Document:

exhibit10.htm

    
      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 

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      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.

      
        
          
          

        

        
          -2-

          
            

          

        

      

       

      “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

                

          
            
              -3-

              
                

              

            

            
              
              

            

          

          	 	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
      

                

           

          
            
              
              

            

            
              -4-

              
                

              

            

          

          	 	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.

              

      

      
        
          -5-

          
            

          

        

        
          
          

        

      

      
        	
                (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.

              

      

       

      
        
          
          

        

        
          -6-

          
            

          

        

      

      
        	
                (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 

                

          
            
              -7-

              
                

              

            

            
              
              

            

          

          	 	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 

      
        
          -8-

          
            

          

        

        
          
          

        

      

      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.

              

      

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      
        	
                (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 

                

          
            
              -10-

              
                

              

            

          

          	 	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

      
        
          -11-

          
            

          

        

        
          
          

        

      

      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
      

                

          
            
              -12-

              
                

              

            

            
              
              

            

          

          	 	 	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
  

                

           

          
            
              
              

            

            
              -13-

              
                

              

            

            
              
              

            

          

          	 	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.

       

       

       

       

      -14-Exhibit 4.1

THE BANK OF NEW YORK MELLON

  NEW YORK’S FIRST BANK-FOUNDED 1784 BY ALEXANDER HAMILTON

2 HANSON PLACE, 12TH FLOOR, BROOKLYN, N.Y. 11217

April 29, 2009

Hennion & Walsh, Inc.

2001 Route 46, Waterview Plaza

Parsippany, New Jersey 07054

Smart Fund, Enhanced Value Trust (2009 Series B)

Dear Sirs:

The Bank of New York Mellon is acting as trustee for Smart Fund, Enhanced Value Trust (2009 Series B) set forth above (the “Trust”). We enclosed a list of the Securities to be deposited in the Trust on the date hereof. The prices
indicated therein reflect our evaluation of such Securities as of close of business on April 29, 2009, in accordance with the valuation method set forth in the Trust Indenture and Agreement. We consent to the reference to The Bank of New York Mellon
as the party performing the evaluations of the Trust Securities in the Registration Statement (No. 333-158415) filed with the Securities and Exchange Commission with respect to the registration of the sale of the Trust Units and to the filing of
this consent as an exhibit thereto.

		
		Very truly yours,
		 
		/s/ MICHAEL KAUFHER 
		
      

    
	
        	
      Vice President

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