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                                                                    EXHIBIT 10.3

                          FACTORY POINT BANCORP, INC.
                           2004 STOCK INCENTIVE PLAN,
                             AS AMENDED AND RESTATED

         The purposed of the Factory Point Bancorp, Inc. 2004 Stock Incentive
Plan (the "Plan") is to provide (i) designated officers (including officers who
are also directors) and other designated employees of Factory Bancorp, Inc., a
Delaware corporation (the "Company"), and its subsidiaries, and (ii)
non-employee members of the board of directors of the Company, and its
subsidiaries (the "Board"), with additional incentive to further the success of
the Company. The Company believes that the Plan will cause the designated
participants to contribute materially to the growth of the Company, thereby
benefiting the Company's shareholders and will align the economic interests of
the participants with those of the shareholders.

                                    ARTICLE I
                                 ADMINISTRATION

         1.1    THE COMMITTEE. The Plan shall be administered and interpreted by
                -------------
a committee (the "Committee"), which shall consist of (i) either the Board
itself or (ii) two or more directors appointed by the Board, all of whom (unless
the Board determines otherwise) shall be "non-employee directors" of the Board
as defined under Rule 16b-3 under the Securities Exchange Act of 1934 (the
"Exchange Act") and "outside directors" as defined under section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code") and related Treasury
regulations. The Board, in its discretion, may appoint separate committees to
administer the Plan with respect to a designated portion of participants (e.g.,
participants subject to Section 16 of the Exchange Act or Section 162(m) of the
Code). If the Board does not appoint a committee to administer all or any
portion of the Plan, then the Board shall be the Committee.

         1.2    DETERMINATIONS WITH RESPECT TO GRANTS. Except for the automatic
                -------------------------------------
grants provided in Article 6 to Non-Employee Directors (as defined in Section
4.1), the Committee shall have the sole authority to (i) determine the
individuals to whom Grants (as defined in Section 2.1) shall be made under the
Plan, (ii) determine the type, size and terms of the Grants to be made to each
such individual, (iii) determine the time when the Grants will be made and the
duration of any applicable exercise or restriction person, including the
criteria for vesting and the acceleration of vesting, (iv) accelerate the
vesting of any Grants and reduce or waive any restrictions on the exercise or
vesting of any Grants, and (v) deal with any other matters arising under the
Plan. The Committee may, if it so desires, base any of the foregoing
determinations upon the recommendations of management of the Company.

         1.3    ACTION BY THE COMMITTEE. A majority of the Committee shall
                -----------------------
constitute a quorum thereof, and the actions of majority of the Committee at a
meeting at which a quorum is present, or actions unanimously approved in writing
by all members of the Committee, shall be actions of the Committee.

         1.4    DELEGATION. The Committee may appoint one of its members to
                ----------
chairman and any person, whether or not a member of the Committee, to be its
secretary or agent. Furthermore, the Committee may delegate any ministerial
duties in connection with the Plan to one or more officers of the Company.

         1.5    INTERPRETATION OF PLAN. The Committee shall have full power and
                ----------------------
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the plan and for the conduct of its business as it deems necessary
or advisable, to waive requirements relating to formalities or other matters
that do not modify the substance of rights of Grantees (as defined in Section
4.2) or constitute a material amendment of the Plan, to correct any defect or
supply any omission of the Plan or any Grant Instrument (as defined in Section
2.2) and to reconcile any inconsistencies in the Plan or any Grant Instrument.
The Committee's interpretations of the Plan and all determinations made or
actions taken by the Committee pursuant to the powers vested in it hereunder
shall be conclusive and binding on all persons having any interests in the Plan
or in any awards granted hereunder. All powers of the Committee shall be
exercised in its sole discretion, in the best interest of the Company and in
keeping with the objectives of the Plan and need not be uniform as to similarly
situated individuals.

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         1.6    NO LIABILITY. No member of the Committee shall be liable for any
                ------------
act or omission (whether or not negligent) taken or omitted in good faith, or
for the good faith exercise of any authority or discretion granted in the Plan
to the Committee, or for any act or omission of any other member of the
Committee.

         1.7    COSTS. All costs incurred in connection with the administration
                -----
and operation of the Plan shall be paid by the Company. Except for the express
obligations of the Company under the Plan and under Grants (as defined in
Section 2.1) in accordance with the provisions of the Plan, the Company shall
have no liability with respect to any Grant, or to any Grantee or any transferee
of shares of Company Stock from any Grantee, including, but not limited to, any
tax liability, capital losses, or other costs or losses incurred by any Grantee,
or any such transferee.

                                    ARTICLE 2
                                     GRANTS

         2.1    TYPE OF GRANTS. Incentives under the Plan shall consist of
                --------------
grants of incentive stock options, nonqualified stock options, stock
appreciation rights, restricted stock, deferred stock and performance awards
(hereinafter collectively referred to as "Grants").

         2.2    GRANT INSTRUMENTS. All Grants shall be subject to the terms and
                -----------------
conditions set forth herein and to those other terms and conditions consistent
with the Plan as the Committee deems appropriate. Each grant shall be evidence
by a written instrument (the "Grant Instrument") specifying the number of shares
of Company Stock to which it relates and containing such other terms and
conditions as the Committee shall approve that are not inconsistent with the
Plan. Grants under a particular section of the Plan need not be uniform as among
the grantees. The Committee shall have the authority to waive any condition of
an outstanding Grant or amend an outstanding Grant, provided that an amendment
of any existing Grant may not be made without the consent of the Grantee if such
amendment would have an adverse effect on the rights of the Grantee.

                                    ARTICLE 3
                           SHARES SUBJECT TO THE PLAN

         3.1    NUMBER OF SHARES. Subject to the adjustment specified below, the
                ----------------
aggregate number of shares of the common stock of the Company, par value $1.00
per share (the "Company Stock"), that may be issued or transferred under the
plan is 250,000 shares. Notwithstanding anything in the Plan to the contrary,
the maximum aggregate numbers of shares of Company Stock that shall be subject
to Grants made under the Plan to any on individual during any calendar year
shall be 35,000. The shares may be authorized but unissued shares of Company
Stock or reacquired shares of Company Stock, including shares purchased by the
Company on the open market for purposes of the Plan. If and to the extent Grants
under the Plan terminate, expire, or are cancelled, forfeited, exchanged or
surrendered without Company Stock being delivered pursuant thereto, of if any
shares of Restricted Stock are forfeited, the shares subject to such grants,
including forfeited shares, shall again be available for purposes of the Plan.

