ex10_08.htm


    Exhibit 10.08

    
      
        

      

    

    
CAPITAL
BANK

    
      SUPPLEMENTAL
RETIREMENT PLAN FOR DIRECTORS

      


      (Amended
and Restated Effective December 18, 2008)

      


      


      

        
          
             


          

          
            
            

            
              

            

          

          
             


          

        
PURPOSE

      


      The
purpose of this Capital Bank Supplemental Retirement Plan for Directors (the
“Plan”) is to provide valuable retirement and other benefits to Board members
who are selected to participate in the Plan and who satisfy the requirements
prescribed by the Plan and Adoption Agreement for the receipt of those
benefits.

      


      This Plan
will only be for those Directors shown in Section 3 of the Adoption Agreement
and no additional Directors may be added to this Plan.

      


      The Plan
was originally adopted effective May 24, 2005. This amendment and restatement of
the Plan was adopted effective December 18, 2008 in order to ensure the Plan’s
compliance with additional rules and regulations under Code Section 409A
governing nonqualified deferred compensation arrangements.

      


      ARTICLE
I

      DEFINITIONS

      


      1.01           Accrued
Benefit

      


      Accrued
Benefit is defined in the Adoption Agreement.

      


      1.02           Adoption
Agreement

      


      Adoption
Agreement means the agreement entered into by the Employer evidencing adoption
of the Plan and selection of key Plan terms and conditions and is incorporated
by reference herein.

      


      1.03           Affiliate

      


      Affiliate
means any entity that is a member of a controlled group of Employers, as defined
in Code section 414(b) or a group of trades or businesses under common
control, as defined in Code section 414(c), of which the Employer is a member
according to Code section 414(b) or Code section 414(c), and which has,
with the approval of the Board, adopted the Plan by action of its
board.

      


      1.04           Board

      


      Board
means the Board of Directors of Capital Bank Corporation or any successor
corporation or bank. Service on an advisory board of any Employer or Affiliate
shall not constitute Board service for purpose of this Plan.

      


      1.05           Cause

      


      Unless
otherwise defined in the Adoption Agreement, Cause means fraud or dishonesty
involving the assets of the Employer or an Affiliate or the conviction of, or
pleading guilty or nolo
contendre to, a felony or embezzlement from the Employer or an
Affiliate.

      


      1.06           Change
in Control

      


      For
purposes of this Plan, the term “Change in Control” shall mean any of the
following:

      


      (i)           Any
“person” (as such term is used in Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Act”)) acquiring “beneficial ownership”
(as such term is used in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Capital Bank Corporation (“the Corporation”), the parent
holding company of Capital Bank (the “Bank”), representing more than fifty
percent (50%) of the total fair market value or total voting power of the
Corporation’s then outstanding voting securities, but excluding for this purpose
an acquisition by the Corporation or by an employee benefit plan (or related
trust) of the Corporation.

      

        
          
             


          

          
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      (ii)           The
shareholders of the Corporation approve a reorganization, share exchange, merger
or consolidation related to the Corporation following which the owners of the
total voting power of the Corporation immediately prior to the closing of such
transaction do not beneficially own, directly or indirectly, more than forty
percent (40%) of the total voting power of the Corporation.

      


      (iii)           A
majority of the Corporation’s Board is replaced during any 12-month period by
Directors whose appointment or election is not endorsed by a majority of the
members of the Corporation’s Board prior to the date of such appointment or
election.

      


      (iv)           The
shareholders of the Corporation approve a complete liquidation or dissolution of
the Corporation, or a sale or other disposition of all or greater than sixty
percent (60%) of the assets of the Corporation.

      


      In no
event, however, will a “Change in Control” include a transaction, or series of
transactions, whereby the Corporation or the Bank becomes a subsidiary of a
holding company if the shareholders of the holding company are substantially the
same as the shareholders of the Corporation prior to such transaction or series
of transactions.

      


      1.07           Code

      


      Code
means the Internal Revenue Code of 1986, as amended.

      


      1.08           Control
Change Date

      


      Control
Change Date means the date on which a Change in Control occurs. If a Change in
Control occurs as a result of a series of transactions, the Control Change Date
is the date of the last of such transactions.

