Common use of CHANGE IN CONTROL OF THE BANK Clause in Contracts

CHANGE IN CONTROL OF THE BANK. (a) If at the effective time of, or any time within 24 months following, a “Change in Control” (as defined below): (i) the Bank terminates Employee’s employment other than for “Cause” (as defined in Paragraph 6(c) above), or (ii) a “Termination Event” (as defined below) occurs and, thereafter, Employee voluntarily terminates his own employment with the Bank in the manner described below, then (subject to the limitations set forth herein) Employee shall be entitled to receive from the Bank, and the Bank shall be obligated to pay or cause to be paid to Employee, an amount equal to 2.99 multiplied by Employee’s annual Base Salary in effect at the time the Change in Control became effective or in effect at the time the termination of Employee’s employment becomes effective, whichever is greater. The payments provided for in this Paragraph 8 shall be paid in a lump-sum payment within thirty (30) days following the effective date of termination of Employee’s employment and shall be in lieu of any other payments provided for in this Agreement, but, to the extent otherwise required by Paragraph 6(c), the Bank shall remain obligated to reimburse Employee for the cost of health insurance coverage to the extent described in that Paragraph. (b) For purposes of this Agreement, a “Change in Control” 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 shall be deemed to have occurred if: (i) after the Effective Date, any “Person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended), directly or indirectly, acquires beneficial ownership of voting stock, or acquires irrevocable proxies or any combination of voting stock and irrevocable proxies, representing more than 50% of any class of voting securities of the Bank or its parent bank holding company, Bank of the Carolinas Corporation (“BankCorp”), or in any manner acquires control of the election of a majority of the directors of the Bank or BankCorp; or (ii) the Bank or BankCorp consolidates or merges with or into another corporation, or otherwise is reorganized, where the Bank or BankCorp is not the resulting or surviving corporation in such transaction; or (iii) all or substantially all the Bank’s or BankCorp’s assets are sold or otherwise transferred to or acquired by any other corporation, association or other person, entity, or group. However, notwithstanding anything contained herein to the contrary, for purposes of this Agreement the term “Change in Control” shall not include a transaction approved by the Bank’s or BankCorp’s Board of Directors that results in the Bank or BankCorp merging with, transferring its assets to, or becoming the subsidiary of, a corporation or entity newly formed at the direction of the Bank’s or BankCorp’s Board of Directors for the purpose of such transaction (including a corporation or entity so formed for the purpose of serving as the Bank’s parent bank holding company), and in connection with which transaction BankCorp’s shareholders (other than those who exercise statutory rights of dissent and appraisal) continue to hold substantially all of BankCorp’s voting stock or become the holders of substantially all of the voting stock of any such newly formed corporation. Further, and notwithstanding the other provisions of this Paragraph 8, a transaction or event shall not be considered a Change in Control if, prior to the consummation or occurrence of such transaction or event, the Bank and Employee agree in writing that the same shall not be treated as a Change in Control for purposes of this Agreement, in which event Employee shall be deemed to have forever waived all right to any payment under this Agreement as a result of that transaction or event, but not to any future transaction or event. (c) For purposes of this Paragraph 8, all references to the Bank shall include any “Successor” (as defined below) to the Bank which shall have assumed and become liable for the Bank’s obligations hereunder (whether such assumption is by agreement, operation of law, or otherwise). “Successor” refers to any Person or entity (corporate or otherwise) into which the Bank (or any such Successor) shall be merged or consolidated or to which all or substantially all the Bank’s (or any such Successor’s) assets shall be transferred in any manner.

CHANGE IN CONTROL OF THE BANK. (a) If : (i) at the effective time of, or any time within 24 36 months following, a “Change in Control” (as defined below): (i) ), the Bank terminates Employee’s employment other than for “Cause” Cause (as defined in Paragraph 6(c6(d) above), or (ii) at the effective time of, or any time within 365 days following, a “Termination EventChange in Control” (as defined below) occurs and, thereafter), Employee voluntarily terminates his own employment with the Bank in the manner described belowBank, then (subject to the limitations set forth herein, and except as provided below) Employee shall be entitled to receive from the Bank, and the Bank shall be obligated to pay or cause to be paid to Employee, an amount equal to 2.99 multiplied by Employee’s annual Base Salary in effect at the time the Change in Control became effective or in effect at the time the termination of Employee’s employment becomes effective, whichever is greatergreater (and which amount shall be subject to adjustment as provided in Paragraph 8(g) below). The payments provided for Notwithstanding anything contained in this Paragraph 8 shall be paid 8(a) to the contrary, in the case of a lump-sum payment within thirty (30) days following the effective date of voluntary termination of Employee’s employment and shall be in lieu of any other payments provided for in this Agreement, but, pursuant to the extent otherwise required by Paragraph 6(c)8(a)(ii) above, the Bank shall remain not be obligated to reimburse make the above payment to Employee for if, at the cost time of health insurance coverage such termination, events have occurred, or circumstances exist, that constitute “Cause” to the extent terminate Employee’s employment as described in that ParagraphParagraph 6(d) above, other than the circumstances described in Paragraph 6(d)(i)(A). (b) For purposes of this Agreement, a “Change in Control” 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 shall be deemed to have occurred if: (i) after the Effective Date, any “Person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended), directly or indirectly, acquires beneficial ownership of voting stock, or acquires irrevocable proxies or any combination of voting stock and irrevocable proxies, representing more than 50% of any class of voting securities of the Bank or its parent bank holding company, Bank of the Carolinas Corporation (“BankCorp”), or in any manner acquires control of the election of a majority of the directors of the Bank or BankCorp; or (ii) the Bank or BankCorp consolidates or merges with or into another corporation, or otherwise is reorganized, where the Bank or BankCorp is not the resulting or surviving corporation in such transaction; or (iii) all or substantially all the Bank’s or BankCorp’s assets are sold