Document:

Capital Split Dollar Agreement

  
 Exhibit 10.29 
  
 CAPITALBANK 
 SPLIT DOLLAR AGREEMENT 
  
 THIS AGREEMENT is made and entered into this 17th day of October, 2002, by and between CAPITALBANK, a state-chartered commercial bank
located in Greenwood, South Carolina (the “Company”), and TAYLOR T. STOKES (the “Executive”). 
  
 This Agreement shall append the Split Dollar Endorsement entered into on October 17, 2002, or as subsequently amended, by and between the aforementioned parties. 
  
 INTRODUCTION 
  
 To encourage the
Executive to remain an employee of the Company, the Company is willing to divide the death proceeds of a life insurance policy on the Executive’s life. The Company will pay life insurance premiums from its general assets. 

 
 Article 1 
 General Definitions

  
 The following terms shall have the meanings specified: 
  
 1.1  “Change of Control” means the first to occur of the following: 
  

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

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

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

  
 For purposes hereof, an “Affiliate” is any entity controlling, controlled by, or under common control with the Company.
For this purpose, “control” means legal or beneficial ownership of fifty (50%) percent or more of the equity or voting interests in an entity. 
  
 1.2  “Disability” means the Executive’s suffering a sickness, accident or injury which has been determined by the carrier of any individual or group disability insurance
policy covering the Executive, or by the Social Security Administration, to be a disability rendering the Executive totally and permanently disabled. The Executive must submit proof to the Company of the carrier’s or Social Security
Administration’s determination upon the request of the Company. 
  
 1.3  “Insurer”
means Jefferson Pilot Financial. 

 
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 1.4  “Policy” means insurance policy no. AH5255185 issued by the Insurer. 

 
 1.5  “Insured” means the Executive. 
  
 1.6  “Normal Retirement Age” means the earliest of August 31st following the Executive’s 62nd birthday, the date of Termination of Employment on account of Disability or the date of a Change of Control. 
  
 1.7  “Termination of Employment” means that the Executive ceases to be employed by the Company. 
  
 Article 2 
 Policy Ownership/Interests 
  
 2.1  Company Ownership.    The Company is the sole owner of the Policy and shall have the right to
exercise all incidents of ownership. The Company shall be the direct beneficiary of an amount of death proceeds equal to the greater of: a) the cash surrender value of the policy, b) the aggregate premiums paid on the Policy by the Company less any
outstanding indebtedness to the Insurer or c) the total death proceeds less the split dollar amount. The split dollar amount shall be 50% of the difference between the total policy death proceeds and the policy cash surrender value at the date of
the Executive’s death. 
  
 2.2  Executive’s Interest.    The Executive
shall have the right to designate the beneficiary of any remaining death proceeds of the Policy. The Executive shall also have the right to elect and change settlement options that may be permitted. Provided, however, the Executive, the
Executive’s transferee or the Executive’s beneficiary shall have no rights or interests in the Policy with respect to that portion of the death proceeds designated in this section 2.2 upon the Executive’s Termination of Employment
prior to Normal Retirement Age. 
  
 2.3  Option to Purchase.    The Company
shall not sell, surrender or transfer ownership of the Policy while this Agreement is in effect without first giving the Executive or the Executive’s transferee the option to purchase the Policy for a period of sixty (60) days from written
notice of such intention. The purchase price shall be an amount equal to the cash surrender value of the Policy. This provision shall not impair the right of the Company to terminate this Agreement. 
  
 2.4  Comparable Coverage.    Upon Termination of Employment after the Executive’s Normal
Retirement Age, the Company shall maintain the Policy in full force and effect and in no event shall the Company amend, terminate or otherwise abrogate the Executive’s interest in the Policy, unless the Company replaces the Policy with a
comparable insurance policy to cover the benefit provided under this Agreement. The Policy or any comparable policy shall be subject to the claims of the Company’s creditors. 
  
 Article 3 
 Premiums 
  
 3.1  Premium Payment.    The Company shall pay any premiums due on the Policy. 

 
 2 

 3.2  Imputed Income.    The Company shall impute income to the Executive in an
amount equal to the current term rate for the Executive’s age multiplied by the aggregate death benefit payable to the Executive’s beneficiary. The “current term rate” is the minimum amount required to be imputed under Revenue
Rulings 64-328 and 66-110, or any subsequent applicable authority. 
  
 Article 4 
 Assignment 
  
 The Executive may assign
without consideration all interests in the Policy and in this Agreement to any person, entity or trust. In the event the Executive transfers all of the Executive’s interest in the Policy, then all of the Executive’s interest in the Policy
and in the Agreement shall be vested in the Executive’s transferee, who shall be substituted as a party hereunder and the Executive shall have no further interest in the Policy or in this Agreement. 
  
