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                                                                    Exhibit 10.7

                        RETIREMENT PLAN FOR BOARD MEMBERS
                                       OF
                 WAKE FOREST FEDERAL SAVINGS & LOAN ASSOCIATION

                Originally Effective Upon the Reorganization Date
             Effective as Amended and Restated on December 19, 2005

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                                TABLE OF CONTENTS


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Article I

Definitions

Section 1.1       Annual Compensation                                  3
Section 1.2        Bank                                                3
Section 1.3       Beneficiary                                          3
Section 1.4       Board                                                3
Section 1.5       Board Member                                         3
Section 1.6       Change of Control                                    3
Section 1.7       Code                                                 3
Section 1.8       Committee                                            3
Section 1.9       Reorganization Date                                  3
Section 1.10      Disability                                           3
Section 1.11      Participant                                          4
Section 1.12      Participating Company                                4
Section 1.13      Person                                               4
Section 1.14      Plan                                                 4
Section 1.15      Predecessor Board                                    4
Section 1.16      Retired Participant                                  4
Section 1.17      Service Recipient                                    4
Section 1.18      Spouse                                               4
Section 1.19      Years of Service                                     4

Article II

eligibility

Section 2.1       Participation.                                       4
Section 2.2       Termination of Participation.                        5

Article III

Retirement Benefits

Section 3.1       Benefits.                                            5
Section 3.2       Payments.                                            5
Section 3.3       Payments of Small Amounts.                           6
Section 3.4       Beneficiaries.                                       6
Section 3.5       Payment upon Change of Control.                      6
Section 3.6       Changes in Payment Elections.                        6
Section 3.7       Restrictions on Payments to Key Employees.           7

Article IV

Duties of the Committee

Section 4.1       Duties of the Committee.                             7
Section 4.2       Liabilities of the Committee.                        7
Section 4.3       Expenses.                                            7


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Article V

Amendment and Termination

Section 5.1       Amendment and Termination.                           7

Article VI

Miscellaneous Provisions

Section 6.1       Plan Documents.                                      7
Section 6.2       Construction of Language.                            7
Section 6.3       Non-Alienation of Benefits.                          8
Section 6.4       Indemnification.                                     8
Section 6.5       Severability.                                        8
Section 6.6       Waiver.                                              8
Section 6.7       Notices.                                             8
Section 6.8       Operation as an Unfunded Plan.                       9
Section 6.9       Required Regulatory Provisions.                      9
Section 6.10      Governing Law.                                       9
Section 6.11      No Deposit Account.                                  9
Section 6.12      Rights of Participants.                              9
Section 6.13      Successors and Assigns.                              9
Section 6.14      Compliance with Section 409A of the Code.            9


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                        RETIREMENT PLAN FOR BOARD MEMBERS
                                       OF
                 WAKE FOREST FEDERAL SAVINGS & LOAN ASSOCIATION

                                    ARTICLE I
                                   DEFINITIONS

The following definitions shall apply for the purposes of this Plan unless a
different meaning is plainly indicated by the context:

SECTION 1.1 ANNUAL COMPENSATION means, on any date for Board Member, the amount
of compensation paid to such Board Member for service as a Board Member during
the twelve (12) month period ending on such date, including retainer payments,
fees paid solely on the basis of attendance at meetings as a Board Member and
any amounts thereof deferred at the request of the Board Member, but excluding
compensation in the form of stock options, appreciation rights or restricted
property, or other special forms of remuneration. In the case of a Board Member
who is a non-employee director and who later becomes an employee-director,
"Annual Compensation" means the amount of such compensation during the twelve
(12) month period immediately preceding service as an employee-director.

SECTION 1.2 BANK means Wake Forest Federal Savings & Loan Association, a federal
stock savings bank, and any successor thereto.

