Amended Preliminary Proxy Statement

YOUR VOTE IS IMPORTANT

If you do not vote by telephone or Internet, please sign and date this proxy card and return it promptly in the enclosed postage-paid envelope, or otherwise to Proxy Tabulator, P.O. Box 535450, Pittsburgh, PA 15253, so your shares will be represented at the Annual Meeting. If you vote by telephone or Internet, it is not necessary to return this proxy card.

ò Please fold and detach card at perforation before mailing. ò

CAPITOL BANCORP LIMITED PROXY

This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted “FOR” the Proposals.

The Board of Directors recommends a vote FOR the following proposals:

1.	Election of Directors:

Class I (nominees to serve until the annual meeting in 2008):

(01) Paul R. Ballard

(02) Michael F. Hannley

(03) Richard A. Henderson

(04) Lewis D. Johns

(05) Lyle W. Miller

(06) Cristin K. Reid

Class II (nominees to serve until the annual meeting in 2009):

(07) Michael J. Devine	(08) Gary A. Falkenberg	(09) Joel I. Ferguson	(10) H. Nicholas Genova	(11) John S. Lewis	(12) Leonard Maas
(13) Myrl D. Nofziger	(14) David O'Leary

Class III (nominees to serve until the annual meeting in 2010):

(15) David L. Becker	(16) Robert C. Carr	(17) Douglas E. Crist	(18) James C. Epolito	(19) Kathleen A. Gaskin
(20) Michael L. Kasten	(21) Joseph D. Reid	(22) Ronald K. Sable

q FOR ALL

q WITHHOLD ALL

q FOR ALL EXCEPT

(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee’s name or number on the line below.)

2.	Approval of the Capitol Bancorp Limited 2007 Equity Incentive Plan.

q FOR

q AGAINST

q ABSTAIN

In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Meeting.

q Please mark the box to the left if you plan to attend the Annual Meeting of Shareholders.

(Continued and to be signed on the reverse side)

	c/o UMB Bank, n. a. P.O. Box 419064 Kansas City, MO 64141	Vote by Telephone Have your proxy card available when you call our Toll-Free number 1-888-693-8683 using a touch-tone phone and follow the simple instructions to record your vote.

		Vote by Internet Have your proxy card available when you access the website www.cesvote.com and follow the simple instructions to record your vote.

		Vote by Mail Please mark, sign and date your proxy card and return it in the postage-paid envelope provided or return it to: Proxy Tabulator, P.O. Box 535450, Pittsburgh PA 15253.

Vote by Telephone	Vote by Internet	Vote by Mail
Call Toll-Free using a	Access the Website and	Return your proxy
touch-tone telephone:	cast your vote:	in the postage-paid
1-888-693-8683	www.cesvote.com	envelope provided

Vote 24 hours a day, 7 days a week.

If you vote by telephone or over the Internet, do not mail your proxy card.

Telephone and Internet votes must be received by 6:00 a.m. EDT

on April 25, 2007 to be included in the final tabulation.

If voting by mail, this proxy card must be signed and dated below.

ò Please fold and detach card at perforation before mailing. ò

CAPITOL BANCORP LIMITED

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned, having received the Notice of Annual Meeting of Shareholders and proxy statement, revoking any proxy previously given, hereby appoint(s) Joseph D. Reid and David O'Leary, and either of them, as proxies with power to appoint his substitute and hereby authorizes them to vote as directed all shares the undersigned is (are) entitled to vote at the Capitol Bancorp Limited 2007 Annual Meeting of Shareholders to be held on April 25, 2007 and authorize(s) each to vote in his discretion upon other business as may properly come before the meeting or an adjournment or postponement thereof. If this signed proxy card contains no specific voting instructions, my (our) shares will be voted "FOR" all nominees for director, "FOR" Proposal 2, and in the discretion of the named proxies on all other matters.

Date:___________________________________, 2007

______________________________________

Signature

______________________________________

Signature (if held jointly)

NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.

IF VOTING BY MAIL, PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.

ANNEX A

CAPITOL BANCORP LIMITED

2007 EQUITY INCENTIVE PLAN

TABLE OF CONTENTS

		Page
1.	PURPOSES OF THE PLAN	1
2.	DEFINITIONS	1
3.	STOCK SUBJECT TO THE PLAN	6
	(a) Stock Subject to the Plan	6
	(b) Automatic Share Reserve Increase	6
	(c) Full Value Awards	6
	(d) Lapsed Awards	6
4.	ADMINISTRATION OF THE PLAN	7
	(a) Procedure	7
	(b) Powers of the Administrator	7
	(c) Effect of Administrator's Decision	8
5.	ELIGIBILITY	8
6.	STOCK OPTIONS	9
	(a) Limitations	9
	(b) Term of Option	9
	(c) Option Exercise Price and Consideration	10
	(d) Exercise of Option	10
7.	STOCK APPRECIATION RIGHTS	12
	(a) Grant of Stock Appreciation Rights	12
	(b) Number of Shares	12
	(c) Exercise Price and Other Terms	13
	(d) Stock Appreciation Right Agreement	13
	(e) Expiration of Stock Appreciation Rights	13
	(f) Payment of Stock Appreciation Right Amount	13
8.	RESTRICTED STOCK	13
	(a) Grant of Restricted Stock	13
	(b) Restricted Stock Agreement	13

(i)

TABLE OF CONTENTS

(continued)

		Page
	(c) Transferability	14
	(d) Other Restrictions	14
	(e) Removal of Restrictions	14
	(f) Voting Rights	14
	(g) Dividends and Other Distributions	14
	(h) Return of Restricted Stock to Company	15
9.	RESTRICTED STOCK UNITS	15
	(a) Grant	15
	(b) Vesting Criteria and Other Terms	15
	(c) Earning Restricted Stock Units	15
	(d) Form and Timing of Payment	15
	(e) Cancellation	16
10.	PERFORMANCE UNITS AND PERFORMANCE SHARES	16
	(a) Grant of Performance Units/Shares	16
	(b) Value of Performance Units/Shares	16
	(c) Performance Objectives and Other Terms	16
	(d) Earning of Performance Units/Shares	16
	(e) Form and Timing of Payment of Performance Units/Shares	17
	(f) Cancellation of Performance Units/Shares	17
11.	PERFORMANCE GOALS	17
12.	LEAVES OF ABSENCE	18
13.	TRANSFERABILITY OF AWARDS	18
14.	ADJUSTMENTS; DISSOLUTION OR LIQUIDATION; MERGER OR CHANGE IN CONTROL	18
	(a) Adjustments	18
	(b) Dissolution or Liquidation	18
	(c) Change in Control	18

(ii)

TABLE OF CONTENTS

(continued)

		Page
15.	TAX WITHHOLDING	20
	(a) Withholding Requirements	20
	(b) Withholding Arrangements	20
16.	NO EFFECT ON EMPLOYMENT OR SERVICE	20
17.	DATE OF GRANT	20
18.	TERM OF PLAN	20
19.	AMENDMENT AND TERMINATION OF THE PLAN	21
	(a) Amendment and Termination	21
	(b) Shareholder Approval	21
	(c) Effect of Amendment or Termination	21
20.	CONDITIONS UPON ISSUANCE OF SHARES	21
	(a) Legal Compliance	21
	(b) Investment Representations	21
21.	INABILITY TO OBTAIN AUTHORITY	21
22.	SHAREHOLDER APPROVAL	21
23.	SECTION 409A	21

(iii)

CAPITOL BANCORP LIMITED 2007 EQUITY INCENTIVE PLAN

1. PURPOSES OF THE PLAN. The purposes of this Plan are to:

•

attract and retain the best available personnel for positions of substantial responsibility,

•

provide incentives to individuals who perform services to the Company, and

•

promote the success of the Company’s business.

