RESTRICTED STOCK AGREEMENT


         THIS RESTRICTED STOCK AGREEMENT (this "Agreement") is made and entered
into as of the 26th day of August, 1996 (hereinafter referred to as the
"Effective Date"), by and between FAC REALTY, INC., a Delaware corporation (the
"Corporation"), and PATRICK M. MINIUTTI (the "Participant").

         WHEREAS, the Corporation's 1996 Restricted Stock Plan (the "Plan") has
been adopted by the Executive Compensation Committee (the "Committee") of the
Board of Directors of the Corporation (the "Board") and the Board; and

         WHEREAS, the Committee has determined that it is desirable and in the
best interest of the Corporation to make an award (the "Award" ) of certain
shares of common stock, par value $.01 per share of the Corporation ("Common
Stock"), under the Plan, to the Participant, subject to certain restrictions as
specified below; and

         WHEREAS, in order to enforce the aforesaid restrictions Participant is
required under the terms of the Award to immediately deposit the certificate(s)
for the shares of Common Stock subject to the Award, together with stock powers
appropriately endorsed in blank, with the Corporation in accordance with the
requirements of this Agreement.

         NOW, THEREFORE, the Corporation and the Participant agree as follows:

         1. Date of Award. The date of making the Award under this Agreement is
the 26th day of August, 1996 (the "Effective Date") .

         2. Receipt by Participant. The Participant acknowledges receipt from
the Corporation of 90,000 shares of Common Stock (the "Restricted Stock" ) and
agrees to the execution of stock powers or such other transfer authorizations as
the Corporation shall request, in blank, covering the Restricted Stock to be
held by the Corporation, prior to the distribution of certificates representing
the Restricted Stock to the Participant as hereinafter provided.

         3. Investment Representation; Transfer Restrictions. and Registration

                  (a) Investment Representation. Participant represents to the
         Corporation that the Participant is taking the Restricted Stock for
         investment and without any present intention to sell, transfer or
         otherwise dispose of the Restricted Stock.

                  (b) Securities Law Restrictions. The Participant agrees with
         the Corporation that the Restricted Stock shall be subject to such stop
         transfer orders and other restrictions as the Committee may deem
         advisable under the rules, regulations, and other requirements of the
         Securities and Exchange Commission, any stock exchange upon which
         Common Stock is then listed and any other applicable federal or state
         securities laws, rules or


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         regulations, and the Committee may cause a legend or legends to be
         placed on any certificate representing any of the shares of Restricted
         Stock to make appropriate reference to such restrictions.

                  (c) Other Transfer Restrictions. The Participant agrees with
         the Corporation that each certificate representing any of the shares of
         Restricted Stock may bear a legend, substantially in the form attached
         as Exhibit A hereto, to the effect that the shares of Restricted Stock
         represented thereby are subject to potential forfeiture and may not be
         sold, exchanged, transferred, pledged, hypothecated or otherwise
         disposed of except in accordance with the terms of this Agreement, and
         shall be subject to such stop transfer orders and other restrictions as
         the Committee shall deem advisable to ensure compliance with the terms
         of this Agreement.

                  (d) Registration. Prior to vesting pursuant to Paragraph 5
         below, the Corporation shall cause the Restricted Stock to be
         registered under the Securities Act of 1933 and to be listed on the New
         York Stock Exchange (the "NYSE" ).

         4. Receipt by the Corporation. The Corporation acknowledges receipt
from the Participant of certificates representing the Restricted Stock,
registered in the name of the Participant, and acknowledges receipt of stock
powers executed in blank by the Participant covering all of the Restricted
Stock. Certificates representing the Restricted Stock shall be held by the
Corporation and distributed or transferred as directed by the Committee in
accordance with this Agreement.

         5.       Vesting and Delivery of Restricted Stock by the Corporation

                  (a) Periodic Vesting. Subject to subparagraph 5(b) below, the
         Restricted Stock shall vest and become nonforfeitable in accordance
         with the following schedule:

<TABLE>
<S>                                                                                        <C>
     On the third anniversary of the Effective Date:                                       30% Vested
     On the fourth anniversary of the Effective Date an additional:                        10% Vested
     On the fifth anniversary of the Effective Date an additional:                         10% Vested
     On the sixth anniversary of the Effective Date an additional:                         10% Vested
     On the seventh anniversary of the Effective Date an additional:                       10% Vested
     On the eighth anniversary of the Effective Date an additional:                        10% Vested
     On the ninth anniversary of the Effective Date an additional:                         10% Vested
     On the tenth anniversary of the Effective Date an additional:                         10% Vested
</TABLE>

