Exhibit 10.01

LANDIS SAVINGS BANK, SSB

DIRECTORS’ RETIREMENT PLAN

(As Amended and Restated Effective December 29, 2008)

1. Purpose. The purpose of the Landis Savings Bank, SSB Directors’ Retirement
Plan (the “Plan”) was adopted effective on June 1, 1997 is to provide retirement
benefits to members of the Board of Directors of Landis Savings Bank, SSB (the
“Savings Bank,” which changed its name to “Bank of the Carolinas” effective on
April 27, 1998) who provided and will provide expertise in enabling the Savings
Bank to experience successful growth and development and to ensure that the
Savings Bank will have their continued services and assistance in the conduct of
its business in the future. Effective on December 27, 2001, the Savings Bank was
merged into Bank of Davie (the “Merger”), which changed its name to Bank of the
Carolinas (“BOC”). In connection with the merger, the Savings Bank’s directors
became directors of BOC, BOC assumed the Savings Bank’s obligations under the
Plan with respect to directors who had served as directors of the Savings Bank
for at least ten years and whose benefits under the Plan had begun to vest, and
BOC was released from any further obligations under the Plan with respect to all
other former directors of the Savings Bank. Participants in the Plan following
the Merger include only those directors of the Savings Bank who had served as
such for at least ten years at the time of the Merger, and no other former
directors of the Savings Bank, or current or former directors of BOC, shall be
eligible or have any right to receive benefits under the Plan. Benefits under
the Plan shall be in addition to any other benefits that the Participant may be
eligible to receive.

2. Definitions. “Administrator” means the Administrator of the Plan., North
Carolina Savings Institutions Division.

(a) “Board of Directors” means those persons serving, from time to time, on the
Board of Directors of the Savings Bank.

(b) “Commissioner” means the North Carolina Commissioner of Banks.

(c) “Committee” means the Corporate Governance Committee comprised of three or
more persons appointed by the BOC’s Board of Directors of the Savings Bank.

(d) “Disability” means absence from normal employment duties on a full-time
basis and certified by a physician that such illness or injury has caused the
disabled party to be incapable of performing normal employment duties.

(e) “Participant” means a former member of the Board of Directors of the Savings
Bank who is eligible to receive benefits under the Plan as provided herein.
Persons hereafter elected or appointed to fill vacancies on the Board of
Directors shall become Participants on the date of election or appointment

(f) “Retirement Benefit” for a particular Participant means an amount equal to
the Retirement Fee multiplied by ten (10), subject to the appropriate vesting
schedule.

(g) “Retirement Fee” means an amount equal to Twelve Thousand Dollar ($12,000).

“Savings Bank” means Landis Savings Bank, SSB, a North Carolina chartered mutual
savings bank, or any successor financial institution.

3. Eligibility. Any person who, is serving or hereinafter serves at the
effective time of the Merger, had served on the Board of Directors of the
Savings Bank for at least ten years and whose benefits under the Plan had begun
vesting shall be a Participant in the Plan. Retirement Benefits, to the extent
vested, shall be payable to a Participant upon (i) such person attaining the age
of 70, and (ii) such Participant’s retirement from service on the BOC’s Board of
Directors, and shall be paid in 120 equal monthly installments commencing within
30 days from the date of the Participant’s retirement.

 

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4. Vesting of Benefits.

(a) For Participants who have had attained the age of 65 on the effective date
of this Plan, the Retirement Benefit shall vest over a five year period
beginning on the first anniversary of the Plan at a rate of 20% per year.

(b) For all other Participants, the Retirement Benefit shall vest 10% per year
commencing on the first anniversary following such Participant’s tenth year of
service as a member of the Savings Bank’s or BOC’s Board of Directors.

(c) Notwithstanding the foregoing, (i) no Retirement Benefit shall be paid until
a Participant attains the age of 70, and (ii) no Retirement Benefit shall be
paid after the AdministratorCommissioner, the Federal Deposit Insurance
Corporation or any other appropriate regulatory body directs the Savings BankBOC
to cease such payments.

5. 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 benefits under this Plan upon the Participant’s death. The
Participant may, from time to time, revoke or change this 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 day prior to
such receipt.

6. Death of a Participant.

(a) Should a Participant designated in Section 4(a) die while serving on the
BOC’s Board of Directors, if there is a designated beneficiary, the Retirement
Benefit immediately shall become 100% vested and its then current present value
as of the Participant’s date of death, discounted based on prevailing interest
rates, shall be paid in 120 equal monthly installments one lump sum payment to
such the Participant’s designated beneficiary within sixty (60) days following
the Participant’s death. Should a Participant designated in Section 4(b) die
while serving on the BOC’s Board of Directors, if there is a designated
beneficiary, the then current present value as of the Participant’s date of
death of the Retirement Benefit that heretofore has vested prior to the date of
such director’s death, discounted based on prevailing interest rates, shall
become immediately payable over the following 120 month period in equal monthly
installments be paid in one lump sum payment to the Participant’s designated
beneficiary within sixty (60) days following the Participant’s death.

(b) 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 balance then current present
value as of the Participant’s date of death of the Retirement Benefit,
discounted as described above, shall be paid to the executor or administrator of
the Participant’s estate in one lump sum payment, discounted for current value
based upon the prevailing interest rates at the time of the Participant’s death.
Such lump sum payment shall be made within sixty (60) days of following the
participant’s death.