The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, Performance Shares and other stock or cash awards as the Administrator may determine.

2. DEFINITIONS. As used herein, the following definitions will apply:

(a) “Administrator” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan.

(b) “Affiliate” means any corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with the Company.

(c) “Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

(d) “Award” means, individually or collectively, a grant under the Plan of Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, Performance Shares and other stock or cash awards as the Administrator may determine.

(e) “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

(f) “Board” means the Board of Directors of the Company.

(g) “Cause” means:

(i) An act of embezzlement, fraud, dishonesty, or breach of fiduciary duty to the Company; or

(ii) A deliberate disregard of the rules of the Company which results in loss, damage or injury to the Company, or

(iii) Any unauthorized disclosure of any of the secrets or confidential information of the Company, or

(iv) Inducing any client or customer of the Company to break any contract with the Company or inducing any principal for whom the Company acts as agent to terminate such agency relations; or

(v) Engaging in any conduct which constitutes unfair competition with the Company; or

(vi) Any act which results in the Participant being removed from any office of the Company by any bank regulatory agency.

(h) “Change in Control” means the consummation of any of the following transactions:

(i) A merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in beneficial owners of the total voting power in the election of directors represented by the voting securities (“Voting Securities”) of the Company (as the case may be) outstanding immediately prior thereto continuing to beneficially own securities representing (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total Voting Securities of the Company, or of such surviving entity, outstanding immediately after such merger or consolidation;

(ii) The filing of a plan of liquidation or dissolution or the closing of the sale, lease, exchange or other transfer or disposition by the Company of all or substantially all of the Company’s assets;

(iii) Any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or (B) a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their beneficial ownership of stock in the Company, is or becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of the securities of the Company representing fifty percent (50%) or more of the Voting Securities; or

(iv) Any person (as such term is used in Sections 13(d) or 14(d) of the Exchange Act), other than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or (B) a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company, is or becomes the beneficial owner (within the meaning or Rule 13d-3 under the Exchange Act), directly or indirectly, of the securities of the Company representing twenty-five percent (25%) or more of the Voting Securities of such corporation, and within twelve (12) months of the occurrence of such event, a change in the composition of the Board occurs as a result of which sixty percent (60%) or fewer of the Directors are Incumbent Directors. For purposes of this definition, Incumbent Directors will mean Directors who either (A) are Directors as of the date hereof, (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Directors who are Incumbent Directors described in (A) above at the time of such election or nomination, or (C) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Directors who are Incumbent Directors described in (A) or (B) above at the time of such election or nomination. Notwithstanding the foregoing, “Incumbent Directors” will not include an individual whose election or nomination to the Board occurs in order to provide representation for a person or group of related persons who have initiated or encouraged an actual or threatened proxy contest relating to the election of Directors.

The Administrator may, in its sole discretion and without Participant consent, amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section 409A of the Code.

(i) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.

(j) “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.

(k) “Common Stock” means the common stock of the Company.

(l) “Company” means Capitol Bancorp Limited, a Michigan corporation, or any successor thereto.

(m) “Consultant” means any person, including an advisor, engaged by the Company or its Affiliates to render services to such entity.

(n) “Determination Date” means the latest possible date that will not jeopardize the qualification of an Award granted under the Plan as “performance-based compensation” under Section 162(m) of the Code.

(o) “Director” means a member of the Board.

(p) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time. The Administrator may, in its sole discretion and without Participant consent, amend the definition of “Disability” to conform to the definition of “Disability” under Section 409A of the Code.

(q) “Employee” means any person, including Officers and Directors, employed by the Company or its Affiliates. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.

(r) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(s) “Fair Market Value” means, as of any date, the value of Common Stock as the Administrator may determine in good faith by reference to the price of such stock on any established stock exchange or a national market system on the day of determination if the Common Stock is so listed on any established stock exchange or a national market system. If the Common Stock is not listed on any established stock exchange or a national market system, the value of the Common Stock will be determined by the Administrator in good faith.

(t) “Fiscal Year” means the fiscal year of the Company.

(u) “Incentive Stock Option” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(v) “Inside Director” means a Director who is an Employee.

(w) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.

(x) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(y) “Option” means a stock option granted pursuant to the Plan.

(z) “Outside Director” means a Director who is not an Employee.

(aa) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

(bb) “Participant” means the holder of an outstanding Award.

(cc) “Performance Goals” will have the meaning set forth in Section 11 of the Plan.

(dd) “Performance Period” means any Fiscal Year of the Company or such other period as determined by the Administrator in its sole discretion.

(ee) “Performance Share” means an Award denominated in Shares which may be earned in whole or in part upon attainment of Performance Goals or other vesting criteria as the Administrator may determine pursuant to Section 10.

(ff) “Performance Unit” means an Award which may be earned in whole or in part upon attainment of Performance Goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 10.

(gg) “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.

(hh) “Plan” means this Capitol Bancorp Limited 2007 Equity Incentive Plan.

(ii) “Restricted Stock” means Shares issued pursuant to an Award of Restricted Stock under Section 8 of the Plan, or issued pursuant to the early exercise of an Option.

(jj) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.

(kk) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

(ll) “Section 16(b)” means Section 16(b) of the Exchange Act.

(mm) “Section 409A” means Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance promulgated thereunder.

(nn) “Service Provider” means an Employee, Director or Consultant.

(oo) “Share” means a share of the Common Stock, as adjusted in accordance with Section 14 of the Plan.

(pp) “Stock Appreciation Right” means an Award, granted alone or in connection with an Option, that pursuant to Section 7 is designated as a Stock Appreciation Right.

(qq) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.

(rr) “Successor Corporation” has the meaning given to such term in Section 14(c) of the Plan.

3. STOCK SUBJECT TO THE PLAN.

(a) Stock Subject to the Plan. Subject to the provisions of Section 14 of the Plan, the maximum aggregate number of Shares that may be awarded and sold under the Plan is three hundred fifty thousand (350,000).

(b) Automatic Share Reserve Increase. The number of Shares available for issuance under the Plan shall be increased on the first day of each Fiscal Year beginning with the 2008 Fiscal Year, in an amount equal to two percent (2%) of the outstanding Shares on the last day of the immediately preceding Fiscal Year.

(c) Full Value Awards. Any Shares subject to Awards granted with an exercise price less than the Fair Market Value on the date of grant of such Awards will be counted against the numerical limits of this Section 3 as two (2) Shares for every one (1) Share subject thereto. Further, if Shares acquired pursuant to any such Award are forfeited or repurchased by the Company and would otherwise return to the Plan pursuant to Section 3(c), two (2) times the number of Shares so forfeited or repurchased will return to the Plan and will again become available for issuance.

(d) Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full, or, with respect to Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, is forfeited to or repurchased by the Company, the unpurchased Shares (or for Awards other than Options and Stock Appreciation Rights, the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated).

With respect to Stock Appreciation Rights, all of the Shares covered by the Award (that is, Shares actually issued pursuant to a Stock Appreciation Right, as well as the Shares that represent payment of the exercise price) will cease to be available under the Plan. However, Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if unvested Shares of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are repurchased by the Company or are forfeited to the Company, such Shares will become available for future grant under the Plan. Shares used to pay the tax and exercise price of an Award will not become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the foregoing and, subject to adjustment provided in Section 14, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Section 422 of the Code, any Shares that become available for issuance under the Plan under this Section 3(c).

4. ADMINISTRATION OF THE PLAN.

(a) Procedure.

