EXHIBIT 10.1

                       EXECUTIVE EMPLOYMENT AGREEMENT
                       ------------------------------

      THIS EMPLOYMENT AGREEMENT (the "Agreement") is between Bank Rhode
Island, a financial institution organized under the laws of the State of
Rhode Island with its executive offices located at One Turks Head Place,
Providence, Rhode Island 02903 (the "Bank"), Bancorp Rhode Island, Inc. a
corporation organized under the laws of the State of Rhode Island and sole
shareholder of the Bank (the "Company"), and Merrill W. Sherman of 24
Channing Avenue, Providence, Rhode Island  02906 (the "Executive").

      IT IS MUTUALLY AGREED by the parties as follows:

            1.    Employment; Duties

            1.1   Responsibilities and Authority.  (a)  The Bank hereby
      employs Executive to serve as President and Chief Executive Officer
      of the Bank, and Executive hereby accepts such employment.  Executive
      shall have the duties, responsibilities, authorities and powers
      normally incident to such offices.  At all times, however,
      Executive's activities and authority with respect to such offices
      will be subject to supervision, control and direction by the Board of
      Directors of the Bank (the "Board") or by the Executive Committee of
      the Board, and Executive hereby agrees to carry out such duties and
      responsibilities as either of them may from time to time reasonably
      assign to Executive.  Executive shall report from time to time or
      routinely, upon request, to the Board as to the current status of any
      of Executive's assigned duties and responsibilities.

                  (b)   The Company hereby employs Executive to serve as
            President and Chief Executive Officer of the Company and such
            other offices and positions as the Company may determine, and
            Executive hereby accepts such employment.  Executive shall have
            the duties, responsibilities, authorities and powers normally
            incident to such offices.  At all times, however, Executive's
            activities and authority with respect to such offices will be
            subject to supervision, control and direction by the Board of
            Directors of the Company (the "Company Board") or by the
            Executive Committee of the Company Board, and Executive hereby
            agrees to carry out such duties and responsibilities as either
            of them may from time to time reasonably assign to Executive.
            Executive shall report from time to time or routinely, upon
            request, to the Company Board as to the current status of any
            of Executive's assigned duties and responsibilities.

            1.2   Compensation.  The Bank shall pay Executive a base salary
      at the rate of (i) Two Hundred Sixty-Three Thousand Seven Hundred
      Dollars ($263,700) per year, commencing on the date hereof and
      continuing through December 31, 2000, and (ii) Three Hundred Fourteen
      Thousand Four Hundred Dollars ($314,400) per year commencing on
      January 1, 2001 and thereafter, payable on a bi-weekly basis, or at
      such higher rate as shall be determined from time to time by the
      Board.  In addition, Executive shall be entitled to receive payments
      under any incentive compensation or bonus program which the Bank may
      establish for its employees and/or senior executives (as in effect
      from time to time), in such amounts as are provided by such programs,
      provided, however, that Executive shall be provided with an annual
      bonus opportunity of no less than 60% of Executive's base salary.

            1.3   Employee Benefits.  As a full-time employee of the Bank,
      Executive shall be eligible to participate in any and all employee
      benefit plans generally available to full-time employees of the Bank,
      including non-contributory plans and, at Executive's option,
      contributory plans.

            1.4   Certain Specific Employee Benefits.

                  (a)   Grant of Stock Options.  Executive shall receive
            stock options to purchase shares of the Company's common stock
            in such number and at an exercise price and such other terms as
            the Compensation Committee of the Company Board may determine,
            in its sole discretion.  Any such options will become
            exercisable on a schedule no less favorable than the following:
            25% on the grant date and an additional 25% on each of the
            first through third anniversaries of the grant date, with such
            vesting to accelerate on a Change in Control (as defined in
            Section 3.2).

