EXHIBIT 10.40

CAPITALBANK
SPLIT DOLLAR AGREEMENT

          THIS AGREEMENT is made and entered into this 31st day of December,
2003, by and between CAPITALBANK, a state-chartered commercial bank located in
Greenwood, South Carolina (the “Company”), and STEVE O. WHITE (the “Executive”).

          This Agreement shall append the Split Dollar Endorsement entered into
on July 12, 2002, or as subsequently amended, by and between the aforementioned
parties.

INTRODUCTION

          To encourage the Executive to remain an employee of the Company, the
Company is willing to divide the death proceeds of a life insurance policy on
the Executive’s life. The Company will pay life insurance premiums from its
general assets.

Article 1
General Definitions

The following terms shall have the meanings specified:

          1.1 “Change of Control” means the first to occur of the following:

  a. Any person or entity, or any two or more persons or entities acting as a
group as defined in Section 13(d)(3) of the Federal Securities and Exchange Act
of 1934, shall acquire ownership of fifty (50%) percent or more of the
outstanding voting stock of the Company; or

  b. The acquisition of, or sale of, all or substantially all of the assets of
the Company, except to an Affiliate as defined hereinbelow; or

  c. The merger of the Company into another entity that is not an Affiliate as
defined hereinbelow, and the Company is not the survivor of such merger.

For purposes hereof, an “Affiliate” is any entity controlling, controlled by, or
under common control with the Company. For this purpose, “control” means legal
or beneficial ownership of fifty (50%) percent or more of the equity or voting
interests in an entity.

          1.2 “Disability” means the Executive’s suffering a sickness, accident
or injury which has been determined by the carrier of any individual or group
disability insurance policy covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally and
permanently disabled. The Executive must submit proof to the Company of the
carrier’s or Social Security Administration’s determination upon the request of
the Company.

          1.3 “Insurer” means New York Life.

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          1.4 “Policy” means insurance policy no. 56602242 issued by the
Insurer.

          1.5 “Insured” means the Executive.

          1.6 “Normal Retirement Age” means the earliest of August 31st
following the Executive’s 65th birthday, the date of Termination of Employment
on account of Disability or the date of a Change of Control.

          1.7 “Termination of Employment” means that the Executive ceases to be
employed by the Company.

Article 2
Policy Ownership/Interests

          2.1 Company Ownership. The Company is the sole owner of the Policy and
shall have the right to exercise all incidents of ownership. The Company shall
be the direct beneficiary of an amount of death proceeds equal to the greater
of: a) the cash surrender value of the policy, b) the aggregate premiums paid on
the Policy by the Company less any outstanding indebtedness to the Insurer or c)
the total death proceeds less the split dollar amount. The split dollar amount
shall be 60% of the difference between the total policy death proceeds and the
policy cash surrender value at the date of the Executive’s death.

          2.2 Executive’s Interest. The Executive shall have the right to
designate the beneficiary of any remaining death proceeds of the Policy. The
Executive shall also have the right to elect and change settlement options that
may be permitted. Provided, however, the Executive, the Executive’s transferee
or the Executive’s beneficiary shall have no rights or interests in the Policy
with respect to that portion of the death proceeds designated in this section
2.2 upon the Executive’s Termination of Employment prior to Normal Retirement
Age.

          2.3 Option to Purchase. The Company shall not sell, surrender or
transfer ownership of the Policy while this Agreement is in effect without first
giving the Executive or the Executive’s transferee the option to purchase the
Policy for a period of sixty (60) days from written notice of such intention.
The purchase price shall be an amount equal to the cash surrender value of the
Policy. This provision shall not impair the right of the Company to terminate
this Agreement.

          2.4 Comparable Coverage. Upon Termination of Employment after the
Executive’s Normal Retirement Age, the Company shall maintain the Policy in full
force and effect and in no event shall the Company amend, terminate or otherwise
abrogate the Executive’s interest in the Policy, unless the Company replaces the
Policy with a comparable insurance policy to cover the benefit provided under
this Agreement. The Policy or any comparable policy shall be subject to the
claims of the Company’s creditors.

