APPENDIX A PLAN OF EXCHANGE This Plan of Exchange has been adopted as of the 11th day of March, 1999, by and between First South Bancorp, Inc., (the "Holding Company") and First South Bank (the "Bank"). 1. The name of the corporation whose shares will...

                                                                      APPENDIX A

                                PLAN OF EXCHANGE

         This Plan of  Exchange  has been  adopted  as of the 11th day of March,
1999,  by and between First South  Bancorp,  Inc.,  (the "Holding  Company") and
First South Bank (the "Bank").

         1. The name of the  corporation  whose shares will be acquired is First
South Bank.

         2. The name of the acquiring corporation is First South Bancorp, Inc.

         3. At the Effective  Time, as hereinafter  defined,  every  outstanding
share of the common  stock of the Bank shall be  exchanged  for and one share of
the common  stock of the  Holding  Company  without  any  further  action by the
holders  of shares  of common  stock of the Bank.  At the  Effective  Time,  the
Holding Company shall,  without any further action,  become the owner and holder
of all of the issued and outstanding shares of the common stock of the Company.

         4. The  Effective  Time shall be the time  stated in, or, if no time is
stated,  the time of the  filing of, the  Articles  of Merger or Share  Exchange
filed with the South Carolina Secretary of State.

         5. After the  Effective  Time,  persons who were  holders of the common
stock of the Bank at and before the Effective  Time shall have no further rights
as shareholders of the Bank.

         6. After the Effective time,  certificates  representing  shares of the
common  stock of the  Bank  shall  evidence  only the  right of the  holders  to
surrender such certificates to the Holding Company and receive  certificates for
an equivalent number of shares of common stock of the Holding Company.