Exhibit 10a

Execution Copy

                              EMPLOYMENT AGREEMENT

     THIS  AGREEMENT is made  effective  as of the 13th day of March,  2003 (the
"Effective  Date"), by and between CAPITOL BANCORP LTD., a Michigan  corporation
(the "Company") and Joseph D. Reid (the "Executive").

                                   BACKGROUND

     The Board of Directors of the Company (the "Board") has determined  that it
is in the best  interests  of the  Company  and its  shareholders  to employ the
Executive.  The Company and the Executive established an employment relationship
pursuant to an  Employment  Agreement  dated  February 21, 1989, as amended (the
"Original Employment Agreement").

     The Company and the Executive  desire to enter into this Agreement to amend
and restate the terms and  conditions of such  employment  relationship  and the
Original Employment Agreement in their entirety.

     This  Agreement  shall  represent  the entire  understanding  and agreement
between the parties with respect to the Executive's employment with the Company.

     NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  terms  and
conditions set forth herein, the parties agree as follows:

                              TERMS AND CONDITIONS

     1. EMPLOYMENT  PERIOD.  The Company hereby agrees to continue the Executive
in its employ,  and the  Executive  hereby agrees to remain in the employ of the
Company  subject  to the  terms  and  conditions  of  this  Agreement,  for  the
Employment Period.  The "Employment  Period" shall mean the period commencing on
the date  hereof  and  ending  on the  third  anniversary  of the  date  hereof;
provided,  however,  that commencing on the date one year after the date hereof,
and on  each  annual  anniversary  of such  date  (such  date  and  each  annual
anniversary  thereof shall be  hereinafter  referred to as the "Renewal  Date"),
unless  previously  terminated,  the  Employment  Period shall be  automatically
extended so as to terminate three years from such Renewal Date,  unless at least
60 days prior to the Renewal Date the Company shall give notice to the Executive
that the Employment Period shall not be so extended.

     2. TERMS OF EMPLOYMENT.

          (a) POSITION AND DUTIES.

               (i) During the Employment  Period,  the Executive  shall serve as
          the  President  and Chief  Executive  Officer of the Company and shall
          have such duties and  responsibilities  as are  assigned to him by the
          Board.  The Company shall  nominate the Executive as a director at the
          relevant  meeting of  shareholders  held for the election of directors
          until such time as the Executive resigns, is terminated,  or until the
          Executive's death or Disability. The Company shall cause the Executive
          to  continue  to be elected to the  position  of Chairman of the Board
          during the Employment Period.
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               (ii) During the Employment  Period,  and excluding any periods of
          vacation  and sick  leave to which  the  Executive  is  entitled,  the
          Executive agrees to devote reasonable attention and time during normal
          business  hours to the business and affairs of the Company and, to the
          extent  necessary to discharge  the  responsibilities  assigned to the
          Executive hereunder, to use the Executive's reasonable best efforts to
          perform faithfully and efficiently such  responsibilities.  During the
          Employment  Period it shall not be a violation of this  Agreement  for
          the Executive to (A) serve on corporate, civic or charitable boards or
          committees,  (B) deliver  lectures,  fulfill  speaking  engagements or
          teach at educational institutions and (C) manage personal investments,
          so long as such  activities do not  significantly  interfere  with the
          performance of the Executive's  responsibilities as an employee of the
          Company in accordance with this Agreement.  It is expressly understood
          and  agreed  that to the  extent  that any such  activities  have been
          conducted by the Executive  prior to the Effective Date, the continued
          conduct of such  activities  (or the conduct of activities  similar in
          nature and scope  thereto)  subsequent to the Effective Date shall not
          thereafter  be  deemed  to  interfere  with  the  performance  of  the
          Executive's responsibilities to the Company.

          (b) COMPENSATION.

               (i) BASE SALARY.  During the  Employment  Period,  the  Executive
          shall  receive an annual base salary  ("Annual  Base  Salary"),  which
          shall be paid at a monthly  rate,  at least equal Nine  Hundred  Forty
          Thousand  Dollars  ($940,000),  which shall be paid in accordance with
          the Company's  normal  payroll  practices for senior  executives as in
          effect from time to time.  During the  Employment  Period,  the Annual
          Base Salary  shall be  reviewed no more than 12 months  after the last
          salary  increase  awarded to the Executive prior to the Effective Date
          and thereafter at least  annually.  Any increase in Annual Base Salary
          shall  not  serve to limit  or  reduce  any  other  obligation  to the
          Executive  under  this  Agreement.  Annual  Base  Salary  shall not be
          reduced  after any such  increase and the term "Annual Base Salary" as
          utilized  in this  Agreement  shall  refer to Annual Base Salary as so
          increased.

               (ii) ANNUAL  BONUS.  In addition to Annual Base Salary,  for each
          fiscal year ending during the Employment  Period,  the Executive shall
          be eligible for an annual cash bonus (the "Annual Bonus") in an amount
          specified  on Exhibit A attached  hereto  pursuant to the terms of the
          Company's  Management  Incentive  Plan,  as  amended  ("MIP")  (or any
          predecessor  or  successor   plan  thereof),   as  determined  by  the
          Compensation  Committee of the Board, upon complete achievement of the
          targets set forth on Exhibit A attached hereto. Each such Annual Bonus
          shall be paid no later  than the end of the third  month of the fiscal
          year next  following  the fiscal  year for which the  Annual  Bonus is
          awarded, unless the Executive shall elect to defer the receipt of such
          Annual Bonus. The amount of any Annual Bonus which exceeds the maximum
          bonus  payable  pursuant  to the MIP in any one fiscal  year,  if any,
          shall be carried over (on a "first-in,  first-out" basis) and added to
          the Annual Bonus (if any)  determined for any of the next

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          three  fiscal  years,  whether  or not any one or more of such  fiscal
          years ends before or after the end of the Employment Period.

               (iii)  LONG-TERM  INCENTIVE  COMPENSATION.  During the Employment
          Period,  the Executive shall be awarded stock options on the terms and
          conditions  set forth on Exhibit B attached  hereto and  otherwise  in
          accordance with the applicable stock plan. The Executive shall also be
          entitled to receive a special long term incentive  bonus in the amount
          and on the date set forth on  Exhibit B  attached  hereto  and in such
          amounts and on such future  dates as  determined  by the  Compensation
          Committee of the Board.

               (iv) WELFARE  BENEFIT PLANS.  During the Employment  Period,  the
          Executive and/or the Executive's  family, as the case may be, shall be
          eligible for  participation  in and shall  receive all benefits  under
          welfare benefit plans,  practices,  policies and programs  provided by
          the  Company  and  its  affiliated   companies   (including,   without
          limitation, medical, prescription,  dental, disability, employee life,
          group life,  accidental death and travel accident  insurance plans and
          programs) to the extent  available  generally to other peer executives
          of  the  Company  and  its  affiliated  companies.  As  used  in  this
          Agreement,  the term "affiliated  companies" shall include any company
          controlled by, controlling or under common control with the Company.