      


      1.09           Designated
Beneficiary

      


      Designated
Beneficiary means the person, persons, entity, entities or the estate of a
Participant which is designated by the Participant or beneficiary to receive any
benefits that may become payable under the Plan as a result of a Participant’s
death. If there is no Designated Beneficiary for any reason then the
Participant’s Designated Beneficiary shall be the Participant’s surviving
spouse, (i.e., the
person to whom the Participant was legally married on the date of the
Participant’s death) and if there is no surviving spouse then the Designated
Beneficiary shall be the Participant’s children, per stirpes, and, if none,
the Designated Beneficiary shall be the Participant’s estate.

      


      1.10           Eligible
Board Member

      


      Eligible
Board Member means an individual who is a member of the Board as of the date of
the adoption of the Plan and not an active employee of the Employer, except for
William Gilliam who has been expressly designated as an Eligible Board Member
despite being an active employee. Only individuals listed in Item 3 of the
Adoption Agreement are eligible to participate in the Plan.

      


      1.11           Employer

      


      Employer
means Capital Bank, Capital Bank Corporation and any successor employer that
sponsors this Plan.

      


      1.12           Participant

      


      Participant
means an Eligible Board Member who is designated to participate in the Plan in
accordance with Article II or a former Eligible Board Member who has
accrued a vested benefit under the Plan. Names of all Participants shall be
listed in item 3 of the Adoption Agreement and no additional Participants will
be eligible to participate in this Plan.

      


      1.13           Plan

      


      Plan
means this Supplemental Retirement Plan for Directors, together with the
Adoption Agreement as completed by the Employer.


      
        
           


        

        
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      1.14           Year
of Service

      


      Year of
Service is defined in the Adoption Agreement.

      


      ARTICLE
II

      PARTICIPATION

      


      An
Eligible Board Member shall become a Participant in the Plan effective as of the
date he is designated a Participant by the Board. Whether a benefit is payable
under the Plan to or on behalf of a Participant whose board service with the
Employer and its Affiliates has terminated shall be determined under the
remaining provisions of the Plan. An individual who is entitled to receive a
benefit under the Plan following termination of Board service shall continue to
be a Participant until that benefit has been paid in full, either to the
Participant or the Designated Beneficiary. An individual who is not entitled to
receive a benefit under the Plan following termination of Board service shall
cease to be a Participant on the date that Board service with the Employer and
its Affiliates terminates or is terminated.

      


      ARTICLE
III

      BENEFITS

      


      Subject
to the limitations set forth in Articles IV and V, the benefits of a Participant
and his Designated Beneficiary shall be as follows:

      


      3.01           Retirement
Benefit

      


      A
Participant shall be entitled to the benefit described in this Section 3.01 if
the Participant’s Board service with the Employer and its Affiliates terminates
for a reason other than the Participant’s death or Disability. A Participant
described in the preceding sentence shall be entitled to receive his or her
Accrued Benefit as defined in the Adoption Agreement and any applicable
provisions of this Plan. The payment of the annual benefit described in this
Section 3.01 shall commence on the first day of the year after both the
Participant’s termination of Board service with the Employer (and its
Affiliates) and after attaining age 72 unless there has been a Change in
Control. Each annual retirement benefit payment provided for in this Section
3.01 shall be made in a lump sum payment within the first thirty-one (31) days
of each calendar year for which the Participant is entitled to a retirement
benefit hereunder.

      


      In the
event of a Change in Control, all benefits will be payable in a lump sum and
present valued to the payment date. Such payment date shall be as soon as
administratively practicable following the Control Change Date but in no event
later than ninety (90) days following the Control Change Date. The present value
for such purposes shall be calculated assuming a stream of ten (10) annual
payments equal to the Participant’s Accrued Benefit commencing on the Control
Change Date and utilizing a discount rate equal to a ten year constant maturity
treasury security.