SECTION 1.3 BENEFICIARY means the Person or Persons designated by the
Participant or Retired Participant to receive a survivor benefit under one of
the optional forms of retirement allowance provided under section 3.4 or section
3.5. If more than one Person is designated, each shall have an equal share
unless the Participant or Retired Participant directed otherwise.

SECTION 1.4 BOARD means the Board of Directors of the Bank.

SECTION 1.5 BOARD MEMBER means any individual who is a voting member of the
Board or a voting member of the board of directors of a Participating Company.

SECTION 1.6 CHANGE OF CONTROL means with respect to a Participant: (a) a change
in ownership of the Participant's Service Recipient; (b) a change in effective
control of the Participant's Service Recipient; or (c) a change in the ownership
of a substantial portion of the assets of the Participant's Service Recipient.
The existence of a Change of Control shall be determined by the Committee in
accordance with section 409A of the Code and the regulations thereunder.

SECTION 1.7 CODE means the Internal Revenue Code of 1986 (including the
corresponding provisions of any succeeding law).

SECTION 1.8 COMMITTEE means the Compensation Committee of the Board of the Bank,
and any successor thereto.

SECTION 1.9 REORGANIZATION DATE means the effective date of the transaction
pursuant to which the Bank became a majority-owned subsidiary of Wake Forest
Bancshares, Inc.

SECTION 1.10 DISABILITY means, with respect to a Participant, any medically
determinable physical or mental impairment which can be expected to result in
death or to last for a continuous period of at least twelve (12) months and as a
result of which either: (a) the Participant is unable to engage in any
substantial gainful activity or (b) the Participant has been receiving income
replacement benefits for a period of at least three (3) months under an accident
and health plan covering employees of the Participant's employer. The existence
of a Disability shall be determined by the Committee in accordance with section
409A and the regulations thereunder.


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SECTION 1.11 PARTICIPANT means a Board Member who satisfies the eligibility
requirements set forth in section 2.1 and whose participation in the Plan has
not terminated pursuant to section 2.2.

SECTION 1.12 PARTICIPATING COMPANY means any savings bank, savings and loan
association, bank, corporation, financial institution or other business
organization or institution which, with the prior approval of the Board, and
subject to such terms and conditions as may be imposed by the Board, shall adopt
this Plan for the benefit of members of its board of directors.

SECTION 1.13 PERSON means an individual, a corporation, a bank, a savings bank,
a savings and loan association, a financial institution, a partnership, an
association, a joint-stock company, a trust, an estate, any unincorporated
organization and any other business organization or institution.

SECTION 1.14 PLAN means the Retirement Plan for Board Members, as amended from
time to time. The Plan may be referred to as the "Retirement Plan for Board
Members of Wake Forest Federal Savings & Loan Association."

SECTION 1.15 PREDECESSOR BOARD means, with the prior approval of the Board, and
subject to such terms and conditions as may be imposed by the Board, the board
of trustees or the board of directors of a Participating Company, prior to the
date such a company became a Participating Company.

SECTION 1.16 RETIRED PARTICIPANT means a former Participant who is receiving a
retirement allowance under this Plan or who is entitled to receive a retirement
allowance under this Plan at a future date.

SECTION 1.17 SERVICE RECIPIENT means with respect to a Participant on any date:
(a) the corporation for which the Participant is performing services on such
date; (b) all corporations that are liable to the Participant for the benefits
due to him under the Plan; (c) a corporation that is a majority shareholder of a
corporation described in section 1.17(a) or (b); or (d) any corporation in a
chain of corporations each of which is a majority shareholder of another
corporation in the chain, ending in a corporation described in section 1.17(a)
or (b).

SECTION 1.18 SPOUSE means an individual who is legally married to a Participant
or Retired Participant.