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Article 3
Premiums

          3.1 Premium Payment. The Company shall pay any premiums due on the
Policy.

          3.2 Imputed Income. The Company shall impute income to the Executive
in an amount equal to the current term rate for the Executive’s age multiplied
by the aggregate death benefit payable to the Executive’s beneficiary. The
“current term rate” is the minimum amount required to be imputed under Revenue
Rulings 64-328 and 66-110, or any subsequent applicable authority.

Article 4
Assignment

          The Executive may assign without consideration all interests in the
Policy and in this Agreement to any person, entity or trust. In the event the
Executive transfers all of the Executive’s interest in the Policy, then all of
the Executive’s interest in the Policy and in the Agreement shall be vested in
the Executive’s transferee, who shall be substituted as a party hereunder and
the Executive shall have no further interest in the Policy or in this Agreement.

Article 5
Insurer

          The Insurer shall be bound only by the terms of the Policy. Any
payments the Insurer makes or actions it takes in accordance with the Policy
shall fully discharge the Insurer and Company from all claims, suits and demands
of all entities or persons. The Insurer shall not be bound by or be deemed to
have notice of the provisions of this Agreement.

Article 6
Claims Procedure

          6.1 Claims Procedure. An Executive or beneficiary (“claimant”) who has
not received benefits under the Agreement that he or she believes should be paid
shall make a claim for such benefits as follows:

            6.1.1 Initiation – Written Claim. The claimant initiates a claim by
submitting to the Company a written claim for the benefits.

            6.1.2 Timing of Company Response. The Company shall respond to such
claimant within 90 days after receiving the claim. If the Company determines
that special circumstances require additional time for processing the claim, the
Company can extend the response period by an additional 90 days by notifying the
claimant in writing, prior to the end of the initial 90-day period, that an
additional period is required. The notice of extension must set forth the
special circumstances and the date by which the Company expects to render its
decision.

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            6.1.3 Notice of Decision. If the Company denies part or all of the
claim, the Company shall notify the claimant in writing of such denial. The
Company shall write the notification in a manner calculated to be understood by
the claimant. The notification shall set forth:

  (a) The specific reasons for the denial,

  (b) A reference to the specific provisions of the Agreement on which the
denial is based,

  (c) A description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is needed,

  (d) An explanation of the Agreement’s review procedures and the time limits
applicable to such procedures, and

  (e) A statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on review.

          6.2 Review Procedure. If the Company denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:

            6.2.1 Initiation – Written Request. To initiate the review, the
claimant, within 60 days after receiving the Company’s notice of denial, must
file with the Company a written request for review.

            6.2.2 Additional Submissions – Information Access. The claimant
shall then have the opportunity to submit written comments, documents, records
and other information relating to the claim. The Company shall also provide the
claimant, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

            6.2.3 Considerations on Review. In considering the review, the
Company shall take into account all materials and information the claimant
submits relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.

            6.2.4 Timing of Company Response. The Company shall respond in
writing to such claimant within 60 days after receiving the request for review.
If the Company determines that special circumstances require additional time for
processing the claim, the Company can extend the response period by an
additional 60 days by notifying the claimant in writing, prior to the end of the
initial 60-day

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  period, that an additional period is required. The notice of extension must
set forth the special circumstances and the date by which the Company expects to
render its decision.

            6.2.5 Notice of Decision. The Company shall notify the claimant in
writing of its decision on review. The Company shall write the notification in a
manner calculated to be understood by the claimant. The notification shall set
forth:

  (a) The specific reasons for the denial,

  (b) A reference to the specific provisions of the Agreement on which the
denial is based,

  (c) A statement that the claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits, and

  (d) A statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).

Article 7
Amendments and Termination

          This Agreement may be amended or terminated only by a written
agreement signed by the Company and the Executive. However, unless otherwise
agreed to by the Company and the Executive, this Agreement will automatically
terminate upon the Executive’s Termination of Employment prior to Normal
Retirement Age other than following a Change of Control or on account of
Disability.

Article 8
Miscellaneous

          8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, their beneficiaries, survivors, executors, administrators and
transferees, and any Policy beneficiary.

          8.2 No Guarantee of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain a
Executive or employee of the Company, nor does it interfere with the Company’s
right to discharge the Executive. It also does not require the Executive to
remain an Executive nor interfere with the Executive’s right to terminate
service at any time.

          8.3 Applicable Law. The Agreement and all rights hereunder shall be
governed by and construed according to the laws of the State of South Carolina,
except to the

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extent preempted by the laws of the United States of America.