         3.2    ANTI-DILUTION ADJUSTMENTS. If there is any change in the number
                -------------------------
or kind of shares of Company Stock outstanding by reason of a stock dividend,
recapitalization, stock split, or combination or exchange of shares, or a
merger, reorganization or consolidation in which the Company is the surviving
corporation, or a reclassification or by reason of any other extraordinary or
unusual events affecting the outstanding Company Stock as a class without the
Company's receipt of consideration, or if the value of outstanding shares of
Company Stock is substantially reduced due to the Company's payment of an
extraordinary dividend or distribution, the kind of shares, the maximum number
of shares of Company Stock available for Grants, the maximum number of shares of
Company Stock that may be subject to Grants to any one individual under the Plan
in any calendar year, the number of shares to be subject to grants under Article
6, the number of shares covered by outstanding Grants, and the price per share
or the applicable fair market value of such Grants shall be equitably adjusted
by the Committee to reflect any increase or decrease in the number or kind of
issued shares of Company Stock to preclude the enlargement or dilution of rights
and benefits under such Grants; provided, however, that any fractional shares
                                --------  -------
resulting from such adjustment shall be eliminated by rounding any portion of a
share equal to .500 or greater up, and any portion of a share equal to less than
..500 down, in each case to the nearest whole number. For purposes of this
Section 3.2, "shares of Company Stock" and "shares" include referenced shares
with respect to SARs. The adjustments

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determined by the Committee shall be final, binding and conclusive.
Notwithstanding the foregoing, no adjustment shall be authorized or made
pursuant to this Section to the extent that such authority or adjustment would
cause any incentive stock option to fail to comply with Section 422 of the Code.

                                    ARTICLE 4
                          ELIGIBILITY FOR PARTICIPATION

         4.1      ELIGIBLE PARTICIPANTS.
                  ---------------------

                  4.1.1 All employees of the Company and its present or future
subsidiaries ("Employees"), including Employees who are officers or members of
the Board, shall be eligible to participate in the Plan.

                  4.1.2 Members of the Board who are not employees of the
Company or any of its subsidiaries ("Non-Employee Directors") shall also be
eligible to participate in the Plan and, in addition to the automatic Grants
provided by Article 6, may receive Grants in the discretion of the Committee;
provided, however, that only Employees shall be eligible to receive Incentive
Stock Options (as defined in Section 5.1.1).

         4.2    SELECTION OF GRANTEES. Except as provided in Article 6, the
                ---------------------
Committee shall select the individuals to receive Grants and determine the
number of shares of Company Stock subject to a particular Grant in such manner
as the Committee determines. Any individuals who receive grants under this Plan
shall hereinafter be referred to as "Grantees."

                                    ARTICLE 5
                               GRANTING OF OPTIONS

         5.1      TYPE OF OPTION AND PRICE.
                  ------------------------

                  5.1.1 The Committee may grant options intended to qualify as
"incentive stock options" within the meaning of Section 422 of the Code
("Incentive Stock Options") or options which are not intended to so qualify
("Nonqualified Stock Options") or any combination of Incentive Stock Options and
Nonqualified Stock Options (hereinafter collectively the "Stock Options"), all
in accordance with the terms and conditions set forth herein.

                  5.1.2 The purchase price of Company Stock subject to a Stock
Option shall be determined by the Committee and shall not be less than 100% of
the Fair Market Value (determined in accordance with Section 5.2.3) of a share
of such Stock on the date such Stock Option is granted.

                  5.13 If the Company Stock is traded in a public market, then
the Fair Market Value per share shall be, if the principal trading market for
the Company Stock is a national securities exchange or the National Market
segment of The NASDAQ Stock Market, the last reported sale price thereof on the
relevant date or (if there were no trades on that date) the latest preceding
date upon which a sale was reported, or, if the Company Stock is not principally
traded on such exchange or market, the mean between the high and low sale prices
for trades for that date as reported on the OTC Bulletin Board; provided that,
if there are no reported sales during such date, then the Fair Market Value
shall be equal to the mean between the closing bid and ask prices quoted on the
OTC Bulletin Board for such date. If the Company Stock is not traded in a public
market or subject to reported transactions or quotations as set forth above, the
Fair Market Value per share shall be as determined by the Committee; provided,
however, that no determination of Fair Market Value with respect to an Incentive
Stock Option shall be inconsistent with Section 422 of the Code or the
regulations thereunder.

         5.2      OPTION TERM.  The Committee  shall  determine the term of each
                  -----------
Stock Option; provided, however, that the term of a Stock Option shall not
exceed ten years from the date of grant.

         5.3      EXERCISABILITY OF OPTIONS. Except as otherwise provided by
                  -------------------------
Article 6 for automatic Grants to Non-Employee Directors, Stock Options shall
become exercisable in accordance with the terms and conditions determined by the
Committee, in its sole discretion. The Committee, in its sole discretion, may
accelerate, in whole or in part, the exercisability of any or all outstanding
Stock Options at any time for any reason. In addition, all

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outstanding Stock Options automatically shall become fully and immediately
exercisable upon a Change of Control (as defined in Section 10.1).

         5.4      VESTING OF OPTIONS AND RESTRICTIONS ON SHARES.
                  ---------------------------------------------

                  5.4.1 The vesting period for Stock Options shall commence on
the date of grant and shall end on the date or dates, determined by the
Committee, that shall be specified in the Grant Instrument.

                  5.4.2 Notwithstanding any other provision of the Plan, except
as otherwise provided by the Committee in the Grant Instrument, all outstanding
Stock Options shall become immediately exercisable upon the earliest to occur of
the following, if at such time the Grantee is an Employee or a Non-Employee
Director: (i) the Grantee's Retirement (as defined in Section 5.6.4), (ii) the
Grantee's death or Disability (as defined in Section 5.6.4), or (iii) the
occurrence of a Change of Control (as defined in Section 10.1).

