Document:

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EXHIBIT 10.1

Compensation Arrangements with Non-Employee Directors

         The following table sets forth the Company's current compensation
arrangements with its non-employee directors as revised May 20, 2005, effective
April 1, 2005.

Annual Retainer -- $35,000, paid quarterly (40% automatically paid in deferred
stock units under the Deferred Compensation Plan discussed below)

Additional Annual Retainer for Chairman of the Board -- $60,000

Additional Annual Retainer for Chairman of the Audit Committee -- $10,000

Board Meeting Fees -- $2,000 for attendance in person, $1,000 for telephonic
attendance

Committee Meeting Fees -- $2,000 for attendance in person (except for meeting
held on the same day as meeting of the Board), $500 for telephonic attendance

Options --

         15,000 shares upon initial election (vesting 3,000 per year),
exercisable at market price on date of grant

         3,000 shares per year upon each re-election (increasing to 5,000 shares
per year in 2006, subject to shareholder approval), vesting after 6 months and
exercisable at market price on date of grant

         Once vested, all options remain exercisable for ten years from grant

Phantom Stock Deferred Compensation Plan -- Each director may elect to designate
all or a portion of his remaining cash compensation to purchase phantom EMS
share units at current market prices. Cash payout occurs following retirement as
a director or, for voluntary deferrals, after 5 years, subject to the director's
limited right to further defer. Payment is based on market value of the common
stock at the time paid, and is taxable income to the director only at that time.

The Company also reimburses travel expenses incurred in connection with
activities as a member of the Board and its Committees.<PAGE>
                                                                  EXHIBIT 10.1

                   BRIGHT HORIZONS FAMILY SOLUTIONS, INC.

                           RESTRICTED STOCK AGREEMENT

         This RESTRICTED STOCK AGREEMENT (the "Agreement") is by and between
Bright Horizons Family Solutions, Inc., a Delaware corporation (the "Company"),
and ______________ ("Grantee") pursuant to the Company's Amended and Restated
1998 Stock Incentive Plan. Capitalized terms not otherwise defined herein shall
have the meaning ascribed to such terms in the Company's Plan.

         WHEREAS, the Company has adopted the Plan, which permits the issuance
of restricted shares of the Company's common stock, par value $0.01 per share
(the "Common Stock"); and

         WHEREAS, pursuant to the Plan, the Board has granted an award of
restricted stock to the Grantee as provided herein;

         Section 1. Restricted Stock Award. The Grantee is hereby granted
_______ shares (the "Restricted Stock") of the Company's Common Stock, subject
to the terms and conditions of this Agreement and the Plan.

         Section 2. Transfer of the Award. Grantee may not sell, transfer,
pledge, assign or otherwise encumber the Restricted Stock prior to the date when
the Grantee is no longer a member of the Board of Directors of the Company (the
"Restriction Termination Date").

         Section 3. Distribution of Restricted Stock. The Restricted Stock will
be distributed to the Grantee as soon as practicable after the Restriction
Termination Date.

         Section 4. Voting Rights and Dividends. Prior to the distribution of
the Restricted Stock, certificates representing shares of Restricted Stock will
be held by the Company (the "Custodian") in the name of the Grantee. Except as
provided in Section 2, Grantee shall have, with respect to the shares of
Restricted Stock, all of the rights of a stockholder of the Company, including
the right to vote the shares and the right to receive any cash dividends. The
Custodian will take such action as is necessary and appropriate to enable the
Grantee to vote the Restricted Stock. All cash dividends received by the
Custodian, if any, with respect to the Restricted Stock will be remitted to the
Grantee at the time the Restricted Stock is distributed. Stock dividends issued
with respect to the Restricted Stock shall be treated as additional shares of
Restricted Stock that are subject to the same restrictions and other terms and
conditions that apply to the shares of Restricted Stock.

         Section 5. Governing Provisions. This Agreement is made under and
subject to the provisions of the Plan, and all of the provisions of the Plan are
also provisions of this Agreement. If there is a difference or conflict between
the provisions of this Agreement and the provisions of the Plan, the provisions
of the Plan will govern. By signing this Agreement, the Grantee confirms that he
or she has received a copy of the Plan.

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<PAGE>

         Section 6. Tax Withholding. The Company may withhold from any
distribution of Restricted Stock an amount of Common Stock equal to such
federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation, unless the Company agrees to accept a payment
of cash in the amount of such withholding taxes.

         Section 7. Legend. Each certificate representing Restricted Stock shall
bear a legend in substantially the following form:

                  THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY
                  ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE
                  AND RESTRICTIONS AGAINST TRANSFER) CONTAINED IN THE BRIGHT
                  HORIZONS FAMILY SOLUTIONS, INC. AMENDED AND RESTATED 1998
                  STOCK INCENTIVE PLAN (THE "PLAN") AND THE RESTRICTED STOCK
                  AGREEMENT (THE "AGREEMENT") BETWEEN THE OWNER OF THE
                  RESTRICTED STOCK REPRESENTED HEREBY AND BRIGHT HORIZONS FAMILY
                  SOLUTIONS, INC. (THE "COMPANY"). THE RELEASE OF SUCH STOCK
                  FROM SUCH TERMS AND CONDITIONS SHALL BE MADE ONLY IN
                  ACCORDANCE WITH THE PROVISIONS OF THE PLAN AND THE AGREEMENT,
                  COPIES OF WHICH ARE ON FILE AT THE COMPANY.

