<PAGE>   1
                                                                    EXHIBIT 10.6

                                BANK RHODE ISLAND
                        NON-EMPLOYEE DIRECTORS STOCK PLAN


        This Bank Rhode Island Non-Employee Directors Stock Plan (the "Plan") is
adopted by Bank Rhode Island (the "Bank") for the purpose of advancing the
interests of the Bank by providing compensation and other incentives for the
continued services of the Bank's non-employee directors and by attracting and
retaining able individuals to directorships with the Bank.

         1. DEFINITIONS. For purposes of this Plan, the following terms shall
have the meanings set forth below:

        "ADMINISTRATOR" means the person(s) appointed by the Board to administer
the Plan as provided in Paragraph 2 hereof.

        "ANNUAL MEETING" means the annual meeting of the Bank's shareholders.

        "BANK" means Bank Rhode Island, a Rhode Island financial institution.

        "BOARD" means the Board of Directors of Bank Rhode Island.

        "CHANGE OF CONTROL" means (i) approval by the Bank's shareholders of a
merger in which the Bank does not survive as an independent, publicly owned
corporation, a consolidation, or a sale, exchange or other disposition of all or
substantially all the Bank's assets, or (ii) any acquisition of voting
securities of the Bank by any person or group (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), but excluding (a) the Bank or any of its
subsidiaries, (b) any person who was an officer or director of the Bank on the
day prior to the Effective Date, or (c) any savings, pension or other benefits
plan for the benefit of employees of the Bank or any of its subsidiaries, which
theretofore did not beneficially own voting securities representing more than
30% of the voting power of all outstanding voting securities of the Bank, if
such acquisition results in such entity, person or group owning beneficially
securities representing more than 30% of the voting power of all outstanding
voting securities of the Bank. As used herein, "voting power" means ordinary
voting power for the election of directors of the Bank.

        "COMMON SHARES" means the Bank's common stock, $1.00 par value per
share.

        "EFFECTIVE DATE" means May 20, 1998, subject to the approval of the Plan
by the Bank's shareholders.

        "GRANT DATE" means the effective date of a grant of options pursuant to
Paragraph 4(a) hereof.


                                      A-1
<PAGE>   2

        "MARKET VALUE" means the last sale price regular way or, in case no such
reported sales take place on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal national securities
exchange on which the Common Shares are admitted to trading or listed, or if not
listed or admitted to trading on any such exchange, the representative closing
bid price as reported by NASDAQ, or other similar organization if NASDAQ is no
longer reporting such information, or if not so available, the fair market price
as determined by the Board of Directors of the Bank.

        "PARTICIPANT" means a director who has met the requirements of
eligibility and participation described in Paragraph 3 hereof.

        2. ADMINISTRATION. The Plan shall be administered by the Administrator.
The Administrator may establish, subject to the provisions of the Plan, such
rules and regulations as it deems necessary for the proper administration of the
Plan, and make such determination and take such action in connection therewith
or in relation to the Plan as it deems necessary or advisable, consistent with
the Plan.

        3. ELIGIBILITY AND PARTICIPATION.

        (a) A non-employee director of the Bank shall automatically become a
Participant in the Plan as of the later of (i) the Effective Date, or (ii) the
date of initial election to the Board. A director who is a regular employee of
the Bank is not eligible to participate in the Plan.

        (b) A Participant shall cease participation in the Plan as of the date
the Participant (i) fails to be re-elected to the Board, (ii) resigns or
otherwise vacates his position on the Board, or (iii) becomes a regular employee
of the Bank.

        4. OPTION AWARDS

        (a) GRANT OF OPTIONS. Each person who is a Participant on the Effective
Date shall be awarded a non-qualified option to purchase 1,500 Common Shares
effective as of the Effective Date, at a price equal to the Market Value of
Common Shares on that date. Any person who becomes a Participant after the
Effective Date shall be awarded non-qualified options to purchase 1,000 Common
Shares effective as of the date of the Annual Meeting at which such election
occurs, or if the Participant is first elected to the Board other than at an
Annual Meeting, as of the date of such election, at a price equal to the Market
Value of Common Shares on that date.

        Commencing with the 1999 Annual Meeting, on the date of the Annual
Meeting of each year, a Participant (other than a director who is first elected
at the Annual Meeting for that year or within six months prior to such Annual
Meeting), shall be awarded non-qualified options to purchase 500 Common Shares,
effective as of such date, at a price equal to the Market Value of Common Shares
on such date.

        (b) TERM AND EXERCISABILITY. All options shall have a term of 10 years
and shall vest six (6) months after the Grant Date. Notwithstanding the
foregoing, all options shall become


                                       A-2
<PAGE>   3

immediately exercisable upon a Change of Control of the Bank. In the event of a
Change of Control, the Board, or the board of directors of any corporation
assuming the obligations of the Bank hereunder may, as to outstanding options,
upon written notice to the Participants, provide that all unexercised options
must be exercised within two (2) years of the date of such notice or they will
be terminated.

