Document:

Southcoast Financial Corporation

                             1999 STOCK OPTION PLAN

     1. Purpose of the Plan. The Plan shall be known as the Southcoast Financial
Corporation  1999 Stock Option Plan (the "Plan").  The purpose of the Plan is to
attract and retain the best  available  personnel for  positions of  substantial
responsibility  and to provide additional  incentive to directors,  officers and
key  employees of  Southcoast  Financial  Corporation  (the  "Company"),  or any
present or future  parent or  subsidiary  of the  Company,  and to  promote  the
success  of the  business.  The Plan is  intended  to  provide  for the grant of
"Incentive  Stock  Options,"  within the meaning of Section 422 of the  Internal
Revenue Code of 1986, as amended (the "Code") and  Non-qualified  Stock Options,
options that do not so qualify. Each and every one of the provisions of the Plan
relating to  Incentive  Stock  Options  shall be  interpreted  to conform to the
requirements of Section 422 of the Code.

     2. Definitions. As used herein, the following definitions shall apply.

     (a) "Award"  means the grant by the Board or the  Committee of an Incentive
Stock Option or a Non-qualified  Stock Option,  or any combination  thereof,  as
provided in the Plan.

     (b) "Company" shall mean Southcoast Financial Corporation, or any successor
corporation thereto.

     (c)  "Board"  shall  mean the Board of  Directors  of the  Company,  or any
successor or parent corporation thereto.

     (d) "Code" shall mean the Internal Revenue Code of 1986, as amended.

     (e)  "Committee"  shall mean the Stock  Option  Committee  appointed by the
Board in accordance with paragraph 5(a) of the Plan.

     (f) "Common Stock" shall mean common stock,  no par value per share, of the
Company, or any successor or parent corporation thereto.

     (g)  "Continuous  Employment" or "Continuous  Status as an Employee"  shall
mean the absence of any  interruption  or  termination  of  employment  with the
Company or any present or future Parent or Subsidiary of the Company. Employment
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Company  (provided,  however,  in the
case of Incentive Stock Options,  no such leave may extend beyond 90 days unless
reemployment  rights are guaranteed by law), or in the case of transfers between
payroll  locations  of the Company or between the Company and any of its Parent,
its Subsidiaries or a successor.

     (h)  "Director"  shall  mean a member of the Board of the  Company,  or any
successor or parent corporation thereto.

     (i) "Effective Date" shall mean the date specified in Section 15 hereof.

     (j) "Employee" shall mean any person employed by the Company or any present
or future Parent or Subsidiary of the Company.

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     (k)  "Incentive  Stock  Option" or "ISO"  shall mean an option to  purchase
Shares granted by the Committee pursuant to Section 8 hereof which is subject to
the limitations and  restrictions of Section 8 hereof and is intended to qualify
under Section 422 of the Code.

     (l)  "Non-qualified  Stock Option" shall mean an option to purchase  Shares
granted  pursuant to Section 9 hereof,  which  option is not intended to qualify
under Section 422 of the Code.

     (m) "Option" shall mean an Incentive or Non-qualified  Stock Option granted
pursuant  to this Plan  providing  the holder of such  Option  with the right to
purchase Common Stock.

     (n) "Optioned Stock" shall mean stock subject to an Option granted pursuant
to the Plan.

     (o)  "Optionee"  shall  mean any  person  who  receives  an Option or Award
pursuant to the Plan.

     (p) "Parent" shall mean any present or future  corporation which would be a
"parent corporation" as defined in Subsections 424(e) and (g) of the Code.

     (q)  "Participant"  means any officer or key employee of the Company or any
Parent or Subsidiary  of the Company or any other person  providing a service to
the Company who is selected by the Board or the  Committee  to receive an Award,
or who by the express terms of the Plan is granted an Award.

     (r) "Plan" shall mean Southcoast  Financial  Corporation  1999 Stock Option
Plan.

     (s) "Share" shall mean one share of the Common Stock.

     (t) "Subsidiary"  shall mean any present or future  corporation which would
be a "subsidiary  corporation"  as defined in Subsections  424(f) and (g) of the
Code.