         5.5      MANNER OF EXERCISE.
                  ------------------

                  5.5.1 A Grantee may exercise a Stock Option which has become
exercisable, in whole or in part, by delivering a duly completed notice of
exercise, in such form as is acceptable to the Committee, to the Secretary or
other officer of the Company designated by the Committee, with accompanying
payment of the option price in accordance with Section 5.7 below.

                  5.5.2 Unless otherwise provided by the Committee, such notice
may instruct the Company to deliver shares of Company Stock due upon the
exercise of the Stock Option to any registered broker or dealer previously
approved or designated by the Committee ("Designated Broker") in lieu of
delivery to the Grantee. The Committee may suspend the ability of a Grantee to
exercise a Stock Option through a Designated Broker at any time that the
Committee, in its sole discretion, determines appropriate.

         5.6      TERMINATION OF EMPLOYMENT OR SERVICE.
                  ------------------------------------

                  5.6.1  General. Except as provided below, a Stock Option may
                         -------
only be exercised while the Grantee is employed by the Company or a subsidiary
of the Company or is serving as a Non-Employee Director.

                  5.6.2  Nonqualified Stock Options. In the event of a Grantee's
                         --------------------------
termination of employment or service for any reason other than death, Disability
or Retirement (as such terms are defined in Section 5.6.4) or following a Change
of Control, the Nonqualified Stock Options shall be exercisable only as to those
shares that were immediately purchasable on the date of termination and only for
a period of three (3) months following termination or for such other period as
the Committee shall establish in its sole discretion. If the Grantee's
termination of employment or service is due to death, Disability or Retirement
or following a Change of Control, all Nonqualified Stock Options held by the
Grantee shall vest and become immediately exercisable upon such event and shall
be thereafter exercisable by the Grantee or the Grantee's legal representative
or beneficiaries, as applicable, for a period of three (3) years following the
date of such event, provided, that in no circumstance shall the period extend
beyond the expiration of the Nonqualified Stock Option term set forth in the
Grant Instrument.

                  5.6.3  Incentive Stock Options. In the event of a Grantee's
                         -----------------------
termination of employment for any reason other than death, Disability,
Retirement, or following a Change of Control, the Grantee's Incentive Stock
Options shall be exercisable only as to those shares that were immediately
purchasable by such Grantee at the date of termination and only for a period of
three (3) months following termination. In the event of a termination of a
Grantee's employment due to death, Disability, Retirement or following a Change
of Control, all Incentive Stock Options held by such Grantee shall vest and
become immediately exercisable and shall thereafter be exercisable by the
Grantee or the Grantee's legal representative or beneficiaries, as applicable,
for a period of three (3) years following the date of such cessation of
employment, provided, however, that any such Option shall not be eligible for
treatment as an Incentive Stock Option in the event such Option is exercised
more than three (3) months following the date of Grantee's Retirement or
termination of employment following a Change of Control; and provided further,
that no Option shall be eligible for treatment as an Incentive Stock Option in
the event such Option is exercised more than one (1) year following termination
of employment due to Disability; and provided further, in order to obtain
Incentive Stock Option treatment for Options exercised by heirs or devisees of a
deceased Grantee,

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the Grantee's death must have occurred while employed or within three (3) months
of termination of employment. Notwithstanding anything herein to the contrary,
in no event shall the period within which an Incentive Stock Option may be
exercised extend beyond the expiration of' the Option term set forth in the
Grant Instrument.

                  5.6.4  Definitions. For purposes of the Plan: (i) the term
                         -----------
"Company" shall include the Company's subsidiaries; (ii) the term "Disability"
or "Disabled" shall mean any physical or mental impairment which qualifies an
individual for disability benefits under the applicable long term disability
plan maintained by the Company, or, if no such plan applies, which would qualify
such individual for disability benefits under the long-term disability plan
maintained by the Company, if such individual were covered by that plan, or, if
no such plan exists, as determined in good faith by the Committee; and (iii)
"Retirement" or "Retired" shall mean a termination of employment which
constitutes a "retirement," whether normal or otherwise, under any applicable
qualified pension benefit plan maintained by the Company, or, if no such plan is
applicable, which would constitute "retirement" under the Company's pension
benefit plan, if such individual were a participant in that plan or, in the case
of a Non-Employee Director, the Grantee ceases to be such after attaining the
age of 65 or such other age as shall be established as a retirement age by the
Committee.

         5.7     PAYMENT OF OPTION PRICE. The Grantee shall pay the option price
                 -----------------------
specified in the Grant Instrument in cash, including through the broker assisted
cashless exercise procedure described in Section 5.5.2, or the Grantee also may
pay the option price specified in the Grant Instrument by delivering shares of
Company Stock owned by the Grantee (including Company Stock acquired in
connection with the exercise of a Stock Option, subject to such restrictions as
the Committee deems appropriate) and having a Fair Market Value on the date of
exercise equal to the option price or through a combination of cash and shares
of Company Common Stock owned by the Grantee. Unless permitted by the Committee,
no tendered shares of Company Stock which were acquired by the Grantee pursuant
to, or upon the previous exercise of, a Grant under the Plan, or an award under
any other award plan of the Company or its subsidiaries, shall be accepted in
payment unless the Grantee has held such shares (without restriction imposed by
the applicable plan or award) for at least six months prior to delivery in
payment. Subject to Article 14, the Grantee shall pay the option price and the
amount of withholding tax due, if any, at the time of exercise. Shares of
Company Stock shall not be issued or transferred upon exercise of a Stock Option
until the option price is fully paid and any required withholding obligations
are satisfied.

         5.8      LIMITS ON INCENTIVE STOCK OPTIONS.
                  ---------------------------------

                  5.8.1 Each Incentive Stock Option shall provide that, to the
extent that the aggregate Fair Market Value of the Company Stock on the date of
the grant with respect to which Incentive Stock Options are exercisable for the
first time by a Grantee during any calendar year under the Plan or any other
stock option plan of the Company exceeds $100,000, then such option as to the
excess shall be treated as a Nonqualified Stock Option.

