AMENDED AND RESTATED

                            FRISBY TECHNOLOGIES, INC.

                                STOCK OPTION PLAN

                       (as adopted on September 26, 2000)


     1. Plan;  Purpose;  General.  The  purpose of this Stock  Option  Plan (the
"Plan") is to advance the interests of Frisby Technologies, Inc. and any present
and  future  subsidiaries  (as  defined  below)  of  Frisby  Technologies,  Inc.
(hereinafter  inclusively referred to as the "Company") by enhancing the ability
of the Company to attract and retain selected employees,  consultants,  advisors
and  directors   (collectively   the   "Participants")   by  creating  for  such
Participants  incentives and rewards for their  contributions  to the success of
the Company,  and by encouraging such Participants to become owners of shares of
the Company's Common Stock, par value $.001 per share, as the title or par value
may be amended (the "Shares").

     2. Effective Date of Plan. The Plan will become  effective upon approval by
the Board of Directors of the Company (the "Board"), and shall be subject to the
approval by the shareholders of the Company as provided under the Securities Act
of 1933, as amended (the "Act").

     3. Administration of the Plan.

     (a) The Plan will be administered by the Board,  subject to Paragraph 3(b).
The Board will have authority,  not inconsistent with the express  provisions of
the Plan, to take all action necessary or appropriate  thereunder,  to interpret
its  provisions,  and to decide all questions and resolve all disputes which may
arise  in  connection  therewith.  Such  determinations  of the  Board  shall be
conclusive and shall bind all parties.

     (b) The Board may, in its  discretion,  delegate its powers with respect to
the Plan to an employee  benefit  plan  committee  or any other  committee  (the
"Committee"), in which event all references to "the Board" hereunder,  including
without  limitation the references in Section 9, but excluding the references in
Section  2,  shall be  deemed to refer to the  Committee.  The  Committee  shall
consist of not fewer than two (2) members of the Board; provided,  however, that
if, at any time the awards under the Plan are granted, the Company is subject to
the reporting  requirements  of the Securities  Exchange Act of 1934, as amended
(the  "Exchange  Act"),  each  of  the  members  of  the  Committee  must  be  a
"non-employee director" as that term is defined in Rule 16b-3 as promulgated and
amended from time to time by the  Securities and Exchange  Commission  under the
Exchange Act, or any successor thereto ("Rule 16b-3"). In addition,  at any time
the  Company  is  subject  to  Section  162(m) of the Code,  each  member of the
Committee shall be an "outside  director" within the meaning of such Section.  A
majority of the members of the  Committee  shall  constitute  a quorum,  and all
determinations of the Committee  (including  determinations of eligibility,  the
number of Options  granted to a Participant  and the exercise  price of Options)
shall  be  made  by the  majority  of its  members  present  at a  meeting.  Any
determination  of the  Committee  under the Plan may be made  without  notice or
meeting of the Committee by a writing signed by all of the Committee members.

     4.  Eligibility.  The  Participants  in the Plan  shall  be all  employees,
consultants, advisors and directors of the Company who are selected by the Board
whether or not they are also officers of the Company;  provided,  however,  that
Incentive  Options  shall only be  granted  to  employees  of the  Company,  and
provided further, however, that Gregory S. Frisby and Jeffry D. Frisby shall not
be eligible Participants.

     5. Grant of Options.

     (a) The Board  shall  grant  Options to  Participants  that it, in its sole
discretion,  selects.  Options shall be granted in accordance with the terms and
conditions  set forth in Section 6 hereof and on such other terms and conditions
as  the  Board  shall  determine.  Such  terms  and  conditions  may  include  a
requirement  that a  Participant  sell to the Company any Shares  acquired  upon
exercise of Options upon the  Participant's  termination of employment upon such
terms and  conditions  as the Board may  determine.  Incentive  Options shall be
granted on terms that comply with the Code and Regulations thereunder.