               (v) EXPENSES.  During the Employment  Period, the Executive shall
          be  entitled  to  receive  prompt  reimbursement  for  all  reasonable
          expenses  incurred  by the  Executive  in  accordance  with  the  most
          favorable plans,  practices,  policies and programs of the Company and
          its affiliated  companies to the extent applicable  generally to other
          peer executives of the Company and its affiliated companies.

               (vi) FRINGE BENEFITS. During the Employment Period, the Executive
          shall be entitled to fringe benefits,  including,  without limitation,
          tax and financial  planning  services,  payment of club dues,  and, if
          applicable,  use of an automobile and payment of related expenses,  in
          accordance  with the most  favorable  plans,  practices,  policies and
          programs of the Company and its affiliated companies in effect for the
          Executive at any time during the 120-day period immediately  preceding
          the  Effective  Date or, if more  favorable  to the  Executive,  as in
          effect  generally  at any time  thereafter  with respect to other peer
          executives of the Company and its affiliated companies.

               (vii) OFFICE AND SUPPORT STAFF. During the Employment Period, the
          Executive shall be entitled to an office or offices of a size and with
          furnishings  and  other   appointments,   and  to  exclusive  personal
          secretarial and other assistance, at least equal to the most favorable
          of the  foregoing  provided  to the  Executive  by the Company and its
          affiliated companies at any time during the 120-day period immediately
          preceding the Effective  Date or, if more  favorable to the Executive,
          as provided  generally  at any time  thereafter  with respect to other
          peer executives of the Company and its affiliated companies.

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               (viii)  VACATION.  During the  Employment  Period,  the Executive
          shall  be  entitled  to paid  vacation  in  accordance  with  the most
          favorable plans,  practices,  policies and programs of the Company and
          its  affiliated  companies as in effect for the  Executive at any time
          during the 120-day period immediately preceding the Effective Date or,
          if more favorable to the Executive, as in effect generally at any time
          thereafter  with respect to other peer  executives  of the Company and
          its affiliated companies.

          (c)  OTHER   AGREEMENTS.   Notwithstanding   the  provisions  of  this
               Agreement, the Company and the Executive acknowledge and agree to
               the following:

               (i) Section 4(c) of the Original Employment Agreement shall apply
          to the share exchanges set forth on Exhibit C attached hereto;

               (ii) that certain  Securities  Repurchase  Agreement  between the
          Company and the  Executive  (the  "Securities  Repurchase  Agreement")
          shall continue in full force and effect;

               (iii)  the  Executive  shall  prepay  the  outstanding  principal
          balance of that  certain  promissory  note in the  original  principal
          amount of  $1,819,151  (the  "Note") to the Company on or before April
          30, 2003, the Company  acknowledges  that such  prepayment of the Note
          will be made five (5) years before the Note's due date; and

               (iv) as soon as practicable after the Effective Date, the Company
          shall enter into an indemnification agreement with the Executive which
          is intended to maximize the  indemnification  coverage for the benefit
          of the Executive.

     3. TERMINATION OF EMPLOYMENT.

          (a) DEATH OR DISABILITY.  The Executive's  employment  shall terminate
automatically  upon the Executive's  death during the Employment  Period. If the
Company  determines  in good  faith that the  Disability  of the  Executive  has
occurred during the Employment  Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 9(b) of this  Agreement of its  intention to terminate  the  Executive's
employment.  In such event,  the  Executive's  employment with the Company shall
terminate  effective  on the  30th  day  after  receipt  of such  notice  by the
Executive (the "Disability  Effective Date"),  provided that, within the 30 days
after  such  receipt,  the  Executive  shall  not  have  returned  to  full-time
performance  of  the  Executive's   duties.  For  purposes  of  this  Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time  basis for 180  consecutive  business  days as a
result of incapacity due to mental or physical illness which is determined to be
total and  permanent by a physician  selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative.

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          (b) CAUSE. The Company may terminate the Executive's employment during
the Employment  Period for Cause. For purposes of this Agreement,  "Cause" shall
mean:

               (i) the willful and continued failure of the Executive to perform
          substantially  the  Executive's  duties with the Company or one of its
          affiliated  companies  (other  than any such  failure  resulting  from
          incapacity due to physical or mental illness),  after a written demand
          for substantial performance is delivered to the Executive by the Board
          which  specifically  identifies the manner in which the Board believes
          that the Executive  has not  substantially  performed the  Executive's
          duties, or

               (ii) the willful  engaging by the Executive in illegal conduct or
          gross misconduct which is materially and demonstrably injurious to the
          Company.

          For purposes of this provision,  no act or failure to act, on the part
          of the Executive,  shall be considered "willful" unless it is done, or
          omitted  to be  done,  by  the  Executive  in  bad  faith  or  without
          reasonable  belief that the Executive's  action or omission was in the
          best interests of the Company.  Any act, or failure to act, based upon
          authority  given pursuant to a resolution duly adopted by the Board or
          based upon the advice of counsel for the Company shall be conclusively
          presumed to be done,  or omitted to be done,  by the Executive in good
          faith and in the best  interests  of the  Company.  The  cessation  of
          employment of the Executive shall not be deemed to be for Cause unless
          and until there shall have been delivered to the Executive a copy of a
          resolution  duly  adopted  by the  affirmative  vote of not less  than
          three-quarters  of the entire  membership of the Board  (excluding the
          vote of the  Executive)  at a meeting of the Board called and held for
          such purpose (after reasonable notice is provided to the Executive and
          the Executive is given an  opportunity,  together with counsel,  to be
          heard before the Board),  finding  that,  in the good faith opinion of
          the Board, the Executive is guilty of the conduct described in clauses
          (i) or (ii) above, and specifying the particulars thereof in detail.

