<PAGE>
                                                     

                              EMPLOYMENT AGREEMENT

         THIS  EMPLOYMENT   AGREEMENT   (sometimes  referred  to  below  as  the
"Agreement"),  Made and entered into this the 1st day of February,  1999, by and
between  JANET H.  HOLLAR,  a resident of  Mecklenburg  County,  North  Carolina
(herein  referred to as  "Employee");  and CAROLINA  FIRST  BANCSHARES,  INC., a
corporation with its principal office in Lincolnton, North Carolina (hereinafter
referred to as "Employer").

         WHEREAS,  the  Employer  desires to secure the future  services  of the
Employee and to that end desires to enter into this  Employment  Agreement  with
Employee,  upon the terms and  conditions  herein set forth,  which replaces and
supersedes all prior employment contracts, agreements or understandings, if any,
between the Employee and the Employer; and,

         WHEREAS, the Employee wishes to continue employment and enter into this
Employment Agreement with Employer effective as of January 1, 1999;

         NOW,  THEREFORE,  in consideration of the mutual promises and covenants
hereinafter set forth, and of other good and valuable consideration, the receipt
and  sufficiency  of  which  are  mutually  acknowledged,  the  parties  hereto,
intending legally to be bound, agree as follows:

         Section 1. Agreement of Employment.  Employer hereby agrees to continue
to employ the Employee and Employee hereby agrees to remain employed by Employer
for the term,  and upon and subject to the terms and  conditions  hereafter  set
forth.

         Section 2. Term. Employer and Employee hereby agree that Employee shall
become  employed by Employer  under the terms of this Agreement as of January 1,
1999 (the  "Commencement  Date"),  and shall  remain  employed by Employer for a
period of five (5) years (through  December 31, 2003),  unless sooner terminated
pursuant to the terms hereof (the "Employment Period").

         Section 3. Employee  Representations.  Employee  represents to Employer
that Employee is not subject to an employment agreement with any other employer,
nor to any other  agreements under the terms of which she may be prohibited from
accepting employment with Employer, and that Employee may accept employment with
Employer effective as of the Commencement Date.

         Section 4.        Duties of Employee.

                  (a)  Subject to the  supervision  and  pursuant to the orders,
advice and  directions  of the Board of Directors and President of the Employer,
Employee  shall  perform her  assigned  duties as Senior Vice  President,  Chief
Financial  Officer,  Secretary  and Treasurer of Employer and shall perform such
other  duties as are  customarily  performed  by one holding  such  positions in
other,  the same or  similar  business  or  enterprises  as that  engaged  in by
Employer.

                  (b)  Employee  agrees  that she will at all times  faithfully,
industriously,  and to the best of her ability,  experience and talents, perform
all of the duties that may be  reasonably  required of and from her  pursuant to
the express and implied  terms hereof,  to the  reasonable  satisfaction  of the
President and Board of Directors of Employer.

                  (c) Employee  hereby  agrees to refrain  from  engaging in any
ventures  or  enterprises  which might  interfere  with the  performance  of her
express  and  implied  duties  hereunder.  Employee  shall at all times  conduct
herself  in a manner  that  will not  prejudice  or  injure  the  reputation  of
Employer, its other employees or any of its affiliates.

         Section 5.  Employer's  Right to Benefits of Work  Performed.  Employer
shall be entitled to all of the benefits,  emoluments,  and profits arising from
or incident to any and all work, services,  and advice of the Employee performed
or rendered in the course of Employee's employment hereunder.

         Section 6.        Compensation, Expenses and Benefits.

                  (a) Employer shall pay Employee during the Employment  Period,
and in consideration  for the services to be performed by Employee,  a salary at
the rate of $90,000.00 per annum (the "Annual Salary"), less deductions required
by law and  Employee  authorized  deductions,  payable  in such  equal  periodic
installments  as Employer may determine,  but not less  frequently than monthly.
Provided,  however,  that each year the salary of the Employee shall be reviewed
and a salary  amount set for the  following  year by mutual  agreement  with the
Board of Directors. In the event an agreement cannot be reached as to the salary
amount, the salary shall be that set for the previous year.