                  (b)      Accelerated Vesting

                           (i) Notwithstanding the requirement of continued
                  employment in subparagraph 5 (a) above, all Restricted Stock
                  not previously vested and subject to forfeiture shall vest and
                  the right of the Participant to such shares of Restricted
                  Stock shall become nonforfeitable upon the occurrence of any
                  of the following:



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                                    (i) the Participant's death during his
                           employment by the Corporation; or

                                    (ii) the Participant's disability (as
                           defined in the Plan) during his employment by the
                           Corporation; or

                                    (iii) termination of the Participant's
                           employment by the Corporation due to the
                           Corporation's election not to extend the
                           Participant's employment agreement (with the
                           Corporation with an Effective Date of August 26,
                           1996, as the same may be amended "the Employment
                           Agreement") as permitted in Paragraph 2(a) thereof;
                           or

                                    (iv) the termination of Participant's
                           employment by the Corporation "without cause"
                           pursuant to 5(a)(iii) of the Employment Agreement if
                           such termination occurs within three (3) months prior
                           to, at the time of, or within one (1) year following
                           a "change of control" as defined in Section 2(e) of
                           the Employment Agreement or, provided that such
                           change is effected, the execution of a definitive
                           agreement therefor.

                  (c) Delivery of Restricted Stock Certificates to the
         Participant. Within thirty (30) days after a date on which shares of
         Restricted Stock have become vested as provided in subparagraphs 5 (a)
         or 5 (b) above, the Committee shall instruct the appropriate officer of
         the Corporation to deliver to the Participant, the Participant's
         designee, or such other person as shall have been designated as
         Participant's beneficiary in accordance with this Agreement, as
         applicable, certificates representing the shares of Restricted Stock
         which have become vested and nonforfeitable, free from any restrictions
         imposed by this Agreement other than such restrictions and conditions
         as may be deemed necessary by the Committee to assure compliance with
         all applicable securities laws rules regulations and listing
         requirements as set forth in subparagraph 3 (b) above.

                  (d) Delivery of Forfeited Restricted Stock. If the
         Participant's employment with the Corporation terminates for any reason
         other than one of those provided in subparagraph 5 (b) above, before
         all of the shares of Restricted Stock are vested in accordance with
         subparagraphs 5 (a) and 5 (b) above, all such shares then subject to
         forfeiture shall be deemed forfeited by the Participant and the
         Committee shall instruct the appropriate officer of the Corporation
         concerning the disposition of such forfeited shares.
         Thereafter such forfeited shares shall cease to be subject to this
Agreement.

                  (e) Limitation on Shares of Restricted Stock. Except as
         otherwise provided in Paragraph 6 (a) or 9 of this Agreement, the
         aggregate number of shares of Restricted Stock which the Participant
         may be entitled to receive under this Agreement shall not exceed
         90,000.


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         6.       Voting Rights; Dividends; Other Distributions

                  (a) The Participant shall have the full power to vote all of
         the Restricted Stock held by the Corporation in his name from time to
         time and shall be entitled to receive all cash dividends declared upon
         any of the Restricted Stock held by the Corporation in his name from
         time to time. All shares of Common Stock or other securities, including
         but not limited to stock dividends, issued in respect of the Restricted
         Stock or in substitution thereof, whether by the Corporation or by
         another issuer, shall be held by the Corporation and shall be subject
         to all terms and conditions of this Agreement and shall be redelivered
         to the Participant or delivered as instructed by the Committee under
         the same circumstances as the Restricted Stock with respect to, or in
         substitution for which they were issued; provided, however, that if the
         Participant should receive rights, warrants or fractional interests in
         respect of any of the Restricted Stock held by the Corporation in his
         name, such rights or warrants may be held, exercised, sold or otherwise
         disposed of, and such fractional interests may be settled, by the
         Participant free and clear of the restrictions herein set forth.

                  (b) The Participant shall use the cash dividends paid on any
         unvested shares of Restricted Stock, less an amount necessary to pay
         all applicable taxes associated with the vesting of the Restricted
         Stock and such dividends, to purchase additional shares of Common Stock
         within thirty (30) days of payment or as soon thereafter as the
         Participant may purchase shares of Common Stock without penalty under
         the Federal securities laws.

         7. Designation of Beneficiary. The Participant may file with the
Committee a written designation of one or more persons as the beneficiary who
shall be entitled to receive the Restricted Stock, if any, distributable to the
Participant upon his death.