(i) Multiple Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the Plan.

(ii) Section 162(m). To the extent that the Administrator determines it to be desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two or more “outside directors” within the meaning of Section 162(m) of the Code.

(iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.

(iv) Other Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy Applicable Laws.

(b) Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Awards may be granted hereunder;

(iii) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder;

(iv) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

(v) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws;

(vi) to modify or amend each Award (subject to Section 19(c) of the Plan). Notwithstanding the previous sentence, the Administrator may not: (A) modify or amend an Option or Stock Appreciation Right to reduce the exercise price of such Option or Stock Appreciation Right after it has been granted (except for adjustments made pursuant to Section 14), (B) cancel any outstanding Option or Stock Appreciation Right and immediately replace it with a new Option or Stock Appreciation Right with a lower exercise price, or (C) accelerate the vesting provisions contained in Sections 8(e), 9(b), or 10(c) other than upon or in connection with a Change in Control or upon or in connection with a Participant’s termination of service due to death, Disability or retirement, as permitted under Section 409A of the Code;

(vii) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;

(viii) to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award pursuant to such procedures as the Administrator may determine and as permitted under Section 409A of the Code; and

(ix) to make all other determinations deemed necessary or advisable for administering the Plan.

(c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.

5. ELIGIBILITY. Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, Performance Shares and such other cash or stock awards as the Administrator determines may be granted to Service Providers. Incentive Stock Options may be granted only to employees of the Company or any Parent or Subsidiary of the Company.

6. STOCK OPTIONS.

(a) Limitations.

(i) Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted.

(ii) The following limitations will apply to grants of Options:

(1) No Service Provider will be granted, in any Fiscal Year, Options to purchase more than two hundred fifty thousand (250,000) Shares.

(2) In connection with his or her initial service, a Service Provider may be granted Options to purchase up to an additional two hundred fifty thousand (250,000) Shares, which will not count against the limit set forth in Section 6(a)(2)(ii)(1) above.

(3) The foregoing limitations will be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 14.

(4) If an Option is cancelled in the same Fiscal Year in which it was granted (other than in connection with a transaction described in Section 14), the cancelled Option, as applicable, will be counted against the limits set forth in subsections (1) and (2) above.

(5) The exercise price for an Option may not be reduced. This will include, without limitation, a repricing of the Option as well as an Option exchange program whereby the Participant agrees to cancel an existing Option in exchange for an Option, Stock Appreciation Right or other Award.

(b) Term of Option. The Administrator will determine the term of each Option in its sole discretion. Any Option granted under the Plan will not be exercisable after the expiration of seven (7) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power

of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.

(c) Option Exercise Price and Consideration.

(i) Exercise Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the Administrator, but will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. In addition, in the case of an Incentive Stock Option granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of this Section 6(c), Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code.

(ii) Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.

(iii) Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory note, (4) other Shares, provided Shares acquired directly or indirectly from the Company, (A) have been owned by the Participant and not subject to substantial risk of forfeiture for more than six months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option will be exercised; (5) consideration received by the Company under a broker-assisted (or other) cashless exercise program implemented by the Company in connection with the Plan; (6) any combination of the foregoing methods of payment; or (7) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.

(d) Exercise of Option.

(i) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in

the Award Agreement. An Option may not be exercised for a fraction of a Share. An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form as the Administrator specifies from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable withholding taxes). No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 14 of the Plan.

(ii) Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s termination for Cause or as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

(iii) Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

(iv) Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the option be exercised later than the expiration of the term of such Option as set forth in the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the

personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participant’s death. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

(v) Termination for Cause. If a Participant’s status as a Service Provider is terminated for Cause, then the Option will immediately terminate, and the Shares covered by such Option will revert to and again become available for issuance under the Plan.

(vi) Other Termination. A Participant’s Award Agreement may also provide that if the exercise of the Option following the termination of Participant’s status as a Service Provider (other than upon the Participant’s death or Disability) would result in liability under Section 16(b), then the Option will terminate on the earlier of (A) the expiration of the term of the Option set forth in the Award Agreement, or (B) the tenth (10^th) day after the last date on which such exercise would result in such liability under Section 16(b). Finally, a Participant’s Award Agreement may also provide that if the exercise of the Option following the termination of the Participant’s status as a Service Provider (other than upon the Participant’s death or disability) would be prohibited at any time solely because the issuance of Shares would violate the registration requirements under the Securities Act, then the Option will terminate on the earlier of (A) the expiration of the term of the Option, or (B) the expiration of a period of three (3) months after the termination of the Participant’s status as a Service Provider during which the exercise of the Option would not be in violation of such registration requirements.

7. STOCK APPRECIATION RIGHTS.

(a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.

(b) Number of Shares. The Administrator will have complete discretion to determine the number of Stock Appreciation Rights granted to any Participant, provided that during any Fiscal Year, no Participant will be granted Stock Appreciation Rights covering more than two hundred fifty thousand (250,000) Shares. Notwithstanding the foregoing limitation, in connection with a Participant’s initial

service as an Employee, an Employee may be granted Stock Appreciation Rights covering up to an additional five hundred thousand (500,000) Shares.

(c) Exercise Price and Other Terms. The Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan, provided, however, that the exercise price will be not less than one hundred percent (100%) of the Fair Market Value of a Share on the date of grant.

(d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.

(e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(d) also will apply to Stock Appreciation Rights.

(f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:

(i) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times

(ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.

At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

8. RESTRICTED STOCK.

(a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.

(b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Notwithstanding the foregoing sentence, during any Fiscal Year no Participant will receive more than an aggregate of one hundred twenty-

five thousand (125,000) Shares of Restricted Stock; provided, however, that in connection with a Participant’s initial service as an Employee, an Employee may be granted an aggregate of up to an additional two hundred fifty thousand (250,000) Shares of Restricted Stock. Unless the Administrator determines otherwise, Shares of Restricted Stock will be held by the Company as escrow agent until the restrictions on such Shares have lapsed.

(c) Transferability. Except as provided in this Section 8, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

(d) Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

(e) Removal of Restrictions. Except as otherwise provided in this Section 8, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction. The restrictions will lapse at a rate determined by the Administrator; provided, however, that, except as otherwise provided in Section 14(c), Shares of Restricted Stock will not vest more rapidly than one-third (1/3^rd) of the total number of Shares of Restricted Stock subject to an Award each year from the date of grant (or, if applicable, the date a Participant begins providing services to the Company or any Parent or Subsidiary of the Company), unless the Administrator determines that the Award is to vest upon the achievement of performance criteria and the period for measuring such performance will cover at least twelve (12) months. Notwithstanding the foregoing sentence, the Administrator, in its sole discretion, may provide at the time of or following the date of grant for accelerated vesting for an Award of Restricted Stock upon or in connection with a Change in Control or upon or in connection with a Participant’s termination of service due to death, Disability or retirement.

(f) Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.

(g) Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.

(h) Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.

9. RESTRICTED STOCK UNITS.

(a) Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. Each Restricted Stock Unit grant will be evidenced by an Award Agreement that will specify such other terms and conditions as the Administrator, in its sole discretion, will determine, including all terms, conditions, and restrictions related to the grant, the number of Restricted Stock Units and the form of payout, which, subject to Section 9(d), may be left to the discretion of the Administrator. Notwithstanding the anything to the contrary in this subsection (a), during any Fiscal Year of the Company, no Participant will receive more than an aggregate of one hundred twenty-five thousand (125,000) Restricted Stock Units; provided, however, that in connection with a Participant’s initial service as an Employee, an Employee may be granted an aggregate of up to an additional two hundred fifty thousand (250,000) Restricted Stock Units.

