2013 Stock and Incentive Plan

The name of the plan is the Washington Trust Bancorp, Inc. 2013 Stock Option and 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 “Corporation”) and its Subsidiaries upon

whose judgment, initiative and efforts the Corporation largely depends for the successful conduct of its business to

acquire a proprietary interest in the Corporation. It is anticipated that providing such persons with a direct stake in the

Corporation’s welfare will assure a closer identification of their interests with those of the Corporation and its

shareholders, thereby stimulating their efforts on the Corporation’s behalf and strengthening their desire to remain with

the Corporation.

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, Restricted Stock Units, Restricted Stock

Awards, Unrestricted Stock Awards, Cash-Based Awards, Performance Share Awards and Dividend Equivalent Rights.

“Award Certificate” means a written or electronic document setting forth the terms and provisions applicable to an

Award granted under the Plan. Each Award Certificate is subject to the terms and conditions of the Plan.

“Board” means the Board of Directors of the Corporation.

“Cash-Based Award” means an Award entitling the recipient to receive a cash-denominated payment.

“Change of Control” is defined in Section 20(c).

“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.

“Consultant” means any natural person that provides bona fide services to the Corporation, and such services are not

in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly

promote or maintain a market for the Corporation’s securities.

“Covered Employee” means an employee who is a “Covered Employee” within the meaning of Section 162(m) of the

Code.

“Dividend Equivalent Right” means 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.

“Effective Date” means the date on which the Plan is approved by shareholders 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 another 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.

“Incumbent Board” is defined in Section 20(c)(ii).

“Non-Employee Director” means a member of the Board who is not also an employee of the Corporation 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.

“Outstanding Corporation Common Stock” is defined in Section 20(c)(i).

“Performance-Based Award” means any Restricted Stock Award, Restricted Stock Units, 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 Corporation or a

unit, division, group, or Subsidiary of the Corporation) 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), assets under management (including or

excluding market appreciation and/or depreciation), residential mortgage origination volume, mortgage banking

revenues, 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

shareholder returns, revenues, net new assets under management, gross or net profit levels, productivity, expense, and

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 comparator 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, Restricted Stock Units,

Performance Share Award or Cash-Based Award, the vesting and/or payment of which is subject to the attainment of

one or more Performance Goals. 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 entitling the recipient to acquire shares of Stock upon the attainment of

specified Performance Goals.

“Restricted Stock Award” means an Award of shares of Stock subject to such restrictions and conditions as the

Administrator may determine at the time of grant.

“Restricted Stock Units” means an Award of stock units subject to such restrictions and conditions as the

Administrator may determine at the time of grant.

“Sale Event” shall mean (i) the sale of all or substantially all of the assets of the Corporation on a consolidated basis to

an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the

Corporation’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a

majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor

entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iii) the sale of all of the

Stock of the Corporation to an unrelated person, entity or group thereof acting in concert, or (iv) any other transaction

in which the owners of the Corporation’s outstanding voting power immediately prior to such transaction do not own

at least a majority of the outstanding voting power of the Corporation or any successor entity immediately upon

completion of the transaction other than as a result of the acquisition of securities directly from the Corporation.

“Sale Price” means the value as determined by the Administrator of the consideration payable, or otherwise to be

received by shareholders, per share of Stock pursuant to a Sale Event.

“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 Corporation, subject to adjustments pursuant to

Section 3.

“Stock Appreciation Right” means an Award entitling the recipient to receive shares of Stock 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 multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right

shall have been exercised.

“Subsidiary” means any corporation or other entity (other than the Corporation) in which the Corporation has at least

a 50 percent interest, either directly or indirectly.

“Ten Percent Owner” means an employee who 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 Corporation or

any parent or subsidiary corporation.

“Unrestricted Stock Award” means an Award of shares of Stock free of any restrictions.

the “Administrator”), provided that the amount, timing and terms of the grants of Awards to Non-Employee

Directors and executive officers shall be determined by the Committee.

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, Restricted Stock Units,

Unrestricted Stock Awards, Cash-Based Awards, Performance Share 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 forms of Award Certificates;

(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(b), 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 Corporation 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.

    

(ix)     All decisions and interpretations of the Administrator shall be binding on all persons, including the

Corporation and Plan grantees.

delegate to the Chief Executive Officer of the Corporation all or part of the Administrator’s authority and

duties with respect to the granting of Awards to individuals who are (i) not subject to the reporting and other

provisions of Section 16 of the Exchange Act and (ii) not 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 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.

conditions and limitations for each Award which may include, without limitation, the term of an Award and

the provisions applicable in the event employment or service terminates.

