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                             FAC REALTY TRUST, INC.
                              AMENDED AND RESTATED
                       1995 OUTSIDE DIRECTORS' STOCK PLAN


         FAC Realty Trust, Inc. hereby amends and restates as of March 31, 1998
its 1995 Outside Directors' Stock Award Plan for the benefit of certain members
of the Board of Directors of the Company, subject to the following provisions:

         SECTION 1. PURPOSES. The purposes of the Plan are to secure for the
Company and its stockholders the benefits of the incentive inherent in increased
Common Stock ownership by the Outside Directors and to provide the Outside
Directors with the opportunity to increase their proprietary interest in the
Company.

         SECTION 2. DEFINITIONS. For the purposes of this Plan and any Award,
the following words shall have the meanings indicated, unless the context
clearly requires otherwise:

                  "AWARD" means an Option or an award of shares of Common Stock,
         in either case pursuant to the terms and conditions of the Plan.

                  "AWARDEE" means an Outside Director granted an Award under the
         Plan.

                  "BOARD"  means the Board of Directors of the Company.

                  "COMMITTEE" means a committee appointed by the Board. Unless
         and until otherwise appointed, the Committee shall be the Board.

                  "COMMON STOCK" means the common stock of the Company, par
         value $0.01 per share, subject to the right of the Company to change
         the authorized number of shares of such class and to provide no par or
         a change in par value for such stock.

                  "COMPANY" means FAC Realty Trust, Inc., a Maryland
         corporation.

                  "DIRECTOR"  means a member of the Board.

                  "EFFECTIVE DATE" means the date on which the Plan is adopted
         by the Company, subject to approval by the stockholders of the Company.

                  "FAIR MARKET VALUE" means, with respect to shares of Common
         Stock, the closing price of the Common Stock on the New York Stock
         Exchange or such other securities exchange which the Common Stock is
         listed on the relevant date.



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                  "OPTION" means a stock option that is not qualified under
         Section 422 of the Internal Revenue Code of 1986, as amended.

                  "OUTSIDE DIRECTOR" means any Director who is not an officer or
         employee of the Company or any Subsidiary.

                  "PLAN" means the FAC Realty Trust, Inc. Amended and Restated
         1995 Outside Directors' Stock Plan, as amended from time to time in
         accordance herewith.

                  "RETAINER FEE" means the annual retainer fee earned by each
         Outside Director.

                  "SUBSIDIARY" means any corporation (other than the Company),
         partnership, joint venture, organization or other entity of which 50
         percent or more of the total combined voting power of all classes of
         equity of such entity or 50 percent or more of the capital account or
         profit interest of such entity is owned, directly or indirectly, by the
         Company or a Subsidiary, whether or not such entity now exists or is
         hereafter organized or acquired by the Company or a Subsidiary.

         SECTION 3. ADMINISTRATION. The Plan shall be administered by the
Committee. The Committee shall have the powers vested in it by the terms of the
Plan, such powers to include authority (within the limitations described herein)
to establish the form, terms and conditions of Awards and of Award agreements,
if any, embodying Awards made under the Plan. Subject to the provisions of the
Plan, the Committee shall have the power to construe the Plan, to determine all
questions arising thereunder and to adopt and amend such rules and regulations
for the administration of the plan as it may deem desirable. Any decision of the
Committee in the administration of the Plan, as described herein, shall be final
and conclusive. The Committee may act only by a majority of its members in
office, except that the members thereof may authorize any one or more of their
number or the Secretary or any other officer of the Company to execute and
deliver documents on behalf of the Committee. No member of the Committee shall
be liable for anything done or omitted to be done by such member or by any other
member of the Board in connection with the Plan except for such member's own
willful misconduct or as expressly provided by statute.

         SECTION 4. AMOUNT OF STOCK. The stock which may be issued and sold
under the Plan will be the Common Stock, of a total number not exceeding one
hundred fifty thousand (150,000) shares, subject to adjustment as provided in
Section 8. The stock to be issued may be either authorized and unissued shares
or issued shares acquired by the Company or one of its Subsidiaries. All or any
shares of Common Stock subject to an Option or stock grant which for any reason
are not issued or are reacquired under the Option or stock grant may again be
made subject to an Option or stock grant under the Plan.

