SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant X
Filed by a party other than the registrant __
Check the appropriate box:
__ Preliminary proxy statement
X Definitive proxy statement
__ Definitive additional materials
__ Soliciting material pursuant to Rule 14a-11(c) or Rule
14a-12
FIRST CHARTER CORPORATION
(Name of Registrant as Specified in Its Charter)
FIRST CHARTER CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
X $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
__ $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
__ Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which transactions
applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to
Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
__ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the form or schedule and the date of its
filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
FIRST CHARTER CORPORATION
22 Union Street, North
Concord, North Carolina 28025
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on April 25, 1995
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of First Charter
Corporation will be held at the Cabarrus Country Club, located on
Weddington Road in Concord, North Carolina, on Tuesday, April 25,
1995, at 3:00 p.m., for the following purposes:
1. To elect five directors for terms expiring in 1998;
2. To consider and vote upon a proposal to approve the
adoption of the Corporation's 1996 Employee Stock
Purchase Plan;
3. To consider and vote upon a proposal to approve the
adoption of the Corporation's Restricted Stock Award
Program;
4. To ratify the action of the Board of Directors in
selecting KPMG Peat Marwick as independent public
accountants to audit the books of the Corporation
for the current year; and
5. To transact such other business as may properly come
before the meeting or any adjournment or
adjournments thereof.
Pursuant to the provisions of the North Carolina Business
Corporation Act, February 17, 1995 has been fixed as the record
date for the determination of shareholders entitled to notice of
and to vote at such Annual Meeting and, accordingly, only holders
of Common Stock of record at the close of business on that date
will be entitled to notice of and to vote at such meeting and at
any adjournment or adjournments thereof.
You are cordially invited to attend the meeting. Whether
or not you plan to attend, please sign, date and return the
accompanying proxy promptly, so that your shares may be
represented and voted at the meeting. A return envelope is
enclosed for your convenience.
By order of the Board of Directors.
James W. Townsend, Jr.
Secretary
March 16, 1995<PAGE>
FIRST CHARTER CORPORATION
22 Union Street, North
Concord, North Carolina 28025
______________________________
PROXY
______________________________
1995 Annual Meeting of Shareholders
to be held on April 25, 1995
The following proxy statement, first mailed or delivered
to security holders on or about March 16, 1995, is furnished in
connection with the solicitation by the Board of Directors of
First Charter Corporation (the "Corporation") of proxies for the
Annual Meeting of Shareholders of the Corporation to be held on
April 25, 1995 at 3:00 p.m. at the Cabarrus Country Club, located
on Weddington Road in Concord, North Carolina, and at any
adjournment or adjournments thereof (the "Annual Meeting"). The
principal executive offices of the Corporation are located at 22
Union Street, North, Concord, North Carolina 28025. The
Corporation's telephone number is (704) 786-3300. The
Corporation owns all of the outstanding capital stock of First
Charter National Bank, a national banking association (the
"Bank").
The accompanying form of proxy is for use at the Annual
Meeting if a shareholder either will be unable to attend in
person or will attend but wishes to vote by proxy. The proxy may
be revoked in writing by the person giving it at any time before
it is exercised by notice to the Secretary of the Corporation or
by submitting a proxy having a later date, or it may be revoked
by such person appearing at the Annual Meeting and electing to
vote in person. All shares of the Corporation's common stock,
$5.00 par value (the "Common Stock"), represented by valid
proxies received pursuant to this solicitation, and not revoked
before they are exercised, will be voted in the manner specified
therein. Where specifications are not made, proxies will be
voted in favor of (i) electing as directors of the Corporation
the five nominees named in this Proxy Statement, (ii) approving
the Corporation's 1996 Employee Stock Purchase Plan, (iii)
approving the Corporation's Restricted Stock Award Program, and
(iv) ratifying the action of the Board of Directors in selecting
KPMG Peat Marwick to audit the books of the Corporation for the
current year, and will be voted in the discretion of the proxy
holders on any other matters presented at the Annual Meeting.
The entire cost of soliciting these proxies will be borne
by the Corporation. In following up the original solicitation of
the proxies by mail, the Corporation will request brokers and
others to send proxies and proxy material to the beneficial
owners of the Common Stock and will reimburse them for their
expenses in so doing. If necessary, the Corporation may also use
one or more of its regular employees, who will not be specially
compensated therefor, to solicit proxies from the shareholders,
either in person, by telephone or by mail.
Pursuant to the provisions of the North Carolina Business
Corporation Act, as amended (the "Business Corporation Act"),
February 17, 1995 has been fixed as the record date in connection
with the Annual Meeting and, accordingly, only holders of the
4,639,105 outstanding shares of Common Stock of record at the
close of business on that date will be entitled to notice of and
to vote at the Annual Meeting. Each share of Common Stock is
entitled to one vote on each of the matters to be voted upon at
the Annual Meeting, except that shares held by the Bank, whether
or not held in a fiduciary capacity, may not be voted by the Bank
in the election of directors. In accordance with North Carolina
law, votes withheld from director nominees and abstentions from
voting will be counted for purposes of determining whether a
quorum has been reached at the Annual Meeting. Furthermore,
pursuant to the rules of the National Association of Securities
Dealers, Inc. (the "NASD"), a broker holding shares of Common
Stock in nominee or "street" name must obtain specific voting
restrictions from beneficial owners of such shares in order to
vote such shares. Any such shares voted with respect to at least
one matter will be counted for purposes of determining whether a
quorum exists, even if such shares are not voted in other matters
where voting instructions were not received ("broker non-votes").
PRINCIPAL SHAREHOLDERS
The following table sets forth each shareholder known to
the Corporation to beneficially own more than 5% of the
outstanding shares of the Common Stock as of December 31, 1994.
The Common Stock is the only class of equity securities of the
Corporation outstanding.
Shares
Beneficially Owned (1)
Percent of
Name and Address Number Class
_________________________________________________________________
First Union National Bank
of North Carolina
Capital Management Group
401 South Tryon Street
Charlotte, North Carolina 28202 371,137 (2) 8.0%
<PAGE>
Shares
Beneficially Owned (1)
Percent of
Name and Address Number Class
_________________________________________________________________
First Charter National Bank
Post Office Box 228
Concord, North Carolina 28025 700,961 (3) 15.1
Kyle E. Black, M.D.