                  5.8.2 An Incentive Stock Option shall not be granted to any
participant who is not an Employee of the Company or any "subsidiary" within the
meaning of Section 424 (f) of the Code.

                  5.8.3 An Incentive Stock Option shall not be granted to any
Employee who, at the time of grant, owns stock possessing more than 10 percent
of the total combined voting power of all classes of stock of the Company or any
"parent" or "subsidiary" of the Company within the meaning of Section 424 (e)
and (f) of the Code, unless the option price per share is not less than 110% of
the Fair Market Value of Company Stock on the date of grant and the option
exercise period is not more than five years from the date of grant.

                  5.8.4 No Incentive Stock Option granted under this Plan is
transferable except by will or the laws of descent and distribution and is
exercisable during the Grantee's lifetime only by the Grantee.

         5.9      NOTICE OF DISPOSITION; WITHHOLDING; ESCROW. A Grantee of an
                  ------------------------------------------
Incentive Stock Option shall immediately notify the Company in writing of any
sale, transfer, assignment or other disposition (or action constituting a
disqualifying disposition within the meaning of Section 421 of the Code) of any
shares of Company Stock acquired through exercise of an Incentive Stock Option,
within two (2) years after the grant of such Incentive Stock Option or within
one (1) year after the acquisition of such shares, setting forth the date and
manner of disposition, the number of shares disposed of and the price at which
such shares were disposed of. The Company shall been entitled to withhold from
any compensation or other payments then or thereafter due to the Grantee such

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amounts as may be necessary to satisfy any withholding requirements of Federal
(including payroll taxes) or state law or regulation and, further, to collect
from the Grantee any additional amounts which may be required for such purpose.
The Committee may, in its sole discretion, require shares of Company Stock
acquired by an Optionee upon exercise of an Incentive Stock Option to be held in
an escrow arrangement for the purpose of enabling compliance with the provisions
of this Section 5.9.

         5.10     NO ISO WARRANTY. The Company makes no warranty that Stock
                  ---------------
Options granted under this Plan that are intended to qualify as Incentive Stock
Options will, in fact, so qualify or that any qualification will not be lost in
the future, including by acts or omissions of the Company or the Committee or by
other cause. If a Stock Option granted hereunder for any reason fails for
whatever reason to comply with the provisions of Section 422 of the Code, and
such failure is not or cannot be cured, such Option shall be a Nonqualified
Stock Option.

                                    ARTICLE 6
                     OPTION GRANTS TO NON-EMPLOYEE DIRECTORS

         6.1      ELIGIBILITY.  A Non-Employee  Director shall receive automatic
                  -----------
grants of Nonqualified Stock Options in accordance this Article 6.

         6.2      INITIAL GRANT. Each Non-Employee Director who is a member of
                  -------------
the Board on the effective date of this Plan, as defined in Section 18 hereof,
shall receive on such date an automatic grant of a Nonqualified Stock Option to
purchase 900 shares of Company Stock. Each Non-Employee Director who first
becomes a member of the Board after the effective date of this Plan, shall
receive an automatic grant of a Nonqualified Stock Option to purchase 900 shares
immediately upon the date he or she becomes a member of the Board.

         6.3      ANNUAL GRANTS. During the term of this Plan, beginning from
                  -------------
the date of the initial grant specified in Section 6.2 above (the "Initial Grant
Date"), and, thereafter, on July 1 of each year (the "Annual Automatic Grant
Date"), each Non-Employee Director will receive a grant of a Nonqualified Stock
Option to purchase 900 shares of Company Stock provided that the Non-Employee
Director remains as such on the Annual Automatic Grant Date; provided, however,
that a director may not receive more than one Grant pursuant to this Article 6
in any calendar year.

         6.4      OPTION PRICE. The purchase price per share of Company Stock
                  ------------
subject to a Stock Option granted under this Article 6 shall be equal to the
Fair Market value of a share of Company Stock on the date of grant.

         6.5      OPTION TERM. The term of each Stock Option granted pursuant to
                  -----------
this Article 6 shall be ten years.

         6.6      EXERCISABILITY.  Options granted under this Article 6 shall be
                  --------------
immediately exercisable.

         6.7      ADMINISTRATION. The provisions of this Article 6 are intended
                  --------------
to operate automatically and not require administration. However, to the extent
that administrative determinations are required, the determinations shall be
made by the Board, but in no event shall such determinations affect the
eligibility of Grantees, the determination of the exercise price, the timing of
the grant or the number of shares subject to Stock Options granted hereunder.

         6.8      APPLICABILITY OF PLAN PROVISIONS. Except as otherwise provided
                  --------------------------------
in, and not inconsistent with, this Article 6, the Nonqualified Stock Options
granted to Non-Employee Directors pursuant to this Article 6 shall be subject to
the provisions of this Plan applicable to Nonqualified Stock Options granted to
other persons.

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                                    ARTICLE 7
                            STOCK APPRECIATION RIGHTS

         7.1    GENERAL REQUIREMENTS. The Committee may grant stock appreciation
                --------------------
rights ("SARs") to any Grantee (i) independently or (ii) in tandem with, any
Stock Option, for all or a portion of the applicable Stock Option. Tandem SARs
may be granted, either at the time the Stock Option is granted or at any time
thereafter while the Stock Option remains outstanding; provided, however, that
in the case of an Incentive Stock Option, such tandem rights may be granted only
at the time of the Grant of such Stock Option. Unless the Committee determines
otherwise, the base price of each SAR shall be equal to the greater of (i) the
exercise price of the related Stock Option, if any, or (ii) the Fair Market
Value of a share of Company Stock as of the date of grant of such SAR.

         7.2      EXERCISE.
                  --------

                  7.2.1 No SAR shall be exercisable more than 10 years after the
date of its grant.

                  7.2.2 A SAR not granted in tandem with a Stock Option will
become exercisable at such time or times, and on such terms and conditions, as
the Committee shall specify. Unless the Committee provides otherwise in the
Grant Instrument, the provisions of Article 5 applicable to Nonqualified Stock
Options, including, without limitation, those related to exercise upon
termination of employment or service, shall be applicable to non-tandem SARs;
provided, however, that all such SARs shall become immediately exercisable upon
the occurrence of a Change of Control of the Company.