     3.  Shares  Subject  to the  Plan.  Except  as  otherwise  required  by the
provisions of Section 13 hereof,  the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall be 50,000. Such Shares shall
be authorized  but unissued  shares of the Common Stock.  Shares of Common Stock
subject to Options  which for any reason are  terminated  unexercised  or expire
shall again be available for issuance under the Plan.

     4. Six Month Holding Period.

     A total of six  months  must  elapse  between  the date of the  grant of an
Option and the date of the sale of Common Stock received through the exercise of
an Option.

     5. Administration of the Plan.

     (a)  Composition of the Committee.  The Plan shall be  administered  by the
Board or a Committee  appointed by the Board,  which shall serve at the pleasure
of the  Board.  Such  Committee  shall  be  constituted  solely  of two or  more
Directors who are not  currently  officers or employees of the Company or any of
its subsidiaries, and who qualify to administer the Plan as contemplated by Rule
16b-3 under the Securities Exchange Act of 1934, or any successor rule.

     (b) Powers of the Committee.  The Board or the Committee is authorized (but
only to the extent not contrary to the express provisions of the Plan or, in the
case of the Committee, to

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resolutions adopted by the Board) to interpret the Plan, to prescribe, amend and
rescind  rules and  regulations  relating to the Plan, to determine the form and
content of Awards to be issued  under the Plan and to make other  determinations
necessary or advisable for the  administration  of the Plan.  The Committee also
shall have and may exercise  such other power and  authority as may be delegated
to it by the Board from time to time. A majority of the entire  Committee  shall
constitute  a quorum and the action of a majority of the members  present at any
meeting  at  which a quorum  is  present  shall  be  deemed  the  action  of the
Committee.  In no event may the Board or the Committee revoke outstanding Awards
without the consent of the Participant.

     The  Chairman  of the Board of  Directors  of the  Company  and such  other
officers  as shall  be  designated  by the  Board or the  Committee  are  hereby
authorized to execute instruments evidencing Awards on behalf of the Company and
to cause them to be delivered to the participants.

     (c)  Effect  of   Board's   or   Committee's   Decision.   All   decisions,
determinations and  interpretations of the Board or the Committee shall be final
and conclusive on all persons affected thereby.

     6. Eligibility. Awards may be granted to directors, officers, key employees
and other persons.  The Board or the Committee shall from time to time determine
the  directors,  officers,  key employees and other persons who shall be granted
Awards under the Plan, the number to be granted to each such director,  officer,
key employee and other persons  under the Plan,  and whether  Awards  granted to
each such  Participant  under the Plan shall be Incentive  and/or  Non-qualified
Stock Options (provided, however, Incentive Stock Options may only be granted to
persons who are employees,  including  officers,  of the Company).  In selecting
participants  and in  determining  the  number of  Shares of Common  Stock to be
granted to each such Participant  pursuant to each Award granted under the Plan,
the Board or the Committee  may consider the nature of the services  rendered by
each  such   Participant,   each  such   Participant's   current  and  potential
contribution to the Company and such other factors as the Board or the Committee
may, in its sole discretion, deem relevant.  Directors,  officers, key employees
or other persons who have been granted an Award may, if otherwise  eligible,  be
granted additional Awards.

     7. Term of the Plan.  The Plan shall  continue  in effect for a term of ten
years from the Effective Date, unless sooner  terminated  pursuant to Section 18
hereof.  No Option  shall be  granted  under the Plan  after ten years  from the
Effective Date.

     8. Terms and Conditions of Incentive Stock Options. Incentive Stock Options
may be granted only to  Participants  who are Employees.  Each  Incentive  Stock
Option granted  pursuant to the Plan shall be evidenced by a written  agreement,
executed by the Company and the  Optionee,  which states the number of shares of
common  stock  subject  to  the  Options  granted  thereby  and  the  period  of
exercisability  of the Options,  and in such form as the Board or the  Committee
shall from time to time approve.  Each and every  Incentive Stock Option granted
pursuant to the Plan shall comply with,  and be subject to, the following  terms
and conditions:

     (a) Option Price.