1 Acorn Lane
Salisbury, North Carolina 28144 241,225 (4) 5.2
__________________
(1) Unless otherwise noted, all shares of Common Stock set
forth in the table are directly owned, with sole voting
and investment power, by such shareholder. The
Corporation has obtained certain of the information from
schedules filed with the Securities and Exchange
Commission pursuant to Section 13(d) or 13(g) of the
Securities Exchange Act of 1934, as amended.
(2) Includes 289,863 shares held in various fiduciary
capacities with respect to which First Union National Bank
has shared voting power and 80,353 shares held in various
fiduciary capacities with respect to which it has sole
voting power. First Union National Bank has shared
investment power with regard to 346,539 shares and sole
investment power with regard to 24,598 shares.
(3) Includes 624,796 shares held in various fiduciary
capacities with respect to which the Bank has sole voting
power and 76,165 shares held in various fiduciary
capacities with respect to which it has shared voting
power. The Bank has sole investment power with respect to
49,056 shares and shared investment power with respect to
81,694 shares.
(4) Includes 83,626 shares owned by Dr. Black, as to which he
has sole voting and investment power; 55,199 shares held
by the estate of his wife, of which Dr. Black is executor
and a beneficiary, as to which shares Dr. Black is deemed
to have sole voting and investment power; and 102,400
shares held in two trusts of which Dr. Black is a
co-trustee, as to which he has shared voting and
investment power. Each trust contains 51,200 shares, and
Dr. Black is the beneficiary of one trust.
<PAGE>
ELECTION OF DIRECTORS
Under the Corporation's Articles of Incorporation and
Bylaws, the Board of Directors of the Corporation shall have not
fewer than five nor more than twenty-five members as determined
from time to time by not less than 75% of the members of the
Board of Directors or by the shareholders of the Corporation, and
the directors shall be divided into three classes having
staggered three-year terms. The Board of Directors has set the
number of directors at fourteen. The Corporation's Bylaws
provide that a director may not be elected as director, or
continue to serve as director, after reaching age 70.
The Board of Directors has nominated for election five
members of the Board of Directors whose terms expire at the
Annual Meeting and are eligible for re-election. It is intended
that the persons named in the accompanying form of proxy will
vote to elect the five nominees listed below as directors for
terms to expire in 1998, unless authority so to vote is withheld.
Each nominee, if elected, will serve until the Annual Meeting of
Shareholders of the Corporation held in 1998, or until such
person's earlier resignation or retirement, or until his
successor shall be elected and shall qualify to serve. Although
management expects that each of the nominees will be available
for election, if a vacancy in the slate of nominees is caused by
death or other unexpected occurrence, it is intended that shares
represented by proxies in the accompanying form will be voted for
the election of a substitute nominee selected by the persons
named in the proxy. Directors will be elected by a plurality of
the votes cast. Accordingly, neither votes withheld from
director nominees nor broker non-votes, if any, will have the
effect of a "negative" vote with respect to the election of
directors. The Board of Directors recommends a vote FOR all of
the nominees for election as directors.
The names of the nominees for election to the Board of
Directors and of the continuing directors, their ages, their
principal occupations or employment for the past five years, and
certain other information with respect to such persons is set
forth below. The dates indicated as the dates from which such
persons have served as directors reflect the year in which the
respective directors became directors of the Corporation, which
was formed in 1983. Most of the directors also have been
directors of the Bank (or other banks which have merged into the
Bank) both prior to and since the formation of the Corporation.
NOMINEES FOR THREE-YEAR TERMS EXPIRING IN 1998
J. KNOX HILLMAN, JR., age 53, is the President of Shuford
Insurance Agency, Inc. He has been a director since 1984.
LAWRENCE M. KIMBROUGH, age 54, is the President and Chief
Executive Officer of the Corporation and the Bank. He has been a
director since 1986.
ROBERT F. LOWRANCE, age 46, is the owner of A&A Realty
Company, a company involved in retail and commercial real estate
sales and development. He has been a director since 1986.
ROBERT L. WALL, age 63, served as President of Cabarrus
Memorial Hospital until February 28, 1994, at which time he
retired. He has been a director since 1983.
JAMES B. WIDENHOUSE, age 67, is a private investor. He
has been a director since 1983.
DIRECTORS WITH TERMS EXPIRING IN 1996
WILLIAM R. BLACK, age 46, is medical doctor specializing
in oncology. He has been a director since 1990.
GRADY S. CARPENTER, age 66, is the President of Security
Oil Company, Inc., a wholesale oil distributor. He has been a
director since 1986.
DUARD C. LINN, JR., age 69, is Vice Chairman of the Board
of Directors of the Corporation and the Bank. He also is a
private business consultant. He has been a director since 1987.
T. DAVID PROPST, age 44, is the President of Earl's Tire
Store, Inc. He has been a director since 1986.
DIRECTORS WITH TERMS EXPIRING IN 1997
JANE B. BROWN, age 63, is a private investor. She has
been a director since 1986.
MICHAEL R. COLTRANE, age 48, is the President of The
Concord Telephone Company. Mr. Coltrane served as director of
the Corporation from 1983 until 1985, and has currently served as
a director since 1988. Mr. Coltrane also serves as a director of
CT Communications, Inc. and a director of US Intelco Holdings,
Inc.
J. ROY DAVIS, JR., age 61, is the Chairman of the Board of
the Corporation and the Bank. He is also the President of S&D
Coffee, Inc. Prior to being elected Chairman of the Board in
1990, Mr. Davis was Vice Chairman of the Board of the Corporation
and the Bank from 1988 to 1990. He has been a director since
1983.
BRANSON C. JONES, age 67, is Consulting Vice President of
Oiles America Corp., a manufacturer of automobile bearings.
Prior to his employment with Oiles America Corp. in 1990, Mr.
Jones served as Executive Vice President of The Greater Cabarrus
County Economic Development Corporation. Mr. Jones has been a
director since 1983.
HUGH H. MORRISON, age 47, is the President of E. L.
Morrison Co., Inc., a retail building supply company. He has
been a director since 1985.
No family relationship as close as first cousin exists
among the directors or executive officers of the Corporation.