                  7.2.3 A SAR granted in tandem with a Stock Option will be
exercisable only at such time or times, and to the extent, that the related
Stock Option is exercisable and will be exercisable only in accordance with the
exercise procedure for the related Stock Option. Upon the exercise of a Stock
Option, the SARs relating to the Company Stock covered by the related Stock
Option shall terminate. Upon the exercise of SARs, the related Stock Option
shall terminate to the extent of an equal number of shares of Company Stock.

         7.3      VALUE OF SARS. Upon a Grantee's exercise of some or all of the
                  -------------
Grantee's SARs, the Grantee shall receive in settlement of such SARs an amount
equal to the value of the stock appreciation for the number of SARs exercised,
payable in cash, Company Stock or a combination thereof. The stock appreciation
for an SAR is the difference between the base price of the SAR as described in
Section 7.1 and the Fair Market Value of the underlying Company Stock on the
date of exercise of such SAR.

         7.4     FORM OF PAYMENT. Upon exercise of an SAR, payment shall be made
                 ---------------
in the form of shares of Company Stock, valued at their Fair Market Value on the
date of exercise, in cash, or in a combination thereof, as the Committee, in its
sole discretion, shall determine. Payment by the Company of SARs shall be
subject to withholding of applicable taxes in accordance with Article 14.

                                    ARTICLE 8
           RESTRICTED AND DEFERRED STOCK GRANTS AND PERFORMANCE AWARDS

         8.1     RESTRICTED STOCK. The Committee may issue or transfer shares of
                 ----------------
Company Stock to an eligible participant under a Grant (a "Restricted Stock
Grant"), upon such terms as the Committee deems appropriate. The following
provisions are applicable to Restricted Stock Grants:

                  8.1.1 Shares of Company Stock issued pursuant to Restricted
Stock Grants may be issued for cash consideration or for no cash consideration,
at the sole discretion of the Committee. The Committee shall establish
conditions under which restrictions, if any, on the transfer of shares of
Company Stock shall lapse over a period of time or according to such other
criteria as the Committee deems appropriate. The period of time during which the
Restricted Stock Grant will remain subject to restrictions will be designated in
the Grant Instrument as the "Restriction Period."

                  8.1.2 If the Grantee ceases to be employed by the Company or,
in the case of a Non-Employee Director, to serve or be engaged as such, during a
period designated in the Grant Instrument as the Restriction Period, or if other
specified conditions are not met, the Restricted Stock Grant shall terminate as
to all shares

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covered by the Grant as to which restrictions on transfer have not lapsed and
those shares of Company Stock must be immediately returned to the Company. The
Committee may, however, in its sole discretion, provide for complete or partial
exceptions to this requirement as it deems appropriate, including, without
limitation, upon death, Disability or Retirement (as defined in Section 5.6.4).

                  8.1.3 During the Restriction Period, a Grantee may not sell,
assign, transfer, pledge or otherwise dispose of the shares of Company Stock to
which such Restriction Period applies except to a Successor Grantee under
Article 10. Each certificate for a share issued or transferred under a
Restricted Stock Grant shall contain a legend giving appropriate notice of the
restrictions in the Grant. The Grantee shall be entitled to have the Restricted
Stock legend pursuant to this Section 8.1 removed from the stock certificate or
certificates covering any of the shares subject to restrictions when all
restrictions on such shares have lapsed.

                  8.1.4 During the Restriction Period, unless the Committee
determines otherwise, the Grantee shall have the right to vote shares subject to
the Restricted Stock Grant and to receive any dividends or other distributions
paid on such shares, subject to any restrictions deemed appropriate by the
Committee.

                  8.1.5 Except as provided by Article 15, all restrictions
imposed under the Restricted Stock Grant shall lapse upon the expiration of the
applicable Restriction Period and the satisfaction of any conditions imposed by
the Committee. The Committee may determine, as to any or all Restricted Stock
Grants, that all the restrictions shall lapse without regard to any Restriction
Period. All restrictions under all outstanding Restricted Stock Grants shall
automatically and immediately lapse upon a Change of Control.

         8.2      DEFERRED STOCK.
                  --------------

                  8.2.1 The Committee may grant a participant the right to
receive shares of Company Stock to be delivered in the future (a "Deferred Stock
Grant"). Delivery of the Company Stock pursuant to a Deferred Stock Grant will
take place at such time or times, and on such terms and conditions, as the
Committee may determine. The Committee may provide at the time of the Deferred
Stock Grant that the stock to be delivered will be restricted stock pursuant to
Section 8.1. The Committee may at any time accelerate the time at which delivery
of all or any part of the Company Stock will take place; provided, however, that
unless otherwise provided by the Committee at the time of grant, the time of
delivery of the deferred stock will automatically accelerate to the date of a
Change of Control.

                  8.2.2 During any deferral period, the Grantee shall not have
any rights as a shareholder with respect to the deferred shares.

         8.3      PERFORMANCE AWARDS. The Committee may grant a participant the
                  ------------------
right to receive, without payment, a grant of Restricted or Deferred Stock, as
determined by the Committee, following the attainment of such performance goals,
during such measurement period or periods, and on such over terms and
conditions, as the Committee may determine (a "Performance Award"). Performance
goals may be related to personal performance, corporation performance, group or
departmental performance or any such other category of performance as the
Committee may determine. The Committee shall have the authority to determine the
performance goals, the period or periods during which performance is to be
measured and all other terms and conditions applicable to the Performance Award.
Unless otherwise determined by the Committee at the time of grant, all
performance goals shall be deemed satisfied and the Performance Award shall vest
upon the occurrence of a Change of Control.

         8.4      TAX WITHHOLDINGS. Delivery of stock pursuant to this Article 8
                  ----------------
shall be subject to withholding of applicable taxes in accordance with Article
14.

