Exhibit 10.01

STATE OF NORTH CAROLINA

COUNTY OF DAVIE

RESIGNATION AND

CONSULTATION AGREEMENT

AND RELEASE

THIS RESIGNATION AND CONSULTATION AGREEMENT AND RELEASE (the “Agreement”) is
made and entered into by and between BANK OF THE CAROLINAS (the “Bank”); and
ERIC E. RHODES (“Rhodes”);

W I T N E S S E T H:

WHEREAS, Rhodes is employed by the Bank as Senior Vice President and Chief
Financial Officer, and serves as Vice President and Chief Financial Officer of
the Bank’s parent company, Bank of the Carolinas Corporation (“BCC”); and

WHEREAS, Rhodes has notified the Bank and BCC that he wishes to resign from
these positions, effective May 30, 2008 (the “Resignation Date”), and the
parties have reached an arrangement as to such resignation, as evidenced in this
Agreement; and

WHEREAS, the Bank desires to assure itself of Rhodes’ availability during the
period following his resignation to assist in the transition of his duties to a
new or interim chief financial officer and, for that purpose, the Bank and
Rhodes have negotiated an agreement pursuant to which Rhodes shall, after the
Resignation Date, perform certain services and provide support, advice, and
counsel from time-to-time to the Bank’s and BCC’s management on an as needed
basis; and

WHEREAS, an agreement has been reached between Rhodes and the Bank concerning
certain other matters as contained herein, and the Bank and Rhodes hereby desire
to set forth the terms and conditions thereof in writing.

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
contained in this Agreement, and for other good and valuable considerations, the
receipt and sufficiency of which hereby are acknowledged, the Bank and Rhodes
agree as follows:

1. RESIGNATION. Rhodes hereby resigns from his positions with the Bank and BCC.
Rhodes’ employment shall terminate on the Resignation Date, and Rhodes shall
have no further authority as an employee or agent of the Bank or BCC. Rhodes
specifically recognizes and agrees that this Agreement is a full and complete
resolution, settlement, and termination of any rights or claims that Rhodes may
have had, or alleges to have had, to any further employment with the Bank, its
subsidiaries, or affiliates following the Resignation Date, including but not
limited to BCC.

2. SALARY AND VACATION PAY. The Bank shall pay to Rhodes his normal salary, plus
the amount of his accrued but unused vacation leave, less normal deductions and
withholdings, through and as of the Resignation Date, and agrees to provide
further special payments and consideration to Rhodes as set forth below.

3. CONSULTING SERVICES AND PAYMENTS.

(a) Effective as of the Resignation Date and continuing until August 31, 2008
(the “Consulting Period”), Rhodes shall become an independent contractor and
consultant to the Bank and BCC and provide support, advice, and counsel to the
Bank’s and BCC’s management on an as-needed basis on matters related to his
former responsibilities as an officer and employee of the Bank and an officer of
BCC and to the transition of his duties to a new or interim chief financial
officer; provided, however, that the Consulting Period shall terminate
immediately in the event Rhodes revokes the release provisions of this Agreement
pursuant to Paragraph 7. Rhodes shall not be obligated to provide consulting
services for more than ten hours per calendar week during the Consulting Period,
and, at his option, he may provide those services at such location, including
his home, as he shall determine from time to time. To the extent that all or any
portion of the consulting services are provided on the Bank’s premises, the Bank
will provide Rhodes with office space, computer access and such other support
services as shall reasonably be needed in order to provide the services
requested by the Bank.

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(b) As consideration for the consulting services to be provided by Rhodes, and
for the other terms and conditions of this Agreement, including but not limited
to the provisions of Paragraph 6 (Covenant of Nondisclosure) and Paragraph 7
(Release), during the Consulting Period the Bank shall pay to Rhodes the amount
of $9,660.00 per full calendar month, beginning June 1, 2008, for each of the
three full calendar months during the Consulting Period (the “Consulting
Payments”); provided, however, that Rhodes shall be entitled to only a pro rata
portion of such Consulting Payments in the event the Consulting Period is
terminated early pursuant to Paragraph 3(a). The Consulting Payments will be due
and payable monthly, in arrears, on the last business day of each calendar
month, as applicable.

Rhodes acknowledges that no withholdings shall be made from the Consulting
Payments, and Rhodes hereby agrees that he shall be solely responsible for all
taxes, insurance, penalties, and other charges, if any, which may be owed to or
assessed by governmental agencies as a result of the payments paid to him
pursuant to this Paragraph 3. Rhodes further agrees to indemnify and hold
harmless the Bank and its attorneys from any claims, demands, deficiencies,
levies, assessments, judgments, or recoveries by any governmental authority
asserted against the Bank because of Rhodes’ failure to pay applicable taxes.

4. INSURANCE CONTINUATION. Rhodes acknowledges and agrees that, upon the
Resignation Date, he shall no longer be eligible for any benefits, including but
not limited to insurance, which are available to employees of the Bank. Rhodes
may elect to continue his group insurance coverage in accordance with provisions
of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”); provided,
however, that Rhodes shall be solely responsible for the payment of the premiums
of such coverage.