COMPENSATION AND ATTENDANCE OF DIRECTORS
During 1994, each director of the Corporation who was not
employed by the Corporation or the Bank was paid $400 for each
meeting of the Board of Directors of the Corporation which he
attended and $200 for each Corporation or Bank committee meeting
he attended. The Corporation also maintains the Deferred
Compensation Plan for Non-Employee Directors (the "Deferred
Compensation Plan"), pursuant to which directors who are not also
full-time employees of the Corporation or the Bank may elect to
defer all or a portion of such director fees. Such deferred fees
may be invested in a cash account, which is credited with
interest at an annual rate equal to the Bank's Prime Rate, or in
a stock-based account, in which the participant will be credited
with units based on the value of shares of Common Stock of the
Corporation. Amounts invested in the stock account are credited
with additional amounts representing the value of dividends
declared from time to time by the Corporation. Under the
Deferred Compensation Plan, a participant may elect to receive
amounts (payable in cash only) in a lump sum or in equal
installments over five years, following the participant's death,
disability, retirement from the Board of Directors or any other
date selected by the participant which is at least six months
following the participant's election date.
During 1994, each member of the Board of Directors of the
Corporation attended at least 75% of the total number of meetings
of the Board of Directors and any committee or committees on
which he served. The Board of Directors met 12 times during
1994.
COMMITTEES OF THE BOARD OF DIRECTORS
The Corporation has Executive, Audit and Compensation
Committees. The Executive Committee reviews the regularly
scheduled Board of Directors meeting agendas. This Committee
receives various reports from management and makes
recommendations based on management reports to the directors at
the regularly scheduled Board of Directors meetings. Pursuant to
the Corporation's Bylaws, the Executive Committee also serves as
the nominating committee. In such capacity, the Executive
Committee determines the nominees for director in a given year
and may consider written nominations of candidates for election
to the Board of Directors submitted by shareholders to the
Secretary of the Corporation that are accompanied by certain
information regarding such nominees. See "Election of Directors
- - -- Nominations for Director." The Executive Committee also
serves the function previously served by the Asset/Liability
Committee. In such capacity, it monitors the financial condition
of the Corporation and makes adjustments in policies affecting
lending, pricing of services, investment securities and liability
positions with a view to current and anticipated interest rates
and other economic conditions.
The Audit Committee reviews the work and reports of the
Corporation's internal auditors and, on an annual basis, reviews
reports of the Corporation's independent auditors and any
examinations of regulatory agencies. The Audit Committee also
establishes the scope and detail of the audit program, which is
conducted by the internal auditors to protect against improper
and unsound practices and to furnish adequate protection of all
assets and records. It also reviews proposals from the
independent public accountants and makes recommendations to the
full Board of Directors.
The Compensation Committee annually reviews and recommends
to the Board of Directors salary grade ranges and merit increase
guidelines. In addition, it recommends to the Board of Directors
the annual budget request for all salaries and overtime and
specifically recommends to the Board of Directors all executive
officers' salaries. It reviews recommendations from management
regarding major benefits plans and recommends to the Board of
Directors annually the formula for matching contributions to the
First Charter Retirement Savings Plan. The Compensation
Committee also administers the Corporation's Comprehensive Stock
Option Plan and the 1993 Employee Stock Purchase Plan.
The members of each Committee and the number of meetings
held by each Committee during 1994 were as follows:
EXECUTIVE (14 meetings)
Michael R. Coltrane
J. Roy Davis, Jr., Chairman
J. Knox Hillman, Jr.
Branson C. Jones
Lawrence M. Kimbrough
Duard C. Linn, Jr.
Hugh H. Morrison
Robert L. Wall
<PAGE>
AUDIT (7 meetings)
Grady S. Carpenter
Michael R. Coltrane
Branson C. Jones, Chairman
Robert F. Lowrance
T. David Propst
James B. Widenhouse
COMPENSATION COMMITTEE
(7 meetings)
Jane B. Brown
Michael R. Coltrane
J. Roy Davis, Jr.
J. Knox Hillman, Jr., Chairman
Duard C. Linn, Jr.
T. David Propst
Robert L. Wall
NOMINATIONS FOR DIRECTOR
The Corporation's Bylaws set forth the procedures for a
shareholder to follow in order to nominate persons for election
to the Board of Directors. Pursuant to these provisions, a
shareholder generally may properly bring a nomination before the
annual meeting of shareholders in a given year if the shareholder
provides written notice to the Corporation's secretary at least
50 but not more than 75 days prior to the anniversary date of the
shareholders' meeting held in the prior year. This notice must
set forth certain biographical information relating to each
person so nominated by the shareholder. In addition, the notice
must set forth such shareholder's beneficial ownership of the
Common Stock. In its discretion, the nominating committee of the
Board of Directors may consider such nomination for the Board of
Directors' slate of nominees for that year. The Bylaws also set
forth the time by which nominations shall be submitted in the
event that the annual meeting is held more than 30 days before or
60 days after the anniversary date of the previous year's annual
meeting. Finally, the Bylaws set forth under what circumstances
a shareholder may bring a nomination for director before a
special meeting of shareholders and the time within which such
nomination must be submitted. Unless nominations are presented
in accordance with these provisions of the Bylaws, they will be
disregarded as invalid. Shareholders may obtain a copy of the
Corporation's Bylaws from the Corporation, upon written request
to First Charter Corporation, 22 Union Street North, Concord,
North Carolina, 28025, Attention: Robert O. Bratton, and upon
payment of $25.00 to cover the costs of reproduction.
<PAGE>
MANAGEMENT OWNERSHIP OF COMMON STOCK
The following table presents information regarding the
beneficial ownership of the Common Stock as of January 31, 1995
of (i) all current directors and nominees for director, (ii) each
executive officer of the Corporation named in the Summary
Compensation Table contained elsewhere herein and (iii) all
directors, nominees for director and executive officers as a
group.
Shares
Beneficially Owned (1)
Percent of
Name and Address Number Class
_________________________________________________________________
William R. Black 1,333 *
Robert O. Bratton 55,985 (2) 1.18%
Jane B. Brown 52,929 1.14
Grady S. Carpenter 8,445 *
Michael R. Coltrane 73,335 (3) 1.58
J. Roy Davis, Jr. 23,178 *
Robert G. Fox 2,944 (4) *
J. Knox Hillman, Jr. 4,652 *
Branson C. Jones 30,433 (5) *
Lawrence M. Kimbrough 29,955 (6) *
Duard C. Linn, Jr. 221,321 (7) 4.77
Robert F. Lowrance 7,568 *
Hugh H. Morrison 29,870 (8) *
T. David Propst 12,501 (9) *
Robert L. Wall 4,828 (10) *
James B. Widenhouse 6,492 *
All directors, nominees and
executive officers of the
Corporation as a group (16 persons) 565,769 12.16%
_______________
*Less than 1%.