         Section 8. Miscellaneous.

                  a. Entire Agreement. This Agreement and the Plan contain the
         entire understanding and agreement between the Company and the Grantee
         concerning the Restricted Stock granted hereby, and supersede any prior
         or contemporaneous negotiations and understandings. The Company and
         Grantee have made no promises, agreements, conditions, or
         understandings relating to the Restricted Stock, either orally or in
         writing, that are not included in this Agreement and the Plan.

                  b. Captions. The captions and section numbers appearing in
         this Agreement are inserted only as a matter of convenience. They do
         not define, limit, construe, or describe the scope or intent of the
         provisions of this Agreement.

                  c. Counterparts. This Agreement may be executed in
         counterparts, each of which when signed by the Company and the Grantee
         will be deemed an original and all of which together will be deemed the
         same Agreement.

                  d. Notice. Any notice or communication having to do with this
         Agreement must

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<PAGE>

         be given by personal delivery or by certified mail, return receipt
         requested, addressed, if to the Company, to the principal office of the
         Company, and, if to the Grantee, to the Grantee's last known address
         provided by the Grantee to the Company.

                  e. Amendment. This Agreement may be amended by the Company,
         provided that unless the Grantee consents in writing, the Company
         cannot amend this Agreement if the amendment will materially change or
         impair the Grantee's rights under this Agreement and such change is not
         to the Grantee's benefit.

                  f. Succession and Transfer. Each and all of the provisions of
         this Agreement are binding upon and inure to the benefit of the Company
         and the Grantee and their heirs, successors, and assigns. However,
         neither the Restricted Stock nor this Agreement is transferable prior
         to the Restriction Termination Date.

                  g. Governing Law. This Agreement shall be governed and
         construed exclusively in accordance with the laws of the State of
         Delaware applicable to agreements to be performed in the State of
         Delaware.

                       [Signature Page on Following Page]

                                       3
<PAGE>

         IN WITNESS WHEREOF, the Company and Grantee have executed this
Agreement to be effective as of _________, 20__.

                                        BRIGHT HORIZONS FAMILY SOLUTIONS, INC.

                                        By:
                                           -------------------------------------

                                        Name:
                                             -----------------------------------

                                        Title:
                                              ----------------------------------

                                        Received:

                                        ----------------------------------------
                                        Name of Grantee

                                        ----------------------------------------
                                        Signature of Grantee

                                        ----------------------------------------
                                        Date

                                       4<PAGE>

                                                                 EXHIBIT 10.1

                       ATLANTIC COAST FEDERAL CORPORATION
                             2005 STOCK OPTION PLAN

1.       PURPOSE

         The purpose of the Atlantic Coast Federal Corporation 2005 Stock Option
Plan (the "Plan") is to advance the interests of Atlantic Coast Federal
Corporation (the "Company") and its stockholders by providing Key Employees and
Outside Directors of the Company and its Affiliates, including Atlantic Coast
Federal (the "Bank"), upon whose judgment, initiative and efforts the successful
conduct of the business of the Company and its Affiliates largely depends, with
an additional incentive to perform in a superior manner as well as to attract
people of experience and ability.

2.       DEFINITIONS

         "AFFILIATE" means any "parent corporation" or "subsidiary corporation"
of the Company or the Bank, as such terms are defined in Section 424(e) or
424(f), respectively, of the Code, or a successor to a parent corporation or
subsidiary corporation.

         "AWARD" means an Award of Non-Statutory Stock Options, Incentive Stock
Options, and Limited Rights granted under the provisions of the Plan.

         "BANK" means Atlantic Coast Federal, or a successor corporation.

         "BENEFICIARY" means the person or persons designated by a Participant
to receive any benefits payable under the Plan in the event of such
Participant's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Participant's surviving spouse, if
any, or if none, his/her estate.

         "BOARD" or "BOARD OF DIRECTORS" means the board of directors of the
Company, unless otherwise noted herein.

         "CAUSE" means personal dishonesty, incompetence, willful misconduct,
any breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, or the willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or a final cease-and-desist
order, any of which results in a material loss to the Company or an Affiliate.

         "CHANGE IN CONTROL" of the Bank or the Company means a change in
control of a nature that: (i) would be required to be reported in response to
Item 5.01 of the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"); or (ii) results in a Change in Control of the Bank or the
Company within the meaning of the Home Owners' Loan Act, as amended ("HOLA"),
and applicable rules and regulations promulgated thereunder, as in effect at the
time of the Change in Control; or (iii) without limitation such a Change in
Control shall be deemed to have occurred at such time as (a) any "person" (as
the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 25% or more of
the combined voting power of Company's outstanding securities, except for any
securities purchased by the Company's employee stock ownership plan or trust; or
(b) individuals who constitute the Board on the date hereof (the "Incumbent
Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date hereof whose election
was approved by a vote of at least three-quarters of the directors comprising
the Incumbent Board, or whose nomination for election by the Company's
stockholders was approved by the same Nominating Committee serving under an
Incumbent Board, shall be, for purposes of this clause (b), considered as though
he/she were a member of the Incumbent Board; or (c) a plan of reorganization,
merger, consolidation, sale of all or substantially all the assets of the Bank
or the Company or similar transaction occurs in which the Bank or Company is not
the surviving institution; or (d) a proxy statement soliciting proxies from
stockholders of the Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or

<PAGE>

similar transaction with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to the Plan are to be
exchanged for or converted into cash or property or securities not issued by the
Company; or (e) a tender offer is made for 25% or more of the voting securities
of the Company and the stockholders owning beneficially or of record 25% or more
of the outstanding securities of the Company have tendered or offered to sell
their shares pursuant to such tender offer and such tendered shares have been
accepted by the tender offeror.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COMMITTEE" means the committee consisting of either (i) at least two
Non-Employee Directors of the Company, or (ii) the entire Board of the Company.

