**EXHIBIT 10.2****CAPITOL BANCORP LTD. MANAGEMENT INCENTIVE PLAN****SECTION 1. PURPOSE.**The purpose of the Capitol Bancorp Ltd. Management Incentive Plan is to promote and advance theinterests of Capitol Bancorp Ltd., a Michigan corporation (the “Corporation”) and its shareholdersby enabling the Corporation to attract, retain and reward key employees of the Corporation and itsAffiliates, and to qualify incentive compensation paid to Participants who are covered Employees asperformance-based compensation within the meaning of Section 162(m) of the Code.**SECTION 2. DEFINITIONS.**The terms below shall have the following meanings:     **(a) **“**Affiliate**” means (i) any entity that is controlled by the Corporation, whether directlyor indirectly, and (ii) any entity in which the Corporation has a significant equity interest, asdetermined by the Committee.     **(b) **“**Annual Base Salary**” means the Participant’s rate of annual salary as of the last December1st occurring during the Performance Period.     **(c) **“**Board**” means the Board of Directors of the Corporation.     **(d) **“**Code**” means the Internal Revenue Code of 1986, as amended.     **(e) **“**Committee**” means the committee appointed by the Board to administer the Plan as providedherein. Unless otherwise determined by the Board, the Compensation Committee of the Board shall bethe Committee.     **(f) **“**Corporation**” means Capitol Bancorp Ltd., a Michigan corporation, and its successors andassigns.     **(g) **“**Covered Employee**” means a “covered employee” within the meaning of Section 162(m)(3) ofthe Code.     **(h) **“**Incentive Payment**” means, with respect to each Participant, the amount he or she mayreceive for the applicable Performance Period as established by the Committee pursuant to theprovisions of the Plan.     **(i) **“**Participant**” means any employee of the Corporation or an Affiliate who is designated bythe Committee as eligible to receive an Incentive Payment under the Plan.     **(j) **“**Performance Goals**” means (i) earnings per share, (ii) return measures (including, but notlimited to, return on assets, equity or sales), (iii) net income (before or after taxes), (iv) cashflow (including, but not limited to, operating cash flow and free cash flow), (v)
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cash flow return on investments, which equals net cash flows divided by owner’s equity, (vi)earnings before or after taxes, interest, depreciation and/or amortization, (vii) internal rate ofreturn or increase in net present value, (viii) gross revenues, (ix) gross margins or (x) shareprice (including, but not limited to, growth measures and total shareholder return). PerformanceGoals with respect to awards for employees who are not Covered Employees may also be based on anyother objective performance goals as may be established by the Committee for a Performance Period.Performance Goals may be absolute in their terms or measured against or in relationship to othercompanies comparably, similarly or otherwise situated and may be based on or adjusted for any otherobjective goals, events, or occurrences established by the Committee for a Performance Period. SuchPerformance Goals may be particular to a line of business, subsidiary or other unit or may be basedon the performance of the Corporation generally. Such Performance Goals may cover such period asmay be specified by the Committee.     **(k) **“**Performance Period**” means, with respect to any Incentive Payment, the period, not to beless than 12 months, specified by the Committee, including but not limited to, for a one-yearperformance period, the calendar year.     **(l) **“**Performance Targets**” mean the specific measures which must be satisfied in connectionwith any Performance Goal prior to funding of any incentive pool.     **(m) **“**Plan**” means the Capitol Bancorp Ltd. Management Incentive Plan.**SECTION 3. ADMINISTRATION.**The Plan shall be administered by the Committee. Subject to the express provisions of the Plan, theCommittee shall have exclusive authority to interpret the Plan, to promulgate, amend, and rescindrules and regulations relating to it and to make all other determinations deemed necessary oradvisable in connection with the administration of the Plan, including, but not limited to,determinations relating to eligibility, whether to make Incentive Payments, the terms of any suchpayments, the time or times at which Performance Goals are established, the Performance Periods towhich Incentive Payments relate, and the actual dollar amount of any Incentive Payment. Thedeterminations of the Committee pursuant to this authority shall be conclusive and binding. TheCommittee may, in its discretion, authorize the Chief Executive Officer of the Corporation to acton its behalf, except with respect to matters relating to such Chief Executive Officer or which arerequired to be certified by a majority of the Committee under the Plan, or which are required to behandled exclusively by the Committee under Code Section 162(m) or the regulations promulgatedthereunder.**SECTION 4. ESTABLISHMENT OF PERFORMANCE GOALS AND INCENTIVE PAYMENTS.**     **(a) **Prior to the earliest time required by Section 162(m) of the Code or the regulationsthereunder, the Committee shall, with the ratification of the “outside directors” of the Board (assuch term is defined in Code Section 162(m)) for each such Performance Period, determine andestablish in writing the following:          (i) The Performance Goals applicable to the Performance Period; and
