**SECOND      AMENDMENT TO EMPLOYMENT AGREEMENT**

***“Amendment”***
***“Executive”***
***“Company”***

**BACKGROUND**

***“Employment      Agreement”***

**TERMS      AND CONDITIONS**

**1.    **
**AMENDMENT      TO SECTION 2(a)(i).**

**2.    AMENDMENT      TO SECTION      2(b)(i).**

***“Annual      Base Salary”***

**3.    **
**AMENDMENT      TO SECTION**
** 2(**
**b)(ii).**

** **
***“Annual      Bonus”***
***“MIP”***

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**4.    **
**AMENDMENT      TO SECTION**
** 4(**
**a)(i).**

***“Accrued      Obligations”***

**5.    **
**AMENDMENT      TO SECTION**
** 4(**
**d).**

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**6.    **
**AMENDMENT        TO SECTION**
**        4(**
**e)(i)C.**

***“Retirement        Plan”***

**7.    **
**AMENDMENT        TO EXHIBIT B**
**.**

**8.    **
**CONSTRUCTION**
**.**

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**IN      WITNESS WHEREOF,**

| **THE                EXECUTIVE:**   /s/                Joseph D. Reid                **JOSEPH                D. REID** | **THE                COMPANY:** **CAPITOL                BANCORP LTD.** By:                      /s/ David O'Leary                Name:                 David O'LearyTitle:                   Secretary |
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**SIGNATURE            PAGE TO FIRST AMENDMENT TO EMPLOYMENT AGREEMENT**

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**EXHIBIT      B**

**LONG-TERM      INCENTIVE BONUS**

| **I.**                                                                 | **RESTRICTED                  STOCK/CASH:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| EXECUTIVE:                                                             | Joseph                  D. Reid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| COMPANY:                                                               | Capitol                  Bancorp Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| PLAN:                                                                  | Capitol                  Bancorp Ltd. Management Incentive Plan, Capitol Bancorp Ltd. 2003                  Stock                  Plan or any other plan adopted by the Company in which the Executive                  may                  participate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| EFFECTIVE                  DATE:                                       | January                  1, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| TARGET                  BONUS &PERFORMANCE                  GOALS: | During                  the Employment Period, for each (a) new bank or holding company                  formed or                  opened for business by the Company or any of its affiliated companies                  (excluding the Company’s Capitol Development Companies) or (b) 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 (each a ***“New                  Affiliate”***),                  the Company shall promptly grant, issue and deliver to the Executive                  the                  following: (i) $50,000 in cash and (ii) a restricted stock award                  for                  shares of the Company’s common stock having a fair market value of                  $100,000 (each a ***“Restricted                  Stock Award”***).                  Each Restricted Stock Award shall vest in equal monthly increments                  over                  four (4) years and fully vest upon (1) the Executive’s death, (2) the                  Executive’s Disability, (3) termination of the Executive’s employment by                  the Executive for Good Reason or by the Company without Cause or                  (4) a                  Change of Control of the Company.   |
| LIMITATION:                                                            | In                  no event shall the Executive be entitled to receive any compensation                  for                  more than ten (10) New Affiliates in each fiscal year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **II.**                                                                | **CASH:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| EXECUTIVE:                                                             | Joseph                  D. Reid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| COMPANY:                                                               | Capitol                  Bancorp Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

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| PLAN:                                        | Capitol                    Bancorp Ltd. Management Incentive Plan, Capitol Bancorp Ltd.                    2003 Stock                    Plan or any other plan adopted by the Company in which the Executive                    may                    participate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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| TARGET                    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 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| VESTING                    DATE:             | December                    31, 2007. If the Executive is not employed on the vesting date,                    the entire                    cash bonus will be forfeited.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| DATE                    PAID:                | No                    later than March 15, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

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