         "COMMON STOCK" means shares of the common stock of the Company, par
value $.01 per share.

         "COMPANY" means Atlantic Coast Federal Corporation, the stock holding
company of the Bank, or a successor corporation.

         "CONTINUOUS SERVICE" means employment as a Key Employee and/or service
as an Outside Director without any interruption or termination of such
employment and/or service. Continuous Service shall also mean a continuation as
a member of the Board of Directors following a cessation of employment as a Key
Employee or continuation of service as a Director Emeritus following termination
of service as a Director. In the case of a Key Employee, employment shall not be
considered interrupted in the case of sick leave, military leave or any other
approved leave of absence or in the case of transfers between payroll locations
of the Company, its subsidiaries or its successor.

         "DATE OF GRANT" means the actual date on which an Award is granted by
the Committee.

         "DIRECTOR" means a member of the Board.

         "DIRECTOR EMERITUS" means a former member of the Board who has been
appointed to a Director Emeritus position.

         "DISABILITY" means the inability to engage in any substantial gainful
activity by reason of any medically determinable mental or physical impairment
which can be expected to result in death or which lasted or can be expected to
last for a continuous period of not less than 12 months. An individual shall not
be considered to be permanently and totally disabled unless he furnishes proof
of the existence thereof in such form and manner, and at such times, as the
Secretary of the Treasury may require, in accordance with Section 22(e)(3) of
the Code.

         "EFFECTIVE DATE" means the date of, or a date determined by the Board
of Directors following, approval of the Plan by the Company's stockholders.

         "FAIR MARKET VALUE" means, when used in connection with the Common
Stock on a certain date, the mean between the highest and lowest quoted selling
prices of the Common Stock as reported on the Nasdaq stock market (or
over-the-counter market) on such date, or if the Common Stock was not traded on
such date, then on the day prior to such date or on the next preceding day on
which the Common Stock was traded; provided, however, that if the Common Stock
is not reported on the Nasdaq stock market (or over the counter market), Fair
Market Value shall mean the average sale price of all shares of Common Stock
sold during the 30-day period immediately preceding the date on which such stock
option was granted, and if no shares of stock have been sold within such 30-day
period, the average sale price of the last three sales of Common Stock sold
during the 90-day period immediately preceding the date on which such stock
option was granted. In the event Fair Market Value cannot be determined in the
manner described above, then Fair Market Value shall be determined by the
Committee. The Committee is authorized, but is not required, to obtain an
independent appraisal to determine the Fair Market Value of the Common Stock.

         "INCENTIVE STOCK OPTION" means an Option granted by the Committee to a
Key Employee, which Option is designated as an Incentive Stock Option pursuant
to Section 9.

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<PAGE>

         "KEY EMPLOYEE" means any person who is currently employed by the
Company or an Affiliate who is chosen by the Committee to participate in the
Plan.

         "LIMITED RIGHT" means the right to receive a number of shares of Common
Stock based upon the terms set forth in Section 10.

         "NON-EMPLOYEE DIRECTOR" means, for purposes of the Plan, a Director who
(a) is not employed by the Company or an Affiliate; (b) does not receive
compensation directly or indirectly as a consultant (or in any other capacity
than as a Director) greater than $60,000; (c) does not have an interest in a
transaction requiring disclosure under Item 404(a) of Regulation S-K; or (d) is
not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K.

         "NON-STATUTORY STOCK OPTION" means an Option granted by the Committee
to (i) an Outside Director or (ii) any other Participant and such Option is
either (a) not designated by the Committee as an Incentive Stock Option, or (b)
fails to satisfy the requirements of an Incentive Stock Option as set forth in
Section 422 of the Code and the regulations thereunder.

         "OTS" means the Office of Thrift Supervision.

         "OPTION" means an Award granted under Section 8 or Section 9.

         "OUTSIDE DIRECTOR" means a Director of the Company or an Affiliate who
is not an employee of the Company or an Affiliate.

         "PARTICIPANT" means a Key Employee or Outside Director of the Company
or its Affiliates who receives or has received an Award under the Plan.

         "RIGHT" means a Limited Right.

         "TERMINATION FOR CAUSE" means the termination of employment or
termination of service on the Board caused by the individual's personal
dishonesty, willful misconduct, any breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, or the willful violation
of any law, rule or regulation (other than traffic violations or similar
offenses), or a final cease and desist order, any of which results in material
loss to the Company or one of its Affiliates.

3.       ADMINISTRATION OF THE PLAN

         (a) ROLE OF THE COMMITTEE. The Plan shall be administered by the
Committee. The interpretation and construction by the Committee of any
provisions of the Plan or of any Option granted hereunder shall be final and
binding. The Committee shall act by vote or written consent of a majority of its
members. Subject to the express provisions and limitations of the Plan and
subject to OTS regulations and policy, the Committee may adopt such rules and
procedures as it deems appropriate for the conduct of its affairs. The Committee
shall report its actions and decisions with respect to the Plan to the Board at
appropriate times, but in no event less than one time per calendar year.