     (i) The price per Share at which each Incentive  Stock Option granted under
the Plan may be  exercised  shall  not,  as to any  particular  Incentive  Stock
Option,  be less than the fair market value of the Common Stock at the time such
Incentive  Stock Option is granted.  For such  purposes,  if the Common Stock is
traded  otherwise  than on a  national  securities  exchange  at the time of the
granting of an Option,  then the price per Share of the Optioned  Stock shall be
not less than the mean between the bid and asked price on the date the Incentive
Stock  Option is  granted  or, if there is no bid and asked  price on said date,
then on the next prior business day on which there was a bid and asked price. If
no such bid and asked  price is  available,  then the  price per Share  shall be
determined by the

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Board or the Committee.  If the Common Stock is listed on a national  securities
exchange at the time of the  granting of an  Incentive  Stock  Option,  then the
price per Share  shall be not less than the  average of the  highest  and lowest
selling  price on such  exchange  on the date  such  Incentive  Stock  Option is
granted  or, if there  were no sales on said date,  then the price  shall be not
less than the mean between the bid and asked price on such date.

     (ii) In the case of an Employee  who owns Common  Stock  representing  more
than ten percent (10%) of the outstanding Common Stock at the time the Incentive
Stock Option is granted, the Incentive Stock Option price shall not be less than
one hundred and ten percent  (110%) of the fair market value of the Common Stock
at the time the Incentive Stock Option is granted.

     (b) Payment. Full payment for each Share of Common Stock purchased upon the
exercise of any Incentive  Stock Option  granted under the Plan shall be made at
the time of exercise of each such  Incentive  Stock  Option and shall be paid in
cash. No Shares of Common Stock shall be issued until full payment  therefor has
been received by the Company,  and no Optionee shall have any of the rights of a
stockholder of the Company until Shares of Common Stock are issued to him.

     (c) Term of Incentive Stock Option. The term of each Incentive Stock option
granted pursuant to the Plan shall be not more ten (10) years from the date each
such Incentive Stock Option is granted, provided that in the case of an Employee
who owns stock  representing  more than ten  percent  (10%) of the Common  Stock
outstanding at the time the Incentive  Stock Option is granted,  the term of the
Incentive Stock Option shall not exceed five (5) years.

     (d) Exercise Generally.  Except as otherwise provided in Section 10 hereof,
no Incentive  Stock Option may be exercised  unless the Optionee shall have been
in the  Continuous  Employment  of the  Company  at all times  during the period
beginning with the date of grant of any such  Incentive  Stock Option and ending
on the date three  months  prior to the date of exercise  of any such  Incentive
Stock  Option.  The  Board or the  Committee  may at the  time of  grant  impose
additional  conditions  upon the right of an Optionee to exercise any  Incentive
Stock Option granted  hereunder which are not inconsistent with the terms of the
Plan or the  requirements  for  qualification as an Incentive Stock Option under
Section 422 of the Code.

     (e) Limitation on Options to be Exercised.  The aggregate fair market value
(determined  as of the date the Option is granted) of the Shares with respect to
which  Incentive  Stock  Options  are  exercisable  for the  first  time by each
Employee  during any calendar year (under all Incentive  Stock Option plans,  as
defined  in Section  422 of the Code,  of the  Company or any  present or future
Parent or Subsidiary of the Company) shall not exceed $100,000.  Notwithstanding
the prior  provisions of this Section 8(e), the Board or the Committee may grant
Options in excess of the foregoing  limitations,  provided said Options shall be
clearly and  specifically  designated as not being Incentive  Stock Options,  as
defined in Section 422 of the Code.

     (f)  Transferability.  Any Incentive  Stock Option granted  pursuant to the
Plan shall be exercised  during an  Optionee's  lifetime only by the Optionee to
whom it was granted and shall not be assignable or  transferable  otherwise than
by will or by the laws of descent and distribution.