(1) Unless otherwise noted, all shares of Common Stock set
forth in the table are directly owned, with sole voting
and investment power, by such shareholders.
(2) Includes 5,493 shares represented by options that are
currently exercisable or exercisable within 60 days, 2,470
shares owned by spouse and 246 shares owned by minor
children.
(3) Includes 6,956 shares owned by spouse as to which Mr.
Coltrane disclaims beneficial ownership and 19,200 shares
held in three trusts of which Mr. Coltrane is a co-
trustee, of which he has shared voting and investment
power.
(4) Includes 1,920 shares represented by options that are
currently exercisable or exercisable within 60 days.
(5) Includes 2,400 shares owned by spouse.
(6) Includes 7,520 shares represented by options that are
currently exercisable or become exercisable within 60
days, 404 shares owned by spouse and 1,737 shares owned by
a minor child.
(7) Includes 25,321 shares owned by spouse and 65,330 shares
held in a family limited partnership of which Mr. Linn has
shared voting and investment power.
(8) Includes 5,719 shares held in trust, 1,061 shares owned by
spouse and 7,056 shares owned by minor children.
(9) Includes 2,470 shares owned by minor children.
(10) Includes 206 shares owned by spouse.
Pursuant to Section 16 ("Section 16") of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), directors
and officers of the Corporation are required to file reports with
the Securities and Exchange Commission indicating their holdings
of and transactions in the Common Stock. To the Corporation's
knowledge, based solely on its review of the copies of such
reports furnished to the Corporation and written representations
that no other reports were required, insiders of the Corporation
complied with all filing requirements.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table indicates for the
past three years the compensation of each person who served as an
executive officer of the Corporation in 1994, including the Chief
Executive Officer (the "named executive officers").
Long Term
Compensation
Awards
Annual Compensation Securities
Underlying
Name and Salary Bonus (1) Options/SARs
Principal Position Year ($) ($) (#)
_________________________________________________________________
Lawrence M. Kimbrough 1994 $132,500 $ 92,750 7,633
President and Chief 1993 125,000 62,500 8,000
Executive Officer 1992 125,000 62,500 8,400
Robert O. Bratton 1994 $ 97,500 $ 48,750 4,900
Executive Vice
President 1993 92,000 36,800 4,933
and Chief Financial
Officer 1992 92,000 36,800 6,672
Robert G. Fox 1994 $ 95,000 $ 47,500 4,733
Executive Vice
President (2) 1993 62,577 27,000 4,800
1992 - - -
All Other
Name and Compensation
Principal Position Year ($)
____________________________________________________________
Lawrence M. Kimbrough 1994 $ 9,364(3)
President and Chief 1993 12,000
Executive Officer 1992 11,475
Robert O. Bratton 1994 $ 9,745(4)
Executive Vice
President 1993 8,832
and Chief Financial
Officer 1992 8,446
Robert G. Fox 1994 $ 3,337(5)
Executive Vice
President (2) 1993 0
1992 -
__________________
(1) Represents amounts paid to the named executive officer
pursuant to the Corporation's Executive Incentive Bonus
Plan. See "Report of Board of Directors on Executive
Compensation" for a brief description of the Executive
Incentive Bonus Plan.
(2) Mr. Fox was hired by the Corporation in April 1993.
(3) Consists of (i) $9,240 contributed by the Corporation
under the Retirement Savings Plan (the "Savings Plan"), a
defined contribution plan intended to qualify under
Sections 401(a) and 401(k) of the Internal Revenue Code of
1986, as amended (the "Code"), and (ii) $124 representing
the dollar value of the premium paid by the Corporation
for term life insurance.
(4) Consists of (i) $9,240 contributed by the Corporation
under the Savings Plan, and (ii) $505 representing the
dollar value of the premium paid by the Corporation for
term life insurance.
(5) Consists of (i) $2,850 contributed by the Corporation
under the Savings Plan, and (ii) $487 representing the
dollar value of the premium paid by the Corporation for
term life insurance.
<PAGE>
STOCK OPTION PLANS
The Corporation has in effect the Comprehensive Stock
Option Plan pursuant to which the Compensation Committee may
grant stock options to officers and other key employees of the
Corporation and the Bank. In addition, during the 1994 fiscal
year, the Corporation had in effect the 1991 Employee Stock
Purchase Plan (the "1991 ESPP") and the 1993 Employee Stock
Purchase Plan (the "1993 ESPP").
The following table indicates option grants pursuant to
the Comprehensive Stock Option and the 1993 ESPP during fiscal
year 1994 to the named executive officers. No options were
granted pursuant to the 1991 ESPP, which terminated by its terms
during such year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
Number of Percent of
Securities Total Options/
Underlying SARs Granted Exercise
Options/SARs to Employees or Base
Granted in Fiscal Price
Name (#) Year ($/Sh)
_________________________________________________________________
L. M. Kimbrough 5,867 (1) 20.28% $ 14.72
1,766 (2) 6.86 10.13
R. O. Bratton 3,600 (1) 12.44 14.72
1,300 (2) 5.05 10.13
R. G. Fox 3,467 (1) 11.98 14.72
1,266 (2) 4.92 10.13
<PAGE>
Grant Date
Expiration Present
Name Date Value (3)
_________________________________________________________________
L. M. Kimbrough 10/24/04 $ 36,531 (4)
1/2/96 4,920 (5)
R. O. Bratton 10/24/04 22,416 (4)
1/2/96 3,621 (5)
R. G. Fox 10/24/04 21,587 (4)
1/2/96 3,527 (5)
__________________
(1) Represents shares covered by options granted pursuant to
the Corporation's Comprehensive Stock Option Plan. All
such options granted under the Comprehensive Stock Option
Plan in 1994 vest at the rate of 20% per year over five
years, based on the date of grant. Such options have an
exercise price equal to 100% of fair market value of such
shares on the date of grant.
(2) Represents shares covered by options granted pursuant to
the Corporation's 1993 ESPP. Pursuant to the 1993 ESPP,
eligible employees are notified of the number of shares
with respect to which options can be granted to such
employee under the plan, and then each employee elects the
number of shares to be so covered by the options. The
numbers in the table represent the number of shares so
elected. Options granted under the 1993 ESPP are
exercisable two years from date of grant, at which time
they expire if not exercised. Options granted under the
1993 ESPP have an exercise price equal to 90% of the fair
market value of such shares on the date of grant.