                  (b)   Automobile.  The Bank shall provide Executive with
            an automobile for Executive's personal and business use, both
            in the course of her employment hereunder and afterwards as
            specifically provided herein, at the Bank's expense.  All
            expenses related to the operation of such automobile shall be
            paid for by the Bank, including but not limited to automobile
            insurance, gasoline, maintenance, repairs, and other expenses
            associated with the operation of such automobile, subject to
            applicable rules and regulations regarding reporting of income
            and withholding of applicable taxes.

            1.5   Vacation.  Executive shall be entitled to six weeks of
      vacation during each year of employment, such vacation to be taken in
      accordance with the Bank's customary vacation policies and at such
      times and intervals as are mutually agreed upon by Executive and the
      Bank.  Executive shall be entitled to holiday time and sick leave in
      accordance with the then existing policies of the Bank, as in effect
      from time to time.

            1.6   Reimbursement of Expenses.  (a)  Executive shall be
      reimbursed by the Bank for reasonable business expenses incurred by
      Executive incident to her employment by the Bank upon presentation of
      appropriate vouchers, receipts, and other supporting documents
      required by the Bank.

                  (b)   Executive shall be reimbursed by the Company for
            reasonable business expenses incurred by Executive incident to
            her employment by the Company upon presentation of appropriate
            vouchers, receipts, and other supporting documents required by
            the Company.

            1.7   Duty to Perform Services.  So long as Executive is
      employed by the Company and Bank, Executive agrees to devote her full
      business and productive time, skill, and energy diligently, loyally,
      effectively, and to the best of her ability to the rendering of
      services to the Company and Bank, and will exert Executive's best
      efforts in the rendering of such services.  This provision will not
      prohibit Executive from:

                  (a)   making passive investments;

                  (b)   serving on the board of directors of any company,
            subject to the provisions of Section 4.2 below and provided
            that Executive shall not render any material services with
            respect to the operations or affairs of any such company; or

                  (c)   engaging in religious, charitable or other
            community or non-profit activities which do not impair
            Executive's ability to fulfill her duties and responsibilities
            to the Company and Bank.

      Executive agrees that in the rendering of all services to the Company
      and Bank and in all aspects of her employment in connection with
      Executive's duties as President and Chief Executive Officer, she will
      comply with all directives, policies, standards, and regulations from
      time to time established by the Company or the Bank or by applicable
      law.

            1.8   Death or Disability.

                  (a)   Death.  In the event of Executive's death during
            the term of her employment under this Agreement, the Bank shall
            immediately pay to Executive's designated beneficiary any
            salary accrued but unpaid as of the date of death.  Upon
            payment of the aforementioned sums, the Bank's obligations to
            make further salary payments shall terminate.  This provision
            shall not be construed to negate any rights Executive may have
            to death benefits under any employee benefit or welfare plan of
            the Company or Bank in which Executive may from time to time be
            a participant or under any other written agreement with the
            Company or Bank which specifically provides for such benefits.

                  (b)   Disability.  In the event of Executive's
            "disability" (as defined below) during the term of her
            employment under this Agreement, the Bank shall continue to pay
            Executive her base salary (reduced by any benefits she may be
            entitled to receive under any state or federal disability
            insurance program, such as Rhode Island temporary disability
            insurance or federal social security) for a period of one year
            from the date of "disability".  For purposes of this Agreement,
            "disability" shall mean the good faith determination by the
            Board that Executive is unable for any reason, either physical
            or mental, to perform the duties required of her hereunder.

            1.9   Term of Employment.  The term of Executive's employment
      under this Agreement shall commence on the date hereof and shall
      continue, unless sooner terminated pursuant to the provisions of this
      Agreement, for a period of three years (the "Term"), which Term shall
      automatically renew on each successive one year anniversary hereafter
      commencing with the first anniversary hereof unless any party shall
      have given written notice to the other parties of such party's
      election not to extend the Term within ninety (90) calendar days
      prior to any anniversary date.