        (c) METHOD OF EXERCISE. An option granted under the Plan may be
exercised, in whole or in part, by submitting a written notice to the Board,
signed by the Participant or such other person who may be entitled to exercise
such option, and specifying the number of Common Shares as to which the option
is being exercised. Such notice shall be accompanied by the payment of the full
option price for such Common Shares, or shall fix a date (not more than ten
business days from the date of such notice) for the payment of the full option
price of the Common Shares being purchased. Payment shall be made in the form of
cash, Common Shares (to the extent permitted by law), or both. A certificate or
certificates for the Common Shares purchased shall be issued by the Bank after
the exercise of the option and full payment therefor.

        (d) TERMINATION OF DIRECTORSHIP. If a Participant fails to be re-elected
to the Board, resigns or otherwise ceases to be a director of the Bank for
reasons other than death or disability (within the meaning of Section 22(e)(3)
of the Internal Revenue Code), all options granted under this Plan to such
Participant which are not exercisable on such date shall immediately terminate,
and any remaining options shall terminate if not exercised before twenty-four
(24) months following such termination, or at such earlier time as may be
applicable under Paragraph 4(b) above.

        If a Participant ceases to be a director of the Bank by reason of death
or disability (within the meaning of Section 22(e)(3) of the Internal Revenue
Code), all options granted under this Plan to such Participant which are not
exercisable on such date shall become immediately exercisable, and may be
exercised at any time before the expiration of twenty-four (24) months following
the date of death or commencement of disability, or such earlier time as may be
applicable under Paragraph 4(b) above.

        (e) NON-TRANSFERABILITY. Each option and all rights thereunder shall be
exercisable during the Participant's lifetime only by him and shall be
non-assignable and non-transferable by the Participant except, in the event of
the Participant's death, by will or by the laws of descent and distribution. In
the event the death of a Participant occurs, the representative or
representatives of the Participant's estate, or the person or persons who
acquired (by bequest or inheritance) the rights to exercise the Participant's
options in whole or in part may exercise the option prior to the expiration of
the applicable exercise period, as specified in Paragraph 4(d) above.

        (f) NO RIGHTS AS SHAREHOLDER. A Participant shall have no rights as a
shareholder with respect to any Common Shares subject to the option prior to the
date of issuance of a certificate or certificates for such Common Shares.


                                      A-3
<PAGE>   4

        (g) COMPLIANCE WITH SECURITIES LAWS. Options granted and Common Shares
issued by the Bank upon exercise of options shall be granted and issued only in
full compliance with all applicable securities laws, including laws, rules and
regulations of the Securities and Exchange Commission and applicable state Blue
Sky Laws. With respect thereto, the Board may impose such conditions on
transfer, restrictions and limitations as it may deem necessary and appropriate
to assure compliance with such applicable securities laws.

        5. SHARES SUBJECT TO THE PLAN.

        (a) The Common Shares to be issued and delivered by the Bank upon the
exercise of options under the Plan may be either authorized but unissued shares
or treasury shares of the Bank.

        (b) The aggregate number of Common Shares of the Bank which may be
issued under the Plan shall not exceed 40,000 shares; subject, however, to the
adjustment provided in Paragraph 6 in the event of stock splits, stock
dividends, exchanges of shares or the like occurring after the effective date of
this Plan.

        (c) Common Shares covered by an option which is no longer exercisable
with respect to such shares shall again be available for issuance under this
Plan.

        6. SHARE ADJUSTMENTS. In the event there is any change in the Bank's
Common Shares resulting from stock splits, stock dividends, combinations or
exchanges of shares, or other similar capital adjustments, equitable
proportionate adjustments shall automatically be made without further action by
the Board or Administrator in (i) the number of Common Shares available for
award under this Plan, (ii) the number of Common Shares subject to options
granted under this Plan, and (iii) the option price of options granted under
this Plan.

        7. AMENDMENT OR TERMINATION. The Board may terminate this Plan at any
time, and may amend the Plan at any time or from time to time; provided,
however, that the Plan shall not be amended more than once every six months,
other than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder; and further provided
that any amendment that would increase the aggregate number of Common Shares
that may be issued under the Plan, materially increase the benefits accruing to
Participants under the Plan, or materially modify the requirements as to
eligibility for participation in the Plan shall be subject to the approval of
the Bank shareholders to the extent required by Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, or any other governing rules or regulations
except that such increase or modification that may result from adjustments
authorized by Paragraph 6 does not require such approval. If the Plan is
terminated, any unexercised option shall continue to be exercisable in
accordance with its terms.

        8. BANK RESPONSIBILITY. All expenses of this Plan, including the cost of
maintaining records, shall be borne by the Bank.


                                      A-4
<PAGE>   5

        9. IMPLIED CONSENT. Every Participant, by acceptance of an award under
this Plan, shall be deemed to have consented to be bound, on his or her own
behalf and on behalf of his or her heirs, assigns, and legal representatives, by
all of the terms and conditions of this Plan.

        10. RHODE ISLAND LAW TO GOVERN. This Plan shall be construed and
administered in accordance with and governed by the laws of the State of Rhode
Island.






                                      A-5