      


      3.02           Death
Benefits

      


      In the
event a Participant’s Board service terminates due to a Participant’s death or
in the event a Participant dies before all of the Retirement Benefits to be
provided to the Participant under this Plan are paid out, the Participant’s
Accrued Benefit shall be paid out to the Participant’s Designated Beneficiary as
Death Benefits in accordance with this Section 3.02 as follows:

      


      (a)           If
a Participant dies while a Director of the Employer or an Affiliate, the
Designated Beneficiary of a Participant shall be entitled to receive the
Participant’s Accrued Benefit. The annual benefit payable under this Section
3.02(a) shall commence on the first day of the calendar year immediately
following the Participant’s death. Such annual payments shall be made in a lump
sum within the first thirty-one (31) days of each calendar year for which the
Participant is entitled to an Accrued Benefit under the Plan. The Designated
Beneficiary shall have the right to designate in writing a beneficiary to
receive any benefits remaining to be paid under this Section 3.02(a) upon the
death of the Designated Beneficiary. If no such designation has been made (or
any such successor designated beneficiary fails to survive the Designated
Beneficiary or is not in existence on the date of the death of the Designated
Beneficiary), any remaining benefits payable under this Section 3.02(a) shall be
paid to the Designated Beneficiary’s estate.


      
        
           


        

        
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      (b)           In
the event a Participant dies (i) after termination of Board service with the
Employer and its Affiliates, and (ii) after the commencement of payment of
Accrued Benefits to the Participant in accordance with Section 3.01 but (iii)
before the payment of all Accrued Benefits due the Participant under the Plan,
such payments shall continue to be paid to the Designated Beneficiary on the
same schedule and in the same form and amount as paid to the Participant until
such benefits are fully paid. The Designated Beneficiary shall have the right to
designate in writing a successor beneficiary to receive any benefits remaining
to be paid under this Section 3.02(b) upon the death of the Designated
Beneficiary. If no such designation has been made (or any such designated
beneficiary fails to survive the Designated Beneficiary or is not in existence
on the date of the death of the Designated Beneficiary), any remaining Accrued
Benefits payable under this Section 3.02(b) shall be paid to the Designated
Beneficiary’s estate.

      


      (c)           This
Section 3.02(c) applies if a Participant dies (i) after termination of Board
service with the Employer and its Affiliates, and (ii) before the payment of
benefits due the Participant has commenced. The Designated Beneficiary of a
Participant described in the preceding sentence shall be entitled to receive the
Participant’s Accrued Benefit. The annual benefit payable under this Section
3.02(c) shall commence on the first day of the calendar year immediately
following the Participant’s death. Such annual payments shall be made in a lump
sum within the first thirty-one (31) days of each calendar year for which the
Participant is entitled to an Accrued Benefit under the Plan. The Designated
Beneficiary shall have the right to designate in writing a successor beneficiary
to receive any benefits remaining to be paid under this Section 3.02(c) upon the
death of the Designated Beneficiary. If no such designation has been made (or
any such designated beneficiary fails to survive the Designated Beneficiary or
is not in existence on the date of the death of the Designated Beneficiary), any
remaining benefits payable under this Section 3.02(c) shall be paid to the
Designated Beneficiary’s estate.

      


      3.03           Forms
of Distribution

      


      A
Participant who is entitled to Accrued Benefits under Sections 3.01 and 3.04 and
a Designated Beneficiary who is entitled to Accrued Benefits under Section 3.02
shall receive an annual cash payment within the first thirty-one (31) days of
each calendar year for which the Participant or Designated Beneficiary is
entitled to a Benefit, unless otherwise specified in the Plan.

      


      3.04           Disability

      


      A
Participant that suffers a Disability while serving as a Director of the
Employer and its Affiliates or after leaving service as a Director but prior to
commencement of distribution of Accrued Benefits under the Plan pursuant to
Section 3.01 shall be entitled to all vested Accrued Benefits under the Plan as
of the time of Disability. Distribution of such Accrued Benefits shall commence
with the first calendar year immediately following the date the Director is
determined to be Disabled and shall be paid in equal annual installments for the
number of years equal to the Years of Service accrued by the Participant under
the Plan prior to becoming Disabled. Such annual payments shall be paid to the
Participant within the first thirty-one (31) days of each calendar year in which
the Participant is entitled to an Accrued Benefit. Any Participant who suffers a
Disability after commencement of payments of Accrued Benefits under the Plan
shall continue to receive such payments on the same schedule and at the same
rates as before the Disability. For purposes of this Plan, the term “Disability”
shall mean any physical or mental impairment which, in the opinion of the Board,
constitutes a “disability” as such term is defined in Section 409A(a)(2)(C) of
the Code and the regulations thereunder.