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 Administrator (and any delegate thereof)

shall be entitled in all cases to indemnification and reimbursement by the Corporation 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 the Corporation’s articles or bylaws or any

directors’ and officers’ liability insurance coverage which may be in effect from time to time and/or any

indemnification agreement between such individual and the Corporation.

shall be 1,748,250. 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, and (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. In the event the Corporation repurchases shares of Stock on the open market, such

shares shall not be added to the shares of Stock available for issuance under the Plan. Subject to such overall

limitations, 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

200,000 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 Corporation.

Appreciation Right) shall be deemed, for purposes of determining the number of shares of Stock available for

issuance under Section 3(a), as an Award of 1.85 shares of Stock for each such share of Stock actually subject

to the Award. The grant of an Option or a Stock Appreciation Right shall be deemed, for purposes of

determining the number of shares of Stock available for issuance under Section 3(a), as an Award for one

share of Stock for each such share of Stock actually subject to the Award. Any forfeitures, cancellations or

other terminations (other than by exercise) of such Awards shall be returned to the reserved pool of shares of

Stock under the Plan in the same manner.

reclassification, stock dividend, stock split, reverse stock split or other similar change in the Corporation’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 Corporation, or additional shares or new or different shares

or other securities of the Corporation 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 Corporation, the outstanding shares of Stock are converted into or exchanged for securities of the

Corporation 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, (ii) the number of Stock Options or Stock Appreciation Rights that can be granted to any one individual

grantee and the maximum number of shares that may be granted under a Performance-Based Award, (iii) the

number and kind of shares or other securities subject to any then outstanding Awards under the Plan, (iv) the

repurchase price, if any, per share subject to each outstanding Restricted Stock Award, and (v) the exercise

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.

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 may otherwise be

provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after

the Award is issued. 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 Corporation will receive upon consummation thereof a cash payment for each

share surrendered in the Sale Event, the Corporation 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 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.

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 Corporation or a Subsidiary or the acquisition

by the Corporation 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).

Grantees under the Plan will be such full or part-time officers and other employees, Non-Employee Directors and key

persons (including Consultants) of the Corporation and its Subsidiaries as are selected from time to time by the

Administrator in its sole discretion.

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 Corporation 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.

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.

Section 5 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 an Incentive Stock Option that is granted to a Ten Percent

Owner, the option price of such Incentive Stock Option shall be not less than 110 percent of the Fair Market Value

on the grant date.

exercisable more than ten years after the date the Stock Option is granted. In the case of an Incentive Stock

Option that is granted to a Ten Percent Owner, the term of such Stock Option shall be no more than five years

from the date of grant.

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 shareholder only as to shares acquired upon the exercise of a Stock Option and not as to unexercised

Stock Options.

exercise to the Corporation, 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 Certificate:

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

(ii)     Through the delivery (or attestation to the ownership) of shares of Stock that are not then subject to

restrictions under any Corporation plan. Such surrendered shares shall be valued at Fair Market Value

on the exercise date;

(iii)     By the optionee delivering to the Corporation a properly executed exercise notice together with

irrevocable instructions to a broker to promptly deliver to the Corporation cash or a check payable and

acceptable to the Corporation 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; or

(iv)     With respect to Stock Options that are not Incentive Stock Options, by a “net exercise” arrangement

pursuant to which the Corporation will reduce the number of shares of Stock issuable upon exercise by

the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise

price.

Payment instruments will be received subject to collection. The transfer to the optionee on the records

of the Corporation or of the transfer agent of 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 Corporation of the full purchase

price for such shares and the fulfillment of any other requirements contained in the Option Award

Certificate or applicable provisions of laws (including the satisfaction of any withholding taxes that the

Corporation is obligated to withhold with respect to the optionee). 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 attested shares. In the event that the Corporation 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.