or otherwise transferred to or acquired by any other corporation, association or other person, entity, or group. However, notwithstanding anything contained herein to the contrary, for purposes of this Agreement the term “Change in Control” shall not include a transaction approved by the Bank’s or BankCorp’s Board of Directors that results in the Bank or BankCorp merging with, transferring its assets to, or becoming the subsidiary of, a corporation or entity newly formed at the direction of the Bank’s or BankCorp’s Board of Directors for the purpose of such transaction (including a corporation or entity so formed for the purpose of a corporate reorganization of the Bank or BankCorp, serving as the Bank’s parent bank holding company, or effecting a reincorporation of BankCorp in a different state), and in connection with which transaction BankCorp’s shareholders (other than those who exercise statutory rights of dissent and appraisal) continue to hold substantially all of BankCorp’s voting stock or become the holders of substantially all of the voting stock of any such newly formed corporation. Further, and notwithstanding the other provisions of this Paragraph 8, a transaction or event shall not be considered a Change in Control if, prior to the consummation or occurrence of such transaction or event, the Bank and Employee agree in writing that the same shall not be treated as a Change in Control for purposes of this Agreement, in which event Employee shall be deemed to have forever waived all right to any payment under this Agreement as a result of that transaction or event, but not to any future transaction or event. (c) For purposes of this Paragraph 8, all references to the Bank shall include any “Successor” (as defined below) to the Bank which shall have assumed and become liable for the Bank’s obligations hereunder (whether such assumption is by agreement, operation of law, or otherwise). “Successor” refers to any Person or entity (corporate or otherwise) into which the Bank (or any such Successor) shall be merged or consolidated or to which all or substantially all the Bank’s (or any such Successor’s) assets shall be transferred in any manner.

CHANGE IN CONTROL OF THE BANK. (a) If : (i) at the effective time of, or any time within 24 months following, a “Change in Control” (as defined below): (i) ), the Bank terminates Employee’s employment other than for “Cause” Cause (as defined in Paragraph 6(c6(d) above), or (ii) at the effective time of, or any time within 365 days following, a “Termination EventChange in Control” (as defined below) occurs and, thereafter), Employee voluntarily terminates his own employment with the Bank in the manner described belowBank, then (subject to the limitations set forth herein, and except as provided below) Employee shall be entitled to receive from the Bank, and the Bank shall be obligated to pay or cause to be paid to Employee, an amount equal to 2.99 multiplied by Employee’s annual Base Salary in effect at the time the Change in Control became effective or in effect at the time the termination of Employee’s employment becomes effective, whichever is greatergreater (and which amount shall be subject to adjustment as provided in Paragraph 8(g) below). The payments provided for Notwithstanding anything contained in this Paragraph 8 shall be paid 8(a) to the contrary, in the case of a lump-sum payment within thirty (30) days following the effective date of voluntary termination of Employee’s employment and shall be in lieu of any other payments provided for in this Agreement, but, pursuant to the extent otherwise required by Paragraph 6(c)8(a)(ii) above, the Bank shall remain not be obligated to reimburse make the above payment to Employee for if, at the cost time of health insurance coverage such termination, events have occurred, or circumstances exist, that constitute “Cause” to the extent terminate Employee’s employment as described in that ParagraphParagraph 6(d) above, other than the circumstances described in Paragraph 6(d)(i)(A). (b) For purposes of this Agreement, a “Change in Control” 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 shall be deemed to have occurred if: (i) after the Effective Date, any “Person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended), directly or indirectly, acquires beneficial ownership of voting stock, or acquires irrevocable proxies or any combination of voting stock and irrevocable proxies, representing more than 50% of any class of voting securities of the Bank or its parent bank holding company, Bank of the Carolinas Corporation (“BankCorp”), or in any manner acquires control of the election of a majority of the directors of the Bank or BankCorp; or (ii) the Bank or BankCorp consolidates or merges with or into another corporation, or otherwise is reorganized, where the Bank or BankCorp is not the resulting or surviving corporation in such transaction; or (iii) all or substantially all the Bank’s or BankCorp’s assets are sold or otherwise transferred to or acquired by any other corporation, association or other person, entity, or group. However, notwithstanding anything contained herein to the contrary, for purposes of this Agreement the term “Change in Control” shall not include a transaction approved by the Bank’s or BankCorp’s Board of Directors that results in the Bank or BankCorp merging with, transferring its assets to, or becoming the subsidiary of, a corporation or entity newly formed at the direction of the Bank’s or BankCorp’s Board of Directors for the purpose of such transaction (including a corporation or entity so formed for the purpose of a corporate reorganization of the Bank or BankCorp, serving as the Bank’s parent bank holding company, or effecting a reincorporation of BankCorp in a different state), and in connection with which transaction BankCorp’s shareholders (other than those who exercise statutory rights of dissent and appraisal) continue to hold substantially all of BankCorp’s voting stock or become the holders of substantially all of the voting stock of any such newly formed corporation. Further, and notwithstanding the other provisions of this Paragraph 8, a transaction or event shall not be considered a Change in Control if, prior to the consummation or occurrence of such transaction or event, the Bank and Employee agree in writing that the same shall not be treated as a Change in Control for purposes of this Agreement, in which event Employee shall be deemed to have forever waived all right to any payment under this Agreement as a result of that transaction or event, but not to any future transaction or event. (c) For purposes of this Paragraph 8, all references to the Bank shall include any “Successor” (as defined below) to the Bank which shall have assumed and become liable for the Bank’s obligations hereunder (whether such assumption is by agreement, operation of law, or otherwise). “Successor” refers to any Person or entity (corporate or otherwise) into which the Bank (or any such Successor) shall be merged or consolidated or to which all or substantially all the Bank’s (or any such Successor’s) assets shall be transferred in any manner.