                                    ARTICLE 9
                            TRANSFERABILITY OF GRANTS

         9.1      LIMITATION. During a Grantee's lifetime, only the Grantee may
                  ----------
exercise rights under a Grant and Grants may not be transferred, assigned,
pledged or hypothecated in any manner, by operation of law or otherwise, except
by will or by the laws of descent and distribution or, with respect to Grants
other than Incentive Stock Options, if permitted in any specific case by the
Committee, in its sole discretion.

                                       8
<PAGE> 9
         9.2      SUCCESSOR GRANTEE. When a Grantee dies, the representative or
                  -----------------
other person entitled to succeed to the rights of the Grantee may exercise such
rights. A successor Grantee must furnish proof satisfactory to the Company of
his or her right to receive the Grant under the Grantee's will or under the
applicable laws of descent and distribution.

                                   ARTICLE 10
                        CHANGE OF CONTROL OF THE COMPANY

         10.1     DEFINITIONS.  As used herein, a "Change of Control" shall be
                  -----------
deemed to have occurred if:

                  (i) a liquidation or dissolution of the Company (excluding
transfers to subsidiaries) or the sale of all or substantially all of the
Company's assets occurs;

                  (ii) as a result of a tender offer, stock purchase, other
stock acquisition, merger, consolidation, recapitalization, reverse split or
sale or transfer of assets, any person or group (as such terms are used in and
under Section 13(d)(3) or 14(d)(2) of the Exchange Act) becomes the beneficial
owner (as defined in Rule 13-d under the Exchange Act), directly or indirectly,
of securities of the Company representing 25% or more of the common stock of the
Company or the combined voting power of the Company's then outstanding
securities; provided, however, that for purposes of this Section 10.1, a person
or group shall not include the Company or any subsidiary or any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
subsidiary;

                  (iii) if at least a majority of the Board at any time does not
consist of individuals who were elected, or nominated for election, by directors
in office at the time of such election or nomination; or

                  (iv) the Company merges or consolidates with any other
corporation (other than a wholly owned subsidiary) and is not the surviving
corporation (or survives only as a subsidiary of another corporation); or

                  (v) the occurrence of such other event as the Committee, in
its sole discretion, shall designate at any time as a Change of Control.

         10.2      BUSINESS COMBINATION TRANSACTION. Any agreement to which the
                   --------------------------------
Company or any of its subsidiaries is a party which provides for any merger,
consolidation, share exchange, or similar transaction of the Company with or
into another corporation or other association whereby the Company is not to be
the surviving or parent corporation may provide, without limitation, for the
assumption of any outstanding Grants by the surviving corporation or association
or its parent or for an equitable mandatory settlement of any outstanding Grants
in cash based on the consideration paid to shareholders in such transaction and
all outstanding Grants shall be subject to such agreement. In any case where
Grants are assumed by another corporation, appropriate equitable adjustments as
to the number and kind of shares or other securities and the purchase or
exercise price(s) shall be made.

                                   ARTICLE 11
                      AMENDMENT AND TERMINATION OF THE PLAN

         11.1     AMENDMENT. The Board may amend, suspend or terminate the Plan
                  ---------
(including, without limitation, Article 6 hereof) at any time, in its
discretion, subject to any required shareholder approval or any shareholder
approval which the Board deems advisable for any reason, such as for the purpose
of obtaining or retaining any statutory or regulatory benefits under tax,
securities or other laws or satisfying any stock listing requirement.

         11.2     TERMINATION OF PLAN. The Plan shall terminate on the day
                  -------------------
immediately preceding the tenth anniversary of its effective date unless
terminated earlier by the Board or unless extended by the Board with the
approval of the shareholders.

         11.3     TERMINATION AND AMENDMENT OF OUTSTANDING GRANTS. A
                  -----------------------------------------------
termination, suspension or amendment of the Plan that occurs after a Grant is
made shall not materially impair the rights of a Grantee unless the Grantee
consents or unless the Committee acts under Section 17.2 hereof. The termination
of the Plan shall not

                                       9
<PAGE> 10
impair the power and authority of the Committee with respect to an outstanding
Grant. Whether or not the Plan has terminated, an outstanding Grant may be
terminated or amended under Section 17.2 hereof or may be amended by agreement
of the Company and the Grantee consistent with the Plan.

         11.4     PLAN PROVISIONS BINDING. The Plan shall be the controlling
                  -----------------------
document. No other statements, representations, explanatory materials or
examples, oral or written, may amend the Plan in any manner. The Plan shall be
binding upon and enforceable against the Company and it successors and assigns.
In the event of any conflict between the Plan and any Grant Instrument, the Plan
shall control.

                                   ARTICLE 12
                               FUNDING OF THE PLAN

         12.1     UNFUNDED PLAN. This Plan shall be unfunded. The Company shall
                  -------------
not be required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Grants under the Plan. In no
event shall interest be paid or accrued on any Grant, including unpaid
installments of Grants.

                                   ARTICLE 13
                              RIGHT OF PARTICIPANTS

         13.1     NO RIGHT TO GRANT.  Nothing  in this Plan  shall  entitle  any
                  -----------------
Grantee  or other  person to any claim or right to be a Grant under the Plan.

         13.2     NO RIGHT TO  EMPLOYMENT OR RETENTION.  Neither the Plan nor
                  ------------------------------------
any action taken hereunder shall be construed as giving any individual any
rights to be retained by or in the employ of the Company or any other employment
or retention rights.

         13.3     NO RESTRICTION ON COMPANY. Nothing contained in the Plan shall
                  -------------------------
be construed to (i) limit the right of the Company to make Grants under this
Plan in connection with the acquisition, by purchase, lease, merger,
consolidation or otherwise, of the business or assets of any corporation, firm
or association, including Grants to employees thereof who become Employees of
the Company, or for other proper corporate purpose, or (ii) limit the right of
the Company to grant stock options or make other awards outside of the Plan.

                                   ARTICLE 14
                              WITHHOLDING OF TAXES

         14.1     RIGHT TO WITHHOLD. The Company shall have the right to deduct
                  -----------------
from all Grants paid in cash, or from other wages paid to an employee of the
Company, any federal, state or local taxes required by law to be withheld with
respect to such cash awards and, in the case of Grants paid in Company Stock,
the Grantee or other person receiving such shares shall be required to pay to
the Company the amount of any such taxes which the Company is required to
withhold with respect to such Grants or the Company shall have the right to
deduct from other wages paid to the employee by the Company the amount of any
withholding due with respect to such Grants.