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

Corporation 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.

less than 100 percent of the Fair Market Value of the Stock on the date of grant.

independently of any Stock Option granted pursuant to Section 5 of the Plan.

and conditions as shall be determined from time to time by the Administrator. The term of a Stock    

Appreciation Right may not exceed ten years.

applicable to each Restricted Stock Award 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 Certificate shall be determined by the

Administrator, and such terms and conditions may differ among individual Awards and grantees.

purchase price, a grantee shall have the rights of a shareholder with respect to the voting of the Restricted

Stock and receipt of dividends; provided that if the lapse of restrictions with respect to the Restricted Stock

Award is tied to the attainment of performance goals, any dividends paid by the Corporation during the

performance period shall accrue and shall not be paid to the grantee until and to the extent the performance

goals are met with respect to the Restricted Stock Award. Unless the Administrator shall otherwise

determine, (i) uncertificated Restricted Stock shall be accompanied by a notation on the records of the

Corporation or the transfer agent to the effect that they are subject to forfeiture until such Restricted Stock are

vested as provided in Section 7(d) below, and (ii) certificated Restricted Stock shall remain in the possession

of the Corporation 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 Corporation such instruments of transfer as the

Administrator may prescribe.

disposed of except as specifically provided herein or in the Restricted Stock Award Certificate. Except as

may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18

below, in writing after the Award is issued, if a grantee’s employment (or other service relationship) with the

Corporation and its Subsidiaries terminates for any reason, any Restricted Stock that has not vested at the

time of termination shall automatically and without any requirement of notice to such grantee from or other

action by or on behalf of, the Corporation be deemed to have been reacquired by the Corporation at its

original purchase price (if any) from such grantee or such grantee’s legal representative simultaneously with

such termination of employment (or other service relationship), and thereafter shall cease to represent any

ownership of the Corporation by the grantee or rights of the grantee as a shareholder. Following such deemed

reacquisition of unvested Restricted Stock that are represented by physical certificates, a grantee shall

surrender such certificates to the Corporation upon request without consideration.

attainment of pre-established performance goals, objectives and other conditions on which the nontransferability

of the Restricted Stock and the Corporation’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 any such Restricted Stock granted to employees shall have a time-based restriction, the total

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

Certificate or, subject to Section 18 below, in writing after the Award 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 Corporation and its Subsidiaries and such shares shall be

subject to the provisions of Section 7(c) above.

applicable to each Restricted Stock Unit 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 Certificate 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 Restricted Stock Units 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 Restricted Stock Units 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 Restricted Stock Units with a time-based restriction may become vested incrementally over

such three-year period. At the end of the deferral period, the Restricted Stock Units, to the extent vested,

shall be settled in the form of shares of Stock. To the extent that an award of Restricted Stock Units 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.

discretion, permit a grantee to elect to receive a portion of future cash compensation otherwise due to such

grantee in the form of an award of Restricted Stock Units. Any such election shall be made in writing and

shall be delivered to the Corporation 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 Restricted Stock

Units 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 Restricted

Stock Units that are elected to be received in lieu of cash compensation shall be fully vested, unless otherwise

provided in the Award Certificate.

by the grantee upon settlement of Restricted Stock Units; provided, however, that the grantee may be credited

with Dividend Equivalent Rights with respect to the phantom stock units underlying his Restricted Stock

Units, subject to such terms and conditions as the Administrator may determine.

subject to Section 18 below, in writing after the Award is issued, a grantee’s right in all Restricted Stock Units

that have not vested shall automatically terminate upon the grantee’s termination of employment (or cessation

of service relationship) with the Corporation and its Subsidiaries for any reason.

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 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.

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 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.

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 except in the case of a Sale Event, and such other limitations and conditions as the Administrator shall

determine.

shareholder 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 Certificate (or in a performance plan adopted by the Administrator).

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 Corporation and its Subsidiaries for any reason.

who is selected by the Administrator may be granted one or more Performance-Based Awards in the form of a

Restricted Stock Award, Restricted Stock Units, 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

Corporation 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 Corporation, or the financial statements

of the Corporation, 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.

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.

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.

under the Plan for a Performance Cycle is 200,000 shares of Stock (subject to adjustment as provided in

Section 3(c) hereof) or $5,000,000 in the case of a Performance-Based Award that is a Cash-Based Award.

component of an award of Restricted Stock Units, Restricted Stock Award or Performance Share Award or as

a freestanding award. The terms and conditions of Dividend Equivalent Rights shall be specified in the

Award Certificate. 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 Corporation, 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 an award of Restricted

Stock Units or Restricted Stock Award with performance vesting or Performance Share Award shall provide

that such Dividend Equivalent Right shall be settled only upon 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.

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.

subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in all Dividend Equivalent

Rights or interest equivalents granted as a component of an award of Restricted Stock Units, Restricted Stock

Award or Performance Share Award that has not vested shall automatically terminate upon the grantee’s

termination of employment (or cessation of service relationship) with the Corporation and its Subsidiaries for

any reason.