                  (b) In addition to the Annual Salary described in Section 6(a)
above,  Employer  agrees to  reimburse  Employee  promptly (in  accordance  with
policies and  procedures  adopted by the Board of Directors of Employer) for all
reasonable and necessary  expenses  incurred by Employee in connection  with the
Employer's business, including, without limitation, all reasonable and necessary
expenses of travel, lodging, entertainment, and meals away from home incurred by
Employee in the course of her employment hereunder.  Employee agrees to keep and
maintain such records of the  aforesaid  expenses as Employer may require and to
account to Employer  therefore prior to any such  reimbursement.  Employee shall
comply  with all  reasonable  and  lawful  policies  and  procedures  applied by
<PAGE>
Employer  from  time to time  to its  employees  generally  and  relating  to or
regulating the nature and extent of  reimbursement  expenses,  and the manner of
accounting and reimbursement therefor.

                  (c)  Employer  hereby  agrees to make  available  to Employee,
during the  Employment  Period,  all benefits  which are generally  available to
similarly  situated  employees  of the  Employer,  subject  to  and  on a  basis
consistent with the terms and conditions of such benefits. In addition, Employer
agrees to provide Employee with the following benefits.

                  (1) A non-contributing  qualified employee profit-sharing plan
and participation in the Employer's 401(K) Plan.

                  (2) A  non-contributing  employee's  group life insurance plan
which will  provide life  insurance  for Employee in the amount equal to two (2)
times  Employee's  annual salary (or a maximum of $250,000.00)  during all times
that Employee remains an employee of Employer.

                  (3) A non-contributing  accident and health insurance plan for
the payment of medical care expenses for Employee.

                  (4) Three (3) weeks of vacation time each year.

                  (5) A non-contributing disability income plan.

                  As to (1), (2), (3) and (5) above,  all such benefits shall be
subject  to the  plans  adopted  by the  Employer  from  time to time,  it being
understood by the parties that said benefits also apply to the  Employer's  work
force generally.

                  The Employer, in its sole discretion, may apply for additional
insurance  in its own name and for its own benefit  covering  the  Employee  for
life, medical, or disability  insurance,  in any amount deemed advisable and the
Employee  shall have no right,  title or interest  therein.  The Employee  shall
submit to any required  examination  and shall execute and assign and/or deliver
such application and policies necessary to effectuate such insurance coverage.

                  The  Employer  may  require  the  Employee  to have a thorough
annual physical examination and will reimburse the Employee for the expense.

                  Except as otherwise  specifically  set forth  herein,  nothing
herein  shall be  construed  to impose upon  Employer  any legal  obligation  to
establish  or  maintain  any  particular  benefit  or  benefits  for  any of its
employees.

                  (d) Employee shall also be eligible to receive an annual bonus
based upon  performance  criteria to be  determined by the Board of Directors of
the  Employer.  The Board of  Directors  of the  Employer  shall  determine  the
performance  criteria to be met by Employee  for each fiscal year of Employer or
other  twelve (12) month  period  designated  by the Board of  Directors  of the
Employer  during the term of this Agreement  prior to the  commencement  of each
fiscal  year  or  such  other  period  and  shall  cause  such  criteria  to  be
communicated  in writing to Employee.  The amount of  Employee's  bonus shall be
determined  based upon the level of achievement of Employee as compared with the
established performance criteria. The final determination  concerning the levels
of  achievement  attained by Employee  and the amount of each such annual  bonus
shall be made by the Board of Directors  of the  Employer in its sole  judgment.
Any bonus earned by the Employee  pursuant to this Section 6(d) shall be payable
to Employee, less deductions required by law and Employee authorized deductions,
no later than March 31 following the year to which such bonus relates. The bonus
provided for hereunder  shall be payable with respect to the fiscal year or such
other period immediately preceding the year in which the bonus is paid and shall
not be payable if the Employee is  terminated  for cause prior to the end of the
fiscal year or such other period for which the bonus is to be paid. In the event
that the  Employee  dies,  is  terminated  because of illness or  disability  as
provided in Section 10 of this Agreement,  is terminated by the Employer without
cause  prior to the end of the fiscal  year or such other  period for which such
bonus is to be paid, or is terminated by Employee  pursuant to Section  10(d), a
pro rata portion of such bonus, if otherwise earned,  shall nevertheless be paid
to the Employee or her estate, as the case may be. The pro rata portion shall be
based upon the number of days the Employee  was employed by the Employer  during
such fiscal year as compared to 365.