The Participant may, from time to time, revoke or change his beneficiary
designation without the consent of any prior beneficiary, if any, by filing a
new designation with the Committee. The last such designation received by the
Committee shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Committee prior to the Participant's death, and in no event shall it be
effective as of a date prior to such receipt.

         If no such beneficiary designation is in effect at the time of the
Participant's death, or if no designated beneficiary survives the Participant,
or if such designation conflicts with law, the Participant's estate shall be
deemed to have been designated his beneficiary and shall receive the Restricted
Stock, if any, distributable to the Participant upon the Participant's death. If
the Committee is in doubt as to the right of any person to receive such
distribution, the Committee may direct an appropriate officer of the Corporation
to retain the Restricted Stock, without liability for any interest in respect
thereof, until the rights thereto are determined, or the Committee may direct
the transfer of such Restricted Stock into any court of appropriate jurisdiction
and such transfer shall be deemed a complete discharge of the obligations of the
Corporation hereunder.



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         8. Effect of Award on Status of Participant. The fact that an Award has
been made to the Participant under this Plan shall not confer on the Participant
any right to continued employment with the Corporation; nor shall it limit the
right of the Corporation to terminate the Participant's employment at any time.

         9. Adjustment Upon Chances in Capitalization: Dissolution or
Liquidation

                  (a) In the event of a change in the number or type of shares
         of Common Stock outstanding (or in the event of an exchange of such
         shares) by reason of a reclassification recapitalization,
         reorganization, merger, or consolidation, or other similar capital
         adjustment, merger or consolidation of the Corporation, or the sale by
         the Corporation of all or a substantial portion of its assets, or the
         occurrence of any other event which could affect the implementation of
         the Plan and the realization of its objectives, the Committee shall
         make such adjustments in the terms, conditions, or restrictions of this
         Agreement as are equitable and just.

                  (b) The making of the Award under this Agreement does not
         affect in any way the right or power of the Corporation or its
         stockholders to make or authorize any adjustment, recapitalization,
         reorganization, or other change in the Corporation's capital structure
         or its business, or any merger or consolidation of the Corporation, or
         to issue bonds, debentures, preferred or other preference stock ahead
         of or affecting Common Stock or the rights thereof or the dissolution
         or liquidation of the Corporation, or any sale or transfer of all or
         any part of the Corporation's assets or business.

         10. Nontransferability. The Restricted Stock may not be sold,
exchanged, transferred, pledged, hypothecated, or otherwise disposed of by the
Participant until transferred to the Participant by the Corporation in
accordance with the terms of this Agreement. Nothing herein shall preclude the
Participant from making a gift of any Restricted Stock to a spouse, child,
stepchild, grandchild, parent, sibling, or legal dependent of the Participant or
to a trust of which the beneficiary or beneficiaries of the trust shall be
either a person designated herein or the Participant, provided, however, that
any Restricted Stock so given shall remain subject to the restrictions,
obligations and conditions set forth in this Agreement. In addition, the
Restricted Stock may be tendered in response to a tender offer for or a request
or invitation to tender of greater than fifty percent (50%) of the common stock
of the Corporation and may be surrendered in a merger, consolidation or share
exchange involving the Corporation; provided, however, in each case, that except
as otherwise provided in Paragraph 6 above, the security or other consideration
received in exchange therefor shall thereafter be subject to the restrictions
and conditions set forth in this Agreement.

         11. Taxes. All Restricted Stock distributed pursuant to this Agreement,
and any amounts distributed with respect thereto prior to distribution of such
Restricted Stock by the Corporation, shall be subject to applicable federal,
state and local withholding for taxes. The Participant expressly acknowledges
and agrees to such withholding without regard to whether the Restricted Stock
may then be sold or otherwise transferred by the Participant.



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         12. Notices. Any notices or other communications required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have
been sufficiently given if delivered personally or when delivered to a
nationally recognized overnight courier service or deposited in the United
States mail as Certified Mail, return receipt requested, properly addressed and
postage prepaid, if to the Corporation at its principal office prior to December
1, 1996 at 230 North Equity Drive, Smithfield, North Carolina 27577 (from and
after December 1, 1996 at 11000 Regency Parkway, Third Floor East Tower, Cary,
North Carolina 27511; and, if to the Participant, at his last address appearing
on the books of the Corporation. The Corporation and the Participant may change
their address or addresses by giving written notice of such change as provided
herein. Any notice or other communication hereunder shall be deemed to have been
given on the date actually delivered, as of the first (1st) business day
following delivery to a nationally recognized overnight courier service or as of
the third (3rd) business day following the date mailed, as the case may be.