     9. Terms and Conditions of Non-qualified Stock Options.  Each Non-qualified
Stock  Option  granted  pursuant  to the Plan  shall be  evidenced  by a written
agreement,  executed by the Company and the Optionee, which states the number of
shares of common stock subject to the Options  granted thereby and the period of
exercisability  of the Options,  and in such form as the Board or the  Committee
shall  from time to time  approve.  Each and every  Non-qualified  Stock  Option
granted  pursuant to the Plan shall comply with and be subject to the  following
terms and conditions.

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<PAGE>

     (a) Option  Price.  The  exercise  price per Share of Common Stock for each
Non- qualified Stock Option granted  pursuant to the Plan shall be at such price
as the Board or the Committee may determine in its sole discretion.

     (b) Payment. Full payment for each Share of Common Stock purchased upon the
exercise of any Non-qualified  Stock Option granted under the Plan shall be made
at the time of exercise  of each such  Non-qualified  Stock  Option and shall be
paid in cash.  No Shares of Common  Stock  shall be issued  until  full  payment
therefor has been received by the Company and no Optionee  shall have any of the
rights of a  stockholder  of the  Company  until the Shares of Common  Stock are
issued to him.

     (c) Term. The term of each  Non-qualified  Stock Option granted pursuant to
the Plan  shall  be not  more  than ten  (10)  years  from  the date  each  such
Non-qualified Stock Option is granted.

     (d) Exercise  Generally.  The Board or the Committee may impose  additional
conditions upon the right of any Participant to exercise any Non-qualified Stock
Option granted hereunder which are not inconsistent with the terms of the Plan.

     (e)  Cashless  Exercise.  An Optionee  who has held a  Non-qualified  Stock
Option  for at least six months may  engage in the  "cashless  exercise"  of the
Option. In a cashless exercise,  an Optionee gives the Company written notice of
the exercise of the Option together with an order to a registered  broker-dealer
or  equivalent  third party,  to sell part or all of the  Optioned  Stock and to
deliver  enough of the  proceeds to the Company to pay the Option  price and any
applicable  withholding  taxes. If the Optionee does not sell the Optioned Stock
through a registered  broker-dealer  or equivalent  third party, he can give the
Company  written  notice of the  exercise  of the  Option  and the  third  party
purchaser of the Optioned  Stock shall pay the Option price plus any  applicable
withholding taxes to the Company.

     (f) Transferability. Any Non-qualified Stock Option granted pursuant to the
Plan shall be exercised  during an  Optionee's  lifetime only by the Optionee to
whom it was granted and shall not be assignable or  transferable  otherwise than
by will or by the laws of descent and distribution.

     10. Effect of Termination  of Employment,  Disability or Death on Incentive
Stock Options.

     (a) Termination of Employment.  In the event that any Optionee's employment
with the Company shall terminate for any reason,  other than Permanent and Total
Disability (as such term is defined in Section 22 (e) (3) of the Code) or death,
all  of any  such  Optionee's  Incentive  Stock  Options,  and  all of any  such
Optionee's  rights to  purchase  or  receive  Shares of  Common  Stock  pursuant
thereto,  shall  automatically  terminate  on the earlier of (i) the  respective
expiration  dates of any such Incentive  Stock Options or (ii) the expiration of
not more than three months after the date of such termination of employment, but
only if, and to the extent that,  the Optionee was entitled to exercise any such
Incentive Stock Options at the date of such termination of employment.

     (b)  Disability.  In the  event  that any  Optionee's  employment  with the
Company shall  terminate as the result of the permanent and Total  Disability of
such Optionee, such Optionee may exercise any Incentive Stock Options granted to
him pursuant to the Plan at any time prior to the earlier of (i) the  respective
expiration  dates of any such Incentive  Stock Options or (ii) the date which is
one year after the date of such  termination of employment,  but only if, and to
the extent that, the Optionee was entitled to exercise any such Incentive  Stock
Options at the date of such termination of employment.