          (c) GOOD REASON.  The Executive's  employment may be terminated by the
Executive for Good Reason.  For purposes of this Agreement,  "Good Reason" shall
mean:

               (i) the assignment to the Executive of any duties inconsistent in
          any material respect with the Executive's position,  authority, duties
          or responsibilities as contemplated by Section 2(a) of this Agreement,
          excluding for this purpose an isolated,  insubstantial and inadvertent
          action  not taken in bad faith and which is  remedied  by the  Company
          promptly after receipt of notice thereof given by the Executive;

               (ii) failure by the Company to comply with any of the  provisions
          of  Section   2(b)  of  this   Agreement,   other  than  an  isolated,
          insubstantial  and inadvertent  failure not occurring in bad faith and
          which is  remedied  by the Company  promptly  after  receipt of notice
          thereof given by the Executive;

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               (iii) the  Company's  requiring  the  Executive  to reside at any
          specific  location,  it being understood that the Executive  maintains
          multiple  residences  and  offices,  or the  Company's  requiring  the
          Executive  to travel on  Company  business  to a greater  extent  than
          required  immediately prior to the Effective Date or in the event of a
          Change of  Control  (as such term is  defined  in  Exhibit D  attached
          hereto),  the Company's  requiring the Executive to travel in a manner
          inconsistent with current practice in effect immediately preceding the
          Change of Control date;

               (iv)  failure by the Company to comply  with and satisfy  Section
          8(c) of this Agreement; or

               (v) upon a Change of Control.

          Within one hundred  eighty (180) days after the  Executive  has actual
          knowledge of the occurrence of an event or  circumstances  which would
          give him reason to believe  constitute Good Reason, the Executive must
          give sixty (60) days prior  written  notice of his intent to terminate
          his employment for Good Reason, which notice shall set forth the event
          or circumstances  believed to constitute Good Reason.  Upon receipt of
          such  notice,  the  Company  shall  have  sixty  (60) days to cure its
          conduct, to the extent such cure is possible. This notice period shall
          not be  required  after a Change  of  Control  nor  serve to limit the
          Executive's  right to terminate for Good Reason at any time during the
          remaining term of this Agreement.

          (d) NOTICE OF  TERMINATION.  Any termination by the Company for Cause,
or by the  Executive  for  Good  Reason,  shall be  communicated  by  Notice  of
Termination  to the other party hereto given in accordance  with Section 9(b) of
this Agreement.  For purposes of this Agreement, a "Notice of Termination" means
a written notice which sets forth (i) the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable,  in reasonable detail, the
facts and  circumstances  claimed  to  provide a basis  for  termination  of the
Executive's employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies  the  termination  date (which date shall be not more than thirty (30)
days after the giving of such notice).  The failure by either party to set forth
in the Notice of Termination  any fact or  circumstance  which  contributes to a
showing of Good Reason or Cause  shall not waive the right of either  party from
asserting such fact or circumstance in enforcing its rights hereunder.

          (e)  DATE OF  TERMINATION.  "Date  of  Termination"  means  (i) if the
Executive's  employment  is  terminated  by the  Company  for  Cause,  or by the
Executive for Good Reason,  the date of receipt of the Notice of  Termination or
any later date specified  therein,  as the case may be, (ii) if the  Executive's
employment is terminated by the Company other than for Cause or Disability,  the
Date of  Termination  shall  be the  date on  which  the  Company  notifies  the
Executive  of such  termination  and  (iii)  if the  Executive's  employment  is
terminated by reason of death or Disability,  the Date of  Termination  shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.

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     4. OBLIGATIONS OF THE COMPANY UPON TERMINATION.

          (a) GOOD REASON;  OTHER THAN FOR CAUSE OR DISABILITY PRIOR TO A CHANGE
OF CONTROL.  If, during the Employment  Period,  the Company shall terminate the
Executive's employment other than for Cause or Disability or the Executive shall
terminate employment for Good Reason prior to a Change of Control:

               (i) the Company shall pay to the Executive, in a lump sum in cash
          within 90 days after the Date of  Termination,  the  aggregate  of the
          following amounts:

                    A. the sum of (1) the Executive's Annual Base Salary through
               the Date of Termination to the extent not  theretofore  paid, (2)
               the product of (x) the higher of (I) the most recent Annual Bonus
               (which   shall  not  include  the   long-term   incentive   bonus
               contemplated by Section 2(b)(iii)) and (II) the Annual Bonus paid
               or payable, including any bonus or portion thereof which has been
               earned  but  deferred  (and   annualized   for  any  fiscal  year
               consisting  of less than twelve  full months or during  which the
               Executive was employed for less than twelve full months), for the
               most recently completed fiscal year during the Employment Period,
               if any (such  higher  amount  being  referred to as the  "Highest
               Annual Bonus") and (y) a fraction,  the numerator of which is the
               number of days in the  current  fiscal  year  through the Date of
               Termination,  and the  denominator  of which is 365,  and (3) any
               compensation  previously deferred by the Executive (together with
               any  accrued  interest  or  earnings  thereon)  and  any  accrued
               vacation  pay,  in each case to the extent not  theretofore  paid
               (the sum of the amounts  described in clauses  (1),  (2), and (3)
               shall be hereinafter  referred to as the "Accrued  Obligations");
               and

                    B. the amount  equal to the  product of (1) three  times the
               sum of (x) the Executive's Annual Base Salary and (y) the Highest
               Annual Bonus;

               (ii) for three years after the  Executive's  Date of Termination,
          or  such  longer  period  as  may be  provided  by  the  terms  of the
          appropriate  plan,  program,  practice or policy,  the  Company  shall
          continue  welfare  benefits to the  Executive  and/or the  Executive's
          family at least equal to those which would have been  provided to them
          in  accordance  with  the  plans,  programs,  practices  and  policies
          described in Section  2(b)(iv) of this  Agreement  if the  Executive's
          employment  had not  been  terminated  or,  if more  favorable  to the
          Executive,  as in effect generally at any time thereafter with respect
          to other peer  executives of the Company and its affiliated  companies
          and their families,  provided,  however, that if the Executive becomes
          reemployed with another employer and is eligible to receive medical or
          other welfare  benefits  under another  employer  provided  plan,  the
          medical and other welfare benefits described herein shall be secondary
          to

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          those provided under such other plan during such applicable  period of
          eligibility. For purposes of determining eligibility (but not the time
          of  commencement  of benefits) of the Executive  for retiree  benefits
          pursuant  to  such  plans,  practices,   programs  and  policies,  the
          Executive  shall be considered to have remained  employed  until three
          years after the Date of  Termination  and to have  retired on the last
          day of such period; and

               (iii) to the extent not theretofore paid or provided, the Company
          shall  timely  pay or provide to the  Executive  any other  amounts or
          benefits  required to be paid or provided  or which the  Executive  is
          eligible  to receive  under any plan,  program,  policy or practice or
          contract or  agreement  of the Company  and its  affiliated  companies
          (such other amounts and benefits shall be  hereinafter  referred to as
          the "Other Benefits").