(b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. Each Award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the vesting criteria, and such other terms and conditions as the Administrator, in its sole discretion, will determine; provided, however, that, except as otherwise provided in Section 14(c), an Award of Restricted Stock Units will not vest more rapidly than one-third (1/3^rd) of the total number of Restricted Stock Units subject to an Award each year from the date of grant (or, if applicable, the date a Participant begins providing services to the Company or any Parent or Subsidiary of the Company), unless the Administrator determines that the Award is to vest upon the achievement of performance criteria and the period for measuring such performance will cover at least twelve (12) months. Notwithstanding the foregoing sentence, the Administrator, in its sole discretion, may provide at the time of or following the date of grant for accelerated vesting for an Award of Restricted Stock Units upon or in connection with a Change in Control or upon or in connection with a Participant’s termination of service due to death, Disability or retirement.

(c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as specified in the Award Agreement.

(d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) set forth in the Award Agreement. The Administrator, in its sole discretion, may pay earned Restricted Stock

Units in cash, Shares, or a combination thereof. Shares represented by Restricted Stock Units that are fully paid in cash again will be available for grant under the Plan.

(e) Cancellation. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.

10. PERFORMANCE UNITS AND PERFORMANCE SHARES.

(a) Grant of Performance Units/Shares. Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion in determining the number of Performance Units/Shares granted to each Participant provided that during any Fiscal Year, (a) no Participant will receive Performance Units having an initial value greater than one million dollars ($1,000,000), and (b) no Participant will receive more than one hundred twenty-five thousand (125,000) Performance Shares. Notwithstanding the foregoing limitation, in connection with a Participant’s initial service as an Employee, an Employee may be granted up to an additional two hundred fifty thousand (250,000) Performance Shares.

(b) Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

(c) Performance Objectives and Other Terms. The Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Participant. The Administrator may set performance objectives based upon the achievement of Company-wide, divisional, or individual goals, or any other basis determined by the Administrator in its discretion. Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its sole discretion, will determine; provided, however, that, except as otherwise provided in Section 14(c), Performance Units/Shares will not vest more rapidly than one-third (1/3^rd) of the total number of Performance Units/Shares subject to an Award each year from the date of grant (or, if applicable, the date a Participant begins providing services to the Company or any Parent or Subsidiary of the Company), unless the Administrator determines that the Award is to vest upon the achievement of performance criteria and the period for measuring such performance will cover at least twelve (12) months. Notwithstanding the foregoing sentence, the Administrator, in its sole discretion, may provide at the time of or following the date of grant for accelerated vesting for an Award of Performance Units/Shares upon or in connection with a Change in Control or upon or

in connection with a Participant’s termination of service due to death, Disability or retirement.

(d) Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved.

(e) Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will be made as soon as practicable after the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof.

(f) Cancellation of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan.

11. PERFORMANCE GOALS. Awards of Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units and other incentives under the Plan may be made subject to the attainment of performance goals relating to one or more business criteria within the meaning of Section 162(m) of the Code and may provide for a targeted level or levels of achievement (“Performance Goals”) including assets; bond rating; cash flow; cash position; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per Share; economic profit; economic value added; equity or shareholder’s equity; growth in earnings; growth in revenue; market share; net income; net profit; net sales; noninterest income as percent of total income; operating earnings; operating income; profit before tax; ratio of debt to debt plus equity; ratio of operating earnings to capital spending; results of regulatory reviews and examinations; return on equity; return on net assets; return on sales; revenue; sales growth; or total return to shareholders. Any Performance Goals may be used to measure the performance of the Company as a whole or a business unit of the Company and may be measured relative to a peer group or index. The Performance Goals may differ from Participant to Participant and from Award to Award. Prior to the Determination Date, the Administrator will determine whether any significant element(s) will be included in or excluded from the calculation of any Performance Goal with respect to any Participant. In all other respects, Performance Goals will be calculated in accordance with the Company’s financial statements, generally accepted accounting principles, or under a methodology established by the Administrator prior to the issuance of an Award, which is consistently applied and identified in the financial statements, including footnotes, or the management discussion and analysis section of the Company’s annual report.

12. LEAVES OF ABSENCE. Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A Service Provider will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company and its Affiliates. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months following the ninety-first (91^st) day of such leave any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.

13. TRANSFERABILITY OF AWARDS. Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate.

14. ADJUSTMENTS; DISSOLUTION OR LIQUIDATION; MERGER OR CHANGE IN CONTROL.

(a) Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, shall adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award, and the numerical Share limits set forth in Sections 3, 6, 7, 8, 9 and 10.

(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.

(c) Change in Control. In the event of a Change in Control, each outstanding Award will be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation (the “Successor Corporation”). In the event that the Successor Corporation refuses to assume or substitute for the Award, the Participant will fully vest in and have the right to

exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Restricted Stock Units, Performance Shares and Performance Units, all Performance Goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be fully vested and exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.

For the purposes of this subsection (c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) or, in the case of a Stock Appreciation Right upon the exercise of which the Administrator determines to pay cash or a Performance Share or Performance Unit which the Administrator can determine to pay in cash, the fair market value of the consideration received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the Successor Corporation, the Administrator may, with the consent of the Successor Corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Performance Share or Performance Unit, for each Share subject to such Award (or in the case of Performance Units, the number of implied shares determined by dividing the value of the Performance Units by the per share consideration received by holders of Common Stock in the Change in Control), to be solely common stock of the Successor Corporation equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.

Notwithstanding anything in this Section 14(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more Performance Goals will not be considered assumed if the Company or its successor modifies any of such Performance Goals without the Participant’s consent; provided, however, a modification to such Performance Goals only to reflect the Successor Corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.

15. TAX WITHHOLDING.

(a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).

(b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the amount required to be withheld, (iii) delivering to the Company already owned Shares having a Fair Market Value equal to the amount required to be withheld, or (iv) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.

16. NO EFFECT ON EMPLOYMENT OR SERVICE. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.

17. DATE OF GRANT. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.

18. TERM OF PLAN. Subject to Section 22 of the Plan, the Plan will become effective upon its adoption by the Board. It will continue in effect for a term of ten (10) years unless terminated earlier under Section 19 of the Plan.

19. AMENDMENT AND TERMINATION OF THE PLAN.

(a) Amendment and Termination. The Administrator may at any time amend, alter, suspend or terminate the Plan.

(b) Shareholder Approval. The Company will obtain shareholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

(c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

20. CONDITIONS UPON ISSUANCE OF SHARES.

(a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.

(b) Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

21. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.

22. SHAREHOLDER APPROVAL. The Plan will be subject to approval by the shareholders of the Company within twelve (12) months after the date the Plan is adopted. Such shareholder approval will be obtained in the manner and to the degree required under Applicable Laws.

23. SECTION 409A. To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions necessary to avoid the consequences described in Section 409A(a)(1) of the Code. To the extent

applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance promulgated thereunder, including without limitation any such regulations or other guidance that may hereafter be issued or amended. Notwithstanding any provision of the Plan to the contrary, in the event that the Administrator determines that any Award may be subject to Section 409A of the Code, the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (i) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Section 409A of the Code.

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·	You can vote by Internet at http://www.cesvote.com, with the voting form in hand, and follow the instructions provided; or
·	You can vote by phone by calling toll-free 1-888-693-8683 on a touch-tone telephone, with the voting form in hand, and follow the instructions; or
·	You can vote by signing and returning the enclosed proxy card in the enclosed envelope; or
·	You may attend the Annual Meeting and cast your vote in person.