     (c) Death.  In the event of the death of an Optionee,  any Incentive  Stock
Options  granted to such  Optionee  may be exercised by the person or persons to
whom the Optionee's  rights under any such Incentive  Stock Options pass by will
or by the laws of descent and  distribution  (including  the  Optionee's  estate
during the period of administration) at any time prior to the earlier of (i) the
respective

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expiration  dates of any such Incentive  Stock Options or (ii) the date which is
one year after the date of death of such Optionee but only if, and to the extent
that, the Optionee was entitled to exercise any such Incentive  Stock Options at
the date of death.  For  purposes of this Section  10(c),  any  Incentive  Stock
Option held by an Optionee  shall be considered  exercisable  at the date of his
death if the only unsatisfied  condition precedent to the exercisability of such
Incentive Stock Option at the date of death is the passage of a specified period
of time. At the discretion of the Board or the Committee,  upon exercise of such
Options the Optionee may receive Shares or cash or combination  thereof. If cash
shall be paid in lieu of  Shares,  such  cash  shall be equal to the  difference
between the fair  market  value of such  Shares and the  exercise  price of such
Options on the exercise date.

     (d) Incentive  Stock Options Deemed  Exercisable.  For purposes of Sections
10(a),  10(b) and 10(c) above,  any Incentive  Stock Option held by any Optionee
shall be considered  exercisable at the date of termination of his employment if
any such  Incentive  Stock  Option would have been  exercisable  at such date of
termination of employment.

     (e)  Termination  of  Incentive  Stock  Options.  To the  extent  that  any
Incentive  Stock Option granted under the Plan to any Optionee whose  employment
with the Company  terminates shall not have been exercised within the applicable
period set forth in this Section 10, any such  Incentive  Stock Option,  and all
rights to purchase or receive  Shares of Common Stock pursuant  thereto,  as the
case may be, shall terminate on the last day of the applicable period.

     11.  Effect  of  Termination   of   Employment,   Disability  or  Death  on
Non-qualified  Stock Options.  The terms and conditions of  Non-qualified  Stock
Options  relating to the effect of the termination of an Optionee's  employment,
disability of an Optionee or his death shall be such terms and conditions as the
Board or the Committee shall, in its sole  discretion,  determine at the time of
termination,  unless specifically  provided for by the terms of the Agreement at
the time of grant of the Award.

     12. Right of Repurchase and  Restrictions on Disposition.  The Board or the
Committee,  in its sole discretion,  may include at the time of award, as a term
of any Incentive  Stock Option or  Non-qualified  Stock  Option,  the right (the
"Repurchase  Right") but not the obligation,  to repurchase all or any amount of
the Shares acquired by an Optionee pursuant to the exercise of any such Options.
The intent of the Repurchase  Right is to encourage the continued  employment of
the Optionee.  The  Repurchase  Right shall provide for,  among other things,  a
specified  duration of the Repurchase  Right, a specified  price per Share to be
paid  upon  the  exercise  of the  Repurchase  Right  and a  restriction  on the
disposition  of the Shares by the Optionee  during the period of the  Repurchase
Right.  The  Repurchase  Right may permit the Company to transfer or assign such
right to another party.  The Company may exercise the  Repurchase  Right only to
the extent permitted by applicable law.

     13. Recapitalization,  Merger, Consolidation, Change in Control and Similar
Transactions.

     (a)  Adjustment.  The aggregate  number of Shares of Common Stock for which
Options may be granted  hereunder,  the number of Shares of Common Stock covered
by each outstanding  Option, and the exercise price per Share of Common Stock of
each such  Option,  shall all be  proportionately  adjusted  for any increase or
decrease  in the  number  of issued  and  outstanding  Shares  of  Common  Stock
resulting from a subdivision or  consolidation  of Shares  (whether by reason of
merger, consolidation,  recapitalization,  reclassification,  splitup, spin-off,
stock split,  combination  of shares,  or  otherwise)  or the payment of a stock
dividend (but only on the Common Stock) or any other increase or decrease in the
number  of  such  Shares  of  Common  Stock  effected  without  the  receipt  of
consideration   by  the  Company   (other   than   Shares  held  by   dissenting
stockholders).