     (b)  Options  granted  pursuant  to the  Plan  (the  "Options")  may be (i)
incentive stock options ("Incentive Options") that are intended to qualify under
the Internal  Revenue Code of 1986,  as amended (the  "Code"),  or, (ii) options
that are not intended to so qualify,  or, (iii) both. The proceeds received from
the sale of Shares  pursuant  to the Plan  shall be used for  general  corporate
purposes.

     (c) No  Options  shall be  granted  after  December  31,  2007 but  Options
previously  granted may be exercised after that date until the expiration of the
Option.

     6. Terms and Conditions of Options

     (a) Exercise  Price.  The purchase price per share for Shares issuable upon
exercise  of Options  shall be a minimum of one hundred  (100%)  percent of fair
market value on the date of grant as determined by the Board.  For this purpose,
"fair  market  value"  will be  determined  as set  forth in  Section  8 hereof.
Notwithstanding the foregoing,  if any person to whom an Option is to be granted
owns in excess of ten (10%) percent of the combined  voting power of all classes
of outstanding capital stock of the Company (a "Principal Shareholder"), then no
Option  may be  granted  to such  person  for less than one  hundred  ten (110%)
percent  of the fair  market  value on the  date of grant as  determined  by the
Board.

     (b) Period of Options.  The expiration of each Option shall be fixed by the
Board, in its discretion, at the time such Option is granted. No Option shall be
exercisable  after the  expiration  of ten (10) years from the date of its grant
and each Option shall be subject to earlier termination as expressly provided in
this Section 6 hereof or as determined by the Board, in its  discretion,  on the
date such Option is granted.

     (c) Payment for  Delivery  of Shares.  Shares  which are subject to Options
shall be issued only upon receipt by the Company of full payment of the purchase
price for the Shares as to which the Option is exercised. Payment for Shares may
be made (as  determined  by the Board at the time the Option is granted)  (i) in
cash; (ii) by certified or bank check payable to the order of the Company in the
amount  of the  purchase  price;  (iii)  by  delivery  of  Shares  owned  by the
Participant  having a fair market value equal to the purchase  price; or (iv) by
any combination of the methods of payment  described in (i) through (iii) above,
as determined by the Board at the time the Option is granted.

     In addition, any grant of a nonqualified Option may provide that payment of
the  purchase  price for the  Option may also be made in whole or in part in the
form of  Shares  that are  subject  to risk of  forfeiture  or  restrictions  of
transfer.  Unless  otherwise  determined  by the  Board on or after  the date of
grant,  whenever any purchase price for an Option is paid in whole or in part by
means of any of the forms of  consideration  specified in this Section 6(c), the
Shares received by the Participant upon the exercise of the nonqualified  Option
shall be subject to the same risk of forfeiture or  restrictions  on transfer as
those  that  applied  to  the  consideration  surrendered  by  the  Participant;
provided,  however,  that such risks of forfeiture and  restrictions on transfer
shall apply only to the same number of Shares  received  by the  Participant  as
applied to the forfeitable or restricted Shares surrendered by the Participant.

     Any grant may, if there is then a public market for the Shares, provide for
deferred  payment of the purchase price for the Option from the proceeds of sale
through a broker of some or all of the Shares to which the exercise relates.

     The Company  shall not be obligated to deliver any Shares unless and until,
in the opinion of the Company's  counsel,  all applicable federal and state laws
and  regulations  have been  complied  with and until all other legal matters in
connection  with the issuance  and delivery of Shares have been  approved by the
Company's counsel. Without limiting the generality of the foregoing, the Company
may require from the person exercising an Option such investment  representation
or such agreement,  if any, as counsel for the Company may consider necessary in
order to comply with the Act and applicable state securities laws.

     (d) Legend on Certificates.  The stock certificates representing the Shares
shall carry such appropriate  legends,  and such written  instructions  shall be
given to the Company's  transfer agent, as may be deemed  necessary or advisable
by counsel to the Company in order to comply with the requirements of the Act or
any state securities laws.