SECTION 1.19 YEARS OF SERVICE means the period beginning on the first day of the
month in which an individual becomes a Board Member and ending on the last day
of the month in which such individual ceases to be a Board Member, but excluding
(a) any period during which the individual was a salaried officer of any
Participating Company, and (b) any period during which the individual was a
salaried officer of any other institution whose board of directors or board of
trustees is considered a Predecessor Board. The Years of Service of an
individual with two or more non-consecutive periods of service as a Board Member
shall be equal to the sum of such non-consecutive periods. For purposes of
determining an individual's Years of Service, service as a member of a
Predecessor Board shall be deemed service as a Board Member. The maximum number
of Years of Service of any Board Members for purposes of the Plan shall be 10.

                                   ARTICLE II
                                   ELIGIBILITY

SECTION 2.1   PARTICIPATION.

A person who is a Board Member on the Reorganization Date shall become a
Participant in the Plan on the Reorganization Date. A person who becomes a Board
Member after the Reorganization Date shall become a Participant in the Plan
immediately upon becoming a Board Member. Any person who was a Board Member
prior to the Reorganization Date, but who ceased to be a Board Member prior to
the Reorganization Date, shall not be eligible for benefits under this Plan
unless he again becomes a Board Member after the Reorganization Date.


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SECTION 2.2   TERMINATION OF PARTICIPATION.

Participation in the Plan shall cease on the date a Participant ceases to be a
Board Member for whatever reason.

                                   ARTICLE III
                               RETIREMENT BENEFITS

SECTION 3.1   BENEFITS

(a) Any Participant who terminates service as a Board Member after attaining age
65 shall be entitled to a normal retirement allowance from the Bank, commencing
as of the first day of the month following the month which he ceases to be a
Board Member, in an annual amount equal to the product of (i) the lesser of (A)
his Annual Compensation as of the date on which be ceases to be a Board Member
or (B) $5,000 multiplied by (ii) a fraction, the numerator of which is his Years
of Service and the denominator of which is 10.

(b) A Participant who ceases to be a Board Member prior to attaining age 65 but
after completing 10 Years of Service will have a retirement allowance commence
as of the first day of any month after the later of (i) the month in which he
attains age 50 or (ii) the month in which he ceases to be a Board Member, and
the amount of the retirement allowance shall be equal to the amount payable at
age 65 reduced by 0.41667% for each month that such commencement date precedes
the date on which he would attain age 65.

(c) If (i) a Retired Participant who is entitled to a retirement benefit should
die prior to the commencement or such retirement benefit or (ii) a Participant
should die while a Board Member (whether before or after completing 10 years of
Service), a benefit shall be payable to his Beneficiary. Such benefit will be in
an amount equal to that amount which would have been provided had the
Participant or Retired Participant retired immediately prior to his death
(whether or not he would have been eligible for retirement) with payments
commencing on the first day of the month following his death, based on his age
and attained Years of Service immediately prior to his death.

SECTION 3.2   PAYMENTS.

Retirement allowances under Section 3.1 shall be paid in an immediate lump sum
payment of the present value of annuity described in Section 3.1. In determining
such present value, the interest rates prescribed under section 415 of the Code
for purposes of valuing lump sum payments under tax-qualified defined benefit
plans shall be used. A Participant may, by written election given in such form
and manner as the Committee may prescribe, elect to change the manner of
distribution to monthly installments provided that such election to receive
monthly installments is received by the Committee prior to December 31, 2005
with each installment being one-twelfth of the annual retirement allowance. The
first payment shall be made in accordance with section 3.1 and installments
shall continue for a fixed period of ten years from the commencement of such
retirement allowance. Alternatively, an election may be made to change the
manner of payment of the retirement allowanced described in Section 3.1;
provided, however, that

         (i) Any such election shall not take effect until twelve (12) months
after it is received by the Committee; and

         (ii) In the case of an election made on account of an event other than
the Participant's death or Disability, the first payment made under such
election shall not occur until at least five (5) years later than such payment
would otherwise have been made.
In the event of his death before the end of such term, the same amount shall
continue to be paid for the remainder of such term to the person (or persons)
whom he shall have named as his Beneficiary (or Beneficiaries).