         Section 7.        Non-Competition.

                  (a)  While   Employee  is  employed  by  Employer  under  this
Agreement,  Employee will not,  directly or indirectly,  own,  manage,  operate,
control or participate in the ownership, management, operation or control of, or
be connected with as an officer,  employee,  partner,  director,  consultant, or
otherwise,  or have any  financial  interest in, or aid or assist anyone else in
the conduct of, any financial  institution  which customarily takes deposits and
gives loans,  or is about to or proposes to engage in such  banking  activities,
which  is in  competition  with  businesses  conducted  by the  Employer  or its
affiliates  [provided,  however, that notwithstanding the foregoing the Employee
shall be entitled to acquire as a passive investment a proprietary  interest not
to exceed 3% of the equity of any publicly-held company) .
<PAGE>
                  (b) While  Employee  is employed  by the  Employer  under this
Agreement  Employee  will not,  directly  or  indirectly,  employ,  solicit  for
employment,  or advise or recommend to any other person that such person  employ
or  solicit  for  employment,  any  person  employed  by  the  Employer  or  its
affiliates.

                  (c) While  Employee  is employed  by the  Employer  under this
Agreement  Employee  shall not,  directly  or  indirectly,  solicit or advise or
recommend  to any other  person that such person  solicit,  any  customer of the
Employer or its affiliates for the purpose of obtaining banking services of such
customer.

                  (d) For one (1) year after the  termination  of the employment
of Employee  hereunder for any reason whatever other than (1) termination of the
employment of Employee by Employer  without cause  pursuant to Section 10(e) or,
(2) by termination  of the  employment of Employee upon material  breach of this
Agreement by Employer pursuant to Section 10(d),  Employee will not, directly or
indirectly,  own,  manage,  operate,  control or  participate  in the ownership,
management,  operation  or  control  of,  or be  connected  with as an  officer,
employee,  partner,  director,  consultant,  or otherwise, or have any financial
interest  in, or aid or assist  anyone  else in the  conduct  of, any  financial
institution  which customarily takes deposits and gives loans, or is about to or
proposes to engage in such  banking  activities,  which is in  competition  with
businesses conducted by the Employer or its affiliates [provided,  however, that
notwithstanding  the  foregoing  the Employee  shall be entitled to acquire as a
passive investment a proprietary  interest not to exceed 3% of the equity of any
publicly-held company].

                  (e) For a period of two (2) years after the termination of the
employment  of Employee  hereunder,  for any reason  whatever  other than (1) by
termination of the employment of Employee by Employer  without cause pursuant to
Section 10(e), or (2) by termination of the employment of Employee upon material
breach of this Agreement by Employer  pursuant to Section  10(d),  Employee will
not,  directly  or  indirectly,  employ,  solicit for  employment,  or advise or
recommend to any other person that such person employ or solicit for employment,
any person employed by the Employer or its affiliates.

                  (f) For a period of two (2) years after the termination of the
employment  of Employee  hereunder,  for any reason  whatever  other than (1) by
termination of the employment of Employee by Employer  without cause pursuant to
Section 10(e), or (2) by termination of the employment of Employee upon material
breach of this Agreement by Employer  pursuant to Section 10(d),  Employee shall
not, directly or indirectly,  solicit or advise or recommend to any other person
that such person solicit, any customer of the Employer or its affiliates for the
purpose of obtaining banking services of such customer.

                  (g) For  purposes  of this  Section 7,  "Employer"  shall also
include the Employer's subsidiaries and other affiliates.

         Section 8. Confidentiality.  The Employee acknowledges that she has had
and will have access to certain information related to the business, operations,
future plans and customers of the Employer, the disclosure or use of which could
cause the Employer  substantial  losses and damages.  Accordingly,  the Employee
covenants  that  during  the  term  of her  employment  with  the  Employer  and
thereafter she will keep confidential all business and technical information and
documents which constitute trade secrets furnished to her by or on behalf of the
Employer  and not use the  same to her  advantage,  except  to the  extent  such
information or documents are or thereafter become lawfully obtainable from other
sources,  are in the public domain through no fault on her part, or is consented
to in writing by the Employer. Upon termination of her employment,  the Employee
shall return to the Employer all records, list, files and documents which are in
her possession and which relate to the Employer.  This restriction  shall expire
two (2) years from the date of Employee's termination.