 Article 5 
 Insurer 
  
 The Insurer shall be bound only by the terms of the Policy. Any payments the Insurer makes or actions it takes in accordance with the
Policy shall fully discharge the Insurer and Company from all claims, suits and demands of all entities or persons. The Insurer shall not be bound by or be deemed to have notice of the provisions of this Agreement. 
  
 Article 6 
 Claims Procedure 

 
 6.1  Claims Procedure.    An Executive or beneficiary (“claimant”) who has not
received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows: 
  
 6.1.1  Initiation – Written Claim.    The claimant initiates a claim by submitting to the Company a written claim for the benefits. 
  
 6.1.2  Timing of Company Response.    The Company shall respond to such claimant
within 90 days after receiving the claim. If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional 90 days by notifying the claimant in
writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision. 

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

 
 3 

  

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

  

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

  

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

  

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

  
 6.2  Review Procedure.    If the Company denies part or all of the
claim, the claimant shall have the opportunity for a full and fair review by the Company of the denial, as follows: 
  
 6.2.1  Initiation – Written Request.    To initiate the review, the claimant, within 60 days after receiving the Company’s notice of denial, must file with the Company a written
request for review. 
  
 6.2.2  Additional Submissions – Information
Access.    The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Company shall also provide the claimant, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits. 
  
 6.2.3  Considerations on Review.    In considering the review, the Company shall take into account all materials and
information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. 
  
 6.2.4  Timing of Company Response.    The Company shall respond in writing to such claimant within 60 days after
receiving the request for review. If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional 60 days by notifying the claimant in writing, prior
to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision. 
  
 6.2.5  Notice of Decision.    The Company shall notify the claimant in writing of its
decision on review. The Company shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: 
  

	 	(a)
	 
	The specific reasons for the denial, 
 

  

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

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

  

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

  
 Article 7 
 Amendments and Termination

  
 This Agreement may be amended or terminated only by a written agreement signed by the Company and the
Executive. However, unless otherwise agreed to by the Company and the Executive, this Agreement will automatically terminate upon the Executive’s Termination of Employment prior to Normal Retirement Age other than following a Change of Control
or on account of Disability. 
  
 Article 8 
 Miscellaneous 
  
 8.1  Binding Effect.    This Agreement
shall bind the Executive and the Company, their beneficiaries, survivors, executors, administrators and transferees, and any Policy beneficiary. 
  
 8.2  No Guarantee of Employment.    This Agreement is not an employment policy or contract. It does not give the Executive the right to remain a Executive or
employee of the Company, nor does it interfere with the Company’s right to discharge the Executive. It also does not require the Executive to remain an Executive nor interfere with the Executive’s right to terminate service at any time.

  
 8.3  Applicable Law.    The Agreement and all rights hereunder shall be
governed by and construed according to the laws of the State of South Carolina, except to the extent preempted by the laws of the United States of America. 
  
 8.4  Reorganization.    The Company shall not merge or consolidate into or with another company, or reorganize, or sell substantially
all of its assets to another company, firm or person unless such succeeding or continuing company, firm or person agrees to assume and discharge the obligations of the Company. 
  
 8.5  Notice.    Any notice, consent or demand required or permitted to be given under the provisions of this Split Dollar Agreement by
one party to another shall be in writing, shall be signed by the party giving or making the same, and may be given either by delivering the same to such other party personally, or by mailing the same, by United States certified mail, postage
prepaid, to such party, addressed to his or her last known address as shown on the records of the Company. The date of such mailing shall be deemed the date of such mailed notice, consent or demand. 
  
 8.6  Entire Agreement.    This Agreement constitutes the entire agreement between the Company and the
Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein. 

 
 5 

 8.7  Administration.    The Company shall have powers which are necessary to
administer this Agreement, including but not limited to: 
  
 (a) Interpreting the provisions of the
Agreement; 
 (b) Establishing and revising the method of accounting for the Agreement; 
 (c) Maintaining a record of benefit payments; and 
 (d) Establishing rules and prescribing any forms necessary or desirable to administer the Agreement. 
  
 8.8  Named Fiduciary.    The Company shall be the named fiduciary and plan administrator under the Agreement. The named fiduciary may delegate to others certain aspects of the management and
operation responsibilities of the plan including the employment of advisors and the delegation of ministerial duties to qualified individuals 
  
 IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written. 
  
