock or other consideration not received by a grantee, a
grantee shall have no rights greater than those of a general creditor of the
Company unless the Administrator shall otherwise expressly determine in
connection with any Award or Awards.  In its sole discretion, the Administrator
may authorize the creation of trusts or other arrangements to meet the Company’s
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.
 
Section 20:  Change Of Control Provisions
Upon the occurrence of a Change of Control as defined in this Section 20:
 
(a) 
Except as otherwise provided in the applicable Award agreement, each outstanding
Stock Option and Stock Appreciation Right shall automatically become fully
exercisable.

 
 (b) 
Except as otherwise provided in the applicable Award Agreement, conditions and
restrictions on each outstanding Restricted Stock Award, Deferred Stock Award
and Performance Share Award will be removed.

 
(c) 
“Change of Control” shall mean the occurrence of any one of the following
events:

 
 
(i)
The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”); provided, however, that any acquisition by
the Company or its subsidiaries, or any employee benefit plan (or related trust)
of the Company or its subsidiaries of 20% or more of Outstanding Company Common
Stock shall not constitute a Change of Control; and provided, further, that any
acquisition by a corporation with respect to which, following such acquisition,
more than 50% of the then outstanding shares of common stock of such
corporation, is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Company Common Stock immediately prior to such acquisition in
substantially the same proportion as their ownership, immediately prior to such
acquisition, of the Outstanding Company Common Stock, shall not constitute a
Change of Control; or

 
 
(ii)
Individuals who, as of the Effective Date, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board,
provided that any individual becoming a director subsequent to the Effective
Date whose election, or nomination for election by the Company’s stockholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office is in connection with either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the
Board; or

 
 
(iii)
Consummation by the Company of (i) a reorganization, merger or consolidation, in
each case, with respect to which all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company Common Stock
immediately prior to such reorganization, merger or consolidation do not,
following such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 40% of the then outstanding shares of common
stock of the corporation resulting from such a reorganization, merger or
consolidation; (ii) a reorganization, merger or consolidation, in each case, (A)
with respect to which all or substantially all of the individuals and entities
who were the beneficial owners of the Outstanding Company Common Stock
immediately prior to such reorganization, merger or consolidation, following
such reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 40% but less than 50% of the then outstanding shares of
common stock of the corporation resulting from such a reorganization, merger or
consolidation, (B) at least a majority of the directors then

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    constituting the Incumbent Board do not approve the transaction and do not
designate the transaction as not constituting a Change of Control, and (C)
following the transaction members of the then Incumbent Board do not continue to
comprise at least a majority of the Board; or (iii) the sale or other
disposition of all or substantially all of the assets of the Company, excluding
a sale or other disposition of assets to a subsidiary of the Company; or

 
 
(iv)
Consummation by The Washington Trust Company, the wholly-owned subsidiary of the
Company, of  (i) a reorganization, merger or consolidation, in each case, with
respect to which, following such reorganization, merger or consolidation, the
Company does not beneficially own, directly or indirectly, more than 50% of the
then outstanding shares of common stock of the corporation or bank resulting
from such a reorganization, merger or consolidation or (ii) the sale or other
disposition of all or substantially all of the assets of the Bank, excluding a
sale or other disposition of assets to the Company or a subsidiary of the
Company.

 
The decision as to whether a Change of Control of the Company has occurred shall
be made by a majority of the Continuing Directors of the Company (as defined in
the Restated Articles of Incorporation of the Company) and shall be conclusive
and binding.
 
Section 21:  General Provisions
(a)
No Distribution; Compliance with Legal Requirements.  The Administrator may
require each person acquiring Stock pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.

 
No shares of Stock shall be issued pursuant to an Award until all applicable
securities law and other legal and stock exchange or similar requirements have
been satisfied.  The Administrator may require the placing of such stop-orders
and restrictive legends on certificates for Stock and Awards as it deems
appropriate.
 
(b)
Delivery of Stock Certificates.  Stock certificates to grantees under this Plan
shall be deemed delivered for all purposes when the Company or a stock transfer
agent of the Company shall have mailed such certificates in the United States
mail, addressed to the grantee, at the grantee’s last known address on file with
the Company.  Uncertificated Stock shall be deemed delivered for all purposes
when the Company or a Stock transfer agent of the Company shall have given to
the grantee by electronic mail (with proof of receipt) or by United States mail,
addressed to the grantee, at the grantee’s last known address on file with the
Company, notice of issuance and recorded the issuance in its records (which may
include electronic “book entry” records).  Notwithstanding anything herein to
the contrary, the Company shall not be required to issue or deliver any
certificates evidencing shares of Stock pursuant to the exercise of any Award,
unless and until the Administrator has determined, with advice of counsel (to
the extent the Administrator deems such advice necessary or advisable), that the
issuance and delivery of such certificates is in compliance with all applicable
laws, regulations of governmental authorities and, if applicable, the
requirements of any exchange on which the shares of Stock are listed, quoted or
traded.  All Stock certificates delivered pursuant to the Plan shall be subject
to any stop-transfer orders and other restrictions as the Administrator deems
necessary or advisable to comply with federal, state or foreign jurisdiction,
securities or other laws, rules and quotation system on which the Stock is
listed, quoted or traded.  The Administrator may place legends on any Stock
certificate to reference restrictions applicable to the Stock.  In addition to
the terms and conditions provided herein, the Administrator may require that an
individual make such reasonable covenants, agreements, and representations as
the Administrator, in its discretion, deems necessary or advisable in order to
comply with any such laws, regulations, or requirements.  The Administrator
shall have the right to require any individual to comply with any timing or
other restrictions with respect to the settlement or exercise of any Award,
including a window-period limitation, as may be imposed in the discretion of the
Administrator.

 
(c) 
Stockholder Rights.  Until Stock is deemed delivered in accordance with Section
21(b), no right to vote or receive dividends or any other rights of a
stockholder will exist with respect to shares of Stock to be issued in
connection with an Award, notwithstanding the exercise of a Stock Option or any
other action by the grantee with respect to an Award.

 
(d)  
Other Compensation Arrangements; No Employment Rights.  Nothing contained in
this Plan shall prevent the Board from adopting other or additional compensation
arrangements, including trusts, and such arrangements may be either generally
applicable or applicable only in specific cases.  The adoption of this Plan and
the grant

 
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  of Awards do not confer upon any employee any right to continued employment
with the Company or any Subsidiary.

 
(e) 
Trading Policy Restrictions.  Option exercises and other Awards under the Plan
shall be subject to such Company’s insider trading policy, as in effect from
time to time.

 
Section 22:  Effective Date Of Plan
This restated Plan shall become effective upon approval by the holders of a
majority of the shares present in person or represented by proxy and entitled to
vote at a meeting of stockholders at which a quorum is present.  Subject to such
approval by the stockholders and to the requirement that no Stock may be issued
hereunder prior to such approval, Stock Options and other Awards may be granted
hereunder on and after adoption of this Plan by the Board.  No grants of Stock
Options and other Awards may be made hereunder after the tenth anniversary of
the Effective Date and no grants of Incentive Stock Options may be made
hereunder after the tenth anniversary of the date the restated Plan is approved
by the Board.
 
Section 23:  Governing Law
This Plan and all Awards and actions taken thereunder shall be governed by, and
construed in accordance with, the laws of the State of Rhode Island, applied
without regard to conflict of law principles.
 
 
 
 
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