(c) If the Committee is in doubt as to the right of any person to receive the
Retirement Benefit, the Committee may retain the Retirement Benefit without
liability for any interest in respect thereof, until the rights thereto are
determined, or the Committee may direct the transfer of the Retirement Benefit
into any court of appropriate jurisdiction and such transfer shall be deemed a
complete discharge of the BOC’s obligations of the Savings Bank hereunder.

 

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7. Disability. Should the service of a Participant designated in Section 4(a)
become disabled, as a member of BOC’s Board of Directors terminate as a result
of his Disability, the Participant’s Retirement Benefit immediately shall become
100% vested and shall be paid in 120 equal monthly installments commencing
within 30 days from the date of the Participant’s termination of service. Should
the service of a Participant designated in Section 4(b) become disabled, as a
member of BOC’s Board of Directors terminate as a result of his Disability, the
Participant’s Retirement Benefit, to the extent vested on the date of
Disability, shall be immediately payable over the following 120 month period in
equal monthly installments paid in 120 equal monthly installments commencing
within 30 days from the date of the Participant’s termination of service.

8. Administration. The Plan shall be administered by the Committee. All
questions of interpretation of the Plan or of any opinions issued under it shall
be final and binding upon all persons having an interest in the Plan. Any or all
powers and discretion vested in the Committee under this Plan may be exercised
by any subcommittee of three or more persons so authorized by the Committee.

9. Amendment. The Committee may amend, modify, suspend, or terminate this Plan
at any time, provided, however, that any amendment, modification, suspension, or
termination shall not affect the rights of Participants who are receiving
payments to which they are entitled pursuant to Paragraph 4. Notwithstanding the
foregoing, this Plan may be terminated at any time and benefits may be affected
in whole or in part if the Plan is deemed by the AdministratorCommissioner or
the Federal Deposit Insurance Corporation to constitute an unsafe or unsound
banking practice.

10. State Law. Notwithstanding the principals of conflicts of laws, this Plan
shall be governed and construed in accordance with the laws of the State of
North Carolina. Any suit or action relating to this Plan shall be instituted and
prosecuted in the Courts of the County of RowanDavie, State of North Carolina.

11. Effective Date. This Plan shall become operative and in effect on June 1,
1997, provided it has been adopted by the Board of Directors prior or
simultaneously thereto and is amended and restated effective on December 29,
2008.

12. Funding. This Plan at all times shall be entirely unfunded and no provision
at any time shall be made with respect to segregating any asset of the Savings
BankBOC for payment of benefits hereunder. No Participant, beneficiary or other
person shall have any interest in any particular assets of the Savings BankBOC
by reason of the right to receive the Retirement Benefit under the Plan, and any
such Participant, beneficiary or other person shall have only the rights of a
general unsecured creditor of the Savings BankBOC with respect to any rights
under this Plan.

13. Section 409A. Notwithstanding anything contained in this Plan to the
contrary:

(a) the terms used in this Plan shall be defined and interpreted in a manner
that is consistent with Section 409A of the Internal Revenue Code of 1986, as
amended, and regulations promulgated thereunder, as applicable (“Section 409A),
and in the event of any ambiguity in any of the terms or provisions of this
Plan, those terms or provisions shall be interpreted in a manner so as to comply
with the applicable requirements of Section 409A;

(b) to the extent the Participant is entitled to a series of installment
payments under the provisions of this Plan, such series of installment payments
shall be treated as a series of separate payments for purposes of Section 409A,
as applicable;

 

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(c) in the case of a payment upon the termination of the Participant’s services
as a member of BOC’s Board of Directors, payment shall not be made under this
Plan unless the termination of service constitutes a “separation from service”
under Section 409A and, if BOC determines that the Participant is a “specified
employee” within the meaning of Section 409A on the date of any such separation
from service (the “Separation from Service Date”), then (i) any installment
payments which the Participant is entitled to under this Plan that would result
in a tax, interest, and/or penalties under Section 409A if paid during the first
six months after the Separation from Service Date shall be delayed and
accumulated by the Administrator and the accumulated amount shall be payable to
the Participant in a lump sum on the date that is six months and one week after
the Separation from Service Date, with any additional installment payments for
which the Participant is entitled to after that six-month period being payable
on the same schedule as otherwise provided under this Plan, and (ii) any
lump-sum payment which the Participant is entitled to under this Plan that would
result in a tax, interest, and/or penalties under Section 409A if paid during
the first six months after the Separation from Service Date shall be delayed and
be payable to the Participant in a lump sum on the date that is six months and
one week after the Separation from Service Date.

(d) in the event that the terms of this Plan shall be deemed not to comply with
Section 409A, BOC shall not be liable to the Participant for any income or
excise taxes or any other amounts payable by the Participant with respect to any
payments made hereunder or for any actions, decisions or determinations made by
BOC in good faith.

The purpose of this Paragraph 13 is to comply with Section 409A

 

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DESIGNATION OF BENEFICIARY

 

To: Compensation Corporate Governance Committee

Landis Savings Bank, SSB Bank of the Carolinas

Gentlemen:

The undersigned hereby designates                                          
                    whose address is                                          
                                        as beneficiary of any and all payments
which may be made under the Landis Savings Bank, SSB Directors’ Retirement Plan
(as amended and restated effective December 29, 2008) after my death. In the
event that said beneficiary does not survive me, I direct that such payments be
made to                                         , whose address is
                                                             . This designation
supersedes any and all prior designations and shall be effective until such time
as it should be succeeded by a subsequent designation.

 

Dated:  

 

Signature:  

 

 

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