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SECTION 3.3   PAYMENTS OF SMALL AMOUNTS.

Notwithstanding any other provision of the Plan, if the present value of the
retirement allowance payable to a Participant or Retired Participant and his
Beneficiary shall at any time after termination of service as a Board Member and
prior to the commencement of payment thereof be less than $10,000, then the
Committee may direct that it be paid in such lump sum in lieu of all other
benefits under the Plan. For purposes of this section 3.3, present values shall
be determined using the interest rate and mortality assumptions then in use
under section 415 of the Code for purposes of valuing lump sum payments under
tax-qualified defined benefit plans.

SECTION 3.4   BENEFICIARIES.

(a) A Participant or Retired Participant may designate a Beneficiary or
Beneficiaries, who may be, but need not be, natural persons, to receive any
benefits payable upon his death. Any designation shall be made in writing in the
form and manner prescribed by the Committee; provided, however, that the
Participant or Retired Participant may change or revoke the Beneficiary or
Beneficiaries designated at any time or from time to time, but such changes or
revocations shall be effective only if received by the Committee prior to the
Participant's or Retired Participant's death.

(b) A Beneficiary designated by Participant or Retired Participant to receive a
survivor benefit may designate a Beneficiary of his own to receive such survivor
benefit in the event the Beneficiary designated by the Participant or Retired
Participant dies prior to receiving complete payment of such survivor benefit.
If a Participant or Retired Participant dies without a Beneficiary, then the
present value of any unpaid installments shall be paid to the estate of such
Participant or Retired Participant in lieu of all other payments. If a
Beneficiary of a deceased Retired Participant entitled to payments dies without
a Beneficiary, then the present value of any unpaid installments shall be paid
to the estate of such Beneficiary in lieu of all other payments. In determining
such present values, the interest rate prescribed under section 415 of the Code
for purposes of valuing lump sum payments under tax-qualified defined benefit
plans shall be used.

SECTION 3.5   PAYMENT UPON CHANGE OF CONTROL.

Upon a Change of Control, each board Member shall be entitled to an immediate
lump sum payment of the present value of annuity for a fixed period of ten (10)
years, commending upon a Change of Control in an annual amount equal to his
Annual Compensation multiplied by a fraction (not greater than one) the
numerator of which is his Years of Service and the denominator, of which is 10.
In determining such present values, the interest rates prescribed under section
415 of the Code for purposes of valuing lump sum payments under tax-qualified
defined benefit plans shall be used.

SECTION 3.6   CHANGES IN PAYMENT ELECTIONS.

Notwithstanding any other provision of the Plan, each Participant may, by
written election given in such form and manner as the Committee may prescribe,
elect to change the time and manner of distribution of the amounts payable under
this Plan, provided, however, that

(i) any such election shall not take effect until twelve (12) months after it is
received by the Committee; and

(ii) in the case of an election to defer a payment to be made on account of an
event other than the Participant's death, the first payment made under such
election shall not occur until at least five (5) years later than such payment
would otherwise have been made; and

(iii) in the case of an election to defer a payment to be made on account of a
Change of Control, such election shall be made at least twelve (12) months prior
to the date of the first payment scheduled to be made on account of the Change
of Control.


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SECTION 3.7   RESTRICTIONS ON PAYMENTS TO KEY EMPLOYEES.

Notwithstanding anything in the Plan to the contrary, to the extent required
under section 409A of the Code, no payment to be made to a key employee (within
the meaning of section 409A of the Code) on or after the date of his termination
of service shall be made sooner than six (6) months after such termination of
service.

                                   ARTICLE IV
                             DUTIES OF THE COMMITTEE

SECTION 4.1   DUTIES OF THE COMMITTEE.

The Committee shall have full responsibility for the management, operation,
interpretation and administration of the Plan in accordance with its terms, and
shall have such authority as is necessary or appropriate in carrying out its
responsibilities. Actions taken by the Committee pursuant to this section 4.1
shall be conclusive and binding upon the Bank, Participants, Retired
Participants and other interested parties.

