Washington Trust Bancorp, Inc. Form of Deferred Stock Unit Award Agreement
EXHIBIT
10.6
Washington
Trust Bancorp, Inc.
The form
of Deferred Stock Unit Award Agreement (the “Agreement”) contains blanks where
the executive’s name, target number of shares, grant date, vesting date,
performance period, shortened performance period start date, and months in term
provided under the Agreement vary for each executive. The information
for the executive officers who entered into the Agreement is provided in the
following chart:
|
Executive
Officer
|
Target
number of share
|
Grant
date
|
Vesting
date
|
Performance
period
|
Shortened
performance period start date
|
Months
in term
|
|
Xxxx
X Xxxxxx
|
6,007
|
June 16,
2008
|
April 30,
2010
|
January 1,
2008 through December 31, 2009
|
January 1,
2008
|
22
|
|
Xxxx
X. Xxxxxxx
|
6,086
|
June 16,
2008
|
June 16,
2011
|
January 1,
2008 through December 31, 2010
|
January 1,
2008
|
36
|
WASHINGTON
TRUST BANCORP, INC.
2003
Stock Incentive Plan
|
Name
of Grantee:
|
<<Name>>
|
|
No.
of Target Shares:
|
<Target
Number of Shares>>
|
|
Grant
Date:
|
<<Grant
Date>>
|
|
Vesting
Date:
|
<<Vesting
Date>>
|
Pursuant
to the Washington Trust Bancorp, Inc. 2003 Stock Incentive Plan (the “Plan”) as
amended through the date hereof, Washington Trust Bancorp, Inc. (the
“Corporation”) hereby grants a Deferred Stock Unit Award (an “Award”) to the
Grantee named above. No shares of Stock shall be issued unless the
provisions of Paragraph 2, 3, 4 or 5 are satisfied.
1. Defined
Terms. For purposes of this Agreement, the following terms
shall mean:
|
a)
|
Performance Measurement
Period: January 1, 20XX through December 31,
20XX. Performance will be assessed for each calendar year in
the Performance Measurement Period.
|
|
b)
|
Acceleration Event
Date: The date of the Grantee’s death, Retirement or
Permanent Disability or a Change in Control of the
Corporation.
|
|
c)
|
Shortened Performance
Measurement Period: The period from January 1, 20XX
through the Acceleration Event Date. Performance will be
assessed as available for each year within the Shortened Performance
Measurement Period. Calendar year performance will be used for
each completed year; and for any partial years, year-to-date performance
through the completed calendar quarter immediately preceding or coinciding
with the Acceleration Event Date. Performance for a partial
year will be weighted accordingly.
|
|
d)
|
Peer
Group: SNL Index of publicly-traded banks and thrifts
located in New England and Mid-Atlantic with assets of $1 billion to $5
billion (excluding institutions in Puerto Rico) as constituted at the end
of the Performance Measurement Period or Shortened Performance Measurement
Period, as applicable.
|
|
e)
|
Retirement: Separation
from service from the Corporation or a Subsidiary after attaining age 65
or after attaining age 55 with at least ten years of
service.
|
|
f)
|
Permanent
Disability: The Grantee is unable to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or
can be expected to last for a continuous period of not less than 12 months
or the Grantee is, by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less than three
months under an accident and health plan covering employees of the
Corporation or a Subsidiary.
|
2. Issuance of
Stock. The actual number of shares of Stock to be issued to
the Grantee will vary depending upon the Corporation’s performance during the
Performance Measurement Period with respect to core return on equity (“Core
XXX”) and core earnings per share growth (“Core EPS Growth”) relative to Core
XXX and Core EPS Growth for the same period by the Peer Group. Core
XXX and Core EPS Growth performance will receive equal weighting. The
Corporation’s relative performance ranking in Core XXX and Core EPS Growth in
each calendar year in the Performance Measurement Period will be averaged to
determine the actual number of shares of Stock, if any, to be issued to the
Grantee pursuant to the following table:
|
Corporation’s
Performance
vs. Peer Group’s
Performance
|
Percentage of Target
Shares
|
|
Below
25th
percentile
|
0%
|
|
25th
percentile
|
50%
|
|
50th
percentile
|
100%
|
|
75th
percentile
|
150%
|
|
100th
percentile
|
200%
|
The
percentage of Target Shares to be issued where performance achievement is
between stated percentiles is determined based on a straight line
interpolation. Notwithstanding the foregoing, if relative performance
for either the Corporation’s Core XXX or Core EPS Growth is less than the
25th
percentile relative to the Peer Group’s, the Award will be
forfeited.