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.

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 Non-Qualified Options 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 Corporation to be bound by all of

the terms and conditions of this Plan and the applicable Award. In no event may an Award be transferred by a

grantee for value.

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.

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.

Stock or other amounts received thereunder first becomes includable in the gross income of the grantee for

Federal income tax purposes, pay to the Corporation, 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 by the

Corporation with respect to such income. The Corporation 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 Corporation’s obligation to deliver evidence of book entry (or stock certificates) to any grantee is subject

to and conditioned on tax withholding obligations being satisfied by the grantee.

minimum required tax withholding obligation satisfied, in whole or in part, by authorizing the Corporation 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.

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.

For purposes of the Plan, the following events shall not be deemed a termination of employment:

from one Subsidiary to another; or

Corporation, 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.

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(c) or 3(d), without prior shareholder 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 or cancellation of Stock Options or Stock Appreciation Rights in exchange for cash. To the extent required

under the rules of any securities exchange or market system on which the Stock is listed, to the extent determined by

the Administrator to be required 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, Plan amendments shall be subject to approval by the Corporation shareholders entitled to vote at a meeting of shareholders. All Material Plan Amendments shall be subject to approval by

the Corporation’s shareholders entitled to vote at a meeting of the shareholders. For purposes of this Section 18, a Material

Plan Amendment shall mean any Plan amendment which would require shareholder approval pursuant to the rules of the national securities exchange or NASDAQ, on which the Corporation’s stock is listed at the time of such amendment.

Material Plan Amendments shall be approved by the shareholders in accordance with the rules of NASDAQ or the

appropriate national securities exchange, as the case may be. Nothing in this Section 18 shall limit the Administrator’s

authority to take any action permitted pursuant to Section 3(c) or 3(d).

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

Corporation 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

Corporation’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.

Upon the occurrence of a Change of Control as defined in this Section 20:

the Award is issued, each outstanding Stock Option and Stock Appreciation Right shall automatically become

fully exercisable.

the Award is issued, conditions and restrictions on each outstanding Restricted Stock Award, Restricted Stock Unit

and Performance Share Award will be removed.

    

(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 Corporation (the

“Outstanding Corporation Common Stock”); provided, however, that any acquisition by the Corporation

or its subsidiaries, or any employee benefit plan (or related trust) of the Corporation or its subsidiaries

of 20% or more of Outstanding Corporation 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 Corporation Common Stock immediately prior to such

acquisition in substantially the same proportion as their ownership, immediately prior to such

acquisition, of the Outstanding Corporation 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 Corporation’s

shareholders, 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 Corporation 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 Corporation 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 Corporation 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 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 Corporation, excluding a sale or other disposition of assets to a subsidiary of the Corporation; or

(iv)     Consummation by The Washington Trust Company, the wholly-owned subsidiary of the Corporation, of

(i) a reorganization, merger or consolidation, in each case, with respect to which, following such

reorganization, merger or consolidation, the Corporation 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

Corporation or a subsidiary of the Corporation.

The decision as to whether a Change of Control of the Corporation has occurred shall be made by a majority of the

Continuing Directors of the Corporation (as defined in the Restated Articles of Incorporation of the Corporation) and

shall be conclusive and binding.

represent to and agree with the Corporation in writing that such person is acquiring the shares without a view

to distribution thereof.

purposes when the Corporation or a stock transfer agent of the Corporation 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

Corporation. Uncertificated Stock shall be deemed delivered for all purposes when the Corporation or a

Stock transfer agent of the Corporation 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

Corporation, notice of issuance and recorded the issuance in its records (which may include electronic “book

entry” records). Notwithstanding anything herein to the contrary, the Corporation 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.

receive dividends or any other rights of a shareholder 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.

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 Corporation or

any Subsidiary.

Corporation’s insider trading policies and procedures, as in effect from time to time.

restatement due to the material noncompliance of the Corporation, as a result of misconduct, with any

financial reporting requirement under the securities laws, then any grantee who is one of the individuals

subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 shall reimburse the

Corporation for the amount of any Award received by such individual under the Plan during the 12-month

period following the first public issuance or filing with the United States Securities and Exchange

Commission, as the case may be, of the financial document embodying such financial reporting requirement.

This Plan shall become effective upon shareholder approval in accordance with applicable state law, the Corporation’s

bylaws and articles of incorporation and applicable stock exchange rules. 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 Plan is approved by the Board.

This Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the