          (b) DEATH.  If the  Executive's  employment is terminated by reason of
the  Executive's  death  during the  Employment  Period,  this  Agreement  shall
terminate without further  obligations to the Executive's legal  representatives
under this Agreement, other than for (x) payment of Accrued Obligations, (y) the
timely payment or provision of Other Benefits and (z) the Company's  obligations
under the Securities Repurchase Agreement.  Accrued Obligations shall be paid to
the  Executive's  estate or  beneficiary,  as applicable,  in a lump sum in cash
within 30 days of the Date of  Termination.  With  respect to the  provision  of
Other  Benefits,  the term Other Benefits as utilized in this Section 4(b) shall
include,  without  limitation,  and the Executive's estate and/or  beneficiaries
shall be  entitled to  receive,  benefits  at least equal to the most  favorable
benefits  provided by the Company and  affiliated  companies  to the estates and
beneficiaries  of peer executives of the Company and such  affiliated  companies
under such plans,  programs,  practices and policies relating to death benefits,
if any.

          (c) DISABILITY.  If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further  obligations to the Executive,  other than for payment
of Accrued  Obligations  and the timely payment or provision of Other  Benefits.
Accrued  Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of  Termination.  With  respect  to the  provision  of Other
Benefits,  the term  Other  Benefits  as  utilized  in this  Section  4(c) shall
include, and the Executive shall be entitled after the Disability Effective Date
to receive,  disability  and other benefits at least equal to the most favorable
of those  generally  provided  by the Company and its  affiliated  companies  to
disabled  executives  and/or  their  families  in  accordance  with such  plans,
programs, practices and policies relating to disability, if any.

          (d)  CAUSE,  ETC.;  OTHER  THAN FOR GOOD  REASON.  If the  Executive's
employment  during the Employment Period shall be terminated for Cause or if the
Executive  voluntarily  terminates  employment  during  the  Employment  Period,
excluding a termination for Good Reason,  this Agreement shall terminate without
further  obligations  to the Executive  other than the  obligation to pay to the
Executive (x) his Annual Base Salary  through the Date of  Termination,  (y) the
amount of any compensation  previously deferred by the Executive,  and (z) Other
Benefits,  in each case to the extent  theretofore  unpaid.  In such  case,  the
amounts contemplated by (x) and (y) shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination.

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          (e) GOOD REASON;  OTHER THAN FOR CAUSE OR DISABILITY  WITHIN TWO YEARS
AFTER A CHANGE OF CONTROL.  If, during the Employment  Period, the Company shall
terminate the Executive's  employment  other than for Cause or Disability or the
Executive shall terminate  employment for Good Reason within two (2) years after
a Change of Control:

               (i) the Company shall pay to the Executive, in a lump sum in cash
          within 30 days after the Date of  Termination,  the  aggregate  of the
          following amounts:

                    A. the Accrued Obligations;

                    B. the amount  equal to the  product of (1) three  times the
               sum of (x) the  Executive's  Annual Base Salary,  (y) the Highest
               Annual  Bonus,  and  (z) the  aggregate  amount  of the  employer
               contributions  made with respect to the most  recently  completed
               plan  year  before  the Date of  Termination  to the  Executive's
               account(s) in any qualified  defined  contribution plan sponsored
               by the Company or any of its  affiliated  companies  in which the
               Executive participated and any related non-qualified plans; and

                    C. an  amount  equal  to the  excess  of (a)  the  actuarial
               equivalent of the benefit under the Company's  qualified  defined
               benefit   retirement  plan  (the  "Retirement  Plan")  (utilizing
               actuarial  assumptions  no less  favorable to the Executive  than
               those in effect under the Company's  Retirement Plan  immediately
               prior to the Effective  Date),  and any  non-qualified  excess or
               supplemental   defined  benefit  retirement  plan  in  which  the
               Executive participates (together, the "SERP") which the Executive
               would receive if the Executive's  employment  continued for three
               years after the Date of  Termination  assuming  for this  purpose
               that (x) all accrued benefits are fully vested, (y) the Executive
               is three years older and (z) the Executive is credited with three
               more  years  of  service,  and,  assuming  that  the  Executive's
               compensation  in each of the  three  years  is that  required  by
               Section  2(b)(i) and  Section  2(b)(ii),  over (b) the  actuarial
               equivalent of the  Executive's  actual benefit (paid or payable),
               if any, under the Retirement  Plan and the SERP as of the Date of
               Termination;

               (ii) for three years after the  Executive's  Date of Termination,
          or  such  longer  period  as  may be  provided  by  the  terms  of the
          appropriate  plan,  program,  practice or policy,  the  Company  shall
          continue  welfare  benefits to the  Executive  and/or the  Executive's
          family at least equal to those which would have been  provided to them
          in  accordance  with  the  plans,  programs,  practices  and  policies
          described in Section  2(b)(iv) of this  Agreement  if the  Executive's
          employment  had not  been  terminated  or,  if more  favorable  to the
          Executive,  as in effect generally at any time thereafter with respect
          to other peer  executives of the

                                       9
<PAGE>
          Company and its  affiliated  companies and their  families,  provided,
          however,  that  if  the  Executive  becomes  reemployed  with  another
          employer and is eligible to receive medical or other welfare  benefits
          under another  employer  provided  plan, the medical and other welfare
          benefits  described  herein shall be secondary to those provided under
          such other plan  during such  applicable  period of  eligibility.  For
          purposes of determining  eligibility (but not the time of commencement
          of benefits) of the  Executive for retiree  benefits  pursuant to such
          plans,  practices,  programs  and  policies,  the  Executive  shall be
          considered to have remained  employed until three years after the Date
          of Termination and to have retired on the last day of such period;

               (iii) for all  purposes  of the  vesting  and  exercisability  of
          equity-based  awards under the Company's stock incentive plans and the
          award agreements thereunder,  the Executive shall be deemed to be on a
          leave of absence  from the  Company  for three years after the Date of
          Termination  and the  Executive's  termination of employment  from the
          Company shall be deemed to occur on the third  anniversary of the Date
          of Termination; and

               (iv) the Company  shall pay and/or  provide to the  Executive the
          Other Benefits to the extent theretofore unpaid.

               (v) The Company's obligation to make the payments provided for in
          this  Agreement  and  otherwise to perform its  obligations  hereunder
          shall  not be  affected  by  any  set-off,  counterclaim,  recoupment,
          defense or other  claim,  right or action  which the  Company may have
          against the  Executive or others.  In no event shall the  Executive be
          obligated to seek other  employment or take any other action by way of
          mitigation of the amounts  payable to the  Executive  under any of the
          provisions  of this  Agreement  and such amounts  shall not be reduced
          whether or not the  Executive  obtains other  employment.  The Company
          agrees to pay as  incurred,  to the full extent  permitted by law, all
          legal fees and expenses which the Executive may reasonably  incur as a
          result of any  contest  (regardless  of the  outcome  thereof)  by the
          Company, the Executive or others of the validity or enforceability of,
          or liability  under,  any provision of this Agreement or any guarantee
          of  performance  thereof  (including as a result of any contest by the
          Executive about the amount of any payment pursuant to this Agreement),
          plus, in each case,  interest on any delayed payment at the applicable
          Federal  rate  provided for in Section  7872(f)(2)(A)  of the Internal
          Revenue Code of 1986, as amended (the "Code").

