EXHIBIT 10.18(e)

                             AMENDMENT NO. 2 TO THE
                       NONQUALIFIED STOCK OPTION AGREEMENT


GRANTED TO:                David I. Brunson

EFFECTIVE DATE OF
ORIGINAL GRANT:            April 23, 1997

GRANTED PURSUANT TO:       NORTH ATLANTIC TRADING COMPANY
                           1997 SHARE INCENTIVE PLAN

DATE OF AMENDMENT:         December 31, 1997



         Amendment No. 2 (the "Amendment"), dated and effective as of December
31, 1997, to the Nonqualified Stock Option Agreement, made and entered into as
of June 25, 1997, between North Atlantic Trading Company, Inc., a Delaware
corporation (the "Company"), and David I. Brunson. Paragraph 9 of the Agreement
is hereby amended to read as follows:

         9. (a) The Employee may pay within thirty (30) days following the
exercise of the Option the amount of taxes required to be withheld upon exercise
of the Option by (i) delivering a check made payable to the Company or (ii)
delivering to the Company shares of Common Stock having a Fair Market Value
equal to the amount of such withholding taxes; provided, however, that at the
Employee's election, any amount due to the Company under this Section 9(a) may
be reduced in whole or in part by any amounts the Company owes such Employee
under subparagraph (b) below.

           (b) Unless otherwise agreed to by the parties, on or before
April 15 of the calendar year following the year in which the Option is
exercised (the "Payment Date"), the Company shall pay the Employee an amount
(the "Payment") equal to (i) the difference between (A) the amount of taxable
income reportable by the Employee in connection with the exercise of the Option
multiplied by the highest aggregate marginal statutory federal, state and local
income tax rate (determined by taking into account the deductibility of state
and local income taxes for federal income tax purposes) to which such Employee
is subject at the time of exercise (the "Marginal Ordinary Tax Rate") and (B)
the amount of taxable income reportable by the Employee in connection with the
exercise of the Option multiplied by the highest aggregate marginal statutory
federal, state and local income tax rate (determined by taking into account the
deductibility of state and local income taxes for federal income tax purposes)
to which such Employee would be subject at the time of exercise if such taxable
income was characterized as long-term capital gain (the "Marginal Capital Gain
Tax Rate") (such difference referred to as the "Incremental Tax Amount"),
divided by (ii) one minus the Employee's Marginal Ordinary Tax Rate.

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                  (c) The payment shall not be made pursuant to Section 9(b) in
the event the Option is exercised (i) within 180 days prior to the Employee's
termination of employment described in Section 6(d) of the Agreement or (ii)
following the Employee's termination of employment described in Section 6(d) of
the Agreement. Notwithstanding the foregoing, if the Payment Date falls within
180 days from the date of exercise, the Company shall only make the Payment to
Employee upon the signing of an undertaking, reasonably satisfactory to the
Company, by the Employee to repay the Payment to the Company if Employee
terminates his employment as described in Section 6(d) of the Agreement: within
180 days of the date of the exercise of the Option.

                  (d) The Company shall treat the amount paid in 9(b) as
compensation payable to the Employee.

         The effects of this Amendment is to supersede and replace Amendment No.
1 executed September 2, 1997.


         IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
December 31, 1997.

                                                NORTH ATLANTIC TRADING COMPANY


                                                By:  /s/ Thomas F. Helms, Jr.
                                                     ---------------------------
                                                         Thomas F. Helms, Jr.
                                                         President


ACCEPTED:


/s/ David I. Brunson
---------------------------------
Signature of Employee



David I. Brunson
----------------------------------
Name of Employee -- Please Print



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