     (b) Change in Control.  All  outstanding  Awards shall  become  immediately
exercisable in the event of a change in control or imminent change in control of
the Company. In the event of such

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a change in control or imminent  change in control,  the Optionee  shall, at the
discretion  of the Board or the  Committee,  be entitled  to receive  cash in an
amount  equal to the  fair  market  value of the  Common  Stock  subject  to any
Incentive or Non-qualified Stock Option over the Option Price of such Shares, in
exchange for the  surrender  of such  Options by the Optionee on that date.  For
purposes of this Section 13,  "change in control"  shall mean: (i) the execution
of an agreement for the sale of all, or a material portion, of the assets of the
Company;  (ii) the execution of an agreement for a merger or recapitalization of
the  Company or any merger or  recapitalization  whereby  the Company is not the
surviving entity; (iii) a change of control of the Company, as otherwise defined
or determined by the State Board of Financial  Institutions pursuant to the laws
of the State of South  Carolina,  or regulations  promulgated by it; or (iv) the
acquisition,  directly or indirectly,  of the beneficial  ownership  (within the
meaning of that term as it is used in Section 13(d) of the  Securities  Exchange
Act of 1934 and the rules and regulations promulgated thereunder) of 25% or more
of the outstanding voting securities of the Company by any person, trust, entity
or  group.  This  limitation  shall  not  apply to the  purchase  of  shares  by
underwriters  in  connection  with a public  offering of Company  stock,  or the
purchase of shares of up to 25% of any class of  securities  of the Company by a
tax  qualified  employee  stock  benefit plan of the Company or to a transaction
which  forms a holding  company  for the  Company,  if the  shareholders  of the
Company own substantially the same  proportionate  interests of the stock of the
holding company  immeiately  after the transaction  except for changes caused by
the exercise of dissenter's rights. The term "person" refers to an individual or
a corporation,  partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. For purposes of this Section 13, "imminent change in
control"  shall  refer to any offer or  announcement,  oral or  written,  by any
person or persons acting as a group, to acquire control of the Company.  Whether
there is an imminent  change in control  shall be determined by the Board or the
Committee.  The decision of the Board or the Committee as to whether a change in
control or  imminent  change in control has  occurred  shall be  conclusive  and
binding.

     (c)  Cancellation  and Payment  for  Options in the Event of  Extraordinary
Corporate  Action.  Subject to any required  action by the  stockholders  of the
Company,  in the  event of any  change  in  control,  recapitalization,  merger,
consolidation,  exchange  of shares,  spin-off,  reorganization,  tender  offer,
liquidation or other  extraordinary  corporate action or event, the Board or the
Committee, in its sole discretion,  shall have the power, prior or subsequent to
such action or event to:

     (i)  cancel  any  or  all  previously   granted   Options,   provided  that
consideration   is  paid  to  the  Optionee  in   connection   therewith   which
consideration  is  sufficient  to put the  Optionee in as  favorable a financial
position as he would have been if the options had not been cancelled; and/or

     (ii) subject to Section 13(a) and (b) above, make such other adjustments in
connection with the Plan as the Board or the Committee,  in its sole discretion,
deems necessary, desirable, appropriate or advisable; provided, however, that no
action shall be taken by the Committee which would cause Incentive Stock Options
granted  pursuant to the Plan to fail to meet the requirements of Section 422 of
the Code.

     Except as  expressly  provided  in  Sections  13(a) and  13(b)  hereof,  no
Optionee  shall have any rights by reason of the occurrence of any of the events
described in this Section 13.

     (d)  Acceleration.  The Board or the Committee  shall at all times have the
power to accelerate  the exercise date of Options  previously  granted under the
Plan.

     14. Time of Granting Options. The date of grant of an Option under the Plan
shall,  for all purposes,  be the date on which the Board or the Committee makes
the determination to grant such Option. Notice of the determination of the grant
of an Option shall be given to each individual to whom an Option

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is so granted  within a  reasonable  time after the date of such grant in a form
determined by the Board or the Committee.

     15.  Effective  Date. The Plan shall become  effective upon adoption by the
Board of Directors.  Options may be granted prior to ratification of the Plan by
the  stockholders  of the Company if the  exercise of such Options is subject to
such stockholder ratification.

     16. Approval by Stockholders. The Plan shall be approved by stockholders of
the  Company  within  twelve  months  before or after the date the Plan  becomes
effective.