         (b) ROLE OF THE BOARD. The members of the Committee shall be appointed
or approved by, and will serve at the pleasure of, the Board of Directors of the
Company. The Board may in its discretion from time to time remove members from,
or add members to, the Committee. The Board shall have all of the powers
allocated to it in the Plan, may take any action under or with respect to the
Plan that the Committee is authorized to take, and may reverse or override any
action taken or decision made by the Committee under or with respect to the
Plan.

         (c) PLAN ADMINISTRATION RESTRICTIONS. All transactions involving a
grant, award or other acquisitions from the Company shall:

                  (i)      be approved by the Company's full Board or by the
                           Committee;

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<PAGE>

                  (ii)     be approved, or ratified, in compliance with Section
                           14 of the Exchange Act, by either: the affirmative
                           vote of the holders of a majority of the shares
                           present, or represented and entitled to vote at a
                           meeting duly held in accordance with the laws under
                           which the Company is incorporated; or the written
                           consent of the holders of a majority of the
                           securities of the issuer entitled to vote, provided
                           that such ratification occurs no later than the date
                           of the next annual meeting of stockholders; or

                  (iii)    result in the acquisition of Common Stock that is
                           held by the Recipient for a period of six months
                           following the date of such acquisition.

         (d) LIMITATION ON LIABILITY. No member of the Board or the Committee
shall be liable for any determination made in good faith with respect to the
Plan or any Awards granted under it. If a member of the Board or the Committee
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of anything done or not done by him in such capacity
under or with respect to the Plan, the Bank or the Company shall indemnify such
member against expense (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he/she acted in good faith and in a manner
he/she reasonably believed to be in the best interests of the Bank and the
Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his/her conduct was unlawful.

         Notwithstanding anything herein to the contrary, and subject to any
adjustment that may be made pursuant to Section 16 hereof, once an Option has
been awarded at Fair Market Value, the Committee shall not have authority to
reprice such Option so that the exercise price of the Option shall be less than
the exercise price on the Date of Grant.

4.       TYPES OF AWARDS

         Awards under the Plan may be granted in any one or a combination of:
(a) Incentive Stock Options; (b) Non-Statutory Stock Options, and (c) Limited
Rights.

5.       STOCK SUBJECT TO THE PLAN

         Subject to adjustment as provided in Section 16, the maximum number of
shares reserved for issuance under the Plan is 712,827 shares. Shares issued
under the Plan may be issued by the Company from authorized but unissued shares,
treasury shares, or acquired by the Company in open market purchases. The
maximum number of Options that may be awarded to a Key Employee is 178,206. The
maximum aggregate number of shares of Common Stock that may be issued pursuant
to the exercise of Incentive Stock Options is 712,827. For these purposes, only
the net number of shares issued pursuant to the exercise of an Incentive Stock
Option are counted against the maximum number of shares.

         To the extent that Options or Rights granted under the Plan are
exercised, the shares covered will be unavailable for future grants under the
Plan; to the extent that Options together with any related Rights granted under
the Plan terminate, expire or are forfeited without having been exercised, new
Awards may be made with respect to these shares.

         Any shares that are issued by the Company, and any Awards that are
granted by, or become obligations of, the Company, through the assumption by the
Company or an affiliate thereof, or in substitution for, outstanding Awards
previously granted by an acquired company, shall not be counted against the
shares available for issuance under the Plan.

6.       ELIGIBILITY

         Key Employees of the Company and its Affiliates shall be eligible to
receive Incentive Stock Options, Non-Statutory Stock Options, and Limited Rights
under the Plan. Outside Directors shall be eligible to receive Non-Statutory
Stock Options under the Plan.

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<PAGE>

7.       GENERAL TERMS AND CONDITIONS OF OPTIONS AND RIGHTS

         (a) The Committee shall have full and complete authority and
discretion, subject to OTS regulations and policy and except as expressly
limited by the Plan, to grant Options and/or Rights and to provide the terms and
conditions (which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, which shall not be less than the
Fair Market Value per share on the Date of Grant, (ii) the number of shares of
Common Stock subject to, and the expiration date of, any Option or Right, which
expiration date shall not exceed ten years from the Date of Grant, (iii) the
manner, time and rate (cumulative or otherwise) of exercise of such Option or
Right, and (iv) the restrictions, if any, to be placed upon such Option or Right
or upon shares of Common Stock which may be issued upon exercise of such Option
or Right.

         (b) The following provisions shall apply to all Awards made under this
Plan: no individual officer shall be granted Awards with respect to more than
25% of the total shares (or 178,206 shares) subject to the Plan; no Outside
Director shall be granted Awards with respect to more than 5% of the total
shares of Common Stock subject to the Plan; all Outside Directors in the
aggregate may not be granted Awards with respect to more than 30% of the total
shares of Common Stock subject to the Plan; no Awards shall begin vesting
earlier than one year from the date the Plan is approved by stockholders of the
Company; and no Awards shall vest at a rate in excess of 20% per year beginning
one year from the Date of Grant.

         (c) Notwithstanding any provision of this Plan to the contrary, all
executive officers or directors must exercise or forfeit their Awards in the
event that the Bank becomes critically undercapitalized (as defined in 12 C.F.R.
Section 565.4), becomes subject to enforcement action by the OTS, or receives a
capital direction from the OTS pursuant to 12 C.F.R. Section 565.7.