David O'Leary	Secretary of Capitol. Mr. O'Leary is the Chairman of O'Leary Paint Company. Mr. O'Leary has been a founding director of Capitol and/or its first bank affiliate since 1982 and is 76 years of age. He formerly served on the Board of Directors of Capitol's affiliate First California Northern Bancorp, which was merged with and into Capitol. Mr. O'Leary also serves as a director of the Bank of San Francisco, an affiliate of Capitol.
Michael J. Devine	Mr. Devine is an Attorney at Law, and was previously a member of the Board of Directors of Sun Community Bancorp Limited, which was merged with and into Capitol. Mr. Devine is 65 years of age and has served as a director of Capitol since 2002 and currently serves as a director and/or Chairman of eleven of Capitol's bank affiliates.
Gary A. Falkenberg, D.O.	Dr. Falkenberg specializes in osteopathic medicine. Dr. Falkenberg has served as a founding director of Capitol and/or its first bank affiliate since 1982. Dr. Falkenberg is 68 years of age.
Joel I. Ferguson	Mr. Ferguson is the Chairman of Ferguson Development, LLC and a director of Maxco, Inc. Mr. Ferguson formerly served as a member of the Board of Directors of Capitol's affiliate, Nevada Community Bancorp Limited, which was merged with and into Capitol. Mr. Ferguson joined the board of Capitol and/or its first bank affiliate in 1982 as a founding director. Mr. Ferguson is 68 years of age.
H. Nicholas Genova	Mr. Genova is the Chairman and Chief Executive Officer of Washtenaw News Company, Inc. and the President of H. N. Genova Development Company and Delivery Unlimited. Mr. Genova also serves on the board of Ann Arbor Commerce Bank, an affiliate of Capitol. Mr. Genova was elected to Capitol's board in 1992 and is 67 years of age.

1.	To elect a total of 22 directors, of which 8 directors to hold office for three years, 8 directors to hold office for two years and 6 directors to hold office for one year and until their successors are elected and qualified or upon their earlier resignation or removal.
2.	To approve the Capitol Bancorp Limited 2007 Equity Incentive Plan.
3.	To conduct such other business as may properly come before the Annual Meeting or any adjournments thereof.

1.	The election of 22 directors with differing terms of office.
2.	Approval of the Capitol Bancorp Limited 2007 Equity Incentive Plan.
3.	Other business that may properly come before the Annual Meeting or any adjournment of the Annual Meeting.

Lyle W. Miller	Vice Chairman of the Board of Capitol. Mr. Miller is President of L.W. Miller Holding Company. He formerly was a director of Sun Community Bancorp Limited, which was merged with and into Capitol. Mr. Miller is 63 years of age and has served as a founding director of Capitol and/or its first bank affiliate since 1982. Mr. Miller also serves as a member of the Board of Directors of Amera Mortgage Corporation, Capitol's mortgage affiliate.
Paul R. Ballard	Mr. Ballard is a retired Executive Vice President of Capitol and retired President and Chief Executive Officer of Portage Commerce Bank, Capitol's second bank affiliate. Mr. Ballard has been a director of Capitol since 1990. Mr. Ballard is 57 years of age.
Michael F. Hannley	Mr. Hannley is the President and Chief Executive Officer of Capitol's affiliate, Bank of Tucson. He formerly served on the Board of Directors of Capitol's affiliates Sun Community Bancorp Limited and Nevada Community Bancorp Limited, which were merged with and into Capitol. He currently serves on the Board of Directors of Bank of Santa Barbara, an affiliate of Capitol. Mr. Hannley is 58 years of age and has served on Capitol's board since 2002. Mr. Hannley is the brother-in-law of Ronald K. Sable.

Richard A. Henderson	Mr. Henderson, a certified public accountant, is president of Henderson & Associates, P.C. Mr. Henderson has served on the Board of Directors of Capitol National Bank, an affiliate of Capitol, since 1992. Mr. Henderson is 55 years of age and has served on Capitol's board since 2006.
Lewis D. Johns	Mr. Johns is the President of Mid-Michigan Investment Company. Mr. Johns formerly served as a member of the Board of Directors of Capitol's affiliate, Nevada Community Bancorp Limited, which was merged with and into Capitol. He has served on the board of Capitol and/or Capitol's first bank affiliate since 1982 as a founding director and is 63 years of age.
Cristin K. Reid	Corporate President of Capitol. Ms. Reid was previously Chief Operating Officer, Chief Administrative Officer, Executive Vice President, General Counsel, and has served in other varying capacities at Capitol since 1997. She joined Capitol's Board of Directors in 2001. She formerly served on the board of Capitol's affiliates Nevada Community Bancorp Limited, which was merged with and into Capitol, Camelback Community Bank, Portage Commerce Bank, Ann Arbor Commerce Bank and currently is a member of the Board of Directors of Capitol's affiliate Capitol National Bank and the Chairperson and Chief Executive Officer of Capitol Development Bancorp Limited II, III, IV, V and VI. Ms. Reid is 38 years of age, is a daughter of Joseph D. Reid and wife of Brian K. English, Capitol's general counsel.

John S. Lewis	Mr. Lewis is the President, Western Regions, and Director of Capitol. Mr. Lewis was Vice Chairman and President and a member of the board of Capitol's affiliate Sun Community Bancorp Limited which was merged with and into Capitol, from 1999 to 2001. Mr. Lewis currently serves as a member of the board and/or chairman of several of Capitol's affiliates. Mr. Lewis was elected to Capitol's board in 2002 and is 53 years of age.
Leonard Maas	Mr. Maas is the President of L & M Maas Investments, LLC. Mr. Maas was formerly the President of Gillisse Construction Company and a partner of CP Limited Partnership. Mr. Maas is also a member of the Board of Directors of Paragon Bank & Trust, an affiliate of Capitol. Mr. Maas was elected to the board of Capitol in 1995 and is 85 years of age.
Myrl D. Nofziger	Mr. Nofziger is the President of Hoogenboom Nofziger and previously served as a member of the Board of Directors of Capitol's affiliate Indiana Community Bancorp Limited, which was merged with and into Capitol. Mr. Nofziger was elected to the board of Capitol in 2003 and is 66 years of age.

Joseph D. Reid	Chairman of the Board, President and CEO and founder of Capitol. Mr. Reid served as Chairman and CEO of Sun Community Bancorp Limited which was merged with and into Capitol. Mr. Reid also serves as the Chairman of several of Capitol's bank subsidiary affiliates. He has served as a director of Capitol and/or its first bank affiliate since inception in 1982. Mr. Reid is 64 years of age.
Robert C. Carr	Vice Chairman of the Board of Capitol. Mr. Carr was formerly Executive Vice President of Capitol, the President and CEO of Capitol National Bank, Capitol's first bank affiliate, and currently serves as that bank's Chairman. He also serves as Chairman of other Capitol affiliates. Mr. Carr is 67 years of age and has served as a founding director of Capitol and/or its first affiliate since 1982.
Michael L. Kasten	Vice Chairman of the Board of Capitol. Mr. Kasten is the Managing Partner of Kasten Investments, L.L.C. He formerly was Vice Chairman and Director of Sun Community Bancorp Limited, which was merged with and into Capitol, and currently serves as Director, Chairman and/or Vice Chairman of several Capitol affiliates. Mr. Kasten is 61 years of age and has served as a director since 1990.
David L. Becker	Mr. Becker is the retired founder of Becker Insurance Agency, P.C. Mr. Becker was elected to the board of Capitol in 1990, and serves as a charter member of the Board of Directors of Portage Commerce Bank, an affiliate of Capitol. Mr. Becker is 71 years of age.
Douglas E. Crist	Mr. Crist is the President of Developers of SW Florida, Inc. Mr. Crist has served as a founding director of Capitol and/or its first bank affiliate since 1982. Mr. Crist is 66 years of age.
James C. Epolito	Mr. Epolito is the President and Chief Executive Officer of the Michigan Economic Development Corporation, a position he has held since 2005. Prior to that, he was the President and Chief Executive Officer of the Accident Fund Company. Mr. Epolito was elected to Capitol's board in 1999 and is 51 years of age.