            1.10  Termination.  This Agreement and the rights of the
      parties hereunder will terminate (subject to the provisions of
      Section 1.11 below) upon the occurrence of one of the following:

                  (a)   Upon the Executive's death or disability as
            provided in Section 1.8 above;

                  (b)   Upon termination of employment by the Bank or the
            Company for Cause as provided in Section 3.5, immediately upon
            the giving of notice by the Bank or at such later time as such
            notice may specify or as may be required by Section 3.5;

                  (c)   Upon termination of employment at the election of
            the Executive for Good Reason (as hereinafter defined) as
            provided in Section 2.2;

                  (d)   Upon expiration of the Term, upon notice by any
            party not to renew the term as provided in Section 1.9; or

                  (e)   In the event of the Executive's resignation for any
            reason (other than the reasons set forth in Sections 1.10(a),
            (c) or (d) above), upon thirty days' prior written notice of
            such resignation to the Bank or the Company; or, in the event
            of termination of Executive's employment by the Bank or the
            Company for any reason (other than the reasons set forth in
            Sections 1.10(a), (b) or (d) above), upon thirty days' prior
            written notice of such termination to the Executive.

            1.11  Survival.  The provisions of Sections 1.8, 2.1, 2.2, 3.1
      through 3.11 inclusive, and 4.1, 4.2, 4.4, 4.6, 4.8, 4.9 and 4.11 of
      the Agreement shall remain in full force and effect and shall
      continue to be enforceable in accordance with their terms beyond the
      termination of employment and beyond expiration of this Agreement,
      except as otherwise agreed in writing by Executive and the Company
      and the Bank.

            2.    Severance.

            2.1   Severance Benefit.  In the event of a termination of
      Executive's employment by the Bank or the Company without Cause (as
      such term is defined in Section 3.5) at any time, or in the event of
      termination of Executive's employment by her for Good Reason, the
      Bank will pay to Executive within 30 days of the date of such
      termination or expiration, in lump sum, a severance payment equal to
      2.99 times the sum of (a) Executive's annual base salary then in
      effect and (b) an amount equal to the average executive cash bonus
      earned by Executive with respect to the two (2) full fiscal years
      immediately preceding the year in which termination occurs (the
      "Severance Benefit").  In addition, the Bank shall continue to pay
      for all medical and life insurance coverage provided on the date of
      termination for the thirty-six month period commencing on the date of
      termination of employment (the "Severance Period"); the Bank shall
      continue to provide Executive with the same automobile then being
      used by Executive in accordance with the provisions of  Section
      1.4(b) of this Agreement for the Severance Period and, at any time
      during or within thirty (30) days of the expiration of the Severance
      Period, Executive shall have the right and option, on written notice
      to the Bank, to purchase such automobile for a purchase price equal
      to 90% of the wholesale value as established by the National
      Automobile Dealers Association Official Used Car Guide published in
      the year of such notice; and, notwithstanding any provision of any
      option agreement governing options to purchase common stock of the
      Company granted to Executive ("Options"), any such Options which are
      exercisable by Executive on the date of termination shall not
      terminate until the expiration of the Severance Period.  Any
      Severance Benefit paid under this Section 2.1 shall be credited
      against any amounts due Executive under Section 3 as a result of a
      Change in Control.  The Bank shall have no obligation to pay the
      Severance Benefit to Executive in the event her employment is
      terminated with Cause by the Bank or the Company or voluntarily by
      Executive without Good Reason prior to a Change in Control.

            2.2   "Good Reason" Defined.  For purposes of this Agreement,
      "Good Reason" shall mean and include any of the following without
      Executive's prior written consent:

                  (i)   a significant reduction in the nature or scope of
            Executive's duties, responsibilities, authority and powers from
            the duties, responsibilities, authority and powers exercised by
            her on the date hereof;

                  (ii)  any requirement by the Bank or any person in
            control of the Bank that the location at which Executive
            performs the principal duties for the Bank or the Company be
            outside a radius of 50 miles from the location at which
            Executive performed such duties as of the date hereof; or