      


      ARTICLE
IV

      VESTING

      


      4.01           Vesting

      


      A
Participant’s right to a Year of Service credit for benefit purposes under the
Plan shall fully vest upon completion of each Year of Service, except subject to
the Forfeiture provisions below.

      

        
          
             


          

          
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4.02           Forfeiture

      


      Notwithstanding
the above, the Participant and his or her Beneficiary shall forfeit all then
unpaid Benefits under the Plan upon the occurrence of any of the following
events: (i) without the Employer’s prior written consent, the Participant
becomes within one (1) year following termination of service as a director with
Employer or its Affiliates, a senior officer, director, or ten percent (10%) or
more shareholder, directly or indirectly, of a for-profit enterprise engaged in
the business of banking within thirty (30) miles of the Participant’s principal
business office or primary residence any time within the three years prior to
the termination of Participant’s service as a director with Employer; (ii) the
Participant makes any materially disparaging public disclosures about the
Employer following the termination of his or her service with the Employer;
(iii) if the Board determines that the Participant’s separation from service as
a director by Employer and its Affiliates is based on Cause; or (iv) without the
Employer’s prior written consent, the Participant uses any of the Employer’s
propri­etary information for business gain following his or her termination
of service as a Director with the Employer. The provisions of this Section shall
not be applicable in the event of a Change in Control.

      


      ARTICLE
V

      TERMINATION, AMENDMENT OR
MODIFICATION OF PLAN

      


      5.01           Right
to Terminate or Amend

      


      Except as
otherwise specifically provided, the Employer reserves prior to a Change in
Control the right to terminate, amend or modify this Plan, wholly or partially,
at any time and from time to time to the extent allowed under Code Section 409A.
Without the written consent of a Participant or, following the Participant’s
death, his Designated Beneficiary, any such termination, amendment or change may
not adversely affect the benefits paid or obligations to any Participant who
died or otherwise terminated Board service before the termination, amendment, or
change. Such right to terminate, amend or modify the Plan shall be exercised by
the Board.

      


      In the
event of termination of the Plan all vested service credit and Accrued Benefits
under the Plan shall remain payable to the Participants in accordance with
Article III. Participants will not be entitled to any future accrual of
additional Benefits or Years of Service credit after the date the Plan is
terminated or entitled to accelerate distributions as a result of the Plan
termination unless distributions in accordance with the plan termination rules
under Code Section 409A.

      


      5.02           Notice

      


      Section
5.01 notwithstanding, no action to terminate the Plan shall be taken except upon
thirty (30) days’ written notice to each Participant affected
thereby.

      


      5.03           Manner
of Giving Notice

      


      Notices
and elections under this Plan must be in writing. A notice or election is deemed
delivered if it is delivered personally or if it is mailed by registered or
certified mail to the person or business at his or its last known
address.

      


      5.04           Discharge
of Obligation

      


      Except as
provided in Section 5.01 above, upon the termination of this Plan by the
Board, the Plan shall no longer be of any further force or effect and neither
the Employer nor any Participant shall have any further obligation or right
under this Plan.

      

        
          
             


          

          
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ARTICLE
VI

      OTHER BENEFITS AND
AGREEMENTS

      


      The
benefits provided for a Participant and his Beneficiary under the Plan are in
addition to any other benefits available to such Participant under any other
plan or program of the Employer or a participating Affiliate for its employees,
and, except as may otherwise be expressly provided for, the Plan shall
supplement and shall not supersede, modify or amend any other plan or program of
the Employer or a participating Affiliate in which a Participant is
participating.

      


      ARTICLE
VII

      EFFECT OF IRC SECTION
4999

      


      If an
amount payable under this Plan, alone or together with any other compensation or
benefit a Participant has received or may receive, would result in the
Participant’s being subject to an excise tax under Section 4999 of the Code, the
amount payable hereunder may be reduced if so provided in the Adoption
Agreement. Such reduction, if any, shall be made only on those terms (and in
those circumstances) set forth in the Adoption Agreement.

