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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001181431-08-068918.txt : 20081223
<SEC-HEADER>0001181431-08-068918.hdr.sgml : 20081223
<ACCEPTANCE-DATETIME>20081223100416
ACCESSION NUMBER:		0001181431-08-068918
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20081219
FILED AS OF DATE:		20081223
DATE AS OF CHANGE:		20081223

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			OAKLEY WALTER FLAKE IV
		CENTRAL INDEX KEY:			0001190719

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-51660
		FILM NUMBER:		081265781

	BUSINESS ADDRESS:	
		STREET 1:		509 COUNTY DOWNS ROAD
		CITY:			MONTGOMERY
		STATE:			AL
		ZIP:			36310

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CapitalSouth Bancorp
		CENTRAL INDEX KEY:			0001338977
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				631026645
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		2340 WOODCREST PLACE, SUITE 200
		CITY:			BIRMINGHAM
		STATE:			AL
		ZIP:			35209
		BUSINESS PHONE:		205-870-1939

	MAIL ADDRESS:	
		STREET 1:		2340 WOODCREST PLACE, SUITE 200
		CITY:			BIRMINGHAM
		STATE:			AL
		ZIP:			35209
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>rrd226805.xml
<DESCRIPTION>OAKLEY- FORM 4 RIGHTS EXERCISE AND 12/08 DIRECTOR FEES
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0303</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2008-12-19</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001338977</issuerCik>
        <issuerName>CapitalSouth Bancorp</issuerName>
        <issuerTradingSymbol>CAPB</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001190719</rptOwnerCik>
            <rptOwnerName>OAKLEY WALTER FLAKE IV</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>2340 WOODCREST PLACE, SUITE 200</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>BIRMINGHAM</rptOwnerCity>
            <rptOwnerState>AL</rptOwnerState>
            <rptOwnerZipCode>35209</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>President</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2008-12-22</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>P</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>5000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>2.00</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>8850</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2008-12-19</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>150</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F1"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>9000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeHolding>
            <securityTitle>
                <value>Employee Stock Option (Right to Buy)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>16.20</value>
            </conversionOrExercisePrice>
            <exerciseDate>
                <footnoteId id="F2"/>
            </exerciseDate>
            <expirationDate>
                <value>2017-06-18</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>3000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>3000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeHolding>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Shares issued in lieu of certain fees for participation in meetings of the Board of Directors and certain of its committees using the closing sale price on December 19, 2008 of $0.70 per share.</footnote>
        <footnote id="F2">The option vests one-third upon grant, and the remainder vests in 1/8 installments on the completion of each calendar quarter beginning September 30, 2008.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Carol W. Marsh, attorney-in-fact</signatureName>
        <signatureDate>2008-12-22</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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