                  (iii) the election by the Company or the Bank not to
            renew this Agreement on any anniversary date unless the Company
            and the Bank enter into a new employment agreement with
            Executive on terms not less favorable than those existing
            immediately prior to such notice of non-renewal, other than a
            reduction of fringe benefits required by law or applicable to
            all employees generally,

      provided, however, that Good Reason shall not be deemed to have
      occurred unless prior to Executive's termination of employment for
      Good Reason, Executive shall give not less than 30 days written
      notice to the Bank and the Company of her intent to terminate for
      Good Reason stating the basis of the Good Reason sufficient to permit
      the Bank and the Company to alleviate the basis of such Good Reason
      prior to termination, and the Bank and the Company have not done so
      within such 30 day period, and further provided, that Executive's
      continuing to work in the absence of entering into a new employment
      agreement following a notice of non-renewal by the Company or the
      Bank shall be without prejudice to her right to claim termination for
      Good Reason, absent written agreement between Executive and the Bank
      or the Company to the contrary.

            3.    Change in Control

            3.1   Purpose.  In order to allow Executive to consider the
      prospect of a Change in Control (as defined in Section 3.2) in an
      objective manner and in consideration of the services rendered and to
      be rendered by Executive to the Bank, the Bank is willing to provide,
      subject to the terms of this Agreement, certain severance benefits to
      protect Executive from the consequences of a Terminating Event (as
      defined in Section 3.4) occurring subsequent to a Change in Control.

            3.2   Change in Control.  A "Change in Control" will be deemed
      to have occurred if: (i) a Takeover Transaction is effectuated; or
      (ii) the Company commences substantive negotiations with a third
      party with respect to a Takeover Transaction if within twelve (12)
      months of the commencement of such negotiations, enters into a
      definitive agreement with respect to a Takeover Transaction with any
      party with which negotiations were originally commenced; or (iii) any
      election of directors of the Company occurs (whether by the directors
      then in office or by the shareholders at a meeting or by written
      consent) where a majority of the directors in office following such
      election are individuals who were not nominated by a vote of two-
      thirds of the members of the board of directors immediately preceding
      such election; or (iv) either of the Company or the Bank effectuates
      a complete liquidation.

            3.3   Takeover Transaction.  A "Takeover Transaction" shall
      mean:

                  (a)   The acquisition of voting securities of the Company
            by any individual, entity or group (within the meaning of
            Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
            1934, as amended (the "Exchange Act")), other than by the
            Company or its subsidiaries or any employee benefit plan (or
            related trust) of the Company or its subsidiaries, which
            theretofore did not beneficially own (within the meaning of
            Rule 13d-3 promulgated under the Exchange Act) securities
            representing 30% or more of the voting power of all outstanding
            shares of voting securities of the Company, if such acquisition
            results in such individual, entity or group owning securities
            representing more than 30% of the voting power of all
            outstanding voting securities of the Company; provided, that
            any acquisition by a corporation with respect to which,
            following such acquisition, more than 50% of the then
            outstanding shares of voting securities 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 voting securities of the Company
            outstanding immediately prior to such acquisition in
            substantially the same proportion as their ownership,
            immediately prior to such acquisition, of the outstanding
            voting securities of the Company, shall not constitute a Change
            in Control; or

                  (b)   The issuance of additional shares of common stock
            of the Company or the Bank, as applicable, in a single
            transaction or a series of related transactions if the
            individuals and entities who were the beneficial owners of the
            outstanding voting securities of the Company or the Bank, as
            applicable, immediately prior to such issuance do not,
            following such issuance, beneficially own, directly or
            indirectly, securities representing more than 50% of the voting
            power of all then outstanding voting securities of the Company
            or the Bank, as applicable; or