     17.  Modification of Options.  At any time and from time to time, the Board
may or may  authorize  the  Committee to direct the  execution of an  instrument
providing  for the  modification  of any  outstanding  Option,  provided no such
modification, extension or renewal shall confer on the holder of said Option any
right or  benefit  which  could  not be  conferred  on him by the grant of a new
Option at such time, or shall not materially  decrease the  Optionee's  benefits
under the Option  without  the  consent of the holder of the  Option,  except as
otherwise permitted under Section 18 hereof.  Notwithstanding anything herein to
the  contrary,  the Board or the  Committee  shall have the  authority to cancel
outstanding  Options with the consent of the Optionee and to reissue new Options
at a lower exercise price, (provided,  however, the exercise price for Incentive
Stock  Options  shall in no event be less  than the then fair  market  value per
share of Common  Stock),  in the event that the fair  market  value per share of
Common  Stock at any time prior to the date of exercise of  outstanding  Options
falls below the exercise price of such Options.

     18. Amendment and Termination of the Plan.

     (a) Action by the Board.  The Board may alter,  suspend or discontinue  the
Plan, except that no action of the Board may increase (other than as provided in
Section 13 hereof) the maximum  number of Shares  permitted to be optioned under
the Plan,  materially  increase the benefits accruing to Participants  under the
Plan or materially  modify the requirements for eligibility for participation in
the Plan  unless  such  action of the Board  shall be  subject  to  approval  or
ratification by the stockholders of the Company.

     (b) Change in Applicable Law. Notwithstanding any other provision contained
in the Plan,  in the  event of a change in any  federal  or state  law,  rule or
regulation  which  would  make  the  exercise  of all or part of any  previously
granted  Incentive  and/or  Non-qualified  Stock Option  unlawful or subject the
Company to any penalty, the Committee may restrict any such exercise without the
consent of the Optionee or other holder thereof in order to comply with any such
law, rule or regulation or to avoid any such penalty.

     19.  Conditions  Upon  Issuance of Shares.  Shares shall not be issued with
respect to any Option granted under the Plan unless the issuance and delivery of
such Shares shall comply with all relevant provisions of law, including, without
limitation,  the Securities Act of 1933, as amended,  the rules and  regulations
promulgated thereunder, any applicable state securities law and the requirements
of any stock exchange upon which the Shares may then be listed.

     The inability of the Company to obtain approval from any regulatory body or
authority deemed by the Company's counsel to be necessary to the lawful issuance
and sale of any Shares  hereunder  shall relieve the Company of any liability in
respect of the non-issuance or sale of such Shares.

     As a condition  to the  exercise of an Option,  the Company may require the
person exercising the Option to make such  representations and warranties as may
be necessary to assure the  availability  of an exemption from the  registration
requirements of federal or state securities law.

                                       45
<PAGE>

     20.  Reservation  of Shares.  During the term of the Plan, the Company will
reserve  and keep  available  a number  of  Shares  sufficient  to  satisfy  the
requirements of the Plan.

     21.  Unsecured  Obligation.  No  Participant  under the Plan shall have any
interest  in any fund or special  asset of the  Company by reason of the Plan or
the grant of any  Incentive or  Non-qualified  Stock  Option under the Plan.  No
trust  fund shall be  created  in  connection  with the Plan or any grant of any
Incentive or Non-qualified Stock Option hereunder and there shall be no required
funding of amounts which may become payable to any Participant.

     22.  Withholding  Tax. The Company  shall have the right to deduct from all
amounts paid in cash with respect to the cashless  exercise of Options under the
Plan  any  taxes  required  by law to be  withheld  with  respect  to such  cash
payments.  Where a  Participant  or other  person is entitled to receive  Shares
pursuant to the exercise of an Option  pursuant to the Plan,  the Company  shall
have the  right to  require  the  Participant  or such  other  person to pay the
Company the amount of any taxes  which the Company is required to withhold  with
respect to such Shares, or, in lieu thereof,  to retain, or sell without notice,
a number of such Shares sufficient to cover the amount required to be withheld.