(3) Based on the Black-Scholes option pricing model adapted
for use in valuing executive stock options. The actual
value, if any, an executive may realize will depend on the
excess of the stock price over the exercise price on the
date the option is exercised, so that there is no
assurance the value realized by an executive will be at or
near the value estimated by the Black-Scholes model.
(4) The estimated values under the Black-Scholes model for
options granted under the Comprehensive Stock Option Plan
are based on the following assumptions: exercise price is
100% of the fair market value at date of grant; exercise
term is ten years; no discounts have been taken for
vesting or restrictions; the risk free rate is 7.94%
(based on the 10-year Treasury note yield as of the date
the options were issued); the volatility factor is .385
(based on the preceding 12 months); and the dividend yield
is 3.25% (based on the preceding 12 months).
(5) The estimated values under the Black-Scholes model for
options granted under the 1993 ESPP are based on the
following assumptions: exercise price is 90% of the fair
market value at date of grant; exercise term is two years;
no discounts have been taken for vesting or restrictions;
the risk free rate is 7.19% (based on the 2-year Treasury
note yield); the volatility factor is .385 (based on the
preceding 12 months); and the dividend yield is 3.25%
(based on the preceding 12 months).
The following table sets forth a summary of certain
information with respect to the exercise of stock options during
1994 by the named executive officers and the value of such
executive's unexercised stock options held at fiscal year end
(including options granted under the Comprehensive Stock Option
Plan and options granted under the 1993 ESPP).
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR
VALUES
Number of
Shares Securities Underlying
Acquired on Value Unexercised Options/SARs
Exercise Realized at Fiscal Year-End (#)
Name (#) ($) Exercisable Unexercisable
_________________________________________________________________
L. M. Kimbrough 1500 21,927 7,040 14,993
R. O. Bratton 1104 16,136 5,093 9,940
R. G. Fox - - 1,920 7,613
Value of Unexercised
In-the-money Options/SARs
at Fiscal Year-End ($) (1)
Name Exercisable Unexercisable
_________________________________________________________________
L. M. Kimbrough $ 47,692 $ 50,741
R.O. Bratton 36,221 36,782
R. G. Fox 7,920 17,577
___________________
(1) Determined based on the closing price of the Common Stock
as reported on the NASDAQ National Market System as of
December 31, 1994.
<PAGE>
CHANGE IN CONTROL AGREEMENTS
During 1994, the Corporation entered into respective
agreements with certain of its executive officers, including each
of the named executive officers, providing for certain payments
to such officers in the event their employment is terminated
following a "change in control" of the Corporation. For purposes
of the agreements, a "change in control" generally includes a
merger or similar transaction involving the Corporation in which
the Corporation's shareholders receive less than 50% of the
voting stock of the surviving corporation, the sale or transfer
of substantially all the Corporation's assets, certain
acquisitions of more than 20% of the Common Stock by any person
or group other than a person or group who owned more than 5% of
the Common Stock as of the date of the agreements unless prior
approval of the Board is received, certain instances in which the
composition of the Corporation's Board of Directors changes by
more than 50% during a two year period, or any other transaction
that would constitute a change in control required to be reported
by the Corporation in a proxy statement or the acquisition of
control of the Corporation under applicable federal banking laws.
To be entitled for payments upon such a change in control, (a)
the officer's employment must be terminated other than for cause,
or (b) the officer must terminate his employment for good reason,
in either case within one year following the change in control.
"Cause" is defined generally as willful misconduct, use of
narcotics or alcohol in a manner that affects the officer's
duties, conviction of a felony or serious misdemeanor involving
moral turpitude, embezzlement or theft or gross inattention or
dereliction of duty. "Good reason" generally means a material
reduction in the officer's duties or a change in title resulting
in reduction of the officer's duties, a material reduction in
salary or bonus, or the relocation of the officer to an area more
than 30 miles outside of Concord, North Carolina. The respective
agreements of the named executive officers provide for continued
payment of base salary and average bonus amounts, as well as
certain continued benefits provided to employees generally, for a
period of 24 months (35 months in the case of Mr. Kimbrough)
following an event which would entitle such officer to payments
under his agreement.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Recommendations regarding the compensation of the
Corporation's executive officers generally are presented by the
Compensation Committee (the "Committee") to the Corporation's
entire Board of Directors. Each member of the Committee is a
non-employee director. However, final decisions with respect to
all matters of compensation, with the exception of grants of
stock options as hereinafter described, are made by the full
Board. The Chief Executive Officer ("CEO") and the Chief
Financial Officer ("CFO") of the Corporation determine the salary
or salary range recommendations for all employees, including
executives other than themselves. They present their information
and recommendations regarding such compensation to the Committee.
In addition, the CEO presents recommendations regarding the CFO's
salary to the Committee. The Committee, in turn, reviews and
analyzes all information submitted to it. Thereafter the
Committee determines its recommendations to the Board of
Directors regarding compensation of all employees of the
Corporation, including recommendations regarding the compensation
of the CEO. During 1994, the Board of Directors approved all
recommendations of the Committee.
Set forth below is a report of the Committee regarding
executive compensation for fiscal year 1994.
Executive Compensation Policies and Program. The
Corporation's executive compensation program is designed to
Attract and retain qualified management of the Corporation;
Enhance short-term financial gains of the Corporation; and
Enhance long-term shareholder value in the Corporation.
The total compensation package for executives of the
Corporation includes cash and equity-based compensation. Annual
compensation may consist of a base salary, a bonus and grants of
stock options. The Corporation's policy is generally to provide
base salary that might fall below the median base salary paid to
comparable executives, while focusing more on incentive
compensation that is linked to the performance of the
Corporation. The Corporation strives, however, to provide each
executive officer with total annual cash compensation (base
salary and bonus) in an amount that would be paid on the open
market for a fully qualified officer of that position.