5. TERMINATION/CONTINUATION OF CERTAIN RIGHTS AND BENEFITS. Rhodes recognizes
and agrees that payment of his salary, payment for accrued but unused vacation
leave, and payment of the Consulting Payments, as described in Paragraphs 2 and
3 of this Agreement, are in full settlement of any wages and benefits owing to
Rhodes through the Resignation Date. Except for Rhodes’ rights and benefits
under this Agreement and his vested rights under the Bank’s Section 401(k) plan,
all of Rhodes’ employment rights, wages, and benefits with the Bank, and all
subsidiaries and affiliates of the Bank, including but not limited to BCC,
shall, to the extent permitted by law, terminate and be forfeited as of the
Resignation Date, including, without limitation, his eligibility for further
payment of any salary, vacation, personal leave, sick leave, severance pay,
bonuses, or any other amounts. Rhodes further recognizes and agrees that payment
of his salary, payment for accrued but unused vacation leave, and payment of the
Consulting Payments by the Bank, are not to be construed as an admission of any
liability on the part of the Bank or its subsidiaries or affiliates, and that
the Bank has denied and denies any violation of any law and any liability, and
intends by such payments simply to recognize Rhodes’ service prior to the
Resignation Date, his consulting services to be rendered, and his agreements
contained herein.

6. COVENANT OF NONDISCLOSURE. During the course of Rhodes’ employment with the
Bank, Rhodes has been given and has obtained various confidential and material
non-public information concerning the Bank, BCC, their subsidiaries and
affiliates, the shareholders, directors, officers, associates, employees, and
agents of said entities, and their customers, prospective customers, services,
trade secrets, proprietary information, personnel information, and other
information concerning their operations, business and financial condition and
results (collectively, the “Information”), all of which constitute valuable
assets and privileged information of the Bank and BCC, and which Information is
particularly sensitive due to the fiduciary responsibilities and public trust
inherent in the Bank’s business and the public trading market for BCC’s common
stock. The Bank and Rhodes acknowledge that the Bank has invested, and shall
continue to invest, considerable amounts of time, effort, and resources in
developing such valuable assets and Information, that BCC and its officers and
directors are subject to various federal laws and regulations regarding the
orderly disclosure of material information, and that disclosure by Rhodes of
such assets and Information to the public or to any other person or entity,
regardless of how insignificant such assets or Information may seem, would cause
irreparable harm, damage, and loss to the Bank and BCC.

To protect the Bank and BCC from Rhodes’ use, disclosure, or exploitation of
customer contacts and the Information, Rhodes agrees that Rhodes shall not,
directly or indirectly, at any time after the Resignation Date, for any reason,
reveal, divulge, disclose, or communicate to any person, corporation, firm, or
other entity or to any shareholder, director, officer, partner, member, manager,
employee, agent, or associate of any such person, corporation, firm, or other
entity, any confidential, sensitive, or personal information, proprietary
information, trade secret, or other information whatsoever, including but not
limited to the Information, about or received by Rhodes from the Bank, BCC, or
their subsidiaries or affiliates, developed or received by Rhodes during
employment with the Bank, BCC, or their subsidiaries or affiliates, or developed
or received by Rhodes during the course of Rhodes’ association with the Bank,
BCC, or their subsidiaries or affiliates, relating to the operations, business
or financial condition or results of the Bank, BCC, or their subsidiaries or
affiliates, or the business or personal affairs of the shareholders, directors,
officers, associates, employees, agents, or attorneys of said entities,
including, without limitation,

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information concerning customer and prospective customer records, personnel
information, ideas, proprietary information, methods, marketing investigations,
surveys, research, accounting information, regulatory examinations, and other
like or similar information, unless required to do so by law or by a court of
competent jurisdiction. Further, Rhodes shall not use the Information to the
detriment of the Bank, BCC, their subsidiaries or affiliates, or the principals,
shareholders, directors, officers, associates, or employees of said entities,
particularly in any manner competitive with the Bank or BCC, in any unlawful
manner, or to interfere with or attempt to terminate or otherwise adversely
affect any business relationship of the Bank or BCC with a customer.