                  (c)   Consummation by the Company or the Bank 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 voting
            securities of such entity immediately prior to such
            reorganization, merger or consolidation do not, following such
            reorganization, merger or consolidation, beneficially own,
            directly or indirectly, securities representing more than 50%
            of the voting power of then outstanding voting securities of
            the corporation resulting from such a reorganization, merger or
            consolidation, or (ii) the sale, exchange or other disposition
            (in one transaction or a series of related transactions) of all
            or substantially all of the assets of the Company (on a
            consolidated basis) or the Bank to a party which is not
            controlled by or under common control with such entity, or
            (iii) the sale by the Company in one transaction or in a series
            of related transactions of voting securities of the Bank such
            that following such transaction or transactions the Company no
            longer beneficially owns, directly or indirectly, securities
            representing more than 50% of the voting power of the then
            outstanding voting securities of the Bank.

      For purposes of this Section 3.3, "voting power" means ordinary
voting power for the election of directors.

            3.4   Terminating Event.  A "Terminating Event" means either

                  (a)   Termination by the Bank or the Company of
            Executive's employment for any reason other than "Cause" (as
            such term is defined in Section 3.5 hereof); or

                  (b)   Executive's resignation as an employee of the
            Company or the Bank or any successor thereof following a
            Takeover Transaction or a Change in Control under Section
            3.2(iii), including, but not limited to, termination of this
            Agreement by reason of disability pursuant to Section 1.8,
            prior to the first anniversary of the Takeover Transaction or
            such Change in Control; or

                  (c)   Executive's death following a Takeover Transaction
            or a Change in Control under Section 3.2(iii), prior to the
            first anniversary of the Takeover Transaction or such Change in
            Control.

            3.5   Termination for "Cause" Defined.  For purposes of this
      Agreement, termination for Cause, as determined by the Board shall
      include termination by reason of any of the following:

                  (a)   Continuing any arrangement, holding any position or
            engaging in any activities that conflict with the interest of,
            or that interfere with Executive's duties owed to, the Company
            or the Bank, after ten (10) days prior written notice by the
            Company or the Bank, as applicable, to Executive of the same;

                  (b)   Conviction of embezzlement or other crimes against
            the Company or the Bank;

                  (c)   Deliberate misappropriation of the Company's or the
            Bank's funds;

                  (d)   Material violation of written policies of the
            Company or the Bank or material breach of any of Executive's
            obligations under the terms of this Agreement, which continues
            after ten (10) days prior written notice by the Company or the
            Bank, as applicable, to Executive of the same; and

                  (e)   Refusal to perform assigned duties when such
            refusal is not justified or excused either by the terms of this
            Agreement or by actions taken by the Bank or the Company in
            violation of this Agreement; provided, however, that if
            Executive should dispute the Bank's or the Company's
            determination that it has caused Executive to terminate her
            employment, or if Executive asserts that this act or omission
            was caused by actions taken by the Bank or the Company in
            violation of this Agreement, the dispute will be governed by
            Section 4.8 hereof.

            3.6   Payment In Connection With Terminating Event.  If a
      Terminating Event occurs within one (1) year after a Change in
      Control (which one year period shall be calculated from the effective
      date of the Takeover Transaction if the Terminating Event occurs
      after a Takeover Transaction), the Bank will pay to Executive an
      amount (the "Severance Payment") equal to 2.99 times the sum of (i)
      the annual base salary in effect at the time of the Change in Control
      plus (ii) the amount of the largest annual bonus paid to Executive
      within the three year period preceding the Change in Control, which
      Severance Payment shall be payable in one lump sum within 30 days of
      the date of termination of employment, or if such Change in Control
      is governed by clause (ii) of Section 3.2 and the Terminating Event
      occurs prior to entering into a definitive agreement, upon the
      entering into of a definitive agreement by the Company.  In addition,
      during the Severance Period (which, for purposes of Section 3 shall
      be deemed to commence on the date of a Terminating Event), the
      Executive shall be entitled to receive continuing medical and life
      insurance benefits, use of an automobile with the option to purchase,
      and extended Options, all as more specifically set forth in Section
      2.1 hereof, provided, however, that any unvested Options held by
      Executive shall accelerate and become vested upon a Change in Control
      pursuant to Section 1.4(a).  No Severance Payment will be made to
      Executive under Section 3 if her employment with the Company and the
      Bank terminates for any reason prior to a Change in Control, or if
      her employment with the Company and the Bank terminates after a
      Change in Control but such termination or resignation is not a
      Terminating Event.  In addition, no Severance Payment will be made to
      Executive under Section 3.6 of this Agreement with respect to a
      Terminating Event which occurs more than one year after a Change in
      Control (which one year period shall be calculated from the effective
      date of the Takeover Transaction if the Terminating Event occurs
      after a Takeover Transaction).