                  SECTION 5. ELIGIBILITY. Each Outside Director shall receive
Awards in accordance with Section 6.

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         SECTION 6. AWARDS. The Committee may provide for Options and/or stock
grants to be awarded to Outside Directors in consideration for their service to
the Company. The Committee shall determine to which Outside Directors any such
Options and/or stock grants shall be awarded hereunder (any such person, an
"Awardee"). The Committee shall specify the number of shares of Common Stock
subject to each Option or stock grant provided for under this Section 6, or the
formula pursuant to which such number shall be determined, the Outside
Director(s) to receive any such Award, the date or triggering event of any such
Award and the vesting and expiration terms applicable to such Award. Subject to
adjustment pursuant to Section 8, the maximum number of shares of Common Stock
subject to Options and stock grants awarded under this Plan during any calendar
year to any person on account of his or her service as an Outside Director shall
not exceed 5,000 shares.

         SECTION 7. TERMS AND CONDITIONS OF AWARDS. Options and stock grants
awarded pursuant to the Plan need not be identical but each Option and each
stock grant shall be subject to the following general terms and conditions.

                  (a) Terms and Restrictions Upon Shares: The Committee may
         provide that the shares of Common Stock issued upon exercise of an
         Option or receipt of a stock grant shall be subject to such further
         conditions, restrictions or agreements as the Committee in its
         discretion may specify prior to the exercise of such Option or receipt
         of such stock grant, including without limitation, deferrals on
         issuance, conditions on vesting or transferability, and forfeiture or
         repurchase provisions. The Committee may waive conditions to and/or
         accelerate exercisability of an Option or stock grant, either
         automatically upon the occurrence of specified events (including in
         connection with a change of control of the Company) or otherwise in its
         discretion.

                  (b) Transferability of Option: Unless otherwise provided by
         the Committee, each Option shall be transferable only by will or the
         laws of descent and distribution.

                  (c) Option Price: The exercise price for each Option shall be
         established by the Committee or under a formula established by the
         Committee. The exercise price shall not be less than the Fair Market
         Value of the stock on the date of grant, except that in the event that
         receipt of Options is conditioned on the Non-Employee Director electing
         to forego his or her right to all or any part of his or her cash
         retainer or other fees, the aggregate exercise price of such Options
         shall not be less than 100% of the fair market value of the number of
         shares of Common Stock subject to such options at the time such options
         are granted less the amount of retainer or other fees such Non-Employee
         Director has elected to forego.

                  (d) Stock Grant Terms: Stock grants under the Plan may, in the
         sole discretion of the Committee, but need not, be conditioned upon the
         Participant paying cash or cash-equivalent consideration or agreeing to
         forego other compensation for the Shares covered by the stock grant.
         Stock grants under the Plan may be subject to such

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         conditions, restrictions or other vesting terms as are established in
         the sole discretion of the Committee. The conditions, restrictions or
         vesting terms may be contingent upon the passage of time, continued
         service or achievement of Company or individual performance goals, as
         specified by the Committee.

                  (e) Award Agreements: The Committee may require any Awardee to
         enter into an Award agreement with the Company in a form specified by
         the Committee agreeing to the terms and conditions of the Award and
         such other matters consistent with the Plan as the Committee in its
         sole discretion shall determine. Certificates representing Award shares
         granted subject to restriction shall bear a legend in such form as may
         be prescribed by the Committee.