      


      ARTICLE
VIII

      RESTRICTIONS ON TRANSFER OF
BENEFITS

      


      No right
or benefit under the Plan shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, and any attempt to do so shall be
void. No right or benefit hereunder shall in any manner be liable for or subject
to the debts, contracts, liabilities, or torts of the person entitled to such
benefit. If any Participant or Designated Beneficiary under the Plan should
become bankrupt or attempt to anticipate, alienate, sell, assign, pledge,
encumber or charge any right to a benefit hereunder, then such right or benefit,
in the discretion of the Board, shall cease and terminate, and, in such event,
the Board may hold or apply the same or any part thereof for the benefit of such
Participant or Designated Beneficiary, his or her spouse, children, or other
dependents, or any of them, in such manner and in such portion as the Board may
deem proper.

      


      ARTICLE
IX

      ADMINISTRATION OF THE
PLAN

      


      9.01           Plan
Administration

      


      (a)           The
Plan shall be administered by the Board or the Compensation Committee of the
Board (“Committee”) if the Board so designates. In the event the Board does not
designate the Committee to administer the Plan, all remaining references in this
Article IX pertaining to Committee will refer instead to the Board. Subject to
the provisions of the Plan, the Committee may adopt such rules and regulations
as may be necessary to carry out the purposes hereof. The Committee’s
interpretation and construction of any provision of the Plan shall be final and
conclusive.

      


      (b)           In
addition to the powers hereinabove specified, the Committee shall have the power
to compute and certify the amount and kind of benefits from time to time payable
to Participants and Beneficiaries under the Plan, and to authorize all
disbursements for such purposes.

      


      (c)           Except
as otherwise expressly provided in the Plan, the Board (or the Committee, as
appropriate) shall have complete control of the administration of the Plan, with
all powers necessary to enable it to carry out its duties in that respect. Not
in limitation, but in amplification of the foregoing, the Board or Committee, as
appropriate, shall have the power in its sole discretion, to interpret or
construe the Plan and to determine all questions that may arise hereunder as to
the status and rights of Participants and others hereunder. Further, any review
of discretionary actions and determinations of such Board or Committee shall be
limited to an arbitrary and capricious standard of review.

      

        
          
             


          

          
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      9.02           Reports
and Records

      


      To enable
the Committee to perform its functions, the Employer and any participating
Affiliate shall supply full and timely information to the Committee on all
matters relating to the compensation of all Participants, their retirement,
death or other cause for termination of Board service, and such other pertinent
facts as the Committee may require.

      


      9.03           Claims

      


      The
benefit claims review procedure set forth in the Capital Bank Corporation 401(k)
Plan, as amended from time to time, is incorporated herein by reference and made
applicable to the Plan.

      


      9.04           Indemnification

      


      The
Employer shall indemnify and save harmless each member of the Board against any
and all expenses and liabilities arising out of membership on the Board and
relating to administration of the Plan, excepting only expenses and liabilities
arising out of a member’s own willful misconduct. Expenses against which a
member of the Board shall be indemnified hereunder shall include, without
limitation, the amount of any settlement or judgment, costs, counsel fees, and
related charges reasonably incurred in connection with a claim asserted, or a
proceeding brought or settlement thereof. The foregoing right of indemnification
shall be in addition to any other rights to which any such member may be
entitled.

      


      ARTICLE
X

      GENERAL

      


      10.01           Funding

      


      (a)           All
Plan Participants and Designated Beneficiaries are general unsecured creditors
of the Employer with respect to the benefits due hereunder and the Plan
constitutes a mere promise by the Employer to make benefit payments in the
future. It is the intention of the Employer that the Plan be considered unfunded
for tax purposes and for purposes of Title I of the Employee Retirement Income
Security Act of 1974, as amended.

      


      (b)           The
Employer may purchase life insurance in amounts sufficient to secure the
benefits provided under this Plan. Participants agree to use their best efforts
to qualify for life insurance coverage if the Employer so elects to obtain life
insurance coverage on a Participant as a means of funding Accrued
Benefits.