CHANGE IN CONTROL OF THE BANK. (a) If at the effective time of, or any time within 24 months following, a “Change in Control” (as defined below): (i) the Bank terminates Employee’s employment other than for “Cause” (as defined in Paragraph 6(c) above), or (ii) a “Termination Event” (as defined below) occurs and, thereafter, Employee voluntarily terminates his own employment with the Bank in the manner described below, then (subject to the limitations set forth herein) Employee shall be entitled to receive from the Bank, and the Bank shall be obligated to pay or cause to be paid to Employee, an amount equal to 2.99 multiplied by Employee’s annual Base Salary in effect at the time the Change in Control became effective or in effect at the time the termination of Employee’s employment becomes effective, whichever is greater. The payments provided for in this Paragraph 8 shall be paid in a lump-sum payment within thirty (30) days following the effective date of termination of Employee’s employment. In the case of a termination of Employee’s employment and described in Paragraph 8(a)(i) above, the payments provided for in this Paragraph 8 shall be in lieu of any other and not in addition to the payments of Base Salary provided for in this AgreementParagraph 6(a) and 6(c) above, but, to the extent otherwise required by Paragraph 6(c), the Bank shall remain obligated to reimburse Employee for the cost of health insurance coverage to the extent described in that Paragraph. (b) For purposes of this Agreement, a “Change in Control” 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 shall be deemed to have occurred if: (i) after the Effective Date, any “Person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended), directly or indirectly, acquires beneficial ownership of voting stock, or acquires irrevocable proxies or any combination of voting stock and irrevocable proxies, representing more than 50% of any class of voting securities of the Bank or its parent bank holding company, Bank of the Carolinas Corporation (“BankCorp”), or in any manner acquires control of the election of a majority of the directors of the Bank or BankCorp; or (ii) the Bank or BankCorp consolidates or merges with or into another corporation, or otherwise is reorganized, where the Bank or BankCorp is not the resulting or surviving corporation in such transaction; or (iii) all or substantially all the Bank’s or BankCorp’s assets are sold or otherwise transferred to or acquired by any other corporation, association or other person, entity, entity or group. However, notwithstanding anything contained herein to the contrary, for purposes of this Agreement the term “Change in Control” shall not include a transaction approved by the Bank’s or BankCorp’s Board of Directors that results in the Bank or BankCorp merging with, transferring its assets to, to or becoming the subsidiary of, a corporation or entity newly formed at the direction of the Bank’s or BankCorp’s Board of Directors for the purpose of such transaction (including a corporation or entity so formed for the purpose of serving as the Bank’s parent bank holding company), and in connection with which transaction BankCorp’s shareholders (other than those who exercise statutory rights of dissent and appraisal) continue to hold substantially all of BankCorp’s voting stock or become the holders of substantially all of the voting stock of any such newly formed corporation. Further, and notwithstanding the other provisions of this Paragraph 8, a transaction or event shall not be considered a Change in Control if, prior to the consummation or occurrence of such transaction or event, the Bank and Employee agree in writing that the same shall not be treated as a Change in Control for purposes of this Agreement, in which event Employee shall be deemed to have forever waived all right to any payment under this Agreement as a result of that transaction or event, but not to any future transaction or event. (c) For purposes of this Paragraph 8, all references to the Bank shall include any “Successor” (as defined below) to the Bank which shall have assumed and become liable for the Bank’s obligations hereunder (whether such assumption is by agreement, operation of law, law or otherwise). “Successor” refers to any Person or entity (corporate or otherwise) into which the Bank (or any such Successor) shall be merged or consolidated or to which all or substantially all the Bank’s (or any such Successor’s) assets shall be transferred in any manner.