SECTION 4.2   LIABILITIES OF THE COMMITTEE.

Neither the Committee nor its individual members shall be deemed to be a
fiduciary with respect to this Plan; nor shall any of the foregoing individuals
or entities be liable to any Participant or Retired Participant in connection
with the management, operation, interpretation or administration of the Plan,
any such liability being solely that of the Bank.

SECTION 4.3   EXPENSES.

Any expenses incurred in the management, operation, interpretation or
administration of the Plan shall be paid by the Bank. In no event shall the
benefits otherwise payable under this Plan be reduced to offset the expenses
incurred in managing, operating, interpreting or administering the Plan.

                                    ARTICLE V
                            AMENDMENT AND TERMINATION

SECTION 5.1   AMENDMENT AND TERMINATION.

The Board shall have the right to amend the Plan, from time to time and at any
time, in whole or is part, and to terminate the Plan, provided, however, that no
such amendment or termination shall reduce the accrued benefits of, or impose
more stringent vesting requirements on any benefits accrued by, any Participant,
Retired Participant or Beneficiary through the date of the amendment or
termination of the Plan.

                                   ARTICLE VI
                            MISCELLANEOUS PROVISIONS

SECTION 6.1   PLAN DOCUMENTS.

The Secretary of the Board shall provide a copy of this Plan to each Board
Member who becomes a Participant in the Plan.

SECTION 6.2   CONSTRUCTION OF LANGUAGE.

Wherever appropriate in the Plan, words used In the singular may be read in the
plural, words in the plural may be read in the singular, and words importing the
masculine gender shall be deemed equally to refer to the feminine or the neuter.
Any reference to an Article or section shall be to an Article or section of the
Plan unless otherwise indicated.


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SECTION 6.3   NON-ALIENATION OF BENEFITS.

Except as may otherwise be required by law, no distribution or payment under the
Plan to any Participant, former Participant or Beneficiary shall be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, whether voluntary or involuntary, and any attempt to so
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the
same shall be void; nor shall any such distribution or payment be in any way
liable for or subject to the debts, contracts, liabilities, engagements or torts
of any person entitled to such distribution or payment. If any Participant,
former Participant or Beneficiary is adjudicated bankrupt or purports to
anticipate, alienate, sell, transfer, assign, pledge encumber or charge any such
distribution or payment, voluntarily or involuntarily, the Committee, in its
sole discretion, may cancel such distribution or payment or may hold or cause to
be held or applied such distribution or payment, or any part thereof, to or for
the benefit of such Participant, former Participant or Beneficiary, in such
manner as the Committee shall direct; provided, however, that no such action by
the Committee shall cause the acceleration or deferral of any benefit payments
from the date on which such payments are scheduled to be made.

SECTION 6.4   INDEMNIFICATION.

The Bank shall indemnify, hold harmless and defend each Board Member,
Participant, Retired Participant and the Beneficiaries of each, against their
reasonable costs, including legal fees, incurred by them, or arising out of any
action, suit or proceeding in which they may be involved, as a result of their
efforts, in good faith, to defend or enforce the terms of the Plan.

SECTION 6.5   SEVERABILITY.

A determination that any provision of the Plan is invalid or unenforceable shall
not affect the validity or enforceability of any other provision hereof.

SECTION 6.6   WAIVER.

Failure to insist upon strict compliance with any of the terms, covenants or
conditions of the Plan shall not be deemed a waiver of such term, covenant or
condition, A waiver of any provision of the Plan must be made in writing,
designated as a waiver, and signed by the party against whom its enforcement is
sought. Any waiver or relinquishment of any right or power hereunder at any one
or more times shall not be deemed a waiver or relinquishment of such right or
power at any other time or times.

SECTION 6.7   NOTICES.