     (e) Rights as Shareholder. A Participant or a transferee of an Option shall
have no rights as a Shareholder with respect to any Shares covered by the Option
until the date of the issuance of a stock certificate to him for such Shares. No
adjustment shall be made for dividends  (ordinary or  extraordinary,  whether in
cash,  securities or other  property) or  distribution of other rights for which
the record date is prior to the date such stock certificate is issued, except as
provided in Section 7 hereof.  Each grant of Options  shall be  evidenced  by an
agreement, which shall be executed on behalf of the Company and delivered to and
accepted by the  Participant  and shall contain such terms and provisions as the
Board may determine consistent with the Plan.

     (f)  Vesting.  Options  granted  shall vest in the  Participant  and become
exercisable by the  Participant as follows:  (i) 25%  immediately on the date of
grant; (ii) 25% as of the first  anniversary of the date of grant;  (iii) 25% as
of the  second  anniversary  of the date of grant;  and (iv) 25% as of the third
anniversary  of the date of grant;  or (v) such  earlier date as of the Board of
Directors,  at its sole  discretion may determine  based upon the achievement of
certain  corporate sales and other  milestones to be established by the Board of
Directors.

     (g) Non-Transferability of Options. Except as provided in Sections 6(h)(ii)
and  (iii),  Options  granted  under  this  Plan may not be  exercised  during a
Participant's lifetime except by the Participant, other than by will or the laws
of descent  and  distribution.  Options may not be sold,  assigned or  otherwise
transferred  or  disposed  of in any manner  whatsoever  except as  provided  in
Section 6(h)  hereof.  Notwithstanding  the  foregoing,  the Board,  in its sole
discretion,  may provide for the transferability of particular awards under this
Plan so long as such  provisions  would not  disqualify  the exemption for other
awards under Rule 16b-3, if then applicable to awards under the Plan.  Moreover,
any grand made under  this Plan may  provide  that all or any part of the Shares
issued or  transferred  by the Company upon exercise of Options shall be subject
to further restrictions on transfer.

     (h) Termination of Relationship.  Except as otherwise provided in an Option
or other agreement  between the Company and a Participant,  upon the termination
of a Participant's status as an employee,  consultant,  advisor or director, for
any reason other than as set forth in  subsections  (ii) and (iii)  below,  at a
time when the  Shares are then  Publicly  Traded (as  defined  below),  then the
following provisions shall apply:

     (i) Such Participant may exercise Options to the extent  exercisable on the
date of termination not later than three (3) months (or such shorter time as may
be specified in the grant),  after the date of such  termination.  To the extent
that the Participant was not entitled to exercise the Option at the date of such
termination,  or does not exercise such Option within the time specified herein,
such Option shall expire and terminate. Notwithstanding anything else herein, if
the  employment or other  relationship  of any  Participant  shall be terminated
voluntarily by the  Participant  and without the consent of the Company,  or for
"Cause" (as hereinafter  defined),  then any Option granted to such  Participant
(whether or not then  vested in the  Participant)  to the extent not  previously
exercised shall expire  immediately on the date of termination.  For purposes of
the Plan,  "Cause"  shall mean  "Cause" as defined in any  employment  agreement
between any employee Participant and the Company ("Employment  Agreement"),  and
in the absence of an  Employment  Agreement or in the absence of a definition of
"Cause" in such  Employment  Agreement,  "Cause"  shall mean:  (i) any continued
failure by the employee  Participant to obey the reasonable  instructions of the
president or any member of the Board;  (ii) continued neglect by the Participant
of his duties and  obligations  as an  employee  of the  Company or a failure to
perform  such  duties and  obligations  to the  reasonable  satisfaction  of the
president or the Board;  (iii) willful  misconduct of the  Participant  or other
actions  in bad  faith by the  Participant  which  are to the  detriment  of the
Company, including, without limitation,  commission of a felony, embezzlement or
misappropriation  of funds or of  confidential  information or commission of any
act of  fraud;  or (iv) a breach of any  material  provision  of any  Employment
Agreement not cured within ten (10) days after written notice thereof.

