AMENDMENT NO. 1 TO
                       1998 STOCK PURCHASE AND OPTION PLAN
                              FOR KEY EMPLOYEES OF
                    KMC TELECOM HOLDINGS, INC. AND AFFILIATES

     This  Amendment  No.  1 to 1998  Stock  Purchase  and  Option  Plan for Key
Employees of KMC Telecom Holdings, Inc. and Affiliates dated as of July 15, 1998
is made as of June 7, 1999 (the "Amendment").

                               W I T N E S S E T H

     WHEREAS,  the Corporation  designed the 1998 Stock Purchase and Option Plan
for Key Employees of the Corporation and Affiliates (the "Plan");

     WHEREAS,  the  Corporation  wishes to increase  the number of shares of the
authorized Common Stock available for Grants under the Plan;

     NOW THEREFORE,  in  consideration  of the premises,  it is hereby agreed as
follows:

     1. DEFINED TERMS.  Unless otherwise  defined herein,  all capitalized terms
defined in the Amendment and used herein are defined in the Plan.

     2.  AMENDMENT TO SECTION 6(A).  Section 6(a) of the Plan is amended to read
in its entirety as follows:

          "The number of Shares  available  for Grants  under this Plan shall be
600,000  shares of the  authorized  Common Stock as of the effective date of the
Plan, subject to adjustment in accordance with Section 8 or 9 hereof. The number
of Shares subject to Grants under this Plan to any one Participant  shall not be
more than 75,000 shares, subject to adjustment in accordance with Section 8 or 9
hereof.  Unless  restricted by applicable law, Shares related to Grants that are
forfeited,  terminated,  cancelled  or expired  unexercised,  shall  immediately
become available for Grants."

     3. Except as expressly  amended  hereby,  all of the provisions of the Plan
are hereby  affirmed and shall  continue in full force and effect in  accordance
with their terms.