          8.4 Reorganization. The Company shall not merge or consolidate into or
with another company, or reorganize, or sell substantially all of its assets to
another company, firm or person unless such succeeding or continuing company,
firm or person agrees to assume and discharge the obligations of the Company.

          8.5 Notice. Any notice, consent or demand required or permitted to be
given under the provisions of this Split Dollar Agreement by one party to
another shall be in writing, shall be signed by the party giving or making the
same, and may be given either by delivering the same to such other party
personally, or by mailing the same, by United States certified mail, postage
prepaid, to such party, addressed to his or her last known address as shown on
the records of the Company. The date of such mailing shall be deemed the date of
such mailed notice, consent or demand.

          8.6 Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Executive as to the subject matter hereof. No rights
are granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.

          8.7 Administration. The Company shall have powers which are necessary
to administer this Agreement, including but not limited to:

  (a) Interpreting the provisions of the Agreement;

  (b) Establishing and revising the method of accounting for the Agreement;

  (c) Maintaining a record of benefit payments; and

  (d) Establishing rules and prescribing any forms necessary or desirable to
administer the Agreement.

          8.8 Named Fiduciary. The Company shall be the named fiduciary and plan
administrator under the Agreement. The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the plan
including the employment of advisors and the delegation of ministerial duties to
qualified individuals

          IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.

  EXECUTIVE:

  /s/ Steve O. White  

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  STEVE O. WHITE

  COMPANY:

  CAPITALBANK

  By /s/ Ralph W. Brewer  

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  Title CFO  

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SPLIT DOLLAR POLICY ENDORSEMENT
CAPITALBANK SPLIT DOLLAR AGREEMENT

Policy No. 56602242 Insured: STEVE O. WHITE

Supplementing and amending the application for insurance to New York Life
(“Insurer”) on July 12, 2002, the applicant requests and directs that:

BENEFICIARIES

          1. CAPITALBANK, a federally-chartered savings association located in
Greenwood, South Carolina (the “Company”), shall be the direct beneficiary of
death proceeds equal to the greater of (a) the cash surrender value of the
policy, (b) the aggregate premiums paid on the Policy by the Company less any
outstanding indebtedness to the Insurer or (c) the total death proceeds less the
split dollar amount. The split dollar amount shall be 60% of the difference
between the total policy death proceeds and the policy cash surrender value at
the date of the Executive’s death.

          2. The beneficiary of any remaining death proceeds shall be designated
by the Insured or the Insured’s transferee, subject to the provisions of
paragraph (5) below.

OWNERSHIP

          3. The Owner of the policy shall be the Company. The Owner shall have
all ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured’s transferee in paragraph (4) of this endorsement.

          4. The Insured or the Insured’s transferee shall have the right to
assign his or her rights and interests in the Policy with respect to that
portion of the death proceeds designated in paragraph (2) of this endorsement,
and to exercise all settlement options with respect to such death proceeds.

          5. Notwithstanding the provisions of paragraph (4) above, the Insured
or the Insured’s transferee shall have no rights or interests in the Policy with
respect to that portion of the death proceeds designated in paragraph (2) of
this endorsement if the Insured ceases to serve as an Executive of the Company
prior to the earliest of August 31st following the Insured’s 65th birthday,
termination of employment on account of Disability as defined in Section 1.2 of
the Split Dollar Agreement or a Change of Control as defined in Section 1.1 of
the Split Dollar Agreement, unless otherwise agreed to by the Company and the
Insured.

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MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY

Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.

OWNERS AUTHORITY

The Insurer is hereby authorized to recognize the Owner’s claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer.

Any transferee’s rights shall be subject to this Endorsement.

The owner accepts and agrees to this Split Dollar Endorsement.

Signed at Greenwood, South Carolina, this 31st day of December, 2003.

CAPITALBANK

By /s/ Ralph W. Brewer  

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Its CFO  

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The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following beneficiaries of the portion
of the proceeds described in (2) above:

  Primary beneficiary: Joan S. White 

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  Relationship to Insured: Wife  

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  Secondary beneficiary: Estate 

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  Relationship to Insured:  

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Signed at Greenwood, South Carolina, this 31st day of December, 2003.

THE INSURED:

/s/ Steve O. White 

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STEVE O. WHITE  

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