     (ii)  Notwithstanding  the provisions of subsection (i) above, in the event
of  termination  of a  Participant's  status  as  an  employee  as a  result  of
"permanent  disability"  (as such term is defined in any contract of  employment
between the Company and the Participant or, if not defined, then such term shall
mean the inability to engage in any  substantial  gainful  activity by reason of
any medically  determinable  physical or mental impairment which can be expected
to  result  in  death or  which  has  lasted  or can be  expected  to last for a
continuous  period of twelve (12) months),  the Participant  (or, in the case of
the  Participant's  legal  incapacity,  such  Participant's  guardian  or  legal
representative acting in a fiduciary capacity on behalf of the Participant under
state law and court supervision) may exercise the Option, but only to the extent
such Option was  exercisable on the date the  Participant  ceased working as the
result of the  permanent  disability.  Such  exercise  must occur within six (6)
months (or such  shorter  time as is  specified  in the grant)  from the date on
which the Participant ceased working as a result of the permanent disability. To
the extent that the  Participant was not entitled to exercise such Option on the
date the Participant ceased working, or does not exercise such Option within the
time specified herein, such Option shall terminate.

     (iii)  Notwithstanding the provisions of subsection (i) above, in the event
of the death of a Participant,  the Option may be exercised,  at any time within
six (6)  months  following  the date of death  (or such  shorter  time as may be
specified in the grant), by the Participant's estate or by a person who acquired
the right to exercise the Option by will or the  applicable  laws of descent and
distribution,  but only to the extent such Option was exercisable on the date of
the Participant's  death. To the extent that the Participant was not entitled to
exercise such Option on the date of death, or the Option is not exercised within
the time specified herein, such Option shall terminate.

     (iv)  Notwithstanding  subsections  (i), (ii),  and (iii) above,  the Board
shall have the authority to extend the expiration date of any outstanding Option
in circumstances in which it deems such action to be appropriate  (provided that
no such  extension  shall extend the term of an Option  beyond the date on which
the  Option  would  have  expired  if  no  termination   of  the   Participant's
relationship's with the Company had occurred).

     (h) Financial  Assistance.  The Company is vested with authority under this
Plan to assist any employee to whom an Option is granted  hereunder  (including,
to the extent  permitted  by law,  any director or officer of the Company who is
also an employee of the Company) in the payment of the purchase price payable on
exercise of that Option,  by lending the amount of such  purchase  price to such
employee on such terms and at such rates of interest and upon such  security (or
unsecured) as shall have been authorized by or under authority of the Board.

     (i) Withholding Taxes. To the extent required by applicable federal, state,
local or foreign law, a Participant shall make arrangements  satisfactory to the
Company for the  satisfaction of any  withholding tax obligations  that arise by
reason of an Option  exercise or any sale of Shares.  The  Company  shall not be
required to issue Shares until such  obligations  are  satisfied.  The Board may
permit  these  obligations  to be  satisfied  by having the  Company  withhold a
portion of the Shares that  otherwise  would be issued to the  Participant  upon
exercise  of the  Option,  or to  the  extent  permitted,  by  tendering  Shares
previously acquired.

     7. Shares Subject to Plan.

     (a) Number of Shares and Stock to be Delivered.  Shares delivered  pursuant
to this Plan shall in the  discretion  of the Board be  authorized  but unissued
Shares or previously  issued  Shares  acquired by the Company.  The  unexercised
portion of any expired,  terminated or cancelled Option shall again be available
for the grant of Options  under the Plan.  Subject to  adjustment  as  described
below,  the  aggregate  number of Shares which may be delivered  under this Plan
shall not exceed one million two hundred fifty thousand (1,250,000) Shares.