Once
performance results for the Corporation and the Peer Group are available, the
Administrator shall certify performance achievement within ten (10)
days. Upon certification by the Administrator and subject to
continued employment of the Grantee by the Corporation through the Vesting Date,
the number of shares of Stock determined pursuant to this Paragraph 2 shall be
issued and delivered to the Grantee, either via book entry or actual stock
certificates, and the Grantee’s name shall be entered as the stockholder of
record on the books of the Corporation, within ten (10) days following such
certification or Vesting Date, if later. Thereupon, the Grantee shall
have all the rights of a shareholder with respect to such shares, including
voting and dividend rights.
3. Death of the
Grantee Prior to Issuance of Stock. In the event of the
Grantee’s death prior to the end of the Performance Measurement Period, the
Administrator shall determine the number of shares of Stock to be issued to the
Grantee’s beneficiary or estate in accordance with the principles set forth in
Paragraph 2 based upon the Corporation’s performance relative to the Peer
Group’s during the Shortened Performance Measurement Period. In the
event of the Grantee’s death after the end of the Performance Measurement Period
but prior to the Vesting Date, the Administrator shall determine the number of
shares of Stock to be issued to the Grantee’s beneficiary or estate in
accordance with the provisions of Paragraph 2. The requirement that
the Grantee be employed by the Corporation through the Vesting Date shall be
waived in the event of the Grantee’s death. Stock shall be issued
within 90 days of the Grantee’s death or the date that the Administrator
certifies the performance achievement of the Corporation, if later.
Notwithstanding
the foregoing, in the event the Grantee dies prior to the completion of at least
one full calendar quarter in the Shortened Performance Measurement Period, no
shares of Stock will be issued to the Grantee’s beneficiary or
estate.
4. Retirement or
Permanent Disability of the Grantee Prior to Issuance of
Stock. In the event of the Grantee’s Retirement or Permanent
Disability prior to the end of the Performance Measurement Period, the
Administrator shall determine the number of shares of Stock to be issued in
accordance with the principles set forth in Paragraph 2 based upon the
Corporation’s performance relative to the Peer Group’s during the Shortened
Performance Measurement Period. In the event of the Grantee’s
Retirement or Permanent Disability after the end of the Performance Measurement
Period but prior to the Vesting Date, the Administrator shall determine the
number of shares of Stock to be issued to the Grantee in accordance with the
provisions of Paragraph 2. The requirement that the Grantee be
employed by the Corporation through the Vesting Date shall be waived in the
event of the Grantee’s Retirement or Permanent Disability. The actual
number of shares of Stock to be issued to the Grantee pursuant to this Paragraph
4 shall be determined by multiplying the number of shares determined by the
Administrator pursuant to the preceding sentences by a fraction, the numerator
of which shall be the number of full calendar months from the Grant Date through
the Grantee’s Retirement or Permanent Disability, and the denominator of which
shall be <<months in term>>.
If the
Grantee becomes entitled to the shares on account of Permanent Disability, the
shares of Stock shall be issued to the Grantee within 90 days after the Grantee
is determined to be permanently disabled. If the Grantee becomes
entitled
to the shares on account of his Retirement, the shares of Stock so determined
under this Paragraph 4 shall be issued to Grantee in the seventh month after the
Grantee’s Retirement.
Notwithstanding
the foregoing, in the event the Grantee’s Retirement or Permanent Disability
occurs prior to the completion of at least one full calendar quarter in the
Shortened Performance Measurement Period, no shares of Stock will be issued to
the Grantee.
5. Change in
Control. In the event a Change in Control of the Corporation
(as defined in the Plan) occurs prior to the end of the Performance Measurement
Period, the Administrator shall determine the number of shares of Stock to be
issued in accordance with the principles set forth in Paragraph 2 based upon the
Corporation’s performance relative to the Peer Group’s during the Shortened
Performance Measurement Period. In the event a Change in Control of
the Corporation (as defined in the Plan) occurs after the end of the Performance
Measurement Period but prior to the Vesting Date, the Administrator shall
determine the number of shares of Stock to be issued to the Grantee in
accordance with the provisions of Paragraph 2. The requirement that
the Grantee be employed by the Corporation through the Vesting Date shall be
waived in the event of a Change in Control of the Corporation.