	(a)	(b)	(c)
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (1)	Weighted-average exercise price of outstanding options, warrants and rights (1)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders	2,011,323	$28.72	41,160
Equity compensation plans not approved by security holders⁽¹⁾	44,830	20.95	- - -
Equity Compensation Plans Resulting from share exchanges	513,938	20.09	- - -

Total	2,570,091	$26.86	41,160

Louis G. Allen*	Paul R. Ballard	David L. Becker
Douglas E. Crist	James C. Epolito	Gary A. Falkenberg
Joel I. Ferguson	Kathleen A. Gaskin	H. Nicholas Genova
Richard A. Henderson	Lewis D. Johns	Michael L. Kasten
Leonard Maas	Myrl D. Nofziger	David O'Leary
* Mr. Allen retired from the Board earlier in 2007 and is not standing for re-election.

Executive Committee		Primary Functions	Meetings in 2006

Joseph D. Reid Joel I. Ferguson¹ Lewis D. Johns Michael L. Kasten Lyle W. Miller David O'Leary	·	may exercise all the powers and authority of the Board, including the power to declare dividends regarding Capitol's common stock, during the intervals between meetings of the full Board of Directors	4
	·	does not have the power or authority to amend the articles of incorporation, adopt an agreement of merger or consolidation, recommend to the shareholders the sale, lease or exchange of all or substantially all of Capitol's property and assets, recommend to the shareholders a dissolution of Capitol or revocation of a dissolution, amend the bylaws of Capitol, fill vacancies in the Board of Directors, or fix compensation of the directors serving on the board or on a committee	4

Audit Committee ¹		Primary Functions	Meetings in 2006

Gary A. Falkenberg, D.O. Louis G. Allen² David L. Becker³ H. Nicholas Genova⁴ Richard A. Henderson⁵	·	review the qualifications, independence and performance of Capitol's independent registered public accounting firm (independent auditors)	5⁶
	·	review general policies and procedures with respect to accounting and financial matters and internal controls
	·	review and approve the cost and types of audit and non-audit services performed by the independent auditors
	·	meet with independent auditors not less than once a year without Capitol's personnel to discuss internal controls and accuracy and completeness of the financial statements
	·	review the scope and budget of the audits of Capitol's consolidated financial statements and notify the Board of major problems or deficiencies discovered with respect to its duties

·	Base Salary;
·	Performance-Based Incentive Compensation;
·	Long-Term Equity Incentive Compensation; and
·	Perquisites and Other Benefits

Summary Compensation Table
Name and Principal Position	Year	Salary($)		Bonus($)		Stock Awards ($)(1)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Change in Pension Value ($)		All Other Compensation ($)		Total ($)
Joseph D. Reid President, Chief Executive Officer and Chairman	2006	$	1,000,000	$	0	$	0	$	0	$	0	$	N/A	$	129,917(2)	$	1,129,917
Lee W. Hendrickson Chief Financial Officer	2006		394,000		75,000		17,824		0		0		23,205		22,954(3)		509,778
John S. Lewis President - Western Regions	2006		375,000		75,000		17,824		0		0		N/A		20,171(4)		487,995
Cristin K. Reid Corporate President	2006		300,000		75,000		17,824		0		0		N/A		22,913(5)		415,737
Bruce A. Thomas President - Eastern Regions	2006		290,000		75,000		17,824		0		0		20,369		22,919(6)		405,743

(1)	Mr. Hendrickson, Mr. Lewis, Ms. Reid and Mr. Thomas each received a restricted stock grant of 2,000 shares on April 21, 2006. The shares do not vest until April 21, 2011, at which point they become 100% vested. The amount reported is 20% of the grant date fair value reflecting 1 year's service of the five-year vesting period.
(2)	Includes $6,600 contributed by Capitol's 401k program, $1,156 in lease payments for an automobile provided by the company that was used for personal use and $83 from supplemental spousal life insurance premiums paid on his behalf.
(3)	Includes $6,600 contributed by Capitol's 401k program, $5,500 contributed by Capitol's ESOP program, a $10,800 automobile allowance and $54 relating to supplemental spousal life insurance premiums paid on his behalf.
(4)	Includes $3,858 contributed by Capitol's 401k program, $5,500 contributed by Capitol's ESOP program, a $10,800 automobile allowance, $13 relating to supplemental spousal life insurance premiums paid on his behalf and $5,776 from dividends received on unvested restricted stock.
(5)	Includes $6,600 contributed by Capitol's 401k program, $5,500 contributed by Capitol's ESOP program, a $10,800 automobile allowance and $13 relating to supplemental spousal life insurance premiums paid on her behalf.
(6)	Includes $6,600 contributed by Capitol's 401k program, $5,500 contributed by Capitol's ESOP program, a $10,800 automobile allowance and $19 relating to supplemental spousal life insurance premiums paid on his behalf.

1.	The members of the Audit Committee meet the standards of independence for audit committee members required by the SEC Rules and the NYSE listing standards. All members of the Audit Committee must be financially literate and at least one member of the Audit Committee must have accounting or related financial management expertise.
2.	Mr. Allen retired from Capitol's Board effective February 1, 2007.
3.	Mr. Becker was reassigned from the Audit Committee to the Nominating and Governance Committee on August 3, 2006. He was subsequently reappointed to the Audit Committee on February 1, 2007 following Mr. Allen's retirement.
4.	Mr. Genova was reassigned from the Audit Committee to the Ethics Committee on August 3, 2006.
5.	Mr. Henderson was appointed to the Audit Committee on August 3, 2006. He is Capitol's "Audit Committee Financial Expert" under the rules and regulations of the SEC for purposes of Section 407 of the Sarbanes-Oxley Act of 2002. The identification of a person as an "audit committee financial expert" does not impose any duties, obligations or liabilities that are greater than those imposed on such person as a member of either the Audit Committee or the Board in the absence of such identification. Moreover, the identification of a person as an audit committee financial expert, for purposes of the regulations of the Securities and Exchange Commission, does not affect the duties, obligations or liability of any other member of the Audit Committee or the Board. Finally, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for purposes of Section 11 of the Securities Act of 1933.
6.	Each Audit Committee member attended 100% of the 2006 meetings except for Mr. Henderson.