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          (ii) The Performance Targets pursuant to which the total amount which may be available forpayment to all Participants as Incentive Payments based upon the relative level of attainment ofthe Performance Goals may be calculated.     **(b) **After the end of each Performance Period, the Committee shall:          (i) Certify in writing, prior to the unconditional payment of any Incentive Payment, the levelof attainment of the Performance Goals for the Performance Period;          (ii) Determine the total amount available for Incentive Payments based on the relative levelof attainment of such Performance Goals;          (iii) In its sole discretion, adjust the size of, or eliminate, the total amount available forIncentive Payments for the Performance Period; and          (iv) In its sole discretion, determine the share, if any, of the available amount to be paidto each Participant as that Participant’s Incentive Payment, and authorize payment of such amount.In the case of a Participant who is a Covered Employee, the Committee shall not be authorized toincrease the amount of the Incentive Payment for any Performance Period determined with respect toany such individual by reference to the applicable Performance Targets except to the extentpermitted under Section 162(m) of the Code and regulations thereunder.     **(c) **The Committee may authorize a conditional payment of a Participant’s Incentive Paymentprior the end of a Performance Period based upon the Committee’s good faith determination of theprojected size of (i) the total amount which will become available for payment as IncentivePayments for the Performance Period, and (ii) the amount determined with respect to any suchParticipant by reference to the Performance Targets.     **(d) Other Applicable Rules.**          (i) Unless otherwise determined by the Committee with respect to any Covered Employee or bythe Corporation’s Chief Executive Officer with respect to any other Participant (unless otherwiserequired by applicable law), no payment pursuant to this Plan shall be made to a Participant unlessthe Participant is employed by the Corporation or an Affiliate as of the date of payment; provided,however, in the event of the Participant’s (A) retirement in accordance with the policies of theCorporation or Affiliate which employs the Participant, (B) death, or (C) disability (within themeaning of such term as set forth in any long-term disability plan of the Corporation or itssuccessor, the provisions of which are incorporated herein by reference, or as the Committee shalldetermine based on information provided to it), the Corporation shall pay the Participant anIncentive Payment for the applicable Performance Period, which Incentive Payment shall be proratedbased on the number of months the Participant was employed by the Corporation or an Affiliateduring the applicable Performance Period, in which the Participant’s retirement, death ordisability occurred. In the case of the Participant’s retirement, such payment shall be made at theend of the Performance Period during which the Participant retired in the normal course of payments made to all other participants, and
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inthe case of the Participant’s death or disability, such payment shall be made as soon as isadministratively feasible following the date of the Participant’s death or disability.          (ii) Incentive Payments shall be subject to applicable federal, state and local withholdingtaxes and other applicable withholding in accordance with the Corporation’s payroll practices asfrom time-to-time in effect.          (iii) The maximum amount which may become payable to any Covered Employee in any calendar yearas an Incentive Payment with respect to all Performance Periods completed during such calendar yearshall be the lesser of (A) 300% of such Participant’s Annual Base Salary, and (B) $5,000,000.          (iv) Incentive Payments calculated by reference to any Performance Periods shall be payable incash; provided however, that such percentage, if any, as determined by the Committee shallautomatically be invested on behalf of the recipient in shares of the Corporation’s common stock(“Shares”). Any such Shares shall be subject to restrictions as may be determined by the Committee.In each case, Incentive Payments shall be made as soon as practical after the completion of thePerformance Period. Notwithstanding anything in this subsection to the contrary, if a Participantelects to defer receipt of all or any portion of an Incentive Payment under the provisions of anydeferred compensation plan maintained by the Corporation, the provisions in this Plan (includingthe Provisions of this subsection) regarding the timing and form of payment of Incentive Paymentsshall cease to apply to such deferred amounts and the provisions of the applicable deferredcompensation plan shall govern the timing and form of payment of such deferred amounts.          (v) A Participant shall have the right to defer any or all of any Incentive Payment aspermitted under the provisions of any deferred compensation plan maintained by the Corporation. TheCommittee, in its sole discretion, may impose limitations on the percentage or dollar amount of anyParticipant election to defer any Incentive Payment and may impose rules prohibiting the deferralof less than 100% of any Incentive Payment.          (vi) Until paid to a Participant, awards may not be assigned, alienated, transferred orencumbered in any way other than by will or pursuant to laws of intestacy.**SECTION 5. AMENDMENT OR TERMINATION.**The Committee may amend, modify or terminate the Plan in any respect at any time without theconsent of any Participant. Any such action may be taken without the approval of the Corporation’sshareholders unless shareholder approval is required by applicable law. Termination of the Planshall not affect any Incentive Payments earned prior to, but payable on or after, the date oftermination, and any such payments shall continue to be subject to the terms of the Plannotwithstanding its termination.