         (d) The Company, or its designee, shall timely furnish to individuals
in the Plan following the individual's exercise of an Incentive Stock Option a
written information statement containing the information set forth in Treasury
Regulation Section 1.6039-1(a).

8.       NON-STATUTORY STOCK OPTIONS

         The Committee may, from time to time, grant Non-Statutory Stock Options
to eligible Key Employees and Outside Directors. Non-Statutory Stock Options
granted under the Plan, including Non-Statutory Stock Options granted in
exchange for and upon surrender of previously granted Awards, are subject to the
terms and conditions set forth in this Section.

         (a) OPTION AGREEMENT. Each Option shall be evidenced by a written
option agreement between the Company and the Participant specifying the number
of shares of Common Stock that may be acquired through its exercise and
containing such other terms and conditions that are not inconsistent with the
terms of the Plan.

         (b) PRICE. The purchase price per share of Common Stock deliverable
upon the exercise of each Non-Statutory Stock Option shall be the Fair Market
Value of the Common Stock of the Company on the Date of Grant. Shares may be
purchased only upon full payment of the purchase price in one or more of the
manners set forth in Section 12 hereof, as determined by the Committee.

         (c) VESTING. Subject to Section 7(b) hereof, a Non-Statutory Stock
Option granted under the Plan shall vest in a Participant at the rate or rates
determined by the Committee. No Options shall become vested in a Participant
unless the Participant maintains Continuous Service until the vesting date of
such Option, except as set forth herein. The Committee may, subject to OTS
regulations and policy, accelerate the time at which any Non-Statutory Stock
Option may be exercised in whole or in part.

         (d) EXERCISE OF OPTIONS. A vested Option may be exercised from time to
time, in whole or in part, by delivering a written notice of exercise to the
President or Chief Executive Officer of the Company, or his/her designee. Such
notice shall be irrevocable and must be accompanied by full payment of the
purchase price in cash or shares of Common Stock at the Fair Market Value of
such shares, determined on the exercise date in the manner

                                       5
<PAGE>

described in Section 2 hereof. If previously acquired shares of Common Stock are
tendered in payment of all or part of the exercise price, the value of such
shares shall be determined as of the date of such exercise.

         (e) AMOUNT OF AWARDS. Subject to Section 7(b) hereof, Non-Statutory
Stock Options may be granted to any Key Employee or Outside Director in such
amounts as determined by the Committee. In granting Non-Statutory Stock Options,
the Committee shall consider such factors as it deems relevant, which factors
may include, among others, the position and responsibility of the Key Employee
or Outside Director, the length and value of his/her service to the Bank, the
Company or the Affiliate, the compensation paid to the Key Employee or Outside
Director, and the Committee's evaluation of the performance of the Bank, the
Company or the Affiliate, according to measurements that may include, among
others, key financial ratios, level of classified assets and independent audit
findings.

         (f) TERM OF OPTIONS. Unless the Committee determines otherwise, the
term during which Non-Statutory Stock Options may be exercised shall not exceed
ten years from the Date of Grant. In no event shall a Non-Statutory Stock Option
be exercisable in whole or in part more than ten years from the Date of Grant.

         (g) TERMINATION OF CONTINUOUS SERVICE. Upon the termination of a Key
Employee's or Outside Director's Continuous Service, for any reason other than
death, Disability, Termination for Cause, termination following a Change in
Control (other than for Cause following a Change in Control), the Participant's
Non-Statutory Stock Options shall be exercisable only as to those shares that
were vested on the date of termination and only for one year following
termination. In the event of Termination for Cause, all rights under a
Participant's Non-Statutory Stock Options shall expire upon termination. In the
event of the Participant's termination of Continuous Service due to death,
Disability, or following a Change in Control, all Non-Statutory Stock Options
held by the Participant, whether or not vested at such time, shall vest and
become exercisable by the Participant or his/her legal representative or
beneficiaries for one year following the date of such termination, death or
cessation of employment or service, provided that in no event shall the period
extend beyond the expiration of the Non-Statutory Stock Option term.

         (h) TRANSFERABILITY. In the discretion of the Board, all or any
Non-Statutory Stock Option granted hereunder may be transferable by the
Participant once the Option has vested in the Participant, provided, however,
that the Board may limit the transferability of such Option or Options to a
designated class or classes of persons.

9.       INCENTIVE STOCK OPTIONS

         The Committee may, from time to time, grant Incentive Stock Options to
Key Employees. Incentive Stock Options granted pursuant to the Plan shall be
subject to the following terms and conditions:

         (a) OPTION AGREEMENT. Each Option shall be evidenced by a written
option agreement between the Company and the Key Employee specifying the number
of shares of Common Stock that may be acquired through its exercise and
containing such other terms and conditions that are consistent with the terms of
the Plan.