Compensation Committee ¹		Primary Functions	Meetings in 2006

Douglas E. Crist James C. Epolito Kathleen A. Gaskin Lewis D. Johns Leonard Maas	·	at least annually, review and approve corporate goals and objectives relevant to the compensation of Capitol's CEO, evaluate the CEO's performance in light of those goals and objectives, determine and approve the CEO's compensation level based on this evaluation, and recommend the CEO's compensation for ratification by the independent directors of the Board	4
	·	at least annually, to review and approve the compensation levels for members of Capitol's executive management team (senior executive officers of Capitol who report directly to the CEO or the Executive Committee of the Board) and any employee-directors of Capitol
	·	make recommendations to the Board with respect to incentive compensation plans and equity-based plans
	·	oversee the administration of the compensation, incentive and equity-based benefit plans of Capitol which have been, or may in the future be, adopted by the Board and, in connection therewith, to approve grants, awards and payouts under Capitol's stock option plans and Capitol's Management Incentive Plan
	·	review periodically, and approve or recommend for Board approval (as applicable) any changes to, Capitol's incentive, equity-based and other compensation plans
	·	review periodically, director and Board committee compensation levels and practices and recommend to the Board changes in such compensation levels and practices in accordance with the principles set forth in Capitol's Corporate Governance Guidelines

Ethics Committee¹		Primary Functions	Meetings in 2006

David O'Leary H. Nicholas Genova² Michael L. Kasten Kathryn L. Munro³	·	assist in monitoring the adequacy of Capitol's Code of Ethics to provide guidance on all related-party transactions including both review and approval on behalf of the Board and to identify potential conflicts of interest, including the establishment of safeguards, when necessary	0

1.	The members of the Ethics Committee are independent under the standards adopted by the Board of Directors and applicable NYSE listing standards and SEC rules and regulations.
2.	Mr. Genova was reassigned from the Audit Committee to the Ethics Committee on August 3, 2006.
3.	Ms. Munro chose not to stand for re-election at the 2006 annual meeting of shareholders. Accordingly, her term expired on April 26, 2006.

Nominating and Governance Committee¹		Primary Functions	Meetings in 2006

Lyle W. Miller² Paul R. Ballard³ David L. Becker⁴ James C. Epolito⁵ Myrl D. Nofziger	·	periodically review the appropriate size of the Board	3⁶
	·	seek individuals qualified to become board members for recommendation to the Board
	·	receive comments from all directors and report annually to the Board with an assessment of the Board's performance, to be discussed with the full Board following the end of each fiscal year
	·	review and reassess the adequacy of the Corporate Governance Guidelines of Capitol and recommend any proposed changes to the Board for approval
	·	review and reassess the adequacy of its charter annually and recommend any proposed changes to the Board for approval

1.	The Nominating and Governance Committee is composed entirely of independent directors and each member of the Nominating and Governance Committee satisfies the independence standards for such committee members established by NYSE.
2.	Former Chairperson. Mr. Miller, upon the determination of the Board of Directors that he was no longer independent, resigned from the Nominating and Governance Committee on February 1, 2007.
3.	Mr. Ballard was appointed to the Nominating and Governance Committee as its Chairperson effective February 1, 2007.
4.	Mr. Becker was reassigned from the Audit Committee to the Nominating and Governance Committee on August 3, 2006.
5.	Mr. Epolito resigned from the Nominating and Governance Committee on August 3, 2006.
6.	Each Nominating and Governance Committee member attended all of the committee's 2006 meetings with the exception of Mr. Becker, who was appointed to the Nominating and Governance Committee after the committee's final meeting of 2006.

Risk Management Committee		Primary Functions	Meetings in 2006

Paul R. Ballard Michael J. Devine Ronald K. Sable	·	assist the Board with oversight of management's compliance with Capitol's regulatory obligations arising under applicable federal and state banking laws, rules and regulations	4
Paul R. Ballard Michael J. Devine Ronald K. Sable	·	monitor and assist management's implementation and enforcement of Capitol's risk management policies and procedures	4

Technology Committee		Primary Functions	Meetings in 2006

John S. Lewis Paul R. Ballard Michael J. Devine² James C. Epolito Ronald K. Sable	·	oversee and approve requests for hardware and software	4³
	·	oversee and approve all requests for systems development
	·	establish technology project priorities
	·	oversee all information systems performance
	·	oversee and recommend disposition of major information systems capital expenditures
	·	oversee implementation of new processes to ensure that Capitol's objectives are met

1.	Mr. Devine was appointed to the Technology Committee on August 3, 2006.
2.	Each Technology Committee member attended all of the meetings except for Mr. Devine.

2.	Performance based incentives - the establishment of financial incentives for senior management who meet certain objectives which promote Capitol's ability to meet its long-term growth and financial goals.
3.	Shareholder value and long-term incentives - the Compensation Committee believes that the long-term success of Capitol and its ability to consistently increase shareholder value is dependent on its ability to attract and retain skilled executives. Capitol's compensation strategy encourages equity-based compensation to align the interests of management and shareholders.
4.	Full Disclosure - the Compensation Committee seeks to provide full disclosure to the independent members of the Board of Directors of Capitol's compensation practices and issues to ensure that all directors understand the implications of committee decisions.

·	Assessment of Company Performance. The committee uses company performance measures in two ways. In establishing total compensation ranges, the committee considers various measures of company and industry performance, asset growth, earnings per share, return on assets, return on equity, total shareholder return and the effective execution of Capitol's growth strategy. The committee does not apply a formula or assign these performance measures relative weights. Instead, it makes a subjective determination after considering such measures collectively.
·	Assessment of Individual Performance. Individual performance has a strong impact on the compensation of all employees, including the CEO and the other executive officers. The CEO's compensation is governed by his employment contract, which is described below. For the other named executive officers, the committee receives a performance assessment and compensation recommendation from the CEO and also exercises its judgment based on the board's interactions with the executive officer. As with the CEO, the performance evaluation of these executives is based on his or her contribution to the company's performance, and other leadership accomplishments.
·	Total Compensation Review. The committee reviews each executive's base pay, bonus and equity incentives annually. In addition to these primary compensation elements, the committee reviews the perquisites and other compensation and payments that would be required under various severance and change-in-control scenarios. Following the 2006 review, the committee determined that these elements of compensation were reasonable in the aggregate.

·	reduce Mr. Reid's salary to $900,000;
·	delete references to Mr. Reid's right to defer his compensation;
·	change the date on which certain amounts are paid to Mr. Reid to avoid any potential issues arising under Section 409A of the Code; and
·	revise Mr. Reid's long term stock award for each new bank or holding company opened or acquired by Capitol (each a *"New Affiliate"*) from an option for 30,000 shares of Capitol's common stock to $50,000 in cash and a restricted stock award for shares of Capitol's common stock having a fair market value of $100,000.
·	Pursuant to such amendment Mr. Reid is not entitled to receive any compensation for more than ten (10) New Affiliates in each fiscal year.

Outstanding Equity Awards at Fiscal Year-End 2006
	Option Awards(1)					Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable	Option Exercise Price ($)		Option Expiration Date	Number of Share or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($)(2)
Joseph D. Reid		18,069	$	23.20	12/31/07	128,503	$	5,936,839
		35,020		20.90	2/1/09	0		0
		60,555		16.40	6/30/09	0		0
		975		21.25	7/8/09	0		0
		51,910		21.48	9/3/09	0		0
		2,373		16.08	10/1/09	0		0
		333		17.81	10/9/09	0		0
		116		16.55	10/10/09	0		0
		103		20.80	11/05/09	0		0
		99		20.75	11/08/09	0		0
		1,432		19.47	11/22/09	0		0
		211		20.00	12/3/09	0		0
		11		21.28	12/17/09	0		0
		249		21.23	12/27/09	0		0
		6107		21.84	12/31/09	0		0
		711		22.28	1/7/10	0		0
		576		23.20	1/8/10	0		0
		42,524		21.95	1/17/10	0		0
		553		22.28	1/20/10	0		0
		94		22.50	1/22/10	0		0
		20		23.00	1/22/10	0		0
		60		21.49	2/3/10	0		0
		227		23.37	2/11/10	0		0
		1,736		20.36	2/12/10	0		0

(1)	All stock option awards are vested.
(2)	Based upon Capitol's common stock closing price as of December 29, 2006 of $46.20 as reported by the NYSE.
(3)	Stock options in Capitol's subsidiary Point Loma Community Bank.
(4)	Stock options in Capitol's subsidiary Bank of San Francisco.