      


      (c)           The
Employer may, but is not required to, establish a grantor trust which may be
used to hold assets of the Employer which are maintained as reserves against the
Employer’s unfunded, unsecured obligations hereunder. Such reserves shall at all
times be subject to the claims of the Employer’s creditors and the creditors of
any Affiliate that is an employer of a Participant. To the extent such trust or
other vehicle is established, the Employer’s obligations hereunder shall be
reduced to the extent such assets are utilized to meet its obligations
hereunder. Any such trust and the assets held thereunder are intended to conform
in substance to the terms of the model trust described in Revenue Procedure
92-64, 1992-33 IRB 11 (8-17-92). Any trust that satisfies the foregoing
requirements must be in effect as of a Control Change Date and the Employer, no
later than thirty (30) days after a Control Change Date, shall transfer to the
trust assets (either money, insurance policies or other property) in an amount
that is not less than the actuarially equivalent value of all obligations that
are owed or projected to be owed to all Participants and Designated
Beneficiaries on and after the Control Change Date. For purposes of the
preceding sentence, the value on any given date of insurance policies held in or
transferred to the trust shall be equal to the unencumbered cash surrender value
of the policies.

      


      10.02           Plan
Binding

      


      The Plan
shall be binding upon the Employer, any participating Affiliate and successors
and assigns, and, subject to the powers set forth in Article V, upon a
Participant’s or a Designated Beneficiary’s assigns, heirs, executors and
administrators.


      
        
           


        

        
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      10.03           Interpretation
of Plan

      


      To the
extent not preempted by federal law, the Plan shall be governed and construed
under the laws of State indicated in the Adoption Agreement (other than its
choice of law rules) as in effect from time to time.

      


      10.04           Construction

      


      Masculine
pronouns wherever used shall include feminine pronouns and the use of the
singular shall include the plural.

      


      10.05           Actuarial
Equivalence

      


      For
purposes of the Plan, the terms “actuarial equivalence,” “actuarially
equivalent” and variations thereof mean that on the date of calculation two
forms of payment have equal values as determined by an independent actuarial
consulting firm selected by the Employer. Such actuarial consulting firm shall
determine actuarial equivalence using the interest rate for an immediate annuity
published by the Pension Benefit Guaranty Corporation and in effect on the date
of calculation.

      


      10.06           Compliance with Code Section
409A

      


      This Plan
is intended to comply with Code Section 409A so that no payments to a
Participant hereunder will be subject to the additional tax imposed by Code
Section 409A. Any ambiguities with respect to any provisions in this Plan
shall be construed and interpreted and the Plan and all benefits provided
hereunder shall be administered to ensure compliance with Code Section 409A. If
any provision of the Agreement would otherwise frustrate or conflict with such
intent, such provision shall be interpreted and deemed amended so as to avoid
such conflict to the maximum extent permissible by Code Section 409A. In
accordance with Section 1.409A-3(d) of the Treasury Regulations issued
under Code Section 409A, a distribution under this Plan shall be treated as made
on the designated payment date if the payment is made (i) at such date or a
later date within the same calendar year, or if later, by the 15th day of the
third month following the date designated in the Plan (provided a Participant
may not, directly or indirectly, designate the year of payment), or (ii) at
a date no earlier than 30 days before the designated payment date (provided
a Participant may not directly or indirectly designate the taxable year of the
payment). Any reference in this Plan to a Participant’s termination of service,
separation from service, or similar term shall mean the Participant’s
“Separation from Service” with the Employer as such term is defined under Code
Section 409A. For purposes of Code Section 409A, each installment payment under
the Plan shall be regarded as a separate payment. Notwithstanding anything in
this Agreement to the contrary, if a Participant should ever be considered a
“Specified Employee” of a public company as such term is defined in Code Section
409A(a)(2)(B) and if payment of any amount under this Agreement is required to
be delayed for a period of six months after Separation from Service in
accordance with Code Section 409A, then payment of such amount shall be delayed
as required by Code Section 409A and instead paid on the first business day of
the seventh month following the Director’s Separation from Service.

