CAPITALSOUTH BANCORP NOMINATING COMMITTEE CHARTER Organization There shall be a committee of the board of directors to be known as the nominating committee. The committee shall be composed of not less than three (3) directors who are independent within the meaning of the rules and regulations of the Securities and Exchange Commission and the Nasdaq Stock Market. Statement of Policy The role of the nominating committee is to (a) identify individuals qualified to become members of the board of directors of the corporation, (b) select, or to recommend to the board to select, the director nominees for the next annual meeting of shareholders, (c) select, or to recommend to the board to select, director nominees for filling vacancies on the board of directors and (d) make recommendations to the board regarding director compensation. The committee may also have other duties as assigned to it by the board. Responsibilities The primary responsibilities of the committee are as follows: (1) Oversee the evaluation of the board of directors and management of the corporation; (2) Develop criteria for the selection of new directors and nominees for vacancies on the board, which criteria shall be designed to develop a board which provides management with experienced and seasoned advisors in fields related to current or future business directions of the corporation who possess the mix of skills and other qualities to assure appropriate board composition, taking into account the current board members and the specific needs of the corporation and the board; (3) Develop procedures for reviewing potential nominees to the board proposed by shareholders; (4) Recommend to the board qualified candidates for the board who bring the backgrounds, knowledge, skill sets and experience that would strengthen the board. The committee shall have the sole authority to retain and terminate any search firm to be used to identify director candidates, including sole authority to approve the search firm's fees and other retention terms; (5) To review the suitability for continued service as a director of each board member when he or she has a significant change in status, such as an employment change, and recommending to the board whether to re-nominate such director; (6) To review periodically the size of the board and recommend to the board changes as appropriate; (7) Self-assess the performance of the nominating committee; and (8) Report regularly to the board of directors on the activities of the committee. Meetings The committee will hold at least one (1) regular meeting per year and additional meetings as the committee deems appropriate.