            3.7   Applicability of Change in Control Provisions.  The
      provisions of Section 3 shall terminate upon the earliest of (i) the
      termination by the Company or the Bank of Executive's employment for
      any reason prior to a Change in Control, (ii) the termination of
      Executive's employment by the Company or the Bank after a Change in
      Control for Cause, (iii) Executive's resignation or termination of
      employment with the Company or the Bank for any reason other than
      Good Reason prior to a Change in Control, and (iv) Executive's
      resignation or termination of employment after a Change in Control on
      or after the first anniversary of the Takeover Transaction or events
      specified in Sections 3.2(iii) or (iv).

            3.8   Excise Tax Equalization Payment.  In the event that
      Executive becomes entitled to a Severance Payment or any other
      payment or benefit under this Agreement, or under any other agreement
      with or plan of the Company (in the aggregate, the "Total Payments"),
      and if any of the Total Payments will be subject to the tax (the
      "Excise Tax") imposed by Section 4999 of the Code (or any similar tax
      that may hereafter be imposed), then the Bank shall pay to Executive
      in cash an additional amount (the "Gross-Up Payment") such that the
      net amount retained by Executive after deduction of any Excise Tax
      upon the Total Payments and any Federal, state and local income tax
      and Excise Tax upon the Gross-Up Payment provided for by this Section
      3.8 (including FICA and FUTA), shall be equal to the Total Payments.
      Such payment shall be made by the Bank to Executive as soon as
      practical following the effective date of the Terminating Event, but
      in no event beyond thirty (30) days from such date.

            3.9   Tax Computation.  For purposes of determining whether any
      of the Total Payments will be subject to the Excise Tax and the
      amounts of such Excise Tax:

                  (a)   Any other payments or benefits received or to be
            received by Executive in connection with a Change in Control or
            Executive's termination of employment (whether pursuant to the
            terms of this Agreement or any other plan, arrangement, or
            agreement with the Company or the Bank, or with any person
            (which shall have the meaning set forth in Section 3(a)(9) of
            the Exchange Act, including a "group" as defined in Section
            13(d) therein) whose actions result in a Change in Control or
            any person affiliated with the Company or such persons) shall
            be treated as "parachute payments" within the meaning of
            Section 280G(b)(1) of the Code, and all "excess parachute
            payments" within the meaning of Section 280G(b)(1) shall be
            treated as subject to the Excise Tax, unless in the opinion of
            tax counsel as supported by the Company's independent auditors
            and acceptable to Executive, such other payments or benefits
            (in whole or in part) do not constitute parachute payments, or
            unless such excess parachute payments (in whole or in part)
            represent reasonable compensation for services actually
            rendered within the meaning of Section 280G(b)(4) of the Code
            in excess of the base amount within the meaning of Section 280G
            (b)(3) of the Code, or are otherwise not subject to the Excise
            Tax;

                  (b)   The amount of the Total Payments which shall be
            treated as subject to the Excise Tax shall be equal to the
            lesser of: (i) the total amount of the Total Payments; or (ii)
            the amount of excess parachute payments within the meaning of
            Section 280G(b)(1) (after applying clause (a) above); and

                  (c)   The value of any noncash benefits or any deferred
            payment or benefit shall be determined by the Company's
            independent auditors in accordance with the principles of
            Sections 280G(d)(3) and (4) of the Code.