If the
Change in Control of the Corporation qualifies as a “change in control event”
within the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended and the regulations promulgated thereunder (“Section 409A”), the shares
of Stock so determined under this Paragraph 5 (or cash equivalent if shares of
Stock are no longer available) shall be issued to the Grantee immediately
following the Change in Control of the Corporation, subject to certification of
performance achievement of the Corporation within ten (10) days after
performance results for the Corporation and the Peer Group become
available. If the Change in Control of the Corporation does not
qualify as a “change in control event” within the meaning of Section 409A, and
subject to certification of performance achievement of the Corporation within
ten (10) days after performance results for the Corporation and the Peer Group
become available, the shares of Stock so determined under this Paragraph 5 (or
cash equivalent if shares of Stock are no longer available) shall be issued to
the Grantee upon the earliest of (i) the Vesting Date, (ii) the Grantee’s death,
or (iii) the Grantee’s “separation from service” within the meaning of Section
409A; provided, however, that if the Grantee is a “specified employee” within
the meaning of Section 409A upon his separation from service, the issuance shall
be delayed until the seventh month after the Grantee’s separation from
service.
Notwithstanding
the foregoing, in the event the Change in Control of the Corporation occurs
prior to the completion of at least one full calendar quarter in the Shortened
Performance Measurement Period, no shares of Stock will be issued to the
Grantee.
6. Restrictions
and Conditions.
|
a)
|
The
Award granted herein may not be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of by the Grantee prior to issuance of
shares of Stock.
|
|
b)
|
If
the Grantee’s employment with the Corporation and its Subsidiaries is
voluntarily or involuntarily terminated for any reason (other than death,
Permanent Disability, Retirement or after a Change in Control) prior to
the Vesting Date, the Award shall automatically be
forfeited.
|
|
c)
|
If
the Corporation is required to prepare an accounting restatement due to
the material noncompliance with any financial reporting requirement under
the Federal securities laws, the Grantee is required to reimburse the
Corporation for the value of shares of Stock issued to him under this
Award that would not have been earned based on the restated financial
results.
|
7. Dividend
Equivalent. Upon the issuance of shares of Stock to the
Grantee, the Corporation shall also provide the Grantee with a lump sum cash
payment in an amount equal to the amount of dividends per share paid by the
Corporation from the Grant Date through the share issuance date multiplied by
the number of shares of Stock actually issued to the Grantee.
8. Incorporation
of Plan. Notwithstanding anything herein to the contrary, this
Agreement shall be subject to and governed by all the terms and conditions of
the Plan. Capitalized terms in this Agreement shall have the meaning
specified in the Plan, unless a different meaning is specified
herein.
9. Tax
Withholding. The Grantee shall, not later than the date as of
which the receipt of this Award becomes a taxable event for Federal income tax
purposes, pay to the Corporation or make arrangements satisfactory to the
Administrator for payment of any Federal, state, and local taxes required by law
to be withheld on account of such taxable event. The Grantee may
elect to have the required minimum tax withholding obligation satisfied, in
whole or
in part,
by authorizing the Corporation to withhold from shares of Stock to be issued, a
number of shares of Stock with an aggregate Fair Market Value that would satisfy
the withholding amount due.
10. Miscellaneous.
|
a)
|
Notice
hereunder shall be given to the Corporation at its principal place of
business, and shall be given to the Grantee at the address maintained in
the Corporation’s payroll records, or in either case at such other address
as one party may subsequently furnish to the other party in
writing.
|
|
b)
|
This
Agreement does not confer upon the Grantee any rights with respect to
continuation of employment by the Corporation or any
Subsidiary.
|
|
c)
|
This
Agreement 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.
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WASHINGTON
TRUST BANCORP, INC
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By:
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||
|
Xxxx
X. Xxxxxxx, Chairperson
|
|
|
|
Compensation
& Human Resources Committee
|
|
|
I hereby
accept the Award in accordance with the terms of this Agreement.
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<<Name>>
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