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                    EXHIBIT 10.4   AMERICAN BANK OF CONNECTICUT
                           DIRECTORS STOCK OPTION PLAN
  (AS ASSUMED BY AMERICAN FINANCIAL HOLDINGS, INC., EFFECTIVE JANUARY 18, 2002)





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                          AMERICAN BANK OF CONNECTICUT
                           DIRECTORS STOCK OPTION PLAN
  (AS ASSUMED BY AMERICAN FINANCIAL HOLDINGS, INC., EFFECTIVE JANUARY 18, 2002)


        1.  PURPOSE OF THE PLAN.  The  Plan shall be known  as the American Bank
of  Connecticut  Directors  Stock  Option  Plan.  The  purpose of the Plan is to
attract  and  retain  the  best   available   Directors  for  American  Bank  of
Connecticut.

        2.  DEFINITIONS.  As used herein, the following definitions shall apply.

        (a)    "BANK" shall mean American Bank of Connecticut.

        (b)    "BOARD" shall mean the Board of Directors of the Bank.

        (c)    "COMMON  STOCK"  shall mean  common  stock,  par value One Dollar
               ($1.00) per share, of the Bank.

        (d)    "ELIGIBLE DIRECTOR" shall mean a director of the Bank who is  not
               also an employee of the Bank.

        (e)    "EFFECTIVE  DATE" of this Plan shall mean the date of  attainment
               of Stockholder approval as provided in Section 10.

        (f)    "OPTION" shall mean a stock option granted pursuant to this Plan.

        (g)    "OPTIONEE"  shall  mean  an  Eligible  Director  who  receives an
               option.

        (h)    "PLAN"  shall mean the  American  Bank of  Connecticut  Directors
               Stock Option Plan.

        3.  SHARES  SUBJECT TO THE PLAN.  Except as  otherwise  required  by the
provisions of section 10 hereof,  the aggregate number of shares of Common Stock
deliverable  upon the exercise of Options  pursuant to the Plan shall not exceed
One Hundred Twenty Thousand (120,000).  Such shares may either be authorized but
unissued or treasury shares.

        4.  ADMINISTRATION OF THE PLAN.

        (A) THE PRESIDENT OF THE BANK SHALL  ADMINISTER  THE PLAN. The President
of the Bank is hereby authorized to execute  instruments  evidencing  Options on
behalf of the Bank and to cause them to be delivered to the Optionees.

        (B) DISTRIBUTIONS OF OPTIONS ON SHAREHOLDER APPROVAL. Upon attainment of
Shareholder approval of this Plan, the President of the Bank shall issue Options
for Five Thousand (5,000) shares to each then serving Eligible Director.



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        (C) FUTURE  DISTRIBUTION  OF OPTIONS.  The  President  of the Bank shall
issue an Option for Three Thousand (3,000) shares to each Eligible Director upon
his election or re-election to the Board of Directors of the Bank.

        5.  TERM OF PLAN - TERM OF OPTIONS.

        (A) The Plan shall  continue in effect for a term of ten (10) years from
its Effective Date, unless sooner terminated pursuant to section 12.

        (B) The term of each  Option  granted  under the Plan  shall be ten (10)
years.

        6. OPTION PRICE.  The price per share at which each Option granted under
the Plan may be  exercised  shall be the fair  market  value of the stock at the
time such Option is granted.

        7. EXERCISE OF OPTION. Any Option granted hereunder shall be exercisable
at such times and under such conditions as shall be permissible  under the terms
of the Plan and of the  Options  granted to the  Optionee.  An Option may not be
exercised for a fractional  share. An Option granted pursuant to the Plan may be
exercised,  subject to provisions relative to its termination and limitations on
its exercise, from time to time only by (a) written notice of intent to exercise
the option with respect to a specified number of shares,  and (b) payment to the
Bank  (contemporaneously  with  delivery  of each  such  notice),  in cash or by
certified bank cashier's or teller's check, of the amount of the Option price of
the number of shares with  respect to which the Option is then being  exercised.
Each such notice and payment shall be delivered, or mailed by prepaid registered
or  certified  mail,  addressed  to the  Secretary  of the  Bank  at the  Bank's
executive offices.

        8.  NON-TRANSFERABILITY  OF OPTIONS.  Options granted under the Plan may
not be sold, pledged, assigned, hypothecated,  transferred or disposed of in any
manner other than by will or by the laws of descent and distribution.

        9. ADJUSTMENTS.  In the event of any change in the outstanding shares of
Common  Stock by  reason  of any  stock  dividend  or  split,  recapitalization,
reclassification,  merger, consolidation,  combination or exchange of shares, or
other  similar  corporate  change,  whether  or not the  Bank  is the  surviving
corporation, then if the President shall determine, in his sole discretion, that
such change  necessarily  or equitably  requires an  adjustment in the number of
shares  subject  to each  outstanding  Option  and the  Option  prices or in the
maximum number of shares subject to this Plan, such adjustments shall be made by
the President and shall be conclusive and binding for all purposes of this Plan.
No adjustments  shall be made in connection with the issuance by the Bank of any
warrants,  rights or options to acquire  additional shares of Common Stock or of
securities convertible into Common Stock.

        10.  APPROVAL  BY  SHAREHOLDERS.  This Plan shall not  become  effective
unless approved by the stockholders of the Bank.


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        11.  MODIFICATION  OF PLAN.  This  Plan may not be  modified  except  as
provided in section 9, without the approval of the stockholders of the Bank.

        12. TERMINATION OF PLAN. The Board may terminate this Plan provided such
termination  does not  impair  any rights of an  Optionee  under an  outstanding
Option.

        13. CONDITIONS UPON ISSUANCE OF SHARES.  Shares shall not be issued with
respect to any Option granted under the Plan unless the issuance and delivery of
such shares shall comply with all relevant  provisions  of Federal and State law
and the rules and  regulations  issued  thereunder and the  requirements  of any
stock exchange upon which the shares may then be listed.

        14.  RESERVATION OF SHARES.  The Bank during the term of this Plan, will
reserve  and keep  available  a number  of  shares  sufficient  to  satisfy  the
requirements of the Plan.



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