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**SECTION 6. CHANGE OF CONTROL.**Notwithstanding any other provision hereof, in the event of a “Change of Control” of theCorporation as defined in any Capitol Bancorp Ltd. Executive Officer Employment Agreements, thefollowing provisions shall be applicable:     **(a) **The Performance Periods then in effect will be deemed to have concluded on the date of theChange of Control of the Corporation and the total amount deemed to be available to fund therelated incentive pools will be that proportion of the amount (based upon the number of months insuch Performance Period elapsed through the date of Change of Control of the Corporation) whichwould be available for funding assuming the Corporation had attained Performance Goals at a levelgenerating maximum funding for the Performance Periods; and     **(b) **The Committee, in its sole discretion, will approve the share of the available amountpayable to each Participant as that Participant’s Incentive Payment (provided that in all eventsthe entire available amount as calculated pursuant to Section 6(a) shall be paid to Participants asIncentive Payments), and payments shall be made to each Participant as soon thereafter as ispracticable.**SECTION 7. EFFECTIVE DATE OF THE PLAN.**This Capitol Bancorp Ltd. Management Incentive Plan is effective as of February 6, 2003 (subject toapproval of the shareholders of the Corporation on May 8, 2003), and thereafter shall remain ineffect until terminated in accordance with Section 5 hereof.**SECTION 8. GENERAL PROVISIONS.**     **(a) **The establishment of the Plan shall not confer upon any Participant any legal or equitableright against the Corporation or any Affiliate, except as expressly provided in the Plan.     **(b) **The Plan does not constitute an inducement or consideration for the employment of anyParticipant, nor is it a contract between the Corporation, or any Affiliate, and any Participant.Participation in the Plan shall not give a Participant any right to be retained in the employ ofthe Corporation or any Affiliate.     **(c) **Nothing contained in this Plan shall prevent the Board or Committee from adopting other oradditional compensation arrangements, subject to shareholder approval if such approval is requiredand such arrangements may be either generally applicable or applicable only in specific cases.     **(d) **The Plan shall be governed, construed and administered in accordance with the laws of theState of Michigan except to the extent such laws may be superseded by federal law.     **(e)**This Plan is intended to comply in all aspects with applicable law and regulation,including, with respect to those Participants who are Covered Employees, Section 162(m) of theCode. In case any one or more of the provisions of this Plan shall be held invalid, illegal orunenforceable in any respect under applicable law or regulation, the validity, legality and
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enforceability of the remaining provisions shall not in any way be affected or impairedthereby and the invalid, illegal or unenforceable provision shall be deemed null and void; however,to the extent permissible by law, any provision which could be deemed null and void shall first beconstrued, interpreted or revised retroactively to permit this Plan to be construed in compliancewith all applicable laws including, without limitation, Code Section 162(m), so as to carry out theintent of this Plan.     Compensation Committee Approved: February 6, 2003     Board Approved: February 6, 2003     Shareholders Approved: February 6, 2003
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