 
	 EXECUTIVE:
 	 	  	 	 COMPANY: 
  
 CAPITALBANK
 
	 
	 /s/ TAYLOR T. STOKES         
 
	 	  	 	 By    /s/ WILLIAM G. STEVENS        
 

	 TAYLOR T. STOKES
 	 	  	 	 Title President and Chief Executive Officer
 

 

 
 6 

  
 SPLIT DOLLAR POLICY ENDORSEMENT 
 CAPITALBANK SPLIT DOLLAR AGREEMENT 
  
 
	 Policy No. AH5255185
 	 	 Insured: TAYLOR T. STOKES
 

 
  
 Supplementing and amending the application for insurance to Jefferson Pilot Financial
(“Insurer”) on July 15, 2002, the applicant requests and directs that: 
  
 BENEFICIARIES

  
 1.  CAPITALBANK, a federally-chartered savings association located in Greenwood, South Carolina
(the “Company”), shall be the direct beneficiary of death proceeds equal to the greater of (a) the cash surrender value of the policy, (b) the aggregate premiums paid on the Policy by the Company less any outstanding indebtedness to the
Insurer or (c) the total death proceeds less the split dollar amount. The split dollar amount shall be 50% of the difference between the total policy death proceeds and the policy cash surrender value at the date of the Executive’s death.

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

 
 3.  The Owner of the policy shall be the Company. The Owner shall have all ownership rights in the Policy except as
may be specifically granted to the Insured or the Insured’s transferee in paragraph (4) of this endorsement. 
  
 4.  The Insured or the Insured’s transferee shall have the right to assign his or her rights and interests in the Policy with respect to that portion of the death proceeds designated in paragraph (2) of this
endorsement, and to exercise all settlement options with respect to such death proceeds. 
  
 5.  Notwithstanding the provisions of paragraph (4) above, the Insured or the Insured’s transferee shall have no rights or interests in the Policy with respect to that portion of the death proceeds designated in
paragraph (2) of this endorsement if the Insured ceases to serve as an Executive of the Company prior to the earliest of August 31st following the Insured’s 62nd birthday, termination of employment on
account of Disability as defined in Section 1.2 of the Split Dollar Agreement or a Change of Control as defined in Section 1.1 of the Split Dollar Agreement, unless otherwise agreed to by the Company and the Insured. 

 
 7 

  
 MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY 

 
 Upon the death of the Insured, the interest of any collateral assignee of the Owner of the Policy designated in (3) above shall be limited to the
portion of the proceeds described in paragraph (1) above. 
  
 OWNERS AUTHORITY 
  
 The Insurer is hereby authorized to recognize the Owner’s claim to rights hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The signature of the Owner shall be sufficient for the exercise of any rights under this Endorsement and the receipt of the Owner for any sums received by it shall be a
full discharge and release therefore to the Insurer. 
  
 Any transferee’s rights shall be subject to this Endorsement. 

 
 The owner accepts and agrees to this Split Dollar Endorsement. 
  
 Signed at Greenwood, South Carolina, this 17th day of October, 2002. 
  
 CAPITALBANK 
  
 
	 
	 By
 	 	 William G. Stevens
 

 
  
 Its President and Chief Executive Officer 
  
 The Insured accepts and agrees to the foregoing and, subject to the rights of the Owner as stated above, designates the following beneficiaries of the portion of
the proceeds described in (2) above: 
  
 Primary beneficiary: Cynthia J. Stokes 
  
 Relationship to Insured: Spouse 
  
 Secondary Beneficiary: “The Estate of” 
  
 Relationship to Insured: N/A 
  
 Signed at Greenwood, South Carolina, this 17th day of October, 2002. 

 
 
	 THE INSURED:
 	 	  	 	  
	 
	 /s/ Taylor T. Stokes            
 
	 	  	 	  	 	  
	 TAYLOR T. STOKES
 	 	  	 	  	 	  

 

 
 8CapitalBank Salary Continuation Agreement

  
 Exhibit 10.30 
  
 CAPITALBANK 
 SALARY CONTINUATION AGREEMENT 
  
 THIS AGREEMENT is adopted this 17th day of October, 2002, by and between CAPITALBANK, a state-chartered commercial bank located in
Greenwood, South Carolina (the “Company”), and WALTER G. STEVENS (the “Executive”). 
  
 INTRODUCTION

  
 To encourage the Executive to remain an employee of the Company, the Company is willing to provide salary
continuation benefits to the Executive. The Company will pay the benefits from its general assets. 
  
 AGREEMENT

  
 The Company and the Executive agree as follows: 
  
 Article 1 
 Definitions 
  

Whenever used in this Agreement, the following words and phrases shall have the meanings specified: 
  
 1.1  “Benefit Amount” means 40% of the Executive’s Compensation. 
  
 1.2  “Change of Control” means the first to occur of the following: 
  

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

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

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

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

  
 1.3  “Code” means the Internal Revenue Code of 1986,
as amended. 
  