Option Exercises and Stock Vested 2006
	Option Awards				Stock Awards
Name		Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)	Value Realized on Vesting ($)
Joseph D. Reid		0	$	0	42,833	$	1,603,668(1)
Lee W. Hendrickson		0		0	0		0
John S. Lewis		30,497(3)		544,132(4)	3,718		149,092(2)
Cristin K. Reid		0		0	0		0
Bruce A. Thomas		0		0	0		0

(1)	Value based upon Capitol's common stock price as reported by the NYSE on December 30, 2005 ($37.44), the most recently reported price at the time of the vesting of the restricted stock award on January 1, 2006.
(2)	Value based upon Capitol's stock price as reported by the NYSE on May 1, 2006 ($40.10), the date of vesting.
(3)	Mr. Lewis held 20,000 stock options in Capitol's subsidiary Bank of Escondido. He exercised his options immediately prior to tendering them to Capitol in its tender offer to Bank of Escondido shareholders. Amount includes 7,134 shares of Capitol common stock acquired as a result of Mr. Lewis tendering his Bank of Escondido shares for shares of Capitol common stock.
(4)	Includes $129,591 attributable to the difference between the value of Mr. Lewis' Bank of Escondido shares ($200,000) and the value of Mr. Lewis' Capitol common stock based upon Capitol's common stock price as reported by the NYSE on December 29, 2006 ($46.20), the most recently reported price at the time of the effective date of the Bank of Escondido tender offer on December 31, 2006.

Pension Benefits 2006

Name	Plan Name	Number of Years of Credited Service (#)(1)	Present Value of Accumulated Benefits ($)	Payments During Last Fiscal Year(($)

Joseph D. Reid	N/A	N/A	$ N/A	$ N/A
Lee W. Hendrickson	Executive Supplemental Income Agreement	15	137,517	0
John S. Lewis	N/A	N/A	N/A	N/A
Cristin K. Reid	N/A	N/A	N/A	N/A
Bruce A. Thomas	Executive Supplemental Income Agreement	8	N/A	0

Non-Employee Director Compensation in 2006
Name	Fees Earned or Paid in Cash ($)		Option Awards ($)(1)		All Other Compensation ($)(2)		Total ($)
Louis G. Allen	$	7,000	$	0(10)	$	3,000	$	10,000
Paul R. Ballard(3)		24,600		0(11)		3,000		27,600
David L. Becker(3)		19,350		0(12)		3,000		22,850
Douglas E. Crist		11,000		0(13)		1,500		12,500
Michael J. Devine(4)		194,900		0(14)		2,000		196,900
James C. Epolito		9,000		0(15)		1,500		10,500
Gary A. Falkenberg		13,000		0(16)		3,000		16,000
Joel I Ferguson		5,000		0(17)		3,000		8,000
Kathleen E. Gaskin		7,500		0(18)		3,000		10,500
H. Nicholas Genova(3)		19,100		0(19)		3,000		22,100
Richard A. Henderson(5)		12,950		0(20)		1,000		13,950
Lewis D. Johns(9)		9,400		0(21)		1,500		10,900
Michael L. Kasten(6)		166,500		0(22)		3,000		168,100
Leonard Maas(3)		9,700		0(23)		2,000		11,700
Lyle W. Miller(7)		63,400		0(24)		3,000		66,400
Kathryn L. Munro(8)		1,000		0(25)		1,500		2,500
Myrl D. Nofziger(3)		9,450		0(26)		6,000		15,450
David O'Leary(9)		14,500		0(27)		3,000		17,500
Ronald K. Sable(3)		18,300		0(28)		5,000		23,300

(1)	Capitol's non-employee directors received a $15,000 retainer paid in stock options for service in 2006. Due to accounting changes, Capitol chose to grant the options in fiscal year 2005 and were fully vested at December 31, 2005.
(2)	All non-employee directors receive a travel allowance per board meeting attended. Non-employee directors are responsible for payment of their own travel accommodations and do not receive reimbursement for such costs.
(3)	Compensation in 2006 included board fees for service on the board of directors of affiliate(s) of Capitol in 2006.
(4)	Mr. Devine's compensation in 2006 included a $25,000 fee for Southwest bank operations oversight and a $50,000 fee for Southwest credit administration/loan portfolio assistance. Mr. Devine's compensation also included board fees for service on various boards of affiliates of Capitol in 2006. In addition, Mr. Devine received a travel allowance in the amount of $24,000 to reimburse him for travel to various bank boards of directors meetings, as well as other travel allowances for his service on other affiliate boards of directors. As of December 31, 2006, Mr. Devine was on the board of 11 affiliates in 2006.
(5)	Mr. Henderson was appointed to the Board of Directors of Capitol effective May 15, 2006. Mr. Henderson's compensation also included board fees for service on the board of directors of an affiliate of Capitol in 2006.
(6)	Mr. Kasten's compensation in 2006 included fees for service on various boards of directors of affiliates of Capitol in 2006 as well as a fee of $80,000 for his service as Vice Chairman of Capitol's Board of Directors. In addition, Mr. Kasten received a travel allowance in the amount of $24,000 to reimburse him for travel to various southwest bank board of directors' meetings, as well as other travel allowances for his service on other affiliate boards of directors. As of December 31, 2006, Mr. Kasten was on the board of directors of 7 affiliates.

(7)	Mr. Miller's compensation included a fee of $50,000 for his service as Vice Chairman of Capitol's board, as well as board fees for service on the board of an affiliate of Capitol in 2006.
(8)	Ms. Munro chose not to stand for re-election to the Board of Directors of Capitol in 2006. Accordingly, her term ended upon election of the current board of directors on April 26, 2006.
(9)	Mr. O'Leary's compensation included board fees for service on the board of an affiliate of Capitol in 2006 as well as a fee of $25,000 for his service as Secretary of Capitol's board. In addition, he received travel allowances for his service on that affiliate board.
(10)	As of December 31, 2006, Mr. Allen had 6,859 stock options outstanding.
(11)	As of December 31, 2006, Mr. Ballard had 23,198 stock options outstanding.
(12)	As of December 31, 2006, Mr. Becker had 2,226 stock options outstanding.
(13)	As of December 31, 2006, Mr. Crist had 3,811 stock options outstanding.
(14)	As of December 31, 2006, Mr. Devine had 7,057 stock options outstanding.
(15)	As of December 31, 2006, Mr. Epolito had 6,893 stock options outstanding.
(16)	As of December 31, 2006, Dr. Falkenberg had 4,076 stock options outstanding.
(17)	As of December 31, 2006, Mr. Ferguson had 1,311 stock options outstanding.
(18)	As of December 31, 2006, Ms. Gaskin had 2,959 stock options outstanding.
(19)	As of December 31, 2006, Mr. Genova had 2,226 stock options outstanding.
(20)	As of December 31, 2006, Mr. Hannley had 55,594 stock options outstanding.
(21)	As of December 31, 2006, Mr. Johns had 6,529 stock options outstanding.
(22)	As of December 31, 2006, Mr. Kasten had 21,354 stock options outstanding.
(23)	As of December 31, 2006, Mr. Maas had 4,645 stock options outstanding.
(24)	As of December 31, 2006, Mr. Miller had 8,176 stock options outstanding.
(25)	As of December 31, 2006, Ms. Munro had no stock options outstanding.
(26)	As of December 31, 2006, Mr. Nofziger had 2,959 stock options outstanding.
(27)	As of December 31, 2006, Mr. O'Leary had 8,450 stock options outstanding.
(28)	As of December 31, 2006, Mr. Sable had 2,226 stock options outstanding.