         (b) PRICE. Subject to Section 16 hereof and Section 422 of the Code,
the purchase price per share of Common Stock deliverable upon the exercise of
each Incentive Stock Option shall be not less than 100% of the Fair Market Value
of the Company's Common Stock on the date the Incentive Stock Option is granted.
However, if a Key Employee owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its Affiliates
(or under Section 424(d) of the Code is deemed to own stock representing more
than 10% of the total combined voting power of all classes of stock of the
Company or its Affiliates by reason of the ownership of such classes of stock,
directly or indirectly, by or for any brother, sister, spouse, ancestor or
lineal descendent of such Key Employee, or by or for any corporation,
partnership, estate or trust of which such Key Employee is a stockholder,
partner or Beneficiary), the purchase price per share of Common Stock
deliverable upon the exercise of each Incentive Stock Option shall not be less
than 110% of the Fair Market Value of the Company's Common Stock on the date the
Incentive Stock Option is granted. Shares may be purchased only upon payment of
the full purchase price. Payment of the purchase price may be made, in whole or
in part, through the surrender of shares of the Common Stock of the Company at
the Fair Market Value of such shares determined on the exercise date.

                                       6
<PAGE>

         (c) VESTING. Subject to Section 7(b) hereof, Incentive Stock Options
awarded to Key Employees shall vest at the rate or rates determined by the
Committee. No Incentive Stock Option shall become vested in a Participant unless
the Participant maintains Continuous Service until the vesting date of such
Option, except as set forth herein.

         (d) EXERCISE OF OPTIONS. Vested Options may be exercised from time to
time, in whole or in part, by delivering a written notice of exercise to the
President or Chief Executive Officer of the Company, or his/her designee. Such
notice is irrevocable and must be accompanied by full payment of the exercise
price in cash or shares of Common Stock at the Fair Market Value of such shares
determined on the exercise date.

         The Options comprising each installment may be exercised in whole or in
part at any time after such installment becomes vested, provided that the amount
able to be first exercised in a given year is consistent with the terms of
Section 422 of the Code. To the extent required by Section 422 of the Code, the
aggregate Fair Market Value (determined at the time the Option is granted) of
the Common Stock for which Incentive Stock Options are exercisable for the first
time by a Participant during any calendar year (under all plans of the Company
and its Affiliates) shall not exceed $100,000.

         The Committee may, in its sole discretion and subject to OTS
regulations and policy, accelerate the time at which any Incentive Stock Option
may be exercised in whole or in part, provided that it is consistent with the
terms of Section 422 of the Code. Notwithstanding the above, in the event of a
Change in Control of the Company, all Incentive Stock Options that have been
awarded shall become immediately exercisable, provided, however, that if the
aggregate Fair Market Value (determined at the time the Option is granted) of
Common Stock for which Options are exercisable as a result of a Change in
Control, together with the aggregate Fair Market Value (determined at the time
the Option is granted) of all other Common Stock for which Incentive Stock
Options become exercisable during such year, exceeds $100,000, then the first
$100,000 of Incentive Stock Options (determined as of the Date of Grant) shall
be exercisable as Incentive Stock Options and any excess shall be exercisable as
Non-Statutory Stock Options (but shall remain subject to the provisions of this
Section to the extent permitted).

         (e) AMOUNTS OF AWARDS. Subject to Section 7(b) hereof, Incentive Stock
Options may be granted to any eligible Key Employee in such amounts as
determined by the Committee; provided that the amount granted is consistent with
the terms of Section 422 of the Code. In granting Incentive Stock Options, the
Committee shall consider such factors as it deems relevant, which factors may
include, among others, the position and responsibilities of the Key Employee,
the length and value of his/her service to the Bank, the Company, or the
Affiliate, the compensation paid to the Key Employee and the Committee's
evaluation of the performance of the Bank, the Company, or the Affiliate,
according to measurements that may include, among others, key financial ratios,
levels of classified assets, and independent audit findings. The provisions of
this subsection (e) shall be construed and applied in accordance with Section
422(d) of the Code and the regulations, if any, promulgated thereunder.

         (f) TERMS OF OPTIONS. The term during which each Incentive Stock Option
may be exercised shall be determined by the Committee, provided, however, in no
event shall an Incentive Stock Option be exercisable in whole or in part more
than 10 years from the Date of Grant. If any Key Employee, at the time an
Incentive Stock Option is granted to him, owns stock representing more than 10%
of the total combined voting power of all classes of stock of the Company or its
Affiliate (or, under Section 424(d) of the Code, is deemed to own stock
representing more than 10% of the total combined voting power of all classes of
stock, by reason of the ownership of such classes of stock, directly or
indirectly, by or for any brother, sister, spouse, ancestor or lineal descendent
of such Key Employee, or by or for any corporation, partnership, estate or trust
of which such Key Employee is a stockholder, partner or Beneficiary), the
Incentive Stock Option granted to him shall not be exercisable after the
expiration of five years from the Date of Grant.

         (g) TERMINATION OF CONTINUOUS SERVICE. Upon the termination of a Key
Employee's Continuous Service for any reason other than death, Disability,
Termination for Cause or termination following a Change in Control (other than
for Cause following a Change in Control) the Key Employee's Incentive Stock
Options shall be exercisable only as to those shares that were vested by such
Key Employee at the date of termination for a period of three months following
termination. Upon termination of a Key Employee's Continuous Service due to
death or Disability or following a Change in Control, all Incentive Options held
by a Key Employee, whether or not vested at such time, shall vest and become
exercisable by the Participant or his/her legal representative or beneficiaries
for

                                       7
<PAGE>

one year following the date of such termination, death or cessation of
Continuous Service, provided that in no event shall the period extend beyond the
expiration of the Stock Option term, and provided, further, that, except in the
event of death or Disability, such Option shall not be eligible for treatment as
an Incentive Stock Option in the event such Option is exercised more than three
months following termination. In the event of Termination for Cause, all rights
under the Incentive Stock Options shall expire upon termination.