         For the purposes of this Section 8,  "Employer"  shall also include the
Employer's subsidiaries and other affiliates.

         Section 9.  Limitations on Section 7. Upon a breach of this  Employment
Agreement by Employer failing to make payments required of it upon a termination
of Employee's  employment,  the  provisions of Section 7 shall  terminate in the
event Employer,  after thirty (30) days notice from Employee,  fails to cure the
breach.  Upon the  failure of Employer  to cure the breach  within the  required
time,  Employee may immediately declare any remaining sums to be immediately due
and payable and may institute  such legal actions as may be necessary to collect
said sums.

          Section 10.  Termination. If the term of this Agreement has not sooner
expired by lapse of time, the term of Employee's employment shall terminate upon
the occurrence of any of the following: 

                  (a)      Death.  Upon the death of the Employee;
<PAGE>
                  (b) Disability. Upon the total and permanent disability of the
Employee. If it is determined that Employee is disabled and that such disability
is likely to be permanent  (herein referred to as a "Determination  of Permanent
Disability"),  Employer may terminate this Agreement. Said termination shall not
be effective  until such time as Employer has given written  notice to Employee,
at the  address  specified  in  Section  14,  of its  intent to  terminate  this
Agreement.  For the purposes of this Section 10(b), the term "Disability"  shall
mean the  Employee's  inability  to perform  functions  normally  performed  for
Employer by the Employee. A "Determination of Permanent  Disability" may be made
at the request of either the Employer or Employee;  provided,  however,  that in
the event Employee is unable, due to her disability, to make such a request, her
spouse or other  designee  may make a request  in her  stead.  In the event of a
request  by either  Employee  or  Employer  for a  "Determination  of  Permanent
Disability",  each of  Employee  and  Employer  shall  designate  one  doctor to
participate in the determination; provided, however, that if Employee is unable,
due to her disability, to make such a designation,  her spouse or other designee
shall make the designation in her stead. If the two doctors so designated  agree
on a determination  required by this Section 10(b), such determination  shall be
final. If the two doctors fail to agree,  they shall designate a third doctor to
make the determination required by this Section 10(b), which determination shall
be final.

                  (c) By the Employer for Cause.  Employee's  employment  may be
terminated  effective  immediately  by the  Employer  for  cause  by  notice  of
termination  to the  Employee.  "Cause"  for  such  termination  shall  mean the
following:

                           (i)  Dishonesty  of the Employee  with respect to her
employment with Employer;
                           (ii)  misfeasance or nonfeasance  with respect to her
employment with Employer;
                           (iii) Conviction of the Employee upon a felony charge
or upon a charge of any crime involving moral
turpitude;

                           (iv)  willful or  prolonged  absence from work by the
Employee  (other than by reason of disability due to physical or mental illness)
or failure, neglect or refusal by the Employee to perform her duties;

                           (v)  Material  breach by the  Employee  of any of the
covenants contained in this Agreement.

                  (d) By Employee.  By Employee  upon a material  breach of this
Agreement by Employer when after thirty (30) days notice of the breach  Employer
fails to cure the  breach.  Any such  termination  must be elected  by  Employee
within thirty (30) days of Employer's  failure to cure such breach or the breach
will be deemed to have been waived for all purposes.

                   (e) By Employer  for any reason  other than cause upon ninety
(90) days notice to Employee. Cause shall have the ----------- definition stated
above.

         Except as otherwise  provided in this  Agreement,  Employee's  right to
further  compensation  and benefits  under this  Agreement  shall cease upon the
termination of her employment.  Except as otherwise  provided in this Agreement,
Employee shall remain entitled to any unpaid  compensation  and benefits accrued
prior to  termination.  Likewise,  Employee  shall be  entitled  to receive  all
insurance and disability  benefits if termination is due to death or disability.
In the event that the  employment  of the Employee is terminated by the Employer
without cause pursuant to Section 10(e) during the terms of this  Agreement,  or
should Employee terminate her employment pursuant to Section 10(d), the Employer
shall  continue to pay the Annual  Salary and provide the  benefits set forth in
Section 6 of this Agreement  [except for the annual bonus,  the payment of which
is  controlled  by Section  6(d)] for a period of twelve (12)  months  after the
termination of Employee's employment, as severance pay.

