Exhibit 10.3


                                 DIRECTORS STOCK RETAINER PLAN
                                              OF
                                    SALISBURY BANCORP, INC.


1. NAME AND PURPOSE.

     1.1 This plan is the Directors  Stock  Retainer Plan of Salisbury  Bancorp,
Inc. (the "Plan").

     1.2 The  purposes  of the Plan are to  enhance  the  ability  of  Salisbury
Bancorp,  Inc.'s  ("Salisbury")  ability to attract and retain highly  qualified
individuals  to  serve  as  non-employee   Directors  of  Salisbury  to  provide
additional  incentives to such Directors to promote the success of Salisbury and
its subsidiary bank. The Plan provides non-employee  Directors of Salisbury with
shares of Restricted Stock of Salisbury as a component of compensation for their
services as Directors.

2. DEFINITIONS.

     For purposes of interpreting the Plan and related documents,  the following
definitions shall apply:

     2.1 "Annual Stock  Retainer"  means the 120 shares of Restricted  Salisbury
Common Stock payable to each Director of Salisbury on an annual basis as part of
each director's compensation for service on the Board of Directors of Salisbury.

     2.2 "Annual  Meeting  Date"  means the date of each  annual  meeting of the
shareholders of Salisbury held after the Effective Date.

     2.3  "Value"  means the value of a share of Stock on the last  trading  day
preceding  a Grant  Date or other  date on  which  Restricted  Stock  is  issued
pursuant to Section 6 of this Plan.

     2.4 "Board" means the Board of Directors of Salisbury.

     2.5  "Director"  means  a  non-employee  member  of  Salisbury's  Board  of
Directors.

     2.6 "Effective  Date" means the date the Directors  Stock Retainer Plan was
approved by the shareholders of Salisbury.

     2.7 "Expiration  Date" means the 10th  anniversary of the day following the
date on which the Plan was approved by the shareholders of Salisbury pursuant to
Section 12.1 below.

     2.8 "Grant Date" means the date on which a grant of Restricted  Stock takes
effect  pursuant  to Section 7 of this Plan,  which shall be last  business  day
preceding the 2002 Annual Meeting Date and each  subsequent  Annual Meeting Date
before the Expiration Date.

     2.9 "Holder" means a person who holds Restricted Stock under this Plan.

     2.10  "Pro-Rated  Stock  Retainer"  means a number of  shares  equal to 120
multiplied by a fraction, the numerator of which is the number of months of such
a new non-employee  director's  service as a member of the Board (rounded to the
nearest full month) and the denominator of which is 12, provided,  however, that
such fraction shall not be in excess of 1.0.

     2.11 "Stock" means the Common Stock, par value $.10, of Salisbury.

     2.12 "Salisbury" means Salisbury Bancorp, Inc., a Connecticut corporation.


<PAGE>


3. ADMINISTRATION OF THE PLAN.

     The Plan shall be administered by the Board.  The Board's  responsibilities
under the Plan  shall be  limited  to  taking  all legal  actions  necessary  to
document the grants of Restricted Stock provided herein, to maintain appropriate
records and reports  regarding those grants,  and to take all acts authorized by
this Plan.

4. STOCK SUBJECT TO THE PLAN.

     4.1 Subject to adjustments made pursuant to Section 4.2, the maximum number
of shares of Stock  that may be issued  pursuant  to the Plan  shall not  exceed
15,000.

     4.2(a) If the  outstanding  shares of Stock are  increased  or decreased or
changed  into or  exchanged  for a  different  number or kind of shares or other
securities  of  Salisbury by reason of any  recapitalization,  reclassification,
stock  split-up,  combination of shares,  exchange of shares,  stock dividend or
other  distribution  payable on capital stock,  or other increase or decrease in
such shares effected without receipt of  consideration  by Salisbury,  occurring
after the Effective  Date, the number and kinds of shares for  Restricted  Stock
may be granted under the Plan shall be adjusted  proportionately and accordingly
by Salisbury.

     (b)  Adjustments  under this Section 4.2 related to stock or  securities of
Salisbury shall be made by the Board, whose  determination in that respect shall
be final,  binding,  and conclusive.  No fractional  shares of Stock or units of
other  securities  shall be  issued  pursuant  to any such  adjustment,  and any
fractions resulting from any such adjustment shall be eliminated in each case by
rounding downward to the nearest whole share or unit.

     (c) The grant of Restricted  Stock pursuant to the Plan shall not affect or
limit  in any  way  the  right  or  power  of  Salisbury  to  make  adjustments,
reclassifications,  reorganizations  or  changes  of  its  capital  or  business
structure  or to  merge,  consolidate,  dissolve  or  liquidate,  or to  sell or
transfer all of any part of its business or assets.

5. ELIGIBILITY.

     Eligibility  under this Plan is limited to Directors  of Salisbury  who are
not employees of Salisbury or any subsidiary of Salisbury.