         13. Construction Controlled by Plan. This Agreement shall be construed
so as to be consistent with the Plan; and except as specifically provided herein
the provisions of the Plan shall be deemed to be controlling in the event that
any provision hereof should appear to be inconsistent therewith. The Participant
hereby acknowledges receipt of a copy of the Plan from the Corporation.

         14. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be valid and enforceable under
applicable law, but if any provision of this Agreement is determined to be
unenforceable, invalid or illegal, the validity of any other provision or part
thereof, shall not be affected thereby and this Agreement shall continue to be
binding on the parties hereto as if such unenforceable, invalid or illegal
provision or part thereof had not been included herein.

         15. Modification of Agreement; Waiver. This Agreement may be modified,
amended, suspended or terminated, and any terms, representations or conditions
may be waived, but only by a written instrument signed by each of the parties
hereto. No waiver hereunder shall constitute a waiver with respect to any
subsequent occurrence or other transaction hereunder or of any other provision
hereof .

         16. Captions and Headings; Gender and Number. Captions and paragraph
headings used herein are for convenience only, do not modify or affect the
meaning of any provision herein are not a part hereof, and shall not serve as a
basis for interpretation or in construction of this Agreement. As used herein,
the masculine gender shall include the feminine and neuter, the singular number
the plural, and vice versa, whenever such meanings are appropriate.

         17. Governing Law: Venue and Jurisdiction. Without regard to the
principles of conflicts of laws, the laws of the state of North Carolina shall
govern and control the validity interpretation, performance, and enforcement of
this Agreement. The parties hereto agree that any suit or action relating to
this Agreement shall be Instituted and prosecuted in the courts of the County of
Johnston, State of North Carolina, and each party hereby does waive any right or
defense relating to such jurisdiction and venue.


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<PAGE>



         18. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the Corporation, and its successors and assigns, and
shall be binding upon and inure to the benefit of the Participant, and his
heirs, legatees, personal representatives, executors and administrators.

         19. Entire Agreement. This Agreement constitutes and embodies the
entire understanding and agreement of the parties hereto and, except as
otherwise provided hereunder, there are no other agreements or understandings,
written or oral in effect between the parties hereto relating to the matters
addressed herein.

         20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.

         IN WITNESS WHEREOF, the Corporation has caused this instrument to be
executed in its corporate name by a duly authorized officer, and attested by its
Secretary or any of its Assistant Secretaries, and its corporate seal to be
hereto affixed, all by authority of its Board of Directors first duly given; and
the individual parties hereto have hereunto set his hand and adopted as his seal
the typewritten word "SEAL" appearing beside his name, all done this the day and
year first above written.

                                FAC REALTY, INC.



                                      By:     /s/ C. Cammack Morton  (SEAL)
                                               C. Cammack Morton
                                               President and COO

ATTEST:

(sig of secretary)
                   Secretary

         [Corporate Seal]


                                          /s/ Patrick M. Miniutti    (SEAL)
                                             Patrick M. Miniutti








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                                    EXHIBIT A

                                 Form of Legend



         The shares represented by this certificate are subject to restrictions
on transfer and potential forfeiture under the terms of a Restricted Stock
Agreement dated April 4, 1996, a copy of which agreement may be obtained from
the issuer by writing to:

                  prior to December 1, 1996

                           FAC Realty, Inc.
                           230 North Equity Drive
                           Smithfield, NC  27577
                           Attention: Corporate Secretary

                  from and after December 1, 1996

                           FAC Realty, Inc.
                           11000 Regency Parkway
                           Third Floor East Tower
                           Cary, North Carolina 27511
                           Attention: Corporate Secretary








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ASSIGNMENT SEPARATE FROM CERTIFICATE


                  FOR VALUE RECEIVED, Patrick M. Miniutti hereby sells, assigns
and transfers in accordance with the terms of that Restricted Stock Agreement
dated August 26, 1996 between himself and the Company (hereinafter defined) unto
( ) unvested Shares of the Common Stock of FAC REALTY, INC. (the "Company")
standing in his name on the books of the Company represented by Certificate(s)
No. herewith, and does hereby irrevocably constitute and appoint the Company as
his attorney-in-fact to transfer the said stock on the books of the Company with
full power of substitution in the same.

Dated


IN THE PRESENCE OF:

                                                              (SEAL)
                                                         Patrick M. Miniutti


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