     (b)  Changes  in Stock.  In the  event of a stock  dividend,  stock  split,
combination  of  Shares,  recapitalization  or  similar  change  in the  capital
structure of the Company,  merger in which the Company is the surviving Company,
consolidation,   spin-off,   split  up,  reorganization,   partial  or  complete
liquidation  or other  distribution  of assets,  issuance  of  warrants or other
rights to purchase securities or any other corporate transaction or event having
any  effect  similar to any of the  foregoing,  the number and kind of Shares of
stock or securities of the Company to be subject to the Plan and to Options then
outstanding  or to be  granted  thereunder,  the  maximum  number  of  Shares or
securities  which may be  delivered  under the Plan,  the Option price and other
relevant   provisions  may  be  appropriately   adjusted  by  the  Board,  whose
determination  shall be binding on all persons. In the event of a consolidation,
merger or tender  offer in which the  Company  is not the  surviving  Company or
which results in the acquisition of substantially all the Company's  outstanding
stock by a single  person or entity,  or in the event of the sale or transfer of
substantially all the Company's assets, all outstanding Options,  whether or not
then exercisable, shall immediately become exercisable. In such event, the Board
shall  notify  the  Participants  that all  outstanding  Options  shall be fully
exercisable for a period of fifteen (15) days from the date of such notice,  and
the Option will terminate upon the expiration of such period.

     The Board may also  adjust  the  number of Shares  subject  to  outstanding
Options,  the exercise price of outstanding Options and the terms of outstanding
Options to take into consideration  material changes in accounting  practices or
principles, consolidations or mergers (except those described in the immediately
preceding  paragraph),  acquisitions or dispositions of stock or property or any
other event if it is determined by the Board that such adjustment is appropriate
to avoid distortion in the operation of the Plan.

     8. Certain Definitions.

     Certain  terms used in the Plan have been defined  above.  In addition,  as
used in the Plan, the following terms shall have the following meanings:

     (a) A "subsidiary"  is any company (i) in which the Company owns,  directly
or  indirectly,  stock  possessing  fifty  (50%)  percent  or more of the  total
combined voting power of all classes of stock or (ii) over which the Company has
effective operating control.

     (b) The "fair market value" of the Shares shall mean:

     (i) If the Shares are then Publicly Traded: The closing price of the Shares
as of the day in question (or, if such day is not a trading day in the principal
securities  market or markets for such Shares,  on the nearest preceding trading
day), as reported  with respect to the market (or the  composite of markets,  if
more than one) in which  Shares are then traded,  or, if no such closing  prices
are reported, on the basis of the mean between the high bid and low asked prices
that day on the  principal  market or quotation  system on which Shares are then
quoted,  or, if not so quoted, as furnished by a professional  securities dealer
making a market in such Shares selected by the Board; or

     (ii) If the Shares  are then not  Publicly  Traded:  The price at which one
could reasonably  expect such Shares to be sold in an arm's length  transaction,
for cash,  other than on an  installment  basis,  to a person not  employed  by,
controlled  by, in control of or under  common  control  with the issuer of such
Shares.  Such fair  market  value shall be that which has  concurrently  or most
recently been  determined for this purpose by the Board, or at the discretion of
the Board by an independent  appraiser or appraisers  selected by the Board,  in
either case giving due consideration to recent transactions involving Shares, if
any, the  issuer's  net worth,  prospective  earning  power and  dividend-paying
capacity,  the goodwill of the issuer's business, the issuer's industry position
and its management, that industry's economic outlook, the value of securities of
issuers  whose  Shares  are  Publicly  Traded  and which are  engaged in similar
businesses,  the effect of  transfer  restrictions  to which such  Shares may be
subject under law and under the applicable terms of any contract  governing such
Shares,  the absence of a public market for such Shares and other matters as the
Board or its appraiser or appraisers deem pertinent.  The  determination  by the
Board or its  appraiser or  appraisers  of the fair market  value shall,  if not
unreasonable,  be conclusive and binding  notwithstanding  the possibility  that
other persons might make a different, and also reasonable, determination. If the
fair market  value to be used was thus fixed more than twelve (12) months  prior
to the day as of which fair market  value is being  determined,  it shall in any
event be no less than the book  value of the Shares  being  valued at the end of
the most  recent  period  for which  financial  statements  of the  Company  are
available; or

     (iii)  Shares  are  "Publicly  Traded"  if stock of that class is listed or
admitted to unlisted  trading  privileges on a national  securities  exchange or
designated as a national  market  system  security on an  interdealer  quotation
system by the National  Association of Securities  Dealers,  Inc. ("NASD") or if
sales or bid and offer  quotations  are  reported for that class of stock in the
automated quotation system ("NASDAQ") operated by the NASD.