         SECTION 8. EFFECT OF CERTAIN TRANSACTIONS. The number of shares of
Common Stock reserved for issuance under the Plan shall be appropriately
adjusted by the Committee, whose determination shall be conclusive, to reflect
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, a consolidation of shares, the payment of a stock
dividend, or any other capital adjustment affecting the number of issued shares
of Common Stock. In the event that the outstanding shares of Common Stock shall
be changed into or exchanged for a different number or kind of shares of stock
or other securities of the Company or another corporation, whether through
reorganization, recapitalization, merger, consolidation, or otherwise, then
there shall be substituted for each share of Common Stock reserved for issuance
under the Plan, but not yet awarded under the Plan, the number and kind of
shares of stock or other securities into which each outstanding share of Common
Stock shall be so changed or for which each such share shall be exchanged.

         SECTION 9. AMENDMENT OR DISCONTINUANCE. The Plan may be amended at any
time and from time to time by the Board as the Board shall deem advisable
including, but not limited to, amendments necessary to qualify for any exemption
or to comply with applicable law or regulations; provided, however, that any
such amendment shall be subject to further approval by the stockholders of the
company to the extent required by law, the New York Stock Exchange or as deemed
advisable by the Board. No amendment of the Plan shall materially and adversely
affect any right of any Awardee with respect to any Award theretofore granted
without such Awardee's written consent. Any such action to amend or discontinue
the Plan shall be adopted by formal action of the Board and executed by an
officer or persons authorized to act on behalf of the Company.

         SECTION 10. TERMINATION. This Plan shall terminate upon the earlier of
the following dates or events to occur:

                  (a) upon the adoption of a resolution of the Board terminating
         the Plan; or

                  (b) May 14, 2005 (which date is ten years from the date the
         Plan was initially approved and adopted by the stockholders of the
         Company).

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         Any action under Section 10(a) to terminate the Plan shall be adopted
by formal action of the Board and executed by an officer or person authorized to
act on behalf of the Company.

         SECTION 11.       MISCELLANEOUS PROVISIONS.

                  (a) Except as expressly provided for in the Plan, no Outside
         Director or other person shall have any claim or right to be granted an
         Award under the Plan. Neither the Plan nor any action taken thereunder
         shall be construed as giving any Outside Director any right to be
         retained in the service of the Company.

                  (b) An Awardee's right and interest under the Plan may not be
         assigned or transferred in whole or in part either directly or by
         operation of law or otherwise (except in the event of an Awardee's
         death, by will or the laws of descent and distribution), including, but
         not by way of limitation, execution, levy, garnishment, attachment,
         pledge, bankruptcy, or in any other manner, and no such right or
         interest of any participant in the Plan shall be subject to any
         obligation or liability of such participant.

                  (c) No shares of Common Stock shall be issued hereunder unless
         counsel for the Company shall be satisfied that (i) such issuance will
         be in compliance with applicable federal and state securities laws,
         including, but not limited to, listing requirements and New York Stock
         Exchange requirements, and any other laws or regulations applicable to
         the delivery of such shares, and (ii) the certificates representing
         shares of Common Stock awarded bear any and all legends necessary in
         order to comply with such laws and regulations.

                  (d) It shall be a condition to the obligation of the Company
         to issue an Award, that the Awardee pay to the Company, upon its
         demand, such amount as may be requested by the Company for the purpose
         of satisfying any liability to withhold federal, state, local income or
         other taxes. If the amount requested is not paid, the Company may
         refuse to issue an Award.

                  (e) The expenses of the Plan shall be borne by the Company.

                  (f) The 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 issuance of Awards under the Plan
         and the issuance of Awards shall be subordinate to the claims of the
         Company's general creditors.

                  (g) By accepting any Award or other benefit under the Plan,
         each Awardee and each person claiming under or through such person
         shall be conclusively deemed to have indicated his or her acceptance
         and ratification of, and consent to, any action taken under the Plan by
         the Company or the Board.


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                  (h) All section references herein refer to sections of this
         Plan unless specifically noted otherwise.

                  (i) Any notice or other communication provided for herein
         shall be given in writing by registered or certified mail, return
         receipt requested, or by facsimile, telecopy, or other means of
         electronic communication, reasonably calculated in any instance to be
         received by the receiving party or his, her or its authorized agent at
         the receiving party's last-known address. The notice or communication
         shall be deemed as delivered when it arrives at such address.


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