     5.  NON-EXCLUSIVITY  OF RIGHTS.  Nothing in this Agreement shall prevent or
limit the  Executive's  future  participation  in any plan,  program,  policy or
practice  provided by the  Company or any of its  affiliated  companies  and for
which the Executive may qualify.  Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan,  policy,  practice or
program  of or  any  contract  or  agreement  with  the  Company  or  any of its
affiliated  companies  at or  subsequent  to the  Date of  Termination  shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.

                                       10
<PAGE>
     6. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

          (a) Anything in this  Agreement to the contrary not  withstanding  and
except as set forth below,  in the event it shall be determined that any payment
or distribution  by the Company to or for the benefit of the Executive  (whether
paid or payable or  distributed or  distributable  pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 6) (a "Payment")  would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the  Executive  with respect to such excise tax (such excise tax,  together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise  Tax"),  then the  Executive  shall be entitled to receive an additional
payment (a  "Gross-Up  Payment")  in an amount  such that  after  payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such  taxes),  including,  without  limitation,  any  income  taxes  (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up  Payment,  the Executive  retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 6(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment,  but that the Payments do not exceed 110% of the
greatest amount (the "Reduced  Amount") that could be paid to the Executive such
that the  receipt of  Payments  would not give rise to any Excise  Tax,  then no
Gross-Up  Payment  shall  be made to the  Executive  and  the  Payments,  in the
aggregate, shall be reduced to the Reduced Amount.

          (b) Subject to the  provisions  of Section  6(c),  all  determinations
required to be made under this Section 6, including  whether and when a Gross-Up
Payment is required and the amount of such Gross-Up  Payment and the assumptions
to be utilized in arriving at such  determination,  shall be made by BDO Seidman
LLP or such other certified  public  accounting firm as may be designated by the
Executive  (the  "Accounting  Firm")  which shall  provide  detailed  supporting
calculations  both to the Company and the  Executive  within 15 business days of
the receipt of notice from the Executive that there has been a Payment,  or such
earlier time as is requested  by the Company.  In the event that the  Accounting
Firm is serving as  accountant  or auditor for the  individual,  entity or group
effecting the Change of Control,  the Executive shall appoint another nationally
recognized accounting firm to make the determinations  required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the  Accounting  Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by
the Company to the Executive  within five days of the receipt of the  Accounting
Firm's determination.  Any determination by the Accounting Firm shall be binding
upon the  Company  and the  Executive.  As a result  of the  uncertainty  in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting  Firm hereunder,  it is possible that Gross-Up  Payments which
will not have been made by the Company  should have been made  ("Underpayment"),
consistent with the  calculations  required to be made  hereunder.  In the event
that  the  Company  exhausts  its  remedies  pursuant  to  Section  6(c) and the
Executive  thereafter  is  required  to make a payment  of any Excise  Tax,  the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such  Underpayment  shall be promptly  paid by the Company to or for the
benefit of the Executive.

                                       11
<PAGE>
          (c) The Executive  shall notify the Company in writing of any claim by
the Internal  Revenue Service that, if successful,  would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable  but no later than ten business days after the Executive is informed
in  writing of such claim and shall  apprise  the  Company of the nature of such
claim and the date on which such claim is  requested to be paid.  The  Executive
shall not pay such claim prior to the expiration of the 30-day period  following
the date on which it gives such notice to the Company  (or such  shorter  period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:

               (i) give the Company any information  reasonably requested by the
          Company relating to such claim,

               (ii) take such action in connection with contesting such claim as
          the Company  shall  reasonably  request in writing  from time to time,
          including,  without  limitation,  accepting legal  representation with
          respect  to such  claim  by an  attorney  reasonably  selected  by the
          Company,

               (iii)   cooperate  with  the  Company  in  good  faith  in  order
          effectively to contest such claim, and

               (iv)  permit  the  Company  to  participate  in  any  proceedings
          relating to such claim; provided, however, that the Company shall bear
          and pay directly all costs and expenses (including additional interest
          and  penalties)  incurred in  connection  with such  contest and shall
          indemnify and hold the Executive harmless,  on an after-tax basis, for
          any Excise Tax or income tax  (including  interest and penalties  with
          respect  thereto)  imposed  as a  result  of such  representation  and
          payment of costs and  expenses.  Without  limitation  on the foregoing
          provisions  of this  Section  6(c),  the  Company  shall  control  all
          proceedings  taken in  connection  with such  contest and, at its sole
          option,  may  pursue  or  forgo  any and all  administrative  appeals,
          proceedings,  hearings and  conferences  with the taxing  authority in
          respect of such claim and may, at its sole option,  either  direct the
          Executive  to pay the tax  claimed and sue for a refund or contest the
          claim in any permissible manner, and the Executive agrees to prosecute
          such contest to a determination before any administrative tribunal, in
          a court of initial  jurisdiction and in one or more appellate  courts,
          as the Company shall determine; provided, however, that if the Company
          directs  the  Executive  to pay such  claim and sue for a refund,  the
          Company shall advance the amount of such payment to the Executive,  on
          an  interest-free  basis and shall  indemnify  and hold the  Executive
          harmless,  on an  after-tax  basis,  from any Excise Tax or income tax
          (including  interest or penalties with respect  thereto)  imposed with
          respect to such  advance or with  respect to any  imputed  income with
          respect to such  advance;  and further  provided that any extension of
          the  statute  of  limitations  relating  to  payment  of taxes for the
          taxable year of the  Executive  with  respect to which such  contested
          amount  is  claimed  to be due is  limited  solely  to such  contested
          amount.  Furthermore,  the  Company's  control of the contest shall be

                                       12
<PAGE>
          limited to issues with  respect to which a Gross-Up  Payment  would be
          payable  hereunder  and the  Executive  shall be entitled to settle or
          contest,  as the case may be, any other issue  raised by the  Internal
          Revenue Service or any other taxing authority.