     9.  Indemnification  of Board.  In addition to and without  affecting  such
other  rights of  indemnification  as they may have as  members  of the Board or
otherwise,  each member of the Board shall be  indemnified by the Company to the
extent legally possible against expenses,  including reasonable attorney's fees,
actually and reasonably incurred in connection with any appeal therein, to which
he may be a party by reason of any  action  taken or  failure to act under or in
connection  with the Plan,  or any Option  granted  thereunder,  and against all
judgments,  fines and amounts paid by him in settlement  thereof;  provided that
such payment of amounts so  indemnified  is first  approved by a majority of the
members of the Board who are not parties to such action, suit or proceedings, or
by  independent  legal  counsel  selected by the Company,  in either case on the
basis of a determination that such member acted in good faith and in a manner he
reasonably  believed  to be in or not  opposed  to  the  best  interests  of the
Company; and except that no indemnification shall be made in relation to matters
as to which it shall be adjudged in such action,  suit or  proceeding  that such
Board  member  is  liable  for a breach  of the duty of  loyalty,  bad  faith or
intentional  misconduct  in his duties;  and  provided  further,  that the Board
member shall in writing offer the Company the  opportunity,  at its own expense,
to handle and defend same.

     10.  Amendments.  The Board may at any time  discontinue  granting  Options
under the Plan.  The Board may at any time or times  amend the Plan or amend any
outstanding  Option or Options for the purpose of satisfying the requirements of
any changes in applicable laws or regulations or for any other purpose which may
at the time be permitted by law,  provided that (except to the extent explicitly
required or permitted  hereinabove) no such amendment will, without the approval
of the  shareholders  of the Company:  (a) increase the maximum number of Shares
available under the Plan; (b) reduce the Option price of outstanding  Options or
reduce the price at which  Options  may be  granted;  (c) extend the time within
which  Options may be granted,  however,  this period  shall not exceed the term
provided in Section 5(c) hereof;  (d) amend the provisions of this Section 10 of
the Plan;  (e)  adversely  affect the  rights of any  Participant  (without  his
consent) under any Options  theretofore  granted;  (f) cause any award under the
Plan to cease to qualify for any applicable  exceptions to Section 162(m) of the
Code,  or (g) be effective  if  shareholder  approval is required by  applicable
statute, rule or regulation.

     11. Miscellaneous Provisions.

     (a) Rule 16b-3.  With respect to Participants  subject to Section 16 of the
Exchange  Act,  transactions  under this Plan are  intended  to comply  with all
applicable  provisions of Rule 16b-3. To the extent any provision of the Plan or
action by the Plan  administrators  fails to so comply,  it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Board.

     (b) Underscored  References.  The underscored  references  contained in the
Plan and in any Option  agreement  are included only for  convenience,  and they
shall  not be  construed  as a part of the Plan or  Option  agreement  or in any
respect affecting or modifying its provisions.

     (c) Number and Gender. The masculine, feminine and neuter, wherever used in
the Plan or in any  Option  agreement,  shall  refer to  either  the  masculine,
feminine or neuter and,  unless the context  otherwise  requires,  the  singular
shall include the plural and the plural the singular.

     (d) Governing Law. The place of  administration of the Plan and each Option
agreement  shall be in the State of New York. The corporate law of the Company's
state of incorporation  shall govern issues related to the validity and issuance
of  Shares.  Otherwise,  this Plan and each  Agreement  shall be  construed  and
administered  in  accordance  with the laws of the  State of New  York,  without
giving effect to principles relating to conflict of laws.

     (e) No  Employment  Contract.  Neither  the  adoption  of the  Plan nor any
benefit  granted  hereunder  shall  confer  upon any  Participant  any  right to
continued  employment or other  service with the Company,  nor shall the Plan or
any benefit  interfere in any way with the right of the Company to terminate any
Participant's employment or other service at any time.