Document:

EXHIBIT 10.39 

CAPITALBANK 

SPLIT DOLLAR AGREEMENT 

 
        THIS
AGREEMENT is made and entered into this 31st day of December, 2003, by and
between CAPITALBANK, a state-chartered commercial bank located in Greenwood, South
Carolina (the “Company”), and WILLIAM G. STEVENS (the “Executive”). 

 
        This
Agreement shall append the Split Dollar Endorsement entered into on July 15, 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 New York Life. 

E-16 

 
        1.4 “Policy”
means insurance policy no. 56602241 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 65th 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 60% 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. 

E-17 

Article 3 

Premiums 

 
        3.1
Premium Payment. The Company shall pay any premiums due on the Policy. 

 
        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. 

E-18 

	 	 
        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 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  

E-19 

	 	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,  

	 	(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 

E-20 

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. 

 
        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:  

	 	/s/
William G. Stevens   

	 	WILLIAM
G. STEVENS  

	 	COMPANY:  

	 	CAPITALBANK  

	 	By 	/s/
Ralph W. Brewer   

	 	Title 	CFO
 

E-21 

SPLIT DOLLAR
POLICY ENDORSEMENT 
CAPITALBANK SPLIT DOLLAR AGREEMENT 

	Policy No. 56602241	Insured: WILLIAM G. STEVENS

Supplementing and
amending the application for insurance to New York Life (“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 60% 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 65th 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. 

E-22 

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 31st day of December, 2003. 

CAPITALBANK 

	By  	 /s/
Ralph W. Brewer   

	Its  	 CFO   

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:	
Linda M. Stevens   

	 	Relationship to Insured:	
Wife  

	 	Secondary Beneficiary:	
W. Gerald Stevens, son - 50 percent, Susan W. Laird, daughter - 50 percent 

Signed at Greenwood,
South Carolina, this 31st day of December, 2003. 

THE INSURED: 

	/s/
William G. Stevens  

	
WILLIAM G. STEVENS  

E-23EXHIBIT 10.40 

CAPITALBANK 

SPLIT DOLLAR AGREEMENT 

 
        THIS
AGREEMENT is made and entered into this 31st day of December, 2003, by and between
CAPITALBANK, a state-chartered commercial bank located in Greenwood, South Carolina (the
“Company”), and STEVE O. WHITE (the “Executive”). 

 
        This
Agreement shall append the Split Dollar Endorsement entered into on July 12, 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 New York Life. 

E-24 

 
        1.4 “Policy”
means insurance policy no. 56602242 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 65th 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 60% 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. 

E-25 

Article 3 

Premiums 

 
        3.1
Premium Payment. The Company shall pay any premiums due on the Policy. 

 
        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.  

E-26 

	 	 
        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 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  

E-27 

	 	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,  

	 	(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 

E-28 

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. 

 
        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:  

	 	/s/
Steve O. White   

	 	STEVE O. WHITE  

	 	COMPANY:  

	 	CAPITALBANK  

	 	By 	/s/
Ralph W. Brewer   

	 	Title 	CFO
 

E-29 

SPLIT DOLLAR
POLICY ENDORSEMENT 

CAPITALBANK SPLIT DOLLAR AGREEMENT 

	Policy No. 56602242	Insured: STEVE O. WHITE

Supplementing and
amending the application for insurance to New York Life (“Insurer”) on July 12,
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 60% 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 65th 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. 

E-30 

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 31st day of December, 2003. 

CAPITALBANK 

	By  	 /s/
Ralph W. Brewer   

	Its  	 CFO   

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:	
Joan S. White 

	 	Relationship to Insured:	
Wife  

	 	Secondary beneficiary:	
Estate 

	 	Relationship to Insured:	
  

Signed at Greenwood,
South Carolina, this 31st day of December, 2003. 

THE INSURED: 

	/s/
Steve O. White 

	
STEVE O. WHITE  

E-31

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