 1.4  “Compensation” means the highest average annual combined total of
annual base salary paid plus bonus earned for such year calculated for a three consecutive year period occurring in the most recently completed five calendar year period at the date of Termination of Employment. If the Executive has not been
employed by the Company for three full calendar years at the time of Termination of Employment, the average calculation will be based on the number of completed calendar years of employment. (Example: Executive is hired at the beginning of year 1.
Base salary paid and bonus earned in year1, respectively, are $100,000 and $10,000; year 2 are $110,000 and $11,000; year 3 are $90,000 and $9,000; year 4 are $110,000 and $5,000; year 5 are $95,000 and $15,000. If termination of employment occurs
in at the end of year 5, Compensation for purposes of this Agreement will be $111,667, the average annual combined base salary paid and bonus earned in years 2-4. If termination of employment occurs at the end of year 2, Compensation for purposes of
this Agreement will be $115,500, the average annual combined base salary paid and bonus earned in years 1 and 2.) 
  
 1.5  “Disability” means the Executive’s suffering a sickness, accident or injury which has been determined by the carrier of any individual or group disability insurance policy covering the Executive,
or by the Social Security Administration, to be a disability rendering the Executive totally and permanently disabled. The Executive must submit proof to the Company of the carrier’s or Social Security Administration’s determination upon
the request of the Company. 
  
 1.6  “Early Termination” means the Termination of
Employment before Normal Retirement Age for reasons other than death, Disability, Termination for Cause or following a Change in Control. 
  
 1.7  “Early Termination Date” means the month, day and year in which Early Termination occurs. 
  
 1.8   “Effective Date” means September 1, 2002. 
  
 1.9   “Normal Retirement Age” means the August 31st
immediately following the Executive’s 62nd birthday. 
  
 1.10 “Normal Retirement Date” means the later of the Normal Retirement Age or Termination of Employment. 

 
 1.11  “PlanYear” means a twelve-month period commencing on September 1st and ending on August 31st of the following year. The initial Plan Year shall commence on the Effective Date of this Agreement. 
  
 1.12  “Termination for Cause” means Termination of Employment by the Company for reasons that shall include, but not be limited to, the commission of any of the following by
the Executive: dishonesty; theft; unethical business conduct; indictment for a felony; indictment for a 

 
 1 

 misdemeanor involving moral turpitude; drug or alcohol addiction; lack of competence in the performance of any duty on behalf of the Company;
violation of the terms and provisions of this Agreement; insubordination or failure to comply with reasonable instructions of the Company; material violation by Executive of any federal or state banking law, rule or regulation; causing or
permitting, whether intentionally or negligently, the Company to materially violate and federal or state banking law, rule or regulation; if Executive is suspended and/or temporarily prohibited from participating in the conduct of the Company’s
affairs by notice served under Section 8(e) of the Federal Deposit Insurance Act (12 U.S.C., Section 1818(e)); or failure of Executive to relocate his residence in accordance with Section 5 of the Executive’s employment agreement in
effect on the Effective Date or as subsequently amended. 
  
 1.13  “Termination of
Employment” means that the Executive ceases to be employed by the Company for any reason, voluntary or involuntary, other than by reason of a leave of absence approved by the Company. 
  

1.14  “Vesting Percentage” means a cumulative ten percent (10%) for each Year of Service until a maximum of one hundred
percent (100%) after ten (10) Years of Service. 
  
 1.15  “Year(s) of
Service” means a full 12-month period of continuous employment (including an approved leave of absence) beginning with the Executive’s date of hire by the Company. 
  
 Article 2 
 Lifetime Benefits 
  
 2.1  Normal Retirement Benefit.    Upon Termination of Employment on or after the Normal Retirement
Age for reasons other than death, the Company shall pay to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Agreement. 
  
 2.1.1  Amount of Benefit.    The annual benefit under this Section 2.1 is the Benefit Amount. 

 
 2.1.2  Payment of Benefit.    The Company shall pay the annual benefit to
the Executive in 12 equal monthly installments commencing with the month following the Executive’s Normal Retirement Date, paying the annual benefit to the Executive for a period of twenty-one years. 
  
 2.2  Early Termination Benefit.    Upon Early Termination, the Company shall pay to the Executive the
benefit described in this Section 2.2 in lieu of any other benefit under this Agreement. 
  
 2.2.1  Amount of Benefit.    The benefit under this Section 2.2 is the Early Termination Annual Benefit set forth in Schedule A for the Plan Year ending immediately prior to the Early Termination
Date (except during the first Plan Year, the benefit is the amount set forth for Plan Year 1), determined by multiplying the Accrual Balance set forth in Schedule A for the 

 
 2 

 Plan Year ending immediately prior to the Early Termination Date by the Vesting Percentage achieved at the Early
Termination Date . Schedule A shall be recalculated each Plan Year to reflect current Compensation based on actual salary and bonus. The resulting Benefit Amount shall be projected to normal retirement date with a 4% annual increase.] This benefit
is determined by calculating a two-hundred fifty-two month fixed annuity from the vested Accrual Balance, crediting interest on the unpaid balance at an annual rate of eight percent, compounded monthly. 
  