          (d) If, after the receipt by the  Executive  of an amount  advanced by
the Company pursuant to Section 6(c), the Executive  becomes entitled to receive
any refund  with  respect to such claim,  the  Executive  shall  (subject to the
Company's  complying with the  requirements of Section 6(c)) promptly pay to the
Company the amount of such refund  (together  with any interest paid or credited
thereon after taxes applicable thereto).  If, after the receipt by the Executive
of an amount  advanced by the Company  pursuant to Section 6(c), a determination
is made that the  Executive  shall not be entitled to any refund with respect to
such  claim and the  Company  does not notify  the  Executive  in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such  determination,  then  such  advance  shall be  forgiven  and  shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

     7.  CONFIDENTIAL  INFORMATION.  The  Executive  shall  hold in a  fiduciary
capacity for the benefit of the Company all secret or confidential  information,
knowledge or data  relating to the Company or any of its  affiliated  companies,
and their respective businesses, which shall have been obtained by the Executive
during  the  Executive's  employment  by the  Company  or any of its  affiliated
companies and which shall not be or become public  knowledge (other than by acts
by the  Executive  or  representatives  of the  Executive  in  violation of this
Agreement).  After  termination of the Executive's  employment with the Company,
the Executive shall not,  without the prior written consent of the Company or as
may otherwise be required by law or legal  process,  communicate  or divulge any
such  information,  knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted  violation of the  provisions of
this  Section 7  constitute a basis for  deferring  or  withholding  any amounts
otherwise payable to the Executive under this Agreement.

     8. SUCCESSORS.

          (a) This  Agreement is personal to the Executive and without the prior
written  consent  of the  Company  shall  not  be  assignable  by the  Executive
otherwise than by will or the laws of descent and  distribution.  This Agreement
shall  inure to the  benefit  of and be  enforceable  by the  Executive's  legal
representatives.

          (b) This  Agreement  shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

          (c)  The  Company  will  require  any  successor  (whether  direct  or
indirect,   by  purchase,   merger,   consolidation  or  otherwise)  to  all  or
substantially  all of the  business  and/or  assets  of the  Company  to  assume
expressly and agree to perform this Agreement in the same manner and to the same
extent  that the Company  would be required to perform it if no such  succession
had taken place. As used in this Agreement,  "Company" shall mean the Company as
hereinbefore  defined  and  any  successor  to its  business  and/or  assets  as
aforesaid  which  assumes and agrees to perform  this  Agreement by operation of
law, or otherwise.

                                       13
<PAGE>
     9. MISCELLANEOUS.

          (a) This  Agreement  shall be governed by and  construed in accordance
with the laws of the State of  Michigan,  without  reference  to  principles  of
conflict of laws.  The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.  This  Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

          (b) All notices and other communications hereunder shall be in writing
and shall be given by hand  delivery  to the  other  party or by  registered  or
certified mail, return receipt requested, postage prepaid, addressed as follows:

          If to the Executive: One Business & Trade Center
                               200 Washington Square
                               Lansing, Michigan 48933

          If to the Company:   Capitol Bancorp Ltd.
                               One Business & Trade Center
                               200 Washington Square
                               Lansing, Michigan 48933
                               Attention: General Counsel

or to such other  address as either  party shall have  furnished to the other in
writing in accordance  herewith.  Notice and  communications  shall be effective
when actually received by the addressee.

          (c)  The  invalidity  or  unenforceability  of any  provision  of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

          (d) The  Company may  withhold  from any  amounts  payable  under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

          (e) The  Executive's  or the  Company's  failure to insist upon strict
compliance  with any  provision  of this  Agreement or the failure to assert any
right the  Executive  or the  Company  may have  hereunder,  including,  without
limitation,  the right of the Executive to terminate  employment for Good Reason
pursuant to Section  3(c)(i)-(v) of this Agreement,  shall not be deemed to be a
waiver  of such  provision  or right  or any  other  provision  or right of this
Agreement.

          (f)  This  Agreement,  and  all  agreements,  documents,  instruments,
schedules,  exhibits or certificates prepared in connection herewith,  represent
the entire  understanding  and agreement between the parties with respect to the
subject matter hereof,  supersede all prior  agreements or negotiations  between
such parties,  including the Original Employment Agreement,  and may be amended,
supplemented  or changed only by an agreement  in writing  which makes  specific
reference to this  Agreement or the  agreement  or document  delivered

                                       14
<PAGE>
pursuant  hereto,  as the case may be, and which is signed by the party  against
whom enforcement of any such amendment, supplement or modification is sought.

     IN WITNESS  WHEREOF,  the Executive has hereunto set the  Executive's  hand
and, pursuant to the authorization from its Board of Directors,  the Company has
caused  these  presents to be executed in its name on its behalf,  all as of the
31st day of March, 2003.


                                        /s/ Joseph D. Reid
                                        ----------------------------------------
                                        Joseph D. Reid


                                        CAPITOL BANCORP LTD.,
                                        a Michigan corporation


                                        By: /s/ Lee W. Hendrickson
                                            ------------------------------------

                                        Its: Chief Financial Officer

                                        AND

                                        /s/ David O'Leary
                                        ----------------------------------------
                                        David O'Leary, Secretary of the Board of
                                        Directors of Capitol Bancorp Ltd.

                                       15
<PAGE>
                                    EXHIBIT A

                         ANNUAL BONUS PERFORMANCE GOALS


Executive:            Joseph D. Reid.

Company:              Capitol Bancorp Ltd.

Plan:                 Capitol Bancorp Ltd. Management Incentive Plan.

Target Annual Bonus:  2%  of  Net  Income  of  Capitol   Bancorp  Ltd.  for  the
                      immediately    preceding   fiscal   year   upon   complete
                      achievement of the performance goals set forth below.

Performance Goals:    The Annual Bonus  contemplated  in this Exhibit A shall be
                      subject  to  the  Company's  complete  achievement  of the
                      following performance goals:

                      1.  Growth of the  Company's  Earnings  Per Share  ("EPS")
                      equal to or greater than 10% for the immediately preceding
                      fiscal year,  PROVIDED,  HOWEVER,  in determining  the EPS
                      growth  rate  new  affiliated  institutions  shall  not be
                      included in the EPS  computation for the first twelve (12)
                      months  of  their  operation  nor  shall  special  charges
                      associated  with  the  acquisition  of a bank,  a  holding
                      company or a  controlling  interest in a bank or a holding
                      company be included in the EPS computation; and

                      2. Growth of the Company's  total assets,  as reflected on
                      the Company's year-end audited financial statements, equal
                      to or  greater  than  10%  for the  immediately  preceding
                      fiscal year.

Net Income:           Means,  with  reference to any period,  the net income (or
                      loss) of the Company and its  subsidiaries for such period
                      (taken as a cumulative whole), as determined in accordance
                      with generally accepted accounting principles and reported
                      on  the  year-end  audited  financial  statements  of  the
                      Company.

                                      A-1
<PAGE>
                                    EXHIBIT B

                            LONG-TERM INCENTIVE BONUS

I.   STOCK OPTIONS:

Executive:            Joseph D. Reid.

Company:              Capitol Bancorp Ltd.