      For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to pay Federal income taxes at the highest
marginal rate of Federal income taxation in the calendar year in which the
Gross-Up Payment is to be made, and state and local income taxes at the
highest marginal rate of taxation in the state and locality of Executive's
residence on the effective date of the Terminating Event, net of the
maximum reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes.

            3.10  Subsequent Recalculation.  In the event the Internal
      Revenue Service adjusts the computation of the Bank under Section 3.9
      herein so that Executive did not receive the greatest net benefit,
      the Bank shall reimburse Executive for the full amount necessary to
      make her whole, plus a market rate of interest, as determined by the
      Compensation Committee of the Board.

            3.11  Dispute Resolution.  If any dispute between the Bank and
      Executive as to any of the amounts to be determined under Sections
      3.8 or 3.9, or the method of calculating such amounts, cannot be
      resolved by Executive and the Bank, either the Bank or Executive
      after giving three (3) days written notice to the other, may refer
      the dispute to a partner in the Boston, Massachusetts office of a
      firm of independent certified public accountants selected jointly by
      Executive and the Bank.  The determination of such partner as to the
      amount to be determined under Section 3.8 and 3.9 and the method of
      calculating such amounts shall be final and binding on both Executive
      and the Bank and the Company.  The Bank shall bear the costs of any
      such determination.  The Company shall have the same rights and
      obligations as the Bank under this Section 3.11 in the event of a
      dispute between the Company and Executive.

            4.    Miscellaneous.

            4.1   Confidential Information.  Unless Executive first secures
      the Company's consent, Executive will not disclose or use, at any
      time either during or subsequent to her employment by the Company or
      the Bank, except as required by her duties to the Company or Bank,
      any secret or confidential information of the Company or Bank of
      which Executive becomes informed during her employment, whether or
      not developed by her.  The term "confidential information" includes,
      without limitation, financial information, business plans, prospects,
      and opportunities (such as lending relationships, financial product
      developments, or possible acquisitions or dispositions of business or
      facilities) which have been discussed or considered by the Company's
      or Bank's management, but does not include any information which has
      become part of the public domain by means other than Executive's non-
      observance of her obligations hereunder.

            4.2   Non-Competition.  During Executive's employment by the
      Company and the Bank hereunder, and during a period of one year
      following the date of termination of her employment with the Company
      or the Bank for any reason, Executive will not, directly or
      indirectly whether as partner, consultant, agent, employee, co-
      venturer, greater than 2% owner, or otherwise, or through any Person
      (as hereafter defined),

                  (a)   attempt to recruit any employee of the Company or
            Bank, assist in such hiring by any other Person, or encourage
            any such employee to terminate his or her relationship with the
            Company or Bank, or

                  (b)   encourage any customer of the Company or Bank to
            conduct with any other Person any business or activity which
            such customer conducts or could conduct with the Company or
            Bank, as applicable.

      For purposes of this Section 4.2, the term "Person" shall mean an
      individual, a corporation, an association, a partnership, an estate,
      a trust and any other entity or organization.

            4.3   No Conflicting Obligations.  The Company and the Bank, in
      entering into this Agreement, understand, and Executive hereby
      represents, that she is not under any obligation to any former
      employer or any person, firm or corporation that would prevent, limit
      or impair, in any way, the performance by Executive of her duties as
      an employee of the Company or the Bank.

            4.4   Ethical Behavior.  Upon termination by the Company or the
      Bank of Executive's employment for any reason, Executive shall act at
      all times in an ethical manner with regard to the Bank and the
      Company, and during the one-year period following the date of such
      termination, shall take no action which directly or indirectly could
      reasonably be expected to have the effect of terminating or otherwise
      adversely affecting the relationship of the Company or the Bank with
      any employee of, or others with business or advantageous
      relationships with, the Company or any of its affiliates, including
      the Bank.

            4.5   Withholding.  All payments made by the Bank or the
      Company under this Agreement will be net of any tax or other amounts
      required to be withheld by the Bank or the Company under applicable
      law.