 2.2.2  Payment of Benefit.    The Company shall pay the annual benefit to the
Executive in 12 equal monthly installments commencing with the month following the Normal Retirement Age, paying the annual benefit to the Executive for a period of twenty-one years. 
  
 2.3  Disability Benefit.    If the Executive terminates employment due to Disability prior to Normal Retirement Age, the Company shall
pay to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Agreement. 
  
 2.3.1  Amount of Benefit.    The benefit under this Section 2.3 is the Disability Lump-sum Benefit set forth in Schedule A for the Plan Year ending immediately prior to the date in which the
Termination of Employment occurs (except during the first Plan Year, the benefit is the amount set forth for Plan Year 1), determined by vesting the Executive in 100 percent of the Accrual Balance. Schedule A shall be recalculated each Plan Year to
reflect current Compensation based on actual salary and bonus. 
  
 2.3.2  Payment of
Benefit.    The Company shall pay the Accrual Balance to the Executive in a lump sum within 90 days following Termination of Employment.  
  
 2.4  Change of Control Benefit.    Upon Termination of Employment following a Change of Control, the Company shall pay to the Executive
the benefit described in this Section 2.4 in lieu of any other benefit under this Agreement. 
  
 2.4.1  Amount of Benefit.    The benefit under this Section 2.4 is the Change in Control Annual Benefit set forth in Schedule A for the Plan Year ending immediately prior to the date in which
Termination of Employment occurs (except during the first Plan Year, the benefit is the amount set forth for Plan Year 1), determined by vesting the Executive in the Normal Retirement Benefit described in Section 2.1.1 calculated as if the Executive
had remained employed by the Company until the Normal Retirement Age. 
  
 2.4.2  Payment
of Benefit.    The Company shall pay the annual benefit to the Executive in 12 equal monthly installments commencing with the month following the Normal Retirement Age, paying the annual benefit to
the Executive for a period of twenty-one years. 
  
 Article 3 
 Death Benefits 

 
 3 

  
 3.1  Death During Active Service.    If the
Executive dies while in the active service of the Company, the Company shall pay to the Executive’s beneficiary the benefit described in this Section 3.1. This benefit shall be paid in lieu of the benefits under Article 2. 

 
 3.1.1  Amount of Benefit.    The benefit under this Section 3.1 is the
Accrual Balance set forth in Schedule A for the Plan Year ending immediately prior to the Early Termination Date. 
  
 3.1.2  Payment of Benefit.    The Company shall pay the benefit to the Executive’s beneficiary in a lump sum within 90 days following the Executive’s death. 
  
 3.2  Death During Payment of a Lifetime Benefit.    If the Executive dies after any Lifetime Benefit
payments have commenced under this Agreement but before receiving all such payments, the Company shall pay the remaining Accrual Balance at the time of the Executive’s death to the Executive’s beneficiary in a lump sum within 90 days of
the Executive’s death. 
  
 3.3  Death After Termination of Employment But Before Payment of a
Lifetime Benefit Commences.    If the Executive is entitled to a Lifetime Benefit under this Agreement, but dies prior to the commencement of said benefit payments, the Company shall pay the Accrual Balance at the time
of the Executive’s death to the Executive’s beneficiary in a lump sum within 90 days of the Executive’s death. 
  
 Article 4 
 Beneficiaries 
  
 4.1  Beneficiary Designations.    The Executive shall designate a beneficiary by filing a written designation with the Company. The Executive may revoke or modify
the designation at any time by filing a new designation. However, designations will only be effective if signed by the Executive and received by the Company during the Executive’s lifetime. The Executive’s beneficiary designation shall be
deemed automatically revoked if the beneficiary predeceases the Executive, or if the Executive names a spouse as beneficiary and the marriage is subsequently dissolved. If the Executive dies without a valid beneficiary designation, all payments
shall be made to the Executive’s estate. 
  
 4.2   Facility of
Payment.    If a benefit is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent person or incapable person. The Company may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Such
distribution shall completely discharge the Company from all liability with respect to such benefit. 
  
 Article 5

 General Limitations 
  
 5.1  Termination for Cause.    Notwithstanding any provision of this Agreement to the contrary, the Company shall not pay any benefit under this Agreement if the Executive is subject to

 
 4 

 a Termination for Cause. 
  