Plan:                 Capitol  Bancorp  Ltd.  2003 Stock Plan or any other stock
                      option plan adopted by the Company in which the  Executive
                      may participate.

Target Award:         An  option to  purchase  30,000  shares  of the  Company's
                      common stock at an exercise price equal to the fair market
                      value of the  Company's  common  stock on the date of such
                      grant for (i) each new bank or holding  company  formed or
                      opened by the Company or any of its  affiliated  companies
                      during  the term of this  Agreement,  and (ii) each  bank,
                      holding  company  or  controlling  interest  in a bank  or
                      holding  company  acquired  by the  Company  or any of its
                      affiliated  companies  and banks by  purchase  transaction
                      during the term of this Agreement.

II.  CASH:

Executive:            Joseph D. Reid.

Company:              Capitol Bancorp Ltd.

Target Annual Bonus:  Two times (2X) the Executive's  Annual Base Salary paid to
                      the Executive during the 5th year of this Agreement.

Performance Goals:    The Long-Term  Cash Bonus  contemplated  in this Exhibit B
                      shall be subject to the Company's complete  achievement of
                      the following performance goals:

                      1.  Average  Growth of the  Company's  Earnings  Per Share
                      ("EPS")  equal  to or  greater  than  15% for the  Initial
                      Measuring Period,  PROVIDED,  HOWEVER,  in determining the
                      EPS growth rate newly affiliated institutions which become
                      operative during the Initial Measuring Period shall not be
                      included in the EPS  computation for the first twelve (12)
                      months of their  respective  operation  nor shall  special
                      charges  associated  with  the  acquisition  of a bank,  a
                      holding  company or a controlling  interest in a bank or

                                      B-1
<PAGE>
                      a holding company during the Initial  Measuring  Period be
                      included in the EPS computation; and

                      2.  Average  Growth  of the  Company's  total  assets,  as
                      reflected  on the  Company's  year-end  audited  financial
                      statements for fiscal year ending December 31, 2007, equal
                      to or greater than 15% for the Initial Measuring Period.

Initial Measuring
Period:               The five year  period  beginning  on  January  1, 2003 and
                      ending on December 31, 2007.

Date Paid:            No later than March 31, 2008,  unless the Executive  shall
                      elect to defer the receipt or a portion of such bonus.

                                      B-2
<PAGE>
                                    EXHIBIT C

               SHARE EXCHANGES THAT REMAIN SUBJECT TO SECTION 4(C)
                      OF THE ORIGINAL EMPLOYMENT AGREEMENT

1. Desert Community Bank

2. Red Rock Community Bank

3. Black Mountain Community Bank

4. Goshen Community Bank

5. Elkhart Community Bank

6. Arrowhead Community Bank

7. Yuma Community Bank

8. Sunrise Bank of Albuquerque

                                      C-1
<PAGE>
                                    EXHIBIT D

                                CHANGE OF CONTROL

For the purpose of this Agreement, a "Change of Control" shall mean:

          (a) The  acquisition  by any  individual,  entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities  Exchange Act of 1934,
as amended (the "Exchange  Act")) (a "Person") of beneficial  ownership  (within
the meaning of Rule 13d-3  promulgated under the Exchange Act) of 20% or more of
either  (i) the then  outstanding  shares of common  stock of the  Company  (the
"Outstanding  Company  Common  Stock") or (ii) the combined  voting power of the
then outstanding  voting securities of the Company entitled to vote generally in
the  election  of  directors  (the  "Outstanding  Company  Voting  Securities");
provided,  however,  that for purposes of this  subsection  (a),  the  following
acquisitions  shall not  constitute  a Change of  Control:  (i) any  acquisition
directly  from the  Company,  (ii) any  acquisition  by the  Company,  (iii) any
acquisition  by any  employee  benefit  plan (or  related  trust)  sponsored  or
maintained by the Company or any corporation controlled by the Company, (iv) any
acquisition  by any  corporation  pursuant to a transaction  which complies with
clauses  (i),  (ii) and  (iii) of  subsection  (c) of this  Section 2 or (v) any
acquisition of shares of the Company's stock owned by the Executive; or

          (b) Individuals who, as of the date hereof,  constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided,  however, that any individual becoming a director subsequent to
the date hereof whose  election,  or  nomination  for election by the  Company's
shareholders,  was  approved by a vote of at least a majority  of the  directors
then  comprising  the  Incumbent  Board  shall  be  considered  as  though  such
individual  were a  member  of the  Incumbent  Board,  but  excluding,  for this
purpose,  any such  individual  whose  initial  assumption of office occurs as a
result of an actual or threatened  election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

          (c) Consummation of a reorganization,  merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company (a
"Business   Combination"),   in  each  case,  unless,  following  such  Business
Combination,  (i) all or  substantially  all of the individuals and entities who
were the beneficial  owners,  respectively,  of the  Outstanding  Company Common
Stock  and  Outstanding  Company  Voting  Securities  immediately  prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively,  the then  outstanding  shares  of common  stock and the  combined
voting  power  of the  then  outstanding  voting  securities  entitled  to  vote
generally in the election of directors,  as the case may be, of the  corporation
resulting  from such Business  Combination  (including,  without  limitation,  a
corporation  which as a result of such  transaction  owns the  Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries)  in  substantially   the  same  proportions  as  their  ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and  Outstanding  Company Voting  Securities,  as the case may be, (ii) no
Person  (excluding any corporation  resulting from such Business  Combination or
any employee  benefit plan (or related trust) of the Company or such corporation
resulting  from  such  Business  Combination)  beneficially  owns,  directly  or
indirectly, 20% or more of, respectively,  the then outstanding shares of common
stock

                                      D-1
<PAGE>
of the  corporation  resulting  from such Business  Combination  or the combined
voting  power of the then  outstanding  voting  securities  of such  corporation
except  to the  extent  that  such  ownership  existed  prior  to  the  Business
Combination,  and  (iii) at least a  majority  of the  members  of the  board of
directors of the  corporation  resulting  from such  Business  Combination  were
members  of the  Incumbent  Board at the time of the  execution  of the  initial
agreement,  or  of  the  action  of  the  Board,  providing  for  such  Business
Combination; or

          (d)  Approval  by  the  shareholders  of  the  Company  of a  complete
liquidation or dissolution of the Company.

                                      D-2
<PAGE>
                        AMENDMENT TO EMPLOYMENT AGREEMENT

     THIS AMENDMENT is made effective as of the 22nd day of April,  2003, by and
between Joseph D. Reid (the  "Executive")  and CAPITOL  BANCORP LTD., a Michigan
corporation (the "Company").