6. NUMBER OF SHARES AND GRANT DATE.

     Subject  to  approval  of the  Plan by the  shareholders  of  Salisbury  as
provided  in  Section  12.1 and to the  availability  of shares  of Stock  under
Section 4.1  hereof,  on each annual  Grant Date  beginning  with the Grant Date
preceding the 2002 Annual Meeting of  Shareholders  of Salisbury,  each Director
whose term of office begins with or continues after such Effective Date shall be
issued a number of whole  shares  of  Restricted  Stock set forth in the  Annual
Stock Retainer (120 shares). Subject to approval of the Plan by the shareholders
of Salisbury as provided in Section 12.1 below and to the availability of shares
of Stock under Section 4.1 hereof,  each Director who is first elected after the
Effective  Date to the Board (and who was not then a member of the Board)  other
than on an Annual  Meeting  Date  shall be  granted a number of whole  shares of
Restricted Stock equal to the Pro-Rated Stock Retainer.

7. VESTING.

     Restricted Stock shall become fully vested upon issuance following approval
of the Plan by shareholders in accordance with Section 12.1 hereof.


<PAGE>


8. SHAREHOLDER RIGHTS.

     Except as provided in Section 11 hereof,  the Holder  shall have all of the
rights of a shareholder  with respect to shares of Restricted  Stock,  including
the right to vote such  shares and the right to receive  dividends  thereon.  No
Holders  shall  have  any  right  to  compel  Salisbury  to file a  Registration
Statement  with respect to shares of  Restricted  Stock  issued  pursuant to the
Plan.

9. CONTINUATION OF SERVICE.

     Nothing in the Plan shall  confer  upon any person any right to continue to
serve as a Director,  or to receive shares of stock issued pursuant to this Plan
if such person is not serving as a Director on a Grant Date.

10. WITHHOLDING.

     Salisbury shall have the right to withhold, or require a Holder to remit to
Salisbury,  an amount sufficient to satisfy any applicable federal, state, local
or foreign  withholding  tax  requirements  imposed with respect to the grant of
Restricted Stock or the payment of dividends thereon.

11. NONTRANSFERABILITY; LEGEND.

     No  shares of  Restricted  Stock  granted  pursuant  to this Plan  shall be
transferable by the Holder without compliance with the registration requirements
of applicable law or exemptions thereto. All share certificates issued hereunder
shall bear an  appropriate  legend  reflecting  the foregoing  restrictions  and
limitations on transfer.

12. ADOPTION, AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN.

     12.1  The  Plan  shall  be  effective  as of the  date of  adoption  by the
shareholders of Salisbury  present,  or  represented,  and entitled to vote at a
meeting duly held in accordance with applicable law.

     12.2 Subject to the  limitation of Section 12.2,  the Board may at any time
suspend  or  terminate  the  Plan,  and may  amend it from  time to time in such
respects as the Board may deem advisable; provided, however, the Board shall not
amend the Plan in the following  respects  without the approval of  shareholders
then sufficient to approve the Plan in the first instance:

     (a) To materially  increase the benefits accruing to participants under the
Plan (for example, to increase the number of shares of Restricted Stock that may
be granted to any Director).

     (b) To increase  the  maximum  number of shares of Stock that may be issued
under the Plan;

     (c)  To  materially   modify  the   requirements   as  to  eligibility  for
participation in the Plan.

     12.3 No Restricted  Stock may be granted during any suspension or after the
termination of the Plan, and no amendment, suspension or termination of the Plan
shall,  without the Holder's consent,  alter or impair any rights or obligations
under any  Restricted  Stock  previously  issued into under the Plan.  This Plan
shall terminate upon the Expiration Date,  unless  previously  terminated by the
Board pursuant to this Section 12.

<PAGE>


13. REQUIREMENTS OF LAW.

     13.1 Salisbury shall not be required to issue any shares of Stock hereunder
if the  issuance of such shares  would  constitute  a violation by the Holder or
Salisbury  of any  provisions  of  any  law or  regulation  of any  governmental
authority,  including without limitation any federal or state securities laws or
regulations.  Any  determination in this connection by the Board shall be final,
binding,  and  conclusive.   Salisbury  shall  not  be  obligated  to  take  any
affirmative action in order to cause the issuance of shares pursuant to the Plan
to comply with any law or regulation of any  governmental  authority.  As to any
jurisdiction  that expressly  imposes the requirement that shares of Stock shall
not be issued  hereunder  unless and until the shares of Stock are registered or
are subject to an available exemption from registration, the grant of Restricted
Stock (under  circumstances in which the laws of such jurisdiction  apply) shall
be  deemed  conditioned  upon  the  effectiveness  of such  registration  or the
availability of such an exemption.

     13.2 The intent of this Plan is to qualify  for the  exemption  provided by
Rule 16b-3 under the  Exchange  Act. To the extent any  provision of the Plan or
action by the Plan  administrators does not comply with the requirements of Rule
16b-3, it shall be deemed inoperative, to the extent permitted by law and deemed
advisable by the Plan  administrators,  and shall not affect the validity of the
Plan.  In the event Rule 16b-3 is revised or  replaced,  the Board may  exercise
discretion  to  modify  this  Plan  in any  respect  necessary  to  satisfy  the
requirements of the revised exemption or its replacement.

14. GOVERNING LAW.

     The validity, interpretation and effect of this Plan, and the rights of all
persons  hereunder,  shall be governed by and determined in accordance  with the
laws of Connecticut.

     This Plan was duly  approved by the Board at a meeting held on the 26th day
of February 2001 and by the  shareholders  of Salisbury at a meeting held on the
28th day of April, 2001.