 5.2  Suicide or Misstatement.    The Company shall not pay any benefit under this Agreement if the Executive commits suicide within three years after the date of this Agreement. In addition, the
Company shall not pay any benefit under this Agreement if the Executive has made any material misstatement of fact on an employment application or resume provided to the Company, or on any application for any benefits provided by the Company to the
Executive. 
  
 5.3  Competition After Termination of Employment.    The Company
shall not pay any benefit under this Agreement if the Executive, without the prior written consent of the Company and within 2 years from the Executive’s Termination of Employment, engages in, becomes interested in, directly or indirectly, as a
sole proprietor, as a partner in a partnership, or as a substantial shareholder in a corporation, or becomes associated with, in the capacity of employee, director, officer, principal, agent, trustee or in any other capacity whatsoever, any
enterprise conducted in the trading area (a 50 mile radius) of the business of the Company, which enterprise is, or may deemed to be, competitive with any business carried on by the Company as of the date of termination of the Executive’s
employment or retirement. This section shall not apply following a Change in Control. 
  
 5.4  Solicitation After Termination of Employment.    The Company shall not pay any benefit under this Agreement if the Executive, without the prior written consent of the Company and within 2
years from the Executive’s Termination of Employment, solicits any employee of the Company for the purpose of hiring such employee away from the Company or solicits any customer of the Company that was a customer of the Company at or prior to
the Executive’s Termination of Employment for the purpose of obtaining such customer’s business relationship in any manner that could be deemed to be competitive to the Company. This section shall not apply following a Change in Control.

  
 Article 6 
 Claims and
Review Procedures 
  
 6.1  Claims Procedure.    The Executive or beneficiary
(“claimant”) who has not received benefits under the Plan that he or she believes should be paid shall make a claim for such benefits as follows: 
  
 6.1.1  Initiation – Written Claim.    The claimant initiates a claim by submitting to the Company a written claim
for the benefits. 
  
 6.1.2  Timing of Company Response.    The
Company shall respond to such claimant within 90 days after receiving the claim. If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional 90
days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Company expects to render its
decision. 

 
 5 

  
 6.1.3  Notice of
Decision.    If the Company denies part or all of the claim, the Company shall notify the claimant in writing of such denial. The Company shall write the notification in a manner calculated to be understood by the claimant.
The notification shall set forth: 
  
 (a) The specific reasons for the denial, 
 (b) A reference to the specific provisions of the Plan on which the denial is based, 
 (c) A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed, 
 (d) An explanation of the Plan’s review procedures and the time limits applicable to such procedures, and 
 (e) A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

  
 6.2  Review Procedure.    If the Company denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the Company of the denial, as follows: 
  
 6.2.1  Initiation – Written Request.    To initiate the review, the claimant, within 60 days after receiving the Company’s notice of denial, must file with the Company a written request
for review. 
  
 6.2.2  Additional Submissions – Information
Access.    The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Company shall also provide the claimant, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits. 
  
 6.2.3  Considerations on Review.    In considering the review, the Company shall take into account all materials and
information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. 
  
 6.2.4  Timing of Company Response.    The Company shall respond in writing to such claimant within 60 days after
receiving the request for review. If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional 60 days by notifying the claimant in writing, prior
to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision. 
  
 6.2.5  Notice of Decision.    The Company shall notify the claimant in writing of its
decision on review. The Company shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: 

 
 6 

  
 (a) The specific reasons for the denial, 
 (b) A reference to the specific provisions of the Plan on which the denial is based, 
 (c) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in
applicable ERISA regulations) to the claimant’s claim for benefits, and 
 (d) A statement of the claimant’s right to bring a
civil action under ERISA Section 502(a). 
  
 Article 7 
 Amendments and Termination 
  
 This Agreement may be amended only by a written
agreement signed by the Company and the Executive. 
  
 Notwithstanding the previous paragraph in this Article 7, the
Company may terminate this Agreement at any time. However, in no event shall this Agreement be terminated under this Article 7 without payment to the Executive of 100% of the Accrual Balance set forth on Schedule A (recalculated as set forth in
Section 2.2.1) for the end of the Plan Year in which termination of the Agreement occurs. 
  
 Article 8 

Miscellaneous 
  
 8.1  Binding Effect.    This Agreement shall bind the Executive and the Company, and their beneficiaries, survivors, executors, successors, administrators and transferees. 
  
 8.2  No Guarantee of Employment.    This Agreement is not an employment policy or contract. It does
not give the Executive the right to remain an employee of the Company, nor does it interfere with the Company’s right to discharge the Executive. It also does not require the Executive to remain an employee nor interfere with the
Executive’s right to terminate employment at any time. 
  