         Section 11. Change of Control.  If, at any time within  thirty-six (36)
months  following  a "Change in  Control"  as  defined  hereafter,  Employee  is
terminated  by Employer (or its  successor)  without  cause  pursuant to Section
10(e), Employer shall continue to pay the Annual Salary and provide the benefits
set forth in Section 6 of this Agreement for a period of twenty-four (24) months
after the  termination of Employee as severance pay (this  compensation to be in
lieu of that  severance  compensation  set forth in Section  10 for  termination
without cause).  Said Annual Salary shall be paid  periodically  and on the same
schedule  as  that  prior  to  Employee's  termination.  The  Employer  (or  its
successor)  may not,  following  a Change in  Control,  permanently  assign  the
Employee  to work more than  forty  (40)  miles  from the  intersection  of N.C.
Highway 16 and  Huntersville/Mt.  Holly Highway.  Notwithstanding the foregoing,
the Employer (or its successor) may, following a Change in Control,  require the
Employee  to work more than fifty (50)  miles from the above  intersection  from
time to time but no more often than ninety (90) days per year.
<PAGE>

         A "Change in Control"  shall be deemed to have occurred if and when any
"person" (as such term is used in Sections  13(d) and 14(d)(2) of the Securities
and  Exchange  Act of  1934) is or  becomes  a  beneficial  owner,  directly  or
indirectly,  of  securities of the Employer or its parent  company  representing
greater than fifty percent (50%) of the combined  voting power of the Employer's
or  its  parent  company's  then  outstanding  securities.  Notwithstanding  the
foregoing,  no "change in control" shall be deemed to have occurred by virtue of
any transaction  which results in the Employee and/or a member or members of the
Employer's  present Board of Directors (i.e.  existing on January 1, 1999), or a
group of  persons  including  the  Employee  and/or a member or  members  of the
Employer's present Board of Directors,  acquiring,  directly or indirectly, more
than fifty percent (50%) of the combined  voting power of the  Employer's or its
parent company's outstanding securities.  In limitation of the provisions in the
preceding  sentence,  a "change in control"  shall be deemed to have occurred if
the member or members of the  Employer's  present Board of Directors do not own,
control or constitute a material portion of the acquiring  "person".  "Material"
shall  mean  ownership  or  control  of at  least  twenty  percent  (20%) of the
acquiring person.
<PAGE>

         Any dispute or  controversy  arising under or in  connection  with this
Section 11 shall be settled  exclusively  by  arbitration  in the State of North
Carolina in accordance  with the rules of the American  Arbitration  Association
then in effect.

         Section 12. Enforcement of Employee Restrictions. Employee acknowledges
that she has carefully read and considered the provisions of this Agreement and,
having done so,  agrees that the  restrictions  set forth in this  Agreement  in
Sections 7 and 8 (including,  but not limited to, the period of restriction  and
the geographical  area of restriction set forth therein) are fair and reasonable
and are necessarily required for the protection of the interests of the Employer
and its  affiliates.  Employee  further  acknowledges  that due to the nature of
Employer's business,  more limited restriction than those found herein would not
be reasonable or  appropriate.  The Employee  covenants and agrees with Employer
that the  Employer  shall be  entitled to an  accounting  and  repayment  of all
profits, compensation, commissions, remunerations or benefits which the Employee
directly or indirectly has realized and/or may realize as a result,  growing out
of or in connection with any such  violations;  such remedy to be in addition to
and not in  limitation to any  injunctive  relief or other rights or remedies to
which  Employer or its  affiliates is or may be entitled to at law or in equity.
In the event that  notwithstanding the foregoing,  any part of the covenants set
forth  in this  Agreement  shall be held to be  invalid  or  unenforceable,  the
remaining parts hereof shall  nevertheless  continue to be valid and enforceable
as though the invalid and  unenforceable  part had not been included herein.  In
the event that any provisions of this  Agreement  relating to the time period or
geographical  restriction shall be declared by a court of competent jurisdiction
to exceed the maximum time periods or geographical  areas which such court deems
reasonable  or  enforceable,   such  time  periods  or  geographical   areas  of
restriction  shall be deemed to become and thereafter be the maximum time period
or geographical areas which such court deems reasonable and enforceable.