      

        
          
             


          

          
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SUPPLEMENTAL
RETIREMENT PLAN

      FOR
DIRECTORS

      ADOPTION
AGREEMENT1

      


      1.           Employer
Information

      


      
        
          
            
              	 
      	
                      Name:

                    	
                      Capital
      Bank

                    	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                      Address:

                    	
                      333
      Fayetteville Street, Suite 700, Raleigh, NC 27601

                    	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                      Telephone:

                    	
                      (919)
      645-4000

                    	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                      Employer
      Tax Identification Number:

                    	
                      56-2032984

                    	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                      Type
      of Business Entity:

                    	
                       þ  C
      Corporation

                    	 
      	
                       o  Sole
      Proprietorship

                    	 
      
	 
      	 
      	 
      	
                       o 
      S-Corporation

                    	 
      	
                       o 
      Partnership

                    	 
      
	 
      	 
      	 
      	
                       o 
      LLC

                    	 
      	
                       o  Other
      (Specify)

                    	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                      The
      employer is a member of:

                    	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                      (i)  a
      controlled group?

                    	
                       þ 
      yes

                    	 
      	
                       o 
      no

                    	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                      (ii)  an
      affiliated service group?

                    	
                       o 
      yes

                    	 
      	
                       þ 
      no

                    	 
      


            

          

        

      

      


      


      2.           Plan
Information

      


      Original Effective Date of Plan: May
24, 2005. This Amendment and Restatement is effective as of December 18,
2008.

      


      State Law to be Used For Plan Article X
in Interpreting the Plan:  North Carolina

      


      3.           Definition:
Accrued Benefit

      


      Accrued Benefit means: an Annual
Benefit listed below that will result in annual income for a term equal to Years
of Service on the Board (maximum term = 10 years) as defined in Section 4 of
this Adoption Agreement.

      


      
        
          
            
              
                
                  
                    	 
      	
                            Participant

                          	
                            Annual
      Benefit

                          	 
      
	 
      	 
      	 
      	 
      
	 
      	
                            Charles
      Atkins

                          	
                            $15,000

                          	 
      
	 
      	
                            Bill
      Burkhardt

                          	
                            $28,000

                          	 
      
	 
      	
                            Leopold
      Cohen

                          	
                            $30,625

                          	 
      
	 
      	
                            William
      Gilliam

                          	
                            $15,875

                          	 
      
	 
      	
                            John
      Grimes

                          	
                            $14,625

                          	 
      
	 
      	
                            Robert
      Jones

                          	
                            $24,750

                          	 
      
	 
      	
                            Buddy
      Keller

                          	
                            $100,000

                          	 
      
	 
      	
                            Oscar
      Keller

                          	
                            $32,156

                          	 
      
	 
      	
                            James
      Moser

                          	
                            $33,469

                          	 
      
	 
      	
                            George
      Perkins

                          	
                            $14,625

                          	 
      
	 
      	
                            Don
      Perry

                          	
                            $24,938

                          	 
      
	 
      	
                            Carl
      Ricker

                          	
                            $29,969

                          	 
      
	 
      	
                            Rex
      Thomas

                          	
                            $23,625

                          	 
      
	 
      	
                            Sam
      Wornom

                          	
                            $27,563

                          	 
      


                  

                

              

            

          

        

      

      


      1 All
capitalized terms not defined herein, but defined in the Capital Bank
Corporation Supplemental Retirement Plan for Directors plan document, have the
meaning given those terms in the plan document.


      
        
           


        

        
          - 10
-

          
            

          

        

        
           


        

      

      Upon a
Change in Control, prior to a Participant’s termination of service on the Board,
Participants shall be entitled to receive a benefit for a term equal to 10 years
without regard to the actual Years of Service.

       

      4.           Definition: Year of
Service

      


      For
purposes of vesting and benefit accrual:

      


      A “Year
of Service” means any calendar year in which a Participant has at least three
months of Board service with the Employer in a calendar year in which the Plan
is adopted or any subsequent calendar year after the Effective Date of the Plan.
Directors will be given credit for four and one-half (4.5) months of Board
service with the Employer for the 2005 calendar year for service during 2005
prior to the original Effective Date of the Plan which was May 24,
2005.