         The Company also may withhold or collect amounts with respect to a
disqualifying disposition of shares of Company Stock acquired pursuant to
exercise of an Incentive Stock Option.

         14.2     TENDER OF COMPANY STOCK. A Grantee may elect to satisfy all or
                  -----------------------
part of any withholding or income tax obligations arising in connection with
such Grants by having the Company withhold all or a portion of any shares of
Company Stock that otherwise would be issued to the Grantee or by surrendering
all or a portion of any shares of Company Stock previously acquired by the
Grantee. Such shares of Company Stock shall be valued at their Fair Market Value
on the date when taxes otherwise would be withheld in cash. Any payment of
withholding taxes by assigning shares of Company Stock to the Company may be
subject to such additional restrictions as the Committee at any time deems
appropriate. If the holder of shares of Company Stock purchased in connection
with the exercise of an ISO disposes of such shares within two years of the date
such ISO was granted or within one year of such exercise, he shall notify the
Company of such disposition and remit an amount necessary to satisfy applicable
withholding requirements including those arising under federal income tax laws.
If such holder does not remit such amount, the Company may withhold all or a
portion of any salary then or in the future owed to such

                                       10
<PAGE> 11
holder as necessary to satisfy such requirement. The Committee may, from time to
time, make or impose, in its discretion, such additional restrictions, rules or
regulations as it deems appropriate with respect to withholding of any taxes.

                                   ARTICLE 15
                       REQUIREMENTS FOR ISSUANCE OF SHARES

         15.1    COMPLIANCE WITH LAW. The obligations of the Company to offer,
                 -------------------
sell, issue, deliver or transfer Common Stock under the Plan shall be subject to
all applicable laws, regulations, rules and approvals, including, but not by way
of limitation, the effectiveness of any registration statement under applicable
securities laws if deemed necessary or appropriate by the Company. The Company's
obligation to offer, sell, issue, deliver or transfer its shares under the Plan
is further subject to the approval of any governmental authority required in
connection therewith and is further subject to the Company receiving, should it
determine to do so, the advice of its counsel that all applicable laws and
regulations have been complied with. Certificates for shares of Common Stock
issued hereunder may be legended as the Committee shall deem appropriate.

         15.2    RESTRICTIONS ON GRANTS. The Committee shall have the right to
                 ----------------------
condition any Grant made to any Grantee hereunder on such Grantee's undertaking
in writing to comply with such restrictions on his or her subsequent disposition
of such shares of Company Stock as the Committee shall deem necessary or
advisable as a result of any applicable law, regulation or official
interpretation thereof and certificates representing such shares may be legended
to reflect any such restrictions.

         15.3    SHARE CERTIFICATES. Certificates representing shares of Company
                 ------------------
Stock issued under the Plan will be subject to such stop-transfer orders and
other restrictions as may be applicable under such laws, regulations and other
obligations of the Company, including any requirement that a legend or legends
be placed thereon.

         15.4    NO FRACTIONAL SHARES. No fractional shares of Company Stock
                 --------------------
shall be issued or delivered pursuant to the Plan or any Grant. The Committee
shall determine whether cash, other awards or other property shall be issued or
paid in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.

                                   ARTICLE 16
                                   FORFEITURE

         16.1    MISCONDUCT. Notwithstanding anything to the contrary in the
                 ----------
Plan, if the Committee finds, after consideration of the facts presented on
behalf of the Company and the involved Grantee, that the Grantee has been
engaged in fraud, embezzlement, theft, commission of a felony, or dishonesty in
the course of the Grantee's employment by or service with the Company or by any
subsidiary, or that the Grantee has disclosed trade secrets of the Company or
its affiliates, and that such actions have damaged the Company or any subsidiary
in any significant manner, in the discretion of the Committee, then the Grantee
shall forfeit all rights under and to all unexercised Grants, and under and to
all Grants to the Grantee with respect to which the Company has not yet
delivered payment or certificates for shares of Stock (as the case may be), all
of which Grants and rights shall be automatically canceled.

         16.2    FINALITY OF COMMITTEE DECISION. The decision of the Committee
                 ------------------------------
as to the cause of the Grantee's discharge from employment with the Company and
any subsidiary shall be final for purposes of the Plan, but shall not affect the
finality of the Grantee's discharge or removal by the Company or subsidiary for
any other purposes. The preceding provisions of this Section 16 shall not apply
to any Incentive Stock Option to the extent such application would result in
disqualification of the stock option as an incentive stock option under Sections
421 and 422 of the Code.

                                       11
<PAGE> 12
                                   ARTICLE 17
                                  MISCELLANEOUS

         17.1   SUBSTITUTE GRANTS. The Committee may make a Grant to an employee
                -----------------
or director of another corporation who becomes an Employee or Non-Employee
Director by reason of a corporate merger, consolidation, acquisition of stock or
property, reorganization or liquidation involving the Company or any of its
subsidiaries in substitution for a stock option or restricted stock grant made
by such corporation ("Substituted Stock Incentives"). The terms and conditions
of the substitute grant may vary from the terms and conditions required by the
Plan and from those of the Substituted Stock Incentives. The Committee shall
prescribe the provisions of the substitute grants.

         17.2   SECTION 16 LIMITATIONS. With respect to persons subject to
                ----------------------
Section 16 of the Exchange Act, it is the intent of the Company that the Plan
and all transactions under the Plan comply with all applicable provisions of
Rule 16b-3 or its successors under the Exchange Act. The Committee, as it deems
advisable, may revoke any Grant if it is contrary to law or modify a Grant to
bring it into compliance with any valid and mandatory government regulation.

         17.3   OWNERSHIP OF STOCK. A Grantee or successor Grantee shall have no
                ------------------
rights as a shareholder with respect to any shares of Company Stock covered by a
Grant until the shares are issued or transferred to the Grantee or successor
Grantee on the stock transfer records of the Company.

         17.4   HEADINGS. Section headings are for reference only. In the event
                --------
of a conflict between a title and the content of a Section, the content of the
Section shall control.