          Section 13. Stock Options. Any and all stock options previously issued
in favor of Employee  shall  remain in full force and effect  according to their
terms.

         Section 14. Notices.  All notices required or permitted hereunder shall
be deemed to be duly given if in writing  and  delivered  personally  or sent by
United  States  registered or certified  mail,  postage  pre-paid,  addressed to
Employer at:

                  President, Carolina First BancShares, Inc.
                  402 East Main Street
                  Lincolnton, NC 28092

and addressed to Employee at:

                  Janet H. Hollar
                  11917 Overlook Mountain Drive
                  Charlotte, North Carolina 28216

or at such changed addresses as the parties may designate in writing.
<PAGE>

         Section 15.       Miscellaneous.

                  (a) Headings.  Headings, titles and captions contained in this
Employment  Agreement are inserted only as a matter of convenience and reference
and in no way define,  limit, extend, or describe the scope of this Agreement or
the intent of any provisions hereof.

                  (b) Gender. The use in this Agreement of gender-specific words
or phrases shall be deemed to include the masculine, feminine or neuter genders,
as the context may require.

                  (c) Entire  Agreement.  This  writing  constitutes  the entire
agreement  between the parties hereto and supersedes any prior  understanding or
agreements  among them  respecting the subject  matter.  There are no extraneous
representations,  arrangements,  understandings, or agreements, oral or written,
in respect of the subject matter of this  Agreement,  among the parties  hereto,
except those fully expressed herein.

                  (d)   Amendments.   No   amendments,   changes,   alterations,
modifications, additions and qualifications of the terms of this Agreement shall
be made or binding unless made in writing and signed by all the parties hereto.

                  (e) Waiver. The failure of either party to enforce at any time
any of the  provisions of this  Agreement  shall not be construed as a waiver of
such  provisions  or of the right of such party  thereafter  to enforce any such
provisions.

                  (f)   Invalidity   and   Severability.   The   invalidity   or
unenforceability of any particular  provision of this Agreement shall not affect
the  enforceability  of other  provisions  hereof,  and this Agreement  shall be
construed in all respects as if such invalid or  unenforceable  provisions  were
omitted.
<PAGE>

                  (g)  Governing  Law.  This  Agreement  shall be construed  and
governed in accordance  with the laws of the State of North  Carolina.  Employer
hereby consents to the jurisdiction of any local, state or federal court located
in the State of North Carolina,  and hereby waives  personal  service of process
and consents to service of process by certified or  registered  mail directed to
Employee at Employee's address stated in Section 11 of this Agreement.  Employee
further specifically consents to venue in Lincoln County.

                  (h) Burden and Benefit.  This Agreement  shall be binding upon
and inure to the benefit of the parties hereto and their heirs,  successors and,
as allowed herein, assigns.

                  (i)  Assignment.  The terms of this  Employment  Agreement are
personal  to  Employee.  As such  Employer  may not assign its  interest in this
Employment  Agreement  other than to Employer's  subsidiaries,  parent  company,
sister  companies  and such  affiliates  as may  exist  from  time to time  (the
"Carolina First Family of businesses"). Employer may also assign this Employment
Agreement pursuant to any Merger or Change of Control as set forth in Section 11
herein (subject to Employee's  rights specified in Section 11). Employee may not
assign her interest in this Employment Agreement.



<PAGE>


         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the date and year first above written.

                                    Employer:

                                    CAROLINA FIRST BANCSHARES, INC.

                                    By:     /s/ James E. Burt, III
                                    ------------------------------            
                                    Title:  President and CEO                   

ATTEST:

/s/ Sue Stamey
---------------
Assistant Secretary

(Corporate Seal)

                                    Employee:

                                            /s/ Jan H. Hollar          (SEAL)
                                            ---------------------------------  
                                            Janet H. Hollar