      


      A
Participant’s Years of Service will be credited with the following additional
Years of Service in recognition of Board service prior to the original Effective
Date of the Plan which was May 24, 2005.

      


      
        
          
            	 
      	
                    Charles
      Atkins

                  	
                    8
      (eight)

                  	 
      
	 
      	
                    Bill
      Burkhardt

                  	
                    8
      (eight)

                  	 
      
	 
      	
                    Leopold
      Cohen

                  	
                    8
      (eight)

                  	 
      
	 
      	
                    William
      Gilliam

                  	
                    3
      (three)

                  	 
      
	 
      	
                    John
      Grimes

                  	
                    6
      (six)

                  	 
      
	 
      	
                    Robert
      Jones

                  	
                    8
      (eight)

                  	 
      
	 
      	
                    Buddy
      Keller

                  	
                    8
      (eight)

                  	 
      
	 
      	
                    Oscar
      Keller

                  	
                    8
      (eight)

                  	 
      
	 
      	
                    James
      Moser

                  	
                    3
      (three)

                  	 
      
	 
      	
                    George
      Perkins

                  	
                    8
      (eight)

                  	 
      
	 
      	
                    Don
      Perry

                  	
                    8
      (eight)

                  	 
      
	 
      	
                    Carl
      Ricker

                  	
                    7
      (seven)

                  	 
      
	 
      	
                    Rex
      Thomas

                  	
                    8
      (eight)

                  	 
      
	 
      	
                    Sam
      Wornom

                  	
                    8
      (eight)

                  	 
      


          

        

      

      


      In no
event, however, shall a Director accrue or be credited with more than a total of
ten (10) Years of Service for any purpose under this Plan.

      


      5.           Vesting Requirements Where
Participant Terminates Service Prior to His Death or
Disability


      A
Participant will be fully vested in all Accrued Benefits unless the Participant
has performed acts consistent with the Forfeiture provisions of Article IV of
the Plan.

      

        
          
             


          

          
            - 11
-

            
              

            

          

          
             


          

        
6.           Golden Parachute
Strategy

      


      Employer
should choose A, B, or C unless the small business corporation exception to Code
Sections 280G and 4999 applies, or the Employer is not considered a corporation
for this purpose, in which case D should be selected. Employer should consult
with its tax advisor in making a selection as to golden parachute strategy and
in determining whether it is a non-corporate entity for this purpose or whether
the small business corporation exception applies. Employer should also revisit
this strategy prior to any event that could change its status for golden
parachute purposes.

      


      If an
amount payable under the Plan, alone or together with other compensation, causes
a Participant to be subject to an excise tax under Section 4999 of the Code,
such amount will be:

      


      
        
          	 
      	 
      o	
                  A.  Reduced
      or deferred to the smallest extent necessary to prevent the Participant
      from incurring the excise tax.

                
	 
      	 
      	 
      
	 
      	 
      þ	
                  B.  Reduced
      to the smallest extent necessary to prevent the Participant from incurring
      the excise tax, but only if a Participant retains a greater portion of the
      amount payable under the Plan, on an after-tax basis, as a result of the
      reduction or deferral.

                
	 
      	 
      	 
      
	 
      	 
      o	
                  C.  Supplemented
      with a payment sufficient to reimburse the Participant for the excise tax
      plus income, employment and excise taxes thereon, so that the Participant
      retains the full amount payable under the Plan, as if no excise tax had
      been imposed.

                
	 
      	 
      	 
      
	 
      	 
      o	
                  D.  Not
      applicable.

                


        

      

       

      
        	
                7.

              	
                Signatures

              


      

      


      IN
WITNESS WHEREOF, Employer has executed this Amended and Restated Adoption
Agreement effective this 18th day of December, 2008.

      


      
        
          
            	 
      	
                    CAPITAL BANK AND CAPITAL BANK
      CORPORATION

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:  /s/
      B. Grant
      Yarber

                  	 
      
	 
      	
                    B. Grant
    Yarber

                  	 
      
	 
      	
                    President and Chief Executive Officer

                  	 
      


          

        

      

      

        
          
             


          

          
            - 12
-