7. RELEASE. Except for Rhodes’ specific contractual rights and benefits under
this Agreement and except as prohibited by law, Rhodes hereby releases, acquits,
quitclaims, and discharges the Bank, any subsidiaries or affiliates of the Bank,
and their respective successors and assigns, and the shareholders, directors,
officers, associates, employees, agents, attorneys, benefit plans, and plan
administrators of all of said entities, and their respective successors and
assigns (collectively, the “Releasees”), of and from any and all actions, causes
of action, claims, demands, damages, costs (including reasonable attorneys’
fees), loss of services, expenses, and compensation, and for all consequential,
compensatory, actual, punitive, or liquidated damages, known or unknown,
including those under the Age Discrimination in Employment Act, 29 U.S.C. § 621
et seq., on account of, or in any way arising from the employment or any other
relationship between Rhodes and the Bank, and any and all collateral matters
pertaining thereto, whether directly, indirectly, or in any way connected with
any Releasee. As part of the consideration for this Agreement, Rhodes agrees
that, to the extent permitted by law and except as otherwise required by law,
neither Rhodes nor any of his heirs, legal representatives, or assigns will make
or file any claim, charge, or lawsuit, or cooperate voluntarily in any
investigation, lawsuit, or legal or administrative proceeding by any individual,
entity, or agency, against or involving any Releasee, for or on account of any
claim Rhodes may have or may have had against any Releasee in connection with
Rhodes’ employment or any other relationship with the Bank, the matters
referenced above, and/or the cessation of Rhodes’ employment with the Bank.
Rhodes further agrees that, except as prohibited by law, Rhodes will waive and
release any and all personal damages (including but not limited to damages
relating to pain and suffering, back pay, and compensatory and/or punitive
damages) resulting from any charge filed with or investigation conducted by the
Equal Employment Opportunity Commission or any other administrative agency in
connection with Rhodes’ employment or any other relationship with the Bank.

Rhodes understands and agrees that with respect to any rights or claims of
Rhodes under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq.
(the “Act”): (a) no rights or claims are waived by Rhodes that may arise from an
event or transaction that occurs after the date this Agreement is executed by
Rhodes; (b) Rhodes has been advised in writing to consult with an attorney prior
to executing this Agreement; (c) Rhodes has been advised that he has twenty-one
(21) days from his receipt of this Agreement, unless extended in writing by the
Bank, to consider the release provisions of this Agreement; (d) Rhodes has been
advised that he has seven (7) days following his execution of this Agreement to
revoke the release provisions of this Agreement pertaining to any right or claim
under the Act; and (e) the release provisions of this Agreement pertaining to
any right or claim under the Act shall not become effective or enforceable until
the revocation period of seven (7) days following Rhodes’ execution hereof has
expired (the “Effective Date”).

8. FORFEITURE OF STOCK OPTIONS. Rhodes hereby acknowledges and agrees that his
resignation is voluntary and that, pursuant to the terms of the Bank’s Employee
Stock Option Plan, such voluntary resignation shall result in the immediate
forfeiture of all outstanding stock options currently held by Rhodes, whether
vested or unvested.

9. ENTIRE UNDERSTANDING/AMENDMENTS. This Agreement contains the entire
understanding between the Bank and Rhodes as to the matters contained herein,
and no conditions precedent or subsequent exist which are not contained herein.
This Agreement may not be altered, amended, or revoked except by a written
agreement signed by the Bank and Rhodes.

10. BINDING EFFECT. The Bank and Rhodes recognize and agree that this Agreement
is binding upon the Bank and Rhodes and its/Rhodes’ respective heirs,
representatives, successors, and assigns, as applicable. Rhodes further
acknowledges that Rhodes has carefully read this Agreement, which contains a
release, and knows and understands the contents hereof and voluntarily executes
the same as Rhodes’ free act and deed, and that the provisions contained herein
constitute the entire agreement between the parties hereto, and that the terms
of this Agreement are contractual and not a mere recital.

11. GOVERNING LAW AND VENUE. The Bank and Rhodes agree that without regard to
principles of conflicts of laws, the internal laws of the State of North
Carolina shall govern and control the validity, interpretation, performance, and
enforcement of this Agreement. The Bank and Rhodes agree that any action
relating to this Agreement shall be instituted and prosecuted only in the courts
of Davie County, North Carolina or the federal courts of the Middle District of
North Carolina, and the Bank and Rhodes hereby consent to the jurisdiction of
such courts and waive any right or defense relating to venue and jurisdiction
over the person.

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12. SEVERABILITY. The invalidity or unenforceability of any particular provision
of this Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provision were not contained herein.

13. ASSIGNMENT. The Bank may assign this Agreement to any other corporation or
entity acquiring all or substantially all of the assets of the Bank, or to any
other corporation or entity into which or with which the Bank may be merged or
consolidated. Upon such assignment, merger, or consolidation, the rights of the
Bank under this Agreement, as well as the obligations and liabilities of the
Bank herein, shall inure to the benefit of and be binding upon any and all
successors-in-interest or transferees of all or substantially all of the assets
of the Bank. This Agreement is not assignable in any respect by Rhodes.

14. HEADINGS. The headings appearing in this Agreement are for convenience only
and are not to be considered in interpreting this Agreement.

IN TESTIMONY WHEREOF, the Bank has caused this instrument to be executed under
seal by its duly authorized officer in pursuance of authority duly given by its
Board of Directors, and Rhodes has hereunto set his hand and adopted as his seal
the typewritten word “SEAL” appearing beside his name, all effective as of the
Effective Date.

 

BANK OF THE CAROLINAS By:  

/S/ Robert E. Marziano

  Robert E. Marziano, Chief Executive Officer ERIC E. RHODES:

/S/ Eric E. Rhodes

  (SEAL) Eric E. Rhodes  

5-19-08

Date of Execution by Rhodes