         17.5   GOVERNING LAW. The validity, construction, interpretation and
                -------------
effect of the Plan and Grant Instruments issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the State of
Delaware.

                                   ARTICLE 18
                           EFFECTIVE DATE OF THE PLAN

         18.1   The Plan shall be effective as of the date of the approval of
the Plan by the Company's shareholders.

                                       12<PAGE> 1

                                                                    EXHIBIT 10.4

                       STOCK OPTION ASSUMPTION AGREEMENT

Dear Optionee:

         On September 21, 2007 (the "Closing Date"), Factory Point Bancorp, Inc.
("Factory Point") will merge with and into Berkshire Hills Bancorp, Inc.
("Berkshire"), a Delaware corporation (the "Merger"). On the Closing Date, all
of your outstanding options to purchase shares of Factory Point common stock
granted to you under either the Factory Point Bancorp, Inc. 1999 Stock Option
Plan for Non-employee Directors, the Factory Point Bancorp, Inc. 1999 Stock
Incentive Plan and/or the Factory Point Bancorp, Inc. 2004 Stock Incentive Plan
(collectively referred to as the "plans") and documented with a stock option
agreement(s) will be assumed by Berkshire (the "Factory Point Options").

         A schedule of your Factory Point Options immediately before and after
the Merger is attached to this agreement. The number of stock options and the
exercise price of each stock option has been adjusted by the 0.5844 exchange
ratio in the Merger to: (1) to preserve, on a per share basis, the value that
existed immediately before the Merger; and (2) to the extent applicable by law,
to retain incentive stock option status (if any) under the federal tax laws.

         Unless the context otherwise requires, after the Closing Date, any
references in the plans and the stock option agreement(s) to: (1) the "Company"
or the "Corporation" means Berkshire, (2) "Stock," "Common Stock" or "Shares"
means shares of Berkshire common stock, (3) the "Board of Directors" or the
"Board" means the Board of Directors of Berkshire and (4) the "Committee" means
the Compensation Committee of the Berkshire Board of Directors. All references
in the stock option agreements and the plans relating to your status as an
employee of Factory Point will now refer to your status as an employee of
Berkshire or any present or future Berkshire subsidiary. To the extent your
stock option agreement(s) or the plans allowed you to deliver shares of Factory
Point common stock as payment for the exercise price, shares of Berkshire common
stock may be delivered in payment of the adjusted exercise price, and the period
for which such shares were held as Factory Point common stock before the Merger
will be taken into account.

         The grant date, vesting schedule and the expiration date of your
assumed Factory Point Options remain the same as set forth in your stock option
agreement(s), but the number of shares subject to each stock option has been
adjusted to reflect the Exchange Ratio, as applicable. All other provisions
which govern either the exercise or the termination of the assumed stock options
remain the same as set forth in your stock option agreement(s), and the
provisions of the stock option agreement(s) (except as expressly modified by
this agreement and the Merger) will govern and control your rights under this
agreement to purchase shares of Berkshire common stock. Upon your termination of
employment with Berkshire you will have the limited time period to exercise your
assumed stock options. INCENTIVE STOCK OPTIONS (IF ANY) EXERCISED MORE THAN
THREE MONTHS AFTER THE DATE YOU CEASE TO BE AN EMPLOYEE OF BERKSHIRE (ONE YEAR
IN THE CASE OF DEATH OR DISABILITY) WILL BE TREATED AS NON-STATUTORY STOCK
OPTIONS FOR TAX PURPOSES.

<PAGE> 2
         To exercise your assumed Factory Point Options, you must deliver to the
Berkshire Human Resources Department (1) a written notice of exercise for the
number of shares of Berkshire common stock you want to purchase, (2) the payment
by check (or previously owned shares of Berkshire common stock) equal to the
adjusted exercise price multiplied by the number of shares to be exercised, and
(3) all applicable taxes. Payment of withholding taxes (where applicable) may be
tendered in cash or shares of Berkshire common stock. The exercise notice and
payment should be delivered to the following address:

                          Berkshire Hills Bancorp, Inc.
                           Human Resources Department
                 66 West Street, Pittsfield, Massachusetts 01201

         Nothing in this agreement or your stock option agreement(s) interferes
in any way with your rights and Berkshire's rights, which rights are expressly
reserved, to terminate your employment at any time for any reason. Any future
stock options, if any, you may receive from Berkshire will be governed by the
terms of the Berkshire equity plans, and such terms may be different from the
terms of your assumed Factory Point Options, including, but not limited to, the
time period in which you have to exercise vested options after your termination
of employment.

         Please sign and date this agreement and return it promptly to the
address listed above. If you have any questions regarding this agreement or your
assumed Factory Point Options, please contact the Berkshire Human Resources
Department at (413) 236-3155.

                                        BERKSHIRE HILLS BANCORP, INC.

                                        By:
                                            ------------------------------------
                                            A duly authorized officer

                                 ACKNOWLEDGMENT

         The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Factory Point Options hereby assumed by Berkshire
are as set forth in the stock option agreement(s) for the 1999 Director Stock
Option Plan, the 1999 Stock Incentive Plan and/or the 2004 Stock Incentive Plan
and such Stock Option Assumption Agreement.

Dated: September ____, 2007
                                           -------------------------------------
                                           ________________, Optionee

                                       2
<PAGE> 3
<TABLE>
<CAPTION>

                                                                       EXHIBIT A

                OPTIONEE'S OUTSTANDING OPTIONS TO PURCHASE SHARES
                         OF FACTORY POINT BANCORP, INC.
                                  (PRE-MERGER)
<S>                           <C>                               <C>                          <C>
      Grant Date                     Name of Plan                 Number of Options              Exercise Price
------------------------      ----------------------------      -----------------------      -----------------------

                OPTIONEE'S OUTSTANDING OPTIONS TO PURCHASE SHARES
                  OF BERKSHIRE HILLS BANCORP, INC. COMMON STOCK
                                  (POST-MERGER)

      Grant Date                     Name of Plan                 Number of Options              Exercise Price
------------------------      ----------------------------      -----------------------      -----------------------

</TABLE>
                                       3

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