 8.3  Non-Transferability.    Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner. 
  
 7.4  Reorganization.    The Company shall not merge or consolidate into or with another company, or
reorganize, or sell substantially all of its assets to another company, firm, or person unless such succeeding or continuing company, firm, or person agrees to assume and discharge the obligations of the Company under this Agreement. Upon the
occurrence of such event, the term “Company” as used in this Agreement shall be deemed to refer to the successor or survivor company. 
  
 8.5  Tax Withholding.    The Company shall withhold any taxes that are required to be 

 
 7 

 withheld from the benefits provided under this Agreement. 
  
 8.6  Applicable Law.    The Agreement and all rights hereunder shall be governed by the laws of the State of South Carolina, except to
the extent preempted by the laws of the United States of America. 
  
 8.7  Unfunded
Arrangement.    The Executive and beneficiary are general unsecured creditors of the Company for the payment of benefits under this Agreement. The benefits represent the mere promise by the Company to pay such benefits. The
rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executive’s life is a general asset of the Company to
which the Executive and beneficiary have no preferred or secured claim. 
  
 8.8  Entire
Agreement.    This Agreement constitutes the entire agreement between the Company and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than those
specifically set forth herein. 
  
 8.9  Administration.    The Company shall
have powers which are necessary to administer this Agreement, including but not limited to: 
  
 (a)  Establishing and revising the method of accounting for the Agreement; 
  
 (b)  Maintaining a record of benefit payments; 
  
 (c)  Establishing rules and prescribing any forms necessary or desirable to administer the Agreement; and 
  
 (d)  Interpreting the provisions of the Agreement. 
  
 8.10  Named Fiduciary.    The Company shall be the named fiduciary and plan administrator under this Agreement. It may delegate to others certain aspects of the management and operational
responsibilities including the employment of advisors and the delegation of ministerial duties to qualified individuals. 
  
 IN WITNESS WHEREOF, the Executive and the Company have signed this Agreement. 
  
 
	 EXECUTIVE:
 	 	  	 	 COMPANY:
 CAPITALBANK

 
 
	 
	 /s/ WALTER G. STEVENS
 
	 	  	 	 By
 	 	 /s/ WILLIAM G. STEVENS 
 

	 WALTER G. STEVENS
 	 	  	 	 Title
 	 	 President and Chief Executive Officer
 

 
  

 
 8 

  
 BENEFICIARY DESIGNATION 
  
 CAPITALBANK 
 SALARY CONTINUATION AGREEMENT 
  
 WALTER G. STEVENS 
  
 I designate the following as beneficiary of any death benefits under this Agreement: 
  
 Primary:
Margaret M. Stevens 
  
 Contingent: Lucy M. Stevens – 33.3%, Walter G. Stevens, Jr. – 33.3%, William H.
Stevens – 33.3% 

 
 9 

  
 
 

	Note:
	 
	To name a trust as beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement. 

  
 I understand that I may change these beneficiary designations by filing a new written designation with the Company. I further
understand that the designations will be automatically revoked if the beneficiary predeceases me, or, if I have named my spouse as beneficiary and our marriage is subsequently dissolved. 
  
 
	 
	 Signature
 	 	 /s/    Walter G. Stevens        
 

 
  
 Date 10/17/02 
  
  
 Received by the Company this 17th day of , October 2002. 
  
 
	 
	 By:
 	 	 /s/    William G. Stevens      
 

	 Title
 	 	 President and Chief Executive Officer
 

 

 
 10 

  
 CAPITALBANK 
 WALTER G. STEVENS 
 Salary Continuation Agreement 
 Schedule A 
  
 
	 Plan
 Year

Ending
 
	  	 Benefit
 Level
 
	  	 Accrual
 Balance
 
	  	 Early Term.
 Vesting
 Schedule
 
	  	 Vested
 Accrual
 Balance
 
	  	 Early
 Termination
 Annual Benefit
 Payable at 62
 
	  	 Change of
 Control
 Annual Benefit Payable at 62
 
	  	 Disability
 Lump-sum
 Benefit
 Payable
 Immediately
 

	 Aug-03
 	  	 35,018
 	  	 2,991
 	  	 40%
 	  	 1,196
 	  	 1,260
 	  	 109,209
 	  	 2,991
 
	 Aug-04
 	  	 36,419
 	  	 6,361
 	  	 50%
 	  	 3,181
 	  	 3,093
 	  	 109,209
 	  	 6,361
 
	 Aug-05
 	  	 37,876
 	  	 10,159
 	  	 60%
 	  	 6,096
 	  	 5,474
 	  	 109,209
 	  	 10,159
 
	 Aug-06
 	  	 39,391
 	  	 14,442
 	  	 70%
 	  	 10,109
 	  	 8,382
 	  	 109,209
 	  	 14,442
 