         In order to obtain Incentive Stock Option treatment for Options
exercised by heirs or devisees of an Optionee, the Optionee's death must have
occurred while employed or within three months of termination of Continuous
Service.

         (h) TRANSFERABILITY. No Incentive Stock Option granted under the Plan
is transferable except by will or the laws of descent and distribution and is
exercisable during his/her lifetime only by the Key Employee to which it is
granted.

         (i) COMPLIANCE WITH CODE. The options granted under this Section are
intended to qualify as Incentive Stock Options within the meaning of Section 422
of the Code, but the Company makes no warranty as to the qualification of any
Option as an Incentive Stock Option within the meaning of Section 422 of the
Code. If an Option granted hereunder 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 Non-Statutory Stock Option.

10.      LIMITED RIGHTS

         The Committee may grant a Limited Right simultaneously with the grant
of any Option to any Key Employee of the Bank or the Company, with respect to
all or some of the shares covered by such Option. Limited Rights granted under
the Plan are subject to the following terms and conditions:

         (a) TERMS OF RIGHTS. In no event shall a Limited Right be exercisable
in whole or in part before the expiration of six months from the date of grant
of the Limited Right. A Limited Right may be exercised only in the event of a
Change in Control of the Company.

         The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, provided that the Fair Market Value of the underlying
shares on the day of exercise is greater than the exercise price of the related
Option.

         Upon exercise of a Limited Right, the related Option shall cease to be
exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the exercise price and the Fair Market Value of the Common
Stock subject to the underlying Option. The Limited Right is transferable only
when the underlying Option is transferable and under the same conditions.

         (b) PAYMENT. Upon exercise of a Limited Right, the holder shall
promptly receive from the Company a number of shares of Common Stock equal in
value to the difference between the Fair Market Value of the Common Stock on the
Date of Grant of the Limited Right and the Fair Market Value of the Common Stock
on the date the Limited Right is exercised, multiplied by the number of Limited
Rights being exercised. In no event shall a Limited Right be settled other than
in shares of Common Stock.

         (c) Notwithstanding anything in this paragraph 10 to the contrary, in
no event shall a Limited Right be exercisable in whole or in part if the Common
Stock is not traded on an established securities market.

11.      SURRENDER OF OPTION

         In the event of a Participant's termination of employment or
termination of service as a result of death or Disability, the Participant (or
his/her personal representative(s), heir(s), or devisee(s)) may, in a form
acceptable to the Committee, make application to surrender all or part of the
Options held by such Participant in exchange for a cash payment from the Company
of an amount equal to the difference between the Fair Market Value of the Common
Stock on the date of termination of employment or the date of termination of
service on the Board and the

                                       8
<PAGE>

exercise price per share of the Option. Whether the Company accepts such
application or determines to make payment, in whole or part, is within its
absolute and sole discretion, it being expressly understood that the Company is
under no obligation to any Participant whatsoever to make such payments. In the
event that the Company accepts such application and determines to make payment,
such payment shall be in lieu of the exercise of the underlying Option and such
Option shall cease to be exercisable.

12.      ALTERNATE OPTION PAYMENT MECHANISM

         The Committee has sole discretion to determine what form of payment it
will accept for the exercise of an Option. The Committee may indicate acceptable
forms in the agreement with the Participant covering such Options or may reserve
its decision to the time of exercise. No Option is to be considered exercised
until payment in full is accepted by the Committee or its agent.

         (a) CASH PAYMENT. The exercise price may be paid in cash or by
certified check. To the extent permitted by law, the Committee may permit all or
a portion of the exercise price of an Option to be paid through borrowed funds.

         (b) CASHLESS EXERCISE. Subject to vesting requirements, if applicable,
a Participant may engage in a "cashless exercise" of the Option. Upon a cashless
exercise, the Participant shall give 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 Common Stock subject to the Option and
to deliver enough of the proceeds to the Company to pay the Option exercise
price and any applicable withholding taxes. If the Participant does not sell the
Common Stock subject to the Option through a registered broker-dealer or
equivalent third party, the Participant may give the Company written notice of
the exercise of the Option and the third party purchaser of the Common Stock
subject to the Option shall pay the Option exercise price plus applicable
withholding taxes to the Company.

         (c) EXCHANGE OF COMMON STOCK. The Committee may permit payment of the
Option exercise price by the tendering (or constructively tendering) of
previously acquired shares of Common Stock. All shares of Common Stock tendered
in payment of the exercise price of an Option shall be valued at the Fair Market
Value of the Common Stock. No tendered shares of Common Stock which were
acquired by the Participant upon the previous exercise of an Option or as awards
under a stock award plan (such as the Company's Recognition and Retention Plan)
shall be accepted for exchange unless the Participant has held such shares
(without restrictions imposed by said plan or award) for at least six months
prior to the exchange.

13.      RIGHTS OF A STOCKHOLDER

         A Participant shall have no rights as a stockholder with respect to any
shares covered by a Non-Statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in the Plan or in
any Award granted confers on any person any right to continue in the employ of
the Company or its Affiliates or to continue to perform services for the Company
or its Affiliates or interferes in any way with the right of the Company or its
Affiliates to terminate his/her services as an officer, director or employee at
any time.