During 1993, the Corporation hired an independent
consultant to review the Corporation's annual compensation
package for its executive officers. This consultant obtained a
job description for each of the executive officers of the
Corporation. Based on these descriptions, the consultant
generated a report (the "Report") that provided compensation
information regarding comparable jobs in other financial
institutions, setting forth, among other things, the 50th and
75th percentiles for each of base salary total annual cash
compensation (base salary and bonus). In general, the Committee
used the 1993 information provided in the Report to maintain
levels of total annual cash compensation for 1994 (salary and
potential bonus amounts, each as discussed below) that fell
between the 50th and 75th percentiles as set forth in the Report.
The sources used by the consultant to generate this
information consisted of (i) its internal Compensation Data
Bank--Banking Survey Executive Report, which compiles information
regarding financial institutions located throughout the nation
with $200 to $500 million in assets; (ii) ECS/Wyatt Data
Services--Top Management Compensation-Regression Analysis Report,
which compiles information regarding financial institutions
located throughout the nation with $200 to $500 million in
assets; (iii) Cole Surveys Financial Institutions Position
Report: Commercial Banks, which compiles information regarding
financial institutions located throughout the nation with
$200-$499 million in assets; and (iv) Bank Administration
Institute--Bank Cash Compensation Survey, which compiles
information regarding financial institutions located throughout
the Southeast with $100-$499 million in assets. The institutions
included in these sources are not necessarily the same group of
institutions that comprise the Independent Bank Index used in the
Performance Graph contained elsewhere in this Proxy Statement.
However, the group of institutions comprising the Bank
Administration Institute's Bank Cash Compensation Survey is
comparable to those used in the Independent Bank Index.
Base Salaries. Generally, the Committee determines the
level of base salary for the CEO, the CFO and one additional
executive vice president of the Corporation and a salary range
for other executive officers, in each case based on competitive
norms, derived from annual surveys published by several
independent banking institutes or private companies specializing
in financial analysis of financial institutions. Actual salary
changes are based upon a written evaluation of each individual's
performance based on numerous criteria and the weighing of such
criteria using a previously agreed-upon formula. In addition,
with respect to each executive, including the CEO, the Committee
considers the individual's performance, including such
individual's total level of experience in the banking industry,
his record of performance and contribution to the success of the
Corporation relative to his job responsibilities and his overall
service to the Bank. During 1994, the Committee used the
information set forth in the Report to maintain base salaries for
its executive officers that were at or below the median salaries
reported in the Report.
Bonuses. The Corporation also maintains the Executive
Incentive Bonus Plan (the "Bonus Plan") for executive officers,
from which performance-oriented bonuses may be paid to certain
key executive officers in any given year. The Committee annually
determines the executive officers eligible to participate in the
Bonus Plan. In general, those executives that are considered to
have major policy input with respect to the Corporation, or who
are in a position to generate a major impact on the Corporation's
earnings, are selected to participate in the Bonus Plan. Actual
bonuses paid pursuant to the Bonus Plan are based on various
return on assets ("ROA") levels of the Corporation at fiscal year
end. No bonuses may be paid unless the Corporation reaches a
minimum ROA, determined at the beginning of each year.
Pursuant to the Bonus Plan, the Corporation annually
establishes a bonus pool amount for each participating executive,
which is equal to a given percentage of the base salary of such
executive. Such percentages are determined based on the
executives' relative responsibilities and ability to impact the
financial and operating performance of the Corporation. The
amount of a participant's bonus pool that is eligible to be paid
at the end of the year differs depending on the level of the
Corporation's ROA. Of the amount eligible to be paid to a
participant, 50% is paid to the executive on a non-discretionary
basis. The remaining half of the eligible amount may be paid to
the participant, in the discretion of the Committee, based on the
participant's individual performance. When evaluating the
performance of a participant, the Committee considers the
Corporation's actual operating performance (such as reduced
levels of past due loans, reduced levels of non-performing and
restructured loans, improvements in asset quality and
corresponding reductions in provision amounts, increased
non-interest income and continued control of corporate expenses)
in relation to its targeted long range action plan and the
executive's ability to impact the various components thereof.
Other criteria considered include the executive's initiative,
contribution to overall corporate performance and managerial
ability.
The Corporation achieved a ROA of 1.74% with respect to
the 1994 fiscal year, which was in excess of the maximum ROA
target set forth in the Bonus Plan. As a result, the entire
amount of each executive's bonus pool was available to be awarded
as bonus. Therefore, 50% of each bonus pool was awarded to the
respective executive on a non-discretionary basis. Furthermore,
the remainder of each executive's bonus pool was awarded to him
based upon the evaluation process described above.
Options. Stock options comprise the final component of
executives' core annual compensation. This equity-based
compensation is designed to be a long-term incentive for
executives to enhance shareholder value in the Corporation. The
Corporation maintains the Comprehensive Stock Option Plan (the
"Stock Option Plan") pursuant to which the Corporation grants
stock options (both qualified and non-qualified) to its key
employees. The Committee administers the Stock Option Plan in
its sole discretion, including the determination of the
individuals to whom options will be granted, the terms on which
such options are granted and the number of shares subject to such
options. In general, when determining the key employees to whom
options shall be granted, the Committee considers such employees'
relative job responsibilities and abilities to impact the
financial and operating performance of the Corporation.
Prior to 1993, the Committee had granted options to
executives on a fairly subjective basis, without guidance as to
practices among comparable institutions. In an effort to form a
more standardized method of granting options, the Corporation
requested the independent consultant hired in 1993 to review the
practices of comparable institutions in granting options.
Accordingly, using the information provided in its internal
Compensation Data Bank--Banking Survey Executive Report
(previously described), the consultant determined a scale whereby
the aggregate value of options granted is based on a multiple of
base salary. Based on the policy the Committee developed in
1993, when it granted options in 1994, the Committee considered
several factors, including the number of stock options currently
held by executives and their terms, the maximum aggregate number
of options to be granted under the Stock Option Plan in 1994, as
well as the cumulative amount outstanding, and the aggregate
number of options to be granted as a percentage of total shares
outstanding. Based on these factors, the Committee determined
that the aggregate value of options to be granted to each
executive generally should continue to be at the median of the
scale. Accordingly, using the scale the Committee determined the
applicable multiple of base salary for each executive and granted
options to such executive with an aggregate value (based on the
closing price of the Common Stock on the date of grant) equal to
such amount.
In addition to the Stock Option Plan, the Corporation
maintains an employee stock purchase program pursuant to which
options are granted periodically to all employees of the
Corporation, including executive officers, at an exercise price
equal to 90% of the fair market value of the stock at the date of
grant. The number of shares subject to options granted to each
employee, including executive officers, is determined
automatically based on base salary levels of all employees.