	 Aug-07
 	  	 40,966
 	  	 19,272
 	  	 80%
 	  	 15,418
 	  	 11,804
 	  	 109,209
 	  	 19,272
 
	 Aug-08
 	  	 42,605
 	  	 24,723
 	  	 90%
 	  	 22,251
 	  	 15,729
 	  	 109,209
 	  	 24,723
 
	 Aug-09
 	  	 44,309
 	  	 30,876
 	  	 100%
 	  	 30,876
 	  	 20,154
 	  	 109,209
 	  	 30,876
 
	 Aug-10
 	  	 46,081
 	  	 37,826
 	  	 100%
 	  	 37,826
 	  	 22,798
 	  	 109,209
 	  	 37,826
 
	 Aug-11
 	  	 47,925
 	  	 45,681
 	  	 100%
 	  	 45,681
 	  	 25,422
 	  	 109,209
 	  	 45,681
 
	 Aug-12
 	  	 49,842
 	  	 54,562
 	  	 100%
 	  	 54,562
 	  	 28,038
 	  	 109,209
 	  	 54,562
 
	 Aug-13
 	  	 51,835
 	  	 64,612
 	  	 100%
 	  	 64,612
 	  	 30,657
 	  	 109,209
 	  	 64,612
 
	 Aug-14
 	  	 53,909
 	  	 75,991
 	  	 100%
 	  	 75,991
 	  	 33,293
 	  	 109,209
 	  	 75,991
 
	 Aug-15
 	  	 56,065
 	  	 88,887
 	  	 100%
 	  	 88,887
 	  	 35,959
 	  	 109,209
 	  	 88,887
 
	 Aug-16
 	  	 58,308
 	  	 103,514
 	  	 100%
 	  	 103,514
 	  	 38,667
 	  	 109,209
 	  	 103,514
 
	 Aug-17
 	  	 60,640
 	  	 120,122
 	  	 100%
 	  	 120,122
 	  	 41,432
 	  	 109,209
 	  	 120,122
 
	 Aug-18
 	  	 63,066
 	  	 139,001
 	  	 100%
 	  	 139,001
 	  	 44,269
 	  	 109,209
 	  	 139,001
 
	 Aug-19
 	  	 65,588
 	  	 160,489
 	  	 100%
 	  	 160,489
 	  	 47,195
 	  	 109,209
 	  	 160,489
 
	 Aug-20
 	  	 68,212
 	  	 184,984
 	  	 100%
 	  	 184,984
 	  	 50,230
 	  	 109,209
 	  	 184,984
 
	 Aug-21
 	  	 70,940
 	  	 212,957
 	  	 100%
 	  	 212,957
 	  	 53,393
 	  	 109,209
 	  	 212,957
 
	 Aug-22
 	  	 73,778
 	  	 244,967
 	  	 100%
 	  	 244,967
 	  	 56,712
 	  	 109,209
 	  	 244,967
 
	 Aug-23
 	  	 76,729
 	  	 281,687
 	  	 100%
 	  	 281,687
 	  	 60,215
 	  	 109,209
 	  	 281,687
 
	 Aug-24
 	  	 79,798
 	  	 323,937
 	  	 100%
 	  	 323,937
 	  	 63,940
 	  	 109,209
 	  	 323,937
 
	 Aug-25
 	  	 82,990
 	  	 372,729
 	  	 100%
 	  	 372,729
 	  	 67,932
 	  	 109,209
 	  	 372,729
 
	 Aug-26
 	  	 86,310
 	  	 429,340
 	  	 100%
 	  	 429,340
 	  	 72,253
 	  	 109,209
 	  	 429,340
 
	 Aug-27
 	  	 89,762
 	  	 495,425
 	  	 100%
 	  	 495,425
 	  	 76,985
 	  	 109,209
 	  	 495,425
 
	 Aug-28
 	  	 93,352
 	  	 573,215
 	  	 100%
 	  	 573,215
 	  	 82,246
 	  	 109,209
 	  	 573,215
 
	 Aug-29
 	  	 97,086
 	  	 665,899
 	  	 100%
 	  	 665,899
 	  	 88,222
 	  	 109,209
 	  	 665,899
 
	 Aug-30
 	  	 100,970
 	  	 778,470
 	  	 100%
 	  	 778,470
 	  	 95,232
 	  	 109,209
 	  	 778,470
 
	 Aug-31
 	  	 105,009
 	  	 920,211
 	  	 100%
 	  	 920,211
 	  	 103,944
 	  	 109,209
 	  	 920,211
 
	 Aug-32
 	  	 109,209
 	  	 1,116,665
 	  	 100%
 	  	 1,116,665
 	  	 116,468
 	  	 109,209
 	  	 1,116,665
 

 

 
 11

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