14.      AGREEMENT WITH PARTICIPANTS

         Each Award of Options and Limited Rights will be evidenced by a written
agreement, executed by the Participant and the Company or its Affiliates that
describes the conditions for receiving the Awards, including the date of Award,
the purchase price, applicable periods, and any other terms and conditions as
may be required by the Board or applicable securities laws.

15.      DESIGNATION OF BENEFICIARY

         A Participant may, with the consent of the Committee, designate a
person or persons to receive, in the event of death, any Option or Limited
Rights to which he/she would then be entitled. Such designation will be made
upon forms supplied by and delivered to the Company and may be revoked in
writing. If a Participant fails effectively to designate a Beneficiary, then
his/her estate will be deemed to be the Beneficiary.

                                       9
<PAGE>

16.      DILUTION AND OTHER ADJUSTMENTS

         In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, pro rata return of capital to all
stockholders, recapitalization, or any merger, consolidation, spin-off,
reorganization, combination or exchange of shares, or other similar corporate
change, or other increase or decrease in such shares, without receipt or payment
of consideration by the Company, the Committee will make such adjustments to
previously granted Awards, to prevent dilution or enlargement of the rights of
the Participant, including any or all of the following:

         (a) adjustments in the aggregate number or kind of shares of Common
Stock that may be awarded under the Plan;

         (b) adjustments in the aggregate number or kind of shares of Common
Stock covered by Awards already made under the Plan; or

         (c) adjustments in the purchase price of outstanding Incentive and/or
Non-Statutory Stock Options, or any Limited Rights attached to such Options.

         No such adjustments may, however, materially change the value of
benefits available to a Participant under a previously granted Award. With
respect to Incentive Stock Options, no such adjustment shall be made if it would
be deemed a "modification" of the Award under Section 424 of the Code.

17.      EFFECT OF A CHANGE IN CONTROL ON OPTION AWARDS

         In the event of a Change in Control, the Committee and the Board of
Directors will take one or more of the following actions to be effective as of
the date of such Change in Control:

         (a) provide that such Options shall be assumed, or equivalent options
shall be substituted ("Substitute Options") by the acquiring or succeeding
corporation (or an affiliate thereof), provided that: (1) any such Substitute
Options exchanged for Incentive Stock Options shall meet the requirements of
Section 424(a) of the Code, and (2) the shares of stock issuable upon the
exercise of such Substitute Options shall be registered in accordance with the
Securities Act of 1933, as amended ("1933 Act") or such securities shall be
exempt from such registration in accordance with Sections 3(a)(2) or 3(a)(5) of
the 1933 Act, (collectively, "Registered Securities"), or in the alternative, if
the securities issuable upon the exercise of such Substitute Options shall not
constitute Registered Securities, then the Participant will receive upon
consummation of the Change in Control a cash payment for each Option surrendered
equal to the difference between the (1) fair market value of the consideration
to be received for each share of Common Stock in the Change in Control times the
number of shares of Common Stock subject to such surrendered Options, and (2)
the aggregate exercise price of all such surrendered Options; or

         (b) in the event of a transaction under the terms of which the holders
of Common Stock will receive upon consummation thereof a cash payment (the
"Merger Price") for each share of Common Stock exchanged in the Change in
Control transaction, make or provide for a cash payment to the Participants
equal to the difference between (1) the Merger Price times the number of shares
of Common Stock subject to such Options held by each Participant (to the extent
then exercisable at prices not in excess of the Merger Price), and (2) the
aggregate exercise price of all such surrendered Options.

18.      WITHHOLDING

         There may be deducted from each distribution of cash and/or Common
Stock under the Plan the minimum amount of any federal or state taxes, including
payroll taxes, that are applicable to such supplemental taxable income and that
are required by any governmental authority to be withheld. Shares of Common
Stock will be withheld where required from any distribution of Common Stock.

                                       10
<PAGE>

19.      AMENDMENT OF THE PLAN

         The Board may at any time, and from time to time, modify or amend the
Plan in any respect, or modify or amend an Award received by Key Employees
and/or Outside Directors; provided, however, that no such termination,
modification or amendment may affect the rights of a Participant, without
his/her consent, under an outstanding Award.

20.      EFFECTIVE DATE OF PLAN

         The Plan shall become effective upon the date of approval of the Plan
by the Company's stockholders.

21.      TERMINATION OF THE PLAN

         The right to grant Awards under the Plan will terminate upon the
earlier of (i) 10 years after the Effective Date, or (ii) the date on which the
exercise of Options or related rights equaling the maximum number of shares
reserved under the Plan occurs. The Board may suspend or terminate the Plan at
any time, provided that no such action will, without the consent of a
Participant, adversely affect his/her rights under a previously granted Award.

22.      APPLICABLE LAW

         (a) This Plan, the Awards, all documents evidencing Awards and all
other related documents shall be governed by, and will be construed and
administered in accordance with the laws of the State of Georgia, except to the
extent that federal law shall apply.

         (b) This Plan is subject to the requirements of 12 C.F.R. Part 575,
including the requirements of section 575.8 and the applicable requirements of
section 563b.500. Notwithstanding any other provision in this Plan, no shares of
Common Stock shall be issued with respect to any Award to the extent that such
issuance would cause Atlantic Coast Federal, MHC to fail to qualify as a mutual
holding company under applicable federal regulations.

                                       11

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