            4.6   Legal Fees.  Upon submission of appropriate statements or
      documentation, the Company and the Bank jointly and severally agree
      to reimburse Executive for reasonable legal fees actually incurred by
      her in connection with the negotiation, review and enforcement of the
      terms of this Agreement, provided, however, that neither the Company
      nor the Bank shall be obligated to reimburse Executive for any legal
      fees or expenses incurred by her in connection with the Company's or
      the Bank's enforcement of the terms of this Agreement or in
      connection with any arbitration or litigation in which the Company or
      the Bank is the prevailing party.

            4.7   Binding Effect.  This Agreement is binding upon and will
      inure to the benefit of the parties hereto and their respective
      heirs, administrators, executors, successors and assigns.  The
      Company and the Bank 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 the Company or the
      Bank, as the case may be, to assume expressly and perform the
      Agreement.  Failure of the Company or the Bank, as applicable, to
      obtain such assumption and agreement prior to the effectiveness of
      any such succession shall be a breach of the Agreement and shall
      entitle Executive to compensation from the Bank in the same amount
      and on the same terms as she would be entitled to hereunder following
      a Terminating Event, except that for purposes of implementing the
      foregoing, the date on which any such succession becomes effective
      shall be deemed the date on which Executive becomes entitled to such
      compensation from the Bank.  As used in this Agreement, "Bank" shall
      mean the Bank, as hereinbefore defined and any successor to its
      business and/or assets as aforesaid which assumes and agrees to
      perform the Agreement by operation of law, or otherwise.

            4.8   Arbitration of Disputes.  Any dispute, controversy or
      claim arising out of or relating to this Agreement or the breach or
      performance hereof will be settled by arbitration in accordance with
      the laws of the State of Rhode Island by an arbitrator mutually
      agreed upon by Executive and the Bank and/or the Company.  If an
      arbitrator cannot be agreed upon, Executive shall choose an
      arbitrator and the Company and/or the Bank shall choose an
      arbitrator, and these two together shall select a third arbitrator.
      If the first two arbitrators cannot agree on the appointment of a
      third arbitrator, then the third arbitrator will be appointed by the
      American Arbitration Association in Providence, Rhode Island.  Such
      arbitration will be conducted in the City of Providence in accordance
      with the Commercial Arbitration Rules of the American Arbitration
      Association, except with respect to the selection of arbitrators
      which shall be as provided in this Section 4.8.  Judgment upon the
      award rendered by the arbitrators may be entered in any court having
      jurisdiction thereof.

            4.9   Indemnification.  The Company and the Bank each hereby
      covenants and agrees to indemnify Executive and hold her harmless
      fully, completely, and absolutely against and in respect to any and
      all actions, suits, proceedings, claims, demands, judgments, costs,
      expenses (including attorney's fees), losses, and damages resulting
      from Executive's good faith performance of her duties and obligations
      under the terms of this Agreement.

            4.10  Interpretation.  In case of ambiguity with respect to the
      meaning or intent of any provision herein, whether in the course of
      arbitration or otherwise, such provision shall be construed in the
      manner most favorable to the Executive.

            4.11  Guaranty.  The Company hereby guarantees the due and
      punctual performance in full by the Bank of its covenants, agreements
      and obligations contained herein.


      IN WITNESS WHEREOF, the parties have executed this Agreement on the
/s/18th day of /s/December, 2000.


                                       BANCORP RHODE ISLAND, INC.


                                       By: /s/Malcolm G. Chace
                                           --------------------------------
                                           Malcolm G. Chace, Chairman

                                       BANK RHODE ISLAND


                                       By: /s/Malcolm G. Chace
                                           --------------------------------
                                           Malcolm G. Chace, Chairman

                                       EXECUTIVE

                                       /s/Merrill W. Sherman
                                           --------------------------------
                                          Merrill W. Sherman





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EXHIBIT 10.1