                                   BACKGROUND

     On March 31, 2003, the Company and the Executive entered into an Employment
Agreement  dated  effective  March 13, 2003 (the  "Employment  Agreement").  The
Company and the Executive now wish to amend the Employment Agreement as provided
herein.

     NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  terms  and
conditions set forth below, the parties agree as follows:

                              TERMS AND CONDITIONS

     1. AMENDMENT TO SECTION 2(C).  Section 2(c) of the Employment  Agreement is
hereby deleted in its entirety and amended to read as follows:

          "(c)  OTHER  AGREEMENTS.   Notwithstanding   the  provisions  of  this
     Agreement,  the  Company  and the  Executive  acknowledge  and agree to the
     following:

               (i) Section 4(c) of the Original Employment Agreement shall apply
     to the share exchanges set forth on Exhibit C attached hereto;

               (ii) that certain  Securities  Repurchase  Agreement  between the
     Company and the Executive (the  "Securities  Repurchase  Agreement")  shall
     continue in full force and effect;

               (iii)  the  Executive  shall  prepay  the  outstanding  principal
     balance of that certain promissory note in the original principal amount of
     $1,819,151  (the "Note") to the Company on or before  April 30,  2003,  the
     Company acknowledges that such prepayment of the Note will be made five (5)
     years before the Note's due date;

               (iv) as soon as practicable after the Effective Date, the Company
     shall enter into an  indemnification  agreement with the Executive which is
     intended to maximize  the  indemnification  coverage for the benefit of the
     Executive;

               (v) on or before  May 9, 2003,  the  Company  shall  grant to the
     Executive an award of 214,169  restricted  shares of the  Company's  common
     stock (the  "Restricted  Stock").  The Restricted Stock shall be subject to
     such  vesting  and  forfeiture  conditions  that  are  satisfactory  to the
     Company; and

                                       1
<PAGE>
               (vi) on or before April 30, 2003,  the Executive  shall  exercise
     outstanding  options  to  purchase  shares of the  Company's  common  stock
     currently  held by the Executive  which are  exercisable  for not less than
     598,000 shares of the Company's common stock and have an average  remaining
     exercise period of at least three (3) years."

     2. AMENDMENT TO EXHIBIT B. Exhibit B of the Employment  Agreement is hereby
deleted in its entirety and amended to read as Exhibit B attached hereto.

     3. CONSTRUCTION.  Unless otherwise defined herein,  capitalized terms shall
have the  meanings  set  forth in the  Employment  Agreement.  The terms of this
Amendment amend and modify the Employment Agreement as if fully set forth in the
Employment Agreement. If there is any conflict between the terms, conditions and
obligations  of this Amendment and the Employment  Agreement,  this  Amendment's
terms,  conditions and obligations  shall control.  All other  provisions of the
Employment Agreement not specifically modified by this Amendment are preserved.

     IN WITNESS  WHEREOF,  this Amendment has been made effective as of the date
first set forth above.

THE EXECUTIVE:                          /s/ Joseph D. Reid
                                        ----------------------------------------
                                        Joseph D. Reid

THE CORPORATION:                        CAPITOL BANCORP LTD.,
                                        a Michigan corporation


                                        By: /s/ Lee W. Hendrickson
                                            ------------------------------------

                                        Its: Chief Financial Officer

                                        AND

                                        /s/ David O'Leary
                                        ----------------------------------------
                                        David O'Leary, Secretary of the Board of
                                        Directors of Capitol Bancorp Ltd.

                                       2
<PAGE>
                                    EXHIBIT B

                            LONG-TERM INCENTIVE BONUS

I.   STOCK OPTIONS/RESTRICTED STOCK /CASH:

Executive:            Joseph D. Reid.

Company:              Capitol Bancorp Ltd.

Plan:                 Capitol Bancorp Ltd. 2003 Stock Plan, Capitol Bancorp Ltd.
                      2003  Management  Incentive Plan or any other plan adopted
                      by the Company in which the Executive may participate.

Target Bonus &
Performance Goals:    During  the  term of this  Agreement,  the  Company  shall
                      grant,  issue  or  deliver  to  the  Executive  one of the
                      following:  (A) an option to purchase 30,000 shares of the
                      Company's  common stock at an exercise  price equal to the
                      fair market  value of the  Company's  common  stock on the
                      date of such grant,  (B) a restricted stock grant equal to
                      the value of the option  referred to in (A)  utilizing the
                      Black-Scholes model, or (C) cash in an amount equal to the
                      value  of the  option  referred  to in (A)  utilizing  the
                      Black-Scholes  model,  for each  (i) new  bank or  holding
                      company  formed or opened for  business  by the Company or
                      any of its affiliated companies or (ii) holding company or
                      separate bank directly acquired (including the acquisition
                      of a controlling  interest  therein) by the Company or any
                      of  its   affiliated   companies   or  banks  by  purchase
                      transaction. The Company shall have the sole discretion to
                      elect the method of payment set forth in (A),  (B) and (C)
                      above.

II.  CASH:

Executive:            Joseph D. Reid.

Company:              Capitol Bancorp Ltd.

Plan:                 Capitol  Bancorp  Ltd.  2003  Management  Incentive  Plan,
                      Capitol  Bancorp  Ltd.  2003  Stock Plan or any other plan
                      adopted  by  the  Company  in  which  the   Executive  may
                      participate.

Target Bonus:         Two times (2X) the Executive's  Annual Base Salary paid to
                      the Executive during the 5th year of this Agreement.

                                      B-1
<PAGE>
Performance Goals:    The Long-Term  Cash Bonus  contemplated  in this Exhibit B
                      shall be subject to the Company's complete  achievement of
                      the following performance goals:

                      1.  Average  Growth of the  Company's  Earnings  Per Share
                      ("EPS")  equal  to or  greater  than  15% for the  Initial
                      Measuring Period,  PROVIDED,  HOWEVER,  in determining the
                      EPS growth rate newly affiliated institutions which become
                      operative during the Initial Measuring Period shall not be
                      included in the EPS  computation for the first twelve (12)
                      months of their  respective  operation  nor shall  special
                      charges  associated  with  the  acquisition  of a bank,  a
                      holding  company or a controlling  interest in a bank or a
                      holding  company  during the Initial  Measuring  Period be
                      included in the EPS computation; and

                      2.  Average  Growth  of the  Company's  total  assets,  as
                      reflected  on the  Company's  year-end  audited  financial
                      statements for fiscal year ending December 31, 2007, equal
                      to or greater than 15% for the Initial Measuring Period.

Initial Measuring
Period:               The five year  period  beginning  on  January  1, 2003 and
                      ending on December 31, 2007.

Date Paid:            No later than March 31, 2008,  unless the Executive  shall
                      elect to defer the receipt or a portion of such bonus.

                                      B-2