WASHINGTON TRUST BANCORP INC
2003 STOCK INCENTIVE PLAN
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>q22003ex10.txt
<DESCRIPTION>2003 STOCK INCENTIVE PLAN
<TEXT>




                                   EXHIBIT 10

WASHINGTON TRUST BANCORP INC.                                          EXHIBIT A
2003 STOCK INCENTIVE PLAN


GENERAL PURPOSE OF THE PLAN; DEFINITIONS
----------------------------------------
The name of the plan is the Washington Trust Bancorp,  Inc. 2003 Stock Incentive
Plan (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 and Dividend Equivalent Rights.

     "Board" means the Board of Directors of the Company.

     "Change of Control" is defined in Section 15.

     "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 Benefits  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.

     "Deferred Stock Award" means Awards granted pursuant to Section 8.

     "Dividend Equivalent Right" means Awards granted pursuant to Section 10.

     "Effective  Date"  means  the  date  on  which  the  Plan  is  approved  by
     stockholders as set forth in Section 17.

     "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
     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.

     "Restricted Stock Award" means Awards granted pursuant to Section 7.

     "Stock" means the Common Stock, par value $.0625 per share, of the Company,
     subject to adjustments pursuant to Section 3.

     "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").

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 and  Dividend  Equivalent  Rights,  or 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;

    (vi)  subject to the provisions of Section  5(a)(ii),  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" within the meaning of
     Section 162(m) of the Code. 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  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 600,000  shares,  subject to adjustment as provided
     in Section 3(b); provided that not more than 200,000 shares shall be issued
     in the form of Awards other than Stock Options or Stock Appreciation Rights
     except to the extent such  Awards are granted in lieu of cash  compensation
     or fees. For purposes of this  limitation,  the shares of Stock  underlying
     any  Awards  which are  forfeited,  canceled,  reacquired  by the  Company,
     satisfied without the issuance of Stock or otherwise terminated (other than
     by  exercise)  shall be added  back to the  shares of Stock  available  for
     issuance  under the Plan.  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 Restricted Stock
     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,  (v) the  number of Stock  Options  automatically
     granted  to  Non-Employee  Directors,  and (vi) 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 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.

     The  Administrator  may  also  adjust  the  number  of  shares  subject  to
     outstanding  Awards  and the  exercise  price and the terms of  outstanding
     Awards to take into consideration  material changes in accounting practices
     or principles,  extraordinary  dividends,  acquisitions  or dispositions of
     stock  or  property  or  any  other  event  if  it  is  determined  by  the
     Administrator  that such  adjustment is appropriate to avoid  distortion in
     the operation of the Plan,  provided that no such adjustment  shall be made
     in the case of an  Incentive  Stock  Option,  without  the  consent  of the
     grantee, if it would constitute a modification, extension or renewal of the
     Option within the meaning of Section 424(h) of the Code.

(c)  Mergers and Other  Transactions.
     --------------------------------
     In the case of and subject to the  consummation  of (i) the  dissolution or
     liquidation of the Company,  (ii) the sale of all or  substantially  all of
     the assets of the Company on a consolidated basis to an unrelated person or
     entity,  (iii) a  merger,  reorganization  or  consolidation  in which  the
     outstanding shares of Stock are converted into or exchanged for a different
     kind of 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 (iv) the sale of all of
     the Stock of the Company to an unrelated  person or entity (in each case, 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  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
            -------------

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 20,
2013.

a)   Stock Options Granted to Employees and Key Persons.
     ---------------------------------------------------
     The Administrator in its discretion may grant  Stock  Options  to  eligible
     employees and key persons of the Company or any  Subsidiary.  Stock Options
     granted  pursuant to this  Section  5(a) 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.

     (i)  Exercise Price.
          ---------------
          The exercise price per share for the Stock covered  by a Stock  Option
          granted  pursuant  to this  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.

     (ii) 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.

     (iii)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.

     (iv) 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:

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

          (B)  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

          (C)  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.

     (v)  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.

b)   Stock Options Granted to Non-Employee Directors.
     ------------------------------------------------
     (i)  Automatic Grant of Options.
          ---------------------------
          (A)  Each  Non-Employee  Director  who is serving as  Director  of the
               Company  as of the date of each  Annual  Meeting  of the  Company
               after which such Director will continue to serve as a Director of
               the Company,  beginning  with the 2003 Annual Meeting and in lieu
               of options  which would be granted  pursuant to Section 11 of the
               Company's 1997 Equity  Incentive  Plan,  shall  automatically  be
               granted on such day a Non-Qualified Stock Option to acquire 2,000
               shares of Stock.