Change in Control Agreements. During fiscal year 1994,
the Compensation Committee recommended, and the Board of
Directors approved, agreements for certain of the Corporation's
and the Bank's executives that provide for continued salary,
bonus and benefits for a certain period of time upon termination
of employment following a change in control of the Corporation.
As part of its determination to provide such agreements, the
Compensation Committee, and the Board of Directors, considered
the changing environment in the banking industry due to
interstate banking and branching measures, the increased activity
with respect to acquisitions of community and other banks by
merger or otherwise and, in light of such activity, the potential
stress and anxiety for the Corporation's executives with respect
to future employment. While the Board of Directors is not aware
of any proposed change in control of the Corporation, the
Compensation Committee and the Board determined it to be in the
best interests of the Corporation and its shareholders to
encourage such executives to remain with the Corporation or the
Bank and to help avoid any potential distraction for such
executives. Such Committee and Board further determined that a
primary means of such encouragement would be to provide for
continuing financial stability for such executives in the event a
change in control of the Corporation occurs.
Other. In addition to the above forms of compensation,
the Corporation also provides group term life insurance for its
employees, including its executive officers. Executive officers
also participate in the Corporation's Retirement Savings Plan
(the "Savings Plan"), which is a defined contribution plan
intended to qualify under Section 401(a) of the Code and
containing a cash or deferred arrangement under Section 401(k) of
the Code. Pursuant to the Savings Plan, an eligible employee may
elect to defer between 1% and 10% of compensation. In addition,
the Corporation contributes annually to each participant's
account, out of net profits of the Corporation, 3% of the
participant's base compensation plus a portion of a discretionary
matching amount as determined by the Board of Directors from time
to time, allocated to participants' accounts in proportion to
their elective deferrals up to 6% for such year. Furthermore, an
additional discretionary amount as determined by the Board of
Directors from time to time may be contributed to the accounts of
participants, based on the level of employee contributions, and
is allocated to participants' accounts in proportion to their
base compensation for such year.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. The Board of
Directors of the Corporation determines the compensation of the
CEO based upon recommendations of the Committee. The CEO's base
salary is determined by a review of salaries of top executives of
comparable financial institutions, using the process previously
described. In keeping with the Corporation's general policy with
respect to base salary and bonus, the CEO's base salary is set at
an amount which is approximately 20% lower than the base salaries
for comparable executives. The Compensation Committee instead
places more emphasis on available cash bonus, as a means of more
directly linking the CEO's total annual compensation to the
performance of the Corporation. Total annual compensation for
the CEO in 1994 was slightly below the median for comparable
executives. In 1993, the CEO was awarded the maximum amount of
his eligible bonus pool with respect to such year. The
Corporation achieved a ROA of 1.74% with respect to the 1994
fiscal year, which was in excess of the maximum ROA target set
forth in the Bonus Plan for that year. As a result, the entire
amount of the CEO's bonus pool was available to be awarded as
bonus. In accordance with the terms of the Bonus Plan, 50% of
this amount was awarded to the CEO on a non-discretionary basis.
The remainder of the CEO's bonus pool was awarded to him as the
result of an evaluation of the Corporation's overall improved
financial and operating performance in 1994, including increases
in stock value, increases in trust department income, decreases
in past due and classified loans and containment of costs in
general. The Board of Directors of the Corporation has approved
the CEO's participation in the Bonus Plan in 1995. Finally, the
Board of Directors made a stock option grant to the CEO pursuant
to the Corporation's Stock Option Plan in October 1994. In
determining the number of shares subject to options so granted,
the Board of Directors considered the CEO's responsibilities and
potential contribution to the performance of the Corporation
relative to that of the other executives, and the actual number
of shares subject to such options was determined using the scale
previously described. The number of shares subject to options
granted to the CEO under the 1993 ESPP was determined by formula
based on his 1994 base salary level.
Submitted by the Compensation Committee of the Board of
Directors:
Jane B. Brown Duard C. Linn, Jr.
Michael R. Coltrane T. David Propst
J. Roy Davis, Jr. Robert L. Wall
J. Knox Hillman, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Michael R. Coltrane, a member of the Compensation
Committee, served as Executive Vice President of the Corporation
and the Bank until 1988.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative
total shareholder return on the Common Stock, based on the market
value of the Common Stock and assuming reinvestment of dividends,
with the Independent Bank Index, a published banking industry
index, and the Standard & Poor's 500 Stock Index, a broad equity
market index.
FIRST CHARTER CORPORATION
Five Year Performance Index*
(COMPARISON CHART APPEARS HERE. THE PLOT POINTS ARE LISTED IN
THE FOLLOWING TABLE.)
*$100 invested on 12-31-89 in Stock of Index including
reinvestment of dividends. Fiscal Year Ending December 31
1989 1990 1991 1992 1993 1994
First Charter
Corporation 100 77 81 145 224 300
Independent Bank
Index-Weighted 100 89 99 136 160 193
S&P 500 Index 100 97 127 136 150 152
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Bank has had, and expects to have in the future,
banking transactions in the ordinary course of business with
directors, officers and principal shareholders of the Corporation
and the Bank and their associates. All loans and commitments
included in such transactions were made and are expected to be
made on substantially the same terms, including interest rate and
collateral, as those prevailing at the time for comparable
transactions with other borrowers and did not and are not
expected to involve more than the normal risk of collectibility
or present other unfavorable features.
<PAGE>
APPROVAL OF THE 1996 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors recommends approval by the
shareholders of the 1996 Employee Stock Purchase Plan (the "1996
ESPP"). The text of the 1996 ESPP is set forth as Exhibit A to
this Proxy Statement, and this description thereof is qualified
by reference thereto. The 1996 ESPP is designed to give all
employees an increased personal interest in the success and
progress of the Corporation by encouraging them to become owners
or increase their ownership of Common Stock of the Corporation.
It is substantially similar in operation and effect to the 1993
ESPP currently in effect. The 1993 ESPP expires on January 2,
1996. The maximum number of shares of the Corporation's Common
Stock subject to the 1996 ESPP will be 150,000 shares, with
proportionate adjustments of such amount and of individual
outstanding options in the case of stock dividends, stock splits,
or other stock changes.