Any communication required or permitted to be given under the Plan, including
any notice, direction, designation, comment, instruction, objection or waiver,
shall be in writing and shall be deemed to have been given at such time as it is
delivered personally or 5 days after mailing if mailed, postage prepaid, by
registered or certified mail, return receipt requested, addressed to such party
at the address listed below, or at such other address as one such party may by
written notice specify to the other party:

(a)      if to the Bank:

         Wake Forest Federal Savings & Loan Association
         302 South Brooks Street
         Wake Forest, North Carolina 27588-0107
         Attention:  Corporate Secretary

(b)      if to any party other than the Bank, to such party at the address last
         furnished by such party by written notice to the Bank or the Bank.


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SECTION 6.8   OPERATION AS AN UNFUNDED PLAN.

The Plan is intended to be (a) a contractual obligation of the Bank to pay the
benefits as and when due in accordance with its terms, and (b) an unfunded and
non-qualified plan such that the benefits payable shall not be taxable to the
recipients until such benefits are paid. The Plan is not intended to be subject
to or comply with the requirements of the Employee Retirement Income Security
Act of 1974, as amended, or of section 401(a) of the Code. The Bank may
establish a trust to which assets may be transferred by the Bank in order to
provide a portion or all of the benefits otherwise payable by the Bank under the
Plan; provided, however, that the assets of such trust shall be subject to the
claims of the creditors of the Bank in the event that it is determined that the
Bank is insolvent or that grounds exist for the appointment of a conservator or
receiver. The Plan shall be administered and construed so as to effectuate these
intentions.

SECTION 6.9   REQUIRED REGULATORY PROVISIONS.

Notwithstanding anything herein contained to the contrary, any benefits paid by
the Bank, whether pursuant to this Plan or otherwise, are subject to and
conditioned upon their compliance with section 18(k) of the Federal Deposit
Insurance Act ("FDI Act"), 12 O.K. ss.1828(k), and any regulations promulgated
hereunder.

SECTION 6.10  GOVERNING LAW.

The Plan shall be construed, administered and enforced according to the laws of
the State of North Carolina applicable to contracts between citizens and
residents of the State of North Carolina entered into and to be performed
entirely within such jurisdiction, except to the extent that such laws are
preempted by federal law.

SECTION 6.11  NO DEPOSIT ACCOUNT.

Nothing in this Plan shall be held or construed to establish any deposit account
for any Participant or any deposit liability on the part of the Bank, Company or
any Participating Company. Participants' rights hereunder shall be equivalent to
those of a general unsecured creditor of each Participating Company.

SECTION 6.12  RIGHTS OF PARTICIPANTS.

No Participant shall have any right or claim to any benefit under the Plan
except in accordance with the provisions of the Plan. The establishment of the
Plan shall not be construed as conferring upon any Participant or other person
any legal right to a continuation of service or to any terms or conditions of
service, nor as limiting or qualifying the right of a Participating Company, its
board of directors or its stockholders to remove any director or to fail to
re-elect him or her or decline to nominate him or her for re-election.

SECTION 6.13  SUCCESSORS AND ASSIGNS.

The provisions of the Plan will inure to the benefit of and be binding upon the
Participants and their respective legal representatives and testate or intestate
distributes, and each Participating Company and their respective successors and
assigns, including any successor by merger or consolidation or a statutory
receiver or any other person or firm or corporation to which all or
substantially all of the assets and business of any Participating Company may be
sold or otherwise transferred.

SECTION 6.14  COMPLIANCE WITH SECTION 409A OF THE CODE.

The Plan is intended to be a non-qualified deferred compensation plan described
in section 409A of the Code. The Plan shall be operated, administered and
construed to give effect to such intent. In addition, the Plan shall be subject
to amendment, with or without advance notice to Participants and other
interested parties, and on a prospective or retroactive basis, including but not
limited amendment in a manner that adversely affects the rights of participants
and other interested parties, to the extent necessary to effect such compliance.


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