          (B)  The  exercise  price per share for the Stock  covered  by a Stock
               Option granted under this Section 5(b) shall be equal to the Fair
               Market  Value  of the  Stock  on the date  the  Stock  Option  is
               granted.

     (ii) Exercise; Termination.
          ----------------------
          (A)  Unless  otherwise  determined  by the  Administrator,  an  Option
               granted under Section 5(b) shall be exercisable  upon the earlier
               of (1)  the  third  anniversary  of the  grant  date,  or (2) the
               Non-Employee  Director's  retirement  from the  Board.  An Option
               issued under this Section 5(b) shall not be exercisable after the
               expiration of ten years from the date of grant.

          (B)  Options  granted under this Section 5(b) may be exercised only by
               written notice to the Company  specifying the number of shares to
               be purchased. Payment of the full purchase price of the shares to
               be purchased may be made by one or more of the methods  specified
               in  Section  5(a)(iv).  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.

c)   Non-transferability  of Options.
     --------------------------------
     No Stock Option shall be  transferable by the  optionee  otherwise than  by
     will or by the laws of descent and distribution and all Stock Options shall
     be exercisable, during the optionee's lifetime, only by the optionee, or by
     the  optionee's  legal  representative  or  guardian  in the  event  of the
     optionee's incapacity. Notwithstanding the foregoing, the Administrator, in
     its sole discretion,  may provide in the Award agreement  regarding a given
     Option that the optionee may transfer his  Non-Qualified  Stock  Options to
     members of his immediate  family,  to trusts for the benefit of such family
     members,  to  partnerships  in  which  such  family  members  are the  only
     partners,  or to a former spouse in connection  with a divorce  settlement,
     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 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.

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.

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
     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  shall have a time  based  restriction,  the  restriction
     period  with  respect to such  shares  shall not be less than three  years.
     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 13
     below, in writing after the Award agreement is issued,  a grantee's  rights
     in any shares of 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.

e)   Waiver, Deferral and Reinvestment of Dividends.
     -----------------------------------------------
     The   Restricted   Stock   Award   agreement   may  require  or permit  the
     immediate  payment,  waiver,  deferral  or  investment of dividends paid on
     the Restricted Stock.

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 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 grant of a Deferred Stock Award is
     contingent on the grantee executing the Deferred 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.  At the end of the deferral period, the Deferred Stock
     Award,  to the extent  vested,  shall be paid to the grantee in the form of
     shares of Stock.

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 the cash  compensation  or  Restricted  Stock  Award
     otherwise  due to such grantee in the form of a 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 rules and procedures established by the Administrator.  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.

c)   Rights as a Stockholder.
     ------------------------
     During  the  deferral   period,  a  grantee  shall  have  no  rights  as  a
     stockholder;  provided,  however,  that the grantee  may be  credited  with
     Dividend  Equivalent  Rights  with  respect  to  the  phantom  stock  units
     underlying his Deferred  Stock Award,  subject to such terms and conditions
     as the Administrator may determine.

d)   Restrictions.
     -------------
     A Deferred Stock Award may not be sold, assigned,  transferred , pledged or
     otherwise encumbered or disposed of during the deferral period.

e)   Termination.
     ------------
     Except as may  otherwise  be  provided by the  Administrator  either in the
     Award agreement or, subject to Section 13 below, in writing after the Award
     agreement 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. 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  13 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 11. 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 12. 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 13. 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.  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 13, 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  may be.  Nothing  in this  Section  13  shall  limit  the  Administrator's
authority to take any action permitted pursuant to Section 3(c).

SECTION 14. 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 15. CHANGE OF CONTROL PROVISIONS
            ----------------------------

Upon the occurrence of a Change of Control as defined in this Section 15:

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 and Deferred
     Stock 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 in 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 in 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 constituting the Incumbent Board do not approve the
          transaction and do not designate the transaction as not constituting a
          Change in 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 in 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 16. 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
          therof.

          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.

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

     d)   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.

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

SECTION 17. EFFECTIVE DATE OF PLAN
            ----------------------

This Plan shall become  effective  upon approval by the holders of a majority of
the  votes  cast 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.

SECTION 18. 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.




</TEXT>
</DOCUMENT>