     23.  Governing  Law.  The  Plan  shall  be  governed  by and  construed  in
accordance  with the laws of the State of South  Carolina,  except to the extent
that federal law shall be deemed to apply.

     24. Compliance With Rule 16b-3. With respect to persons to whom options are
granted  hereunder who are subject to Section 16 of the Securities  Exchange Act
of 1934: (i) this Plan is intended to comply with all  applicable  conditions of
Rule   16b-3   or   its   successors,    (ii)   all    transactions    involving
insider-participants  are subject to such  conditions are expressly set forth in
the  Plan,  and  (iii)  any  provision  of the  Plan  or  action  by the  Plan's
administrators  that is contrary to a condition of Rule 16b-3 shall not apply to
insider-participants.

                                       46[DESCRIPTION]   ADDENDUM TO EMPLOYMENT AGREEMENT

                                   ADDENDUM TO
                               EMPLOYMENT AGREEMENT

     This addendum is entered into as of the third day of January 2000 by and
between Alternate Marketing Networks, Inc. (formerly Alternate Postal Delivery,
Inc.), a Michigan corporation ("Company") and Phillip D. Miller ("Executive").

                                     Recitals

     Whereas, the Company and the Executive have entered into an Employment
Agreement, dated July 1, 1995 (the Employment Agreement) and

     Whereas, the Company and the Executive desire to amend certain terms and
conditions of the Employment Agreement as provided in this Addendum.

     Now, therefore, for valuable considerations, the receipt of which is
hereby acknowledged, the Company and the Executive agree as follows:

Section 1 is replaced in its entirety as follows:

     1.  Employment. The Company hereby employs and engages the service of the
Executive as Chief Executive Officer and Chairman of the Board of Directors
during the term of employment set forth in Section 2 of this Addendum. The
Executive agrees to serve the Company in such position and capacity during the
term of employment.

Section 2 is amended as follows:

     2.  Term of Employment.  The Executive's "Term of Employment" shall be
extended to end on September 10, 2003 per the July 15, 1999 Board of
Directors's meeting resolution.

Section 3 is amended as follows:

     3.  Position and Duties.  The position of President is deleted.

Section 4 is amended as follows:

     4.(b) Bonus.  A bonus shall be based on annual budget criteria as well as
goals of the Board of Directors,  and shall be outlined to the Executive each
January in a memo from the Chairman of the Compensation Committee.  The bonus
potential will equal thirty percent (30%) of the base compensation.  Of the
total potential, one third will be achieved through a stock appreciation goal,
one third will be achieved through an annual financial performance goal, and
one third will be achieved through annual goals set by the Board of Directors
in consultation with the Executive.

     For the fiscal year ending December 31, 2000,  the stock appreciation goal
is determined to be an increase of fifty percent (50%) over the price as of
December 31, 1999.  The annual financial performance goal is determined to be a
minimum increase in net profit of twenty percent (20%) for the year ending
December 31, 2000 over the net profit for the year ending December 31, 1999.
The annual goal set by the Board of Directors is to successfully complete a
major complementary acquisition(s) or series of acquisitions with combined
annual revenues of $10,000,000 or more,  that are accretive to the Company.
The Executive shall be entitled to one-third of the total potential bonus for
each objective which is achieved.

     4.(c) Benefit Plans.  The Company agrees to pay for the cost of dependancy
coverage included in the Company's group health insurance plan.

     4.(d) Disability Insurance.  The monthly benefit is increased from
$6,000.00 to $10,500.00.

     4.(f) Life Insurance.  The face amount of the insurance policy for the
benefit of the Company, shall be reduced from $2,000,000.00 to $1,575,000.00.

     All other terms and conditions of the Employment Agreement shall remain
unchanged except as necessary to conform to the terms of this Addendum.

     Executed as of the date first written above.

/s/ Amy Barkema                             ALTERNATE MARKETING NETWORKS, INC.
Witness
                                            By:   /s/ Sandra J. Smith

                                            Title: CFO

                                            Date: March 20, 2000

                                            /s/ Phillip D. Miller
                                            Phillip D. Miller (Executive)

                                            Date: March 20, 2000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}]]