The 1996 ESPP provides for the granting of options to all
eligible employees of the Corporation and its subsidiaries, both
officers and non-officers, entitling them to purchase shares of
the Common Stock of the Corporation at a discounted price. All
employees of the Corporation and the Bank will be eligible to
participate in the 1996 ESPP, except part-time and temporary
employees and employees owning 5% or more of the total voting
power or value of all classes of stock of the Corporation or the
Bank. Under the 1996 ESPP, only those directors and nominees for
director who are full time employees of the Corporation or the
Bank will be eligible to receive options. If the Board of
Directors determines to grant any options pursuant to the 1996
ESPP, each eligible employee will receive an option to purchase
up to the largest whole number of shares obtained by dividing the
employee's annual compensation (as defined in the 1996 ESPP) at
the date the option is granted by $100. Generally, an option
granted under the 1996 ESPP will terminate 24 months from the
date the option is granted, and the option generally is
exercisable only at the end of the 24 month period. However, the
1996 ESPP provides that if an employee's employment terminates
for any reason other than retirement with the consent of the
Corporation (as defined in the 1996 ESPP), medical disability (as
defined in the 1996 ESPP) or death, then such employee's options
terminate immediately. If an employee retires with the consent
of the Corporation, such options may be exercised within 30 days
of his or her date of retirement, and if an employe becomes
medically disabled or dies, such employee (or his or her estate,
personal representative or beneficiary) may exercise the option
within one year of death or disability, but in either case not
later than five days prior to the expiration date of the option.
The 1996 ESPP provides that options will become
immediately exercisable in full, regardless of their terms, upon
the occurrence of certain events involving a change in control of
the Corporation. Such events include the adoption of a plan of
merger or similar transaction involving the Corporation in which
the Corporation's shareholders would receive less than 50% of the
voting stock of the surviving corporation, the approval by the
Board of Directors of the sale or transfer by the Corporation of
a majority of the stock of a significant subsidiary of the
Corporation or substantially all of the Corporation's or such a
subsidiary's assets, certain acquisitions of more than 20% of the
Common Stock by any person or group other than a person or group
who beneficially owned, as of the Option Date, more than 5% of
the Common Stock unless prior approval of the Board of Directors
is received or any other transaction that would constitute a
change in control required to be reported by the Corporation in a
proxy statement or the acquisition of control of the Corporation
under applicable federal banking laws. In addition, upon the
approval of the dissolution or liquidation of the Corporation,
all options shall become exercisable in full. Upon the
occurrence of the dissolution or liquidation of the Corporation,
or upon the consummation of a merger or consolidation in which
the Corporation's shareholders do not receive at least 50% of the
voting stock of the resulting corporation, all options not
exercised shall terminate.
The purchase price of shares covered by an option will be
90% of the fair market value of the stock on the date options are
granted. The fair market value generally will be determined by
reference to the mean between the high and low sales prices as
reported on the NASDAQ National Market. Each employee who elects
to participate shall sign an election form authorizing monthly
payroll deductions for a specific number of shares. Such payroll
deductions will be held by the Corporation and credited with
simple interest based on an annual interest rate equal to First
Charter National Bank Prime Rate in effect from time to time,
based on the balance for such employee's account. The balance in
such account at the end of the option period will be used to
purchase shares under the 1996 ESPP for the benefit of that
employee. If such employee terminates the option without
exercising it, however, the balance in the account shall be paid
to the employee. An employee may elect to discontinue
participation and withdraw funds at any time. Thereafter, such
employee shall be able to participate in the Corporation's stock
purchase program only if and when a new plan is offered. Options
will not be transferable except by will or by the laws of descent
and distribution, and will be exercisable, during the employee's
lifetime, only by such employee.
The Board of Directors shall set a date for grant of the
options at its discretion. Accordingly, adoption of the plan by
the shareholders will not result in any grant of options unless
and until additional action is taken by the Board of Directors.
The 1996 ESPP will be administered by the Compensation Committee
of the Board of Directors of the Corporation. The Compensation
Committee will be able to prescribe rules and regulations for
such administration and to decide questions with respect to the
interpretation or application of the 1996 ESPP. In addition, the
Compensation Committee will have the authority to alter, amend,
suspend or discontinue the 1996 ESPP at any time without notice,
except that no such action may adversely affect the rights of any
employee who has been granted an option. In addition, the
Compensation Committee may not increase the number of shares of
Common Stock subject to option under the 1996 ESPP, change the
formula by which the price at which options may be exercised is
determined or increase the number of shares an employee who is
granted an option may purchase. Furthermore, the 1996 ESPP is
designed to meet the requirements of Rule 16b-3 under the
Exchange Act with respect to participation by insiders of the
Corporation, and, in accordance therewith, certain amendments may
require the approval of the Corporation's shareholders.
The options under the 1996 ESPP will be statutory stock
options of the kind recognized by Section 423 of the Code. For
federal income tax purposes, neither the grant nor the exercise
of the options will be a taxable event to the participants. The
disposition, however, of the shares acquired through the exercise
of the options will be a taxable event. The tax consequences of
such a disposition will depend upon the respective holding
periods of the options and the option shares.
If a disposition of the shares is made after the
expiration of two years from the date the option was granted and
one year after the date the shares were acquired upon exercise of
the options, a portion of the gain, if any, will be taxed as
ordinary income, which portion will be determined by subtracting
the option price from the lesser of (a) the fair market value of
the shares on the date the option was granted or (b) the fair
market value of the shares on the disposition date. The
remaining portion of the gain, if any, will be taxed as capital
gain for federal income tax purposes. When the holding periods
described above are met, the Corporation is not allowed to deduct
any amount for federal income tax purposes with respect to the
issuance or exercise of the options or the sale of the underlying
shares.
If a disposition of the shares is made within two years of
the date the option was granted or one year of the date the
shares were acquired upon exercise of the options, the amount of
the gain which will be taxed as ordinary income will be
determined by subtracting the option price from the fair market
value of the shares on the date on which the option was
exercised. The amount treated as ordinary income would be added
to the employee's basis in calculating whether any capital gain
or loss is to be recognized on the disposition. In the year of
such early disposition, in general the Corporation will be
entitled to a business deduction for federal income tax purposes
in an amount equal to the ordinary income.
As described above, upon certain events involving a change
in control of the Corporation, all options will immediately
become exercisable. In general, if the total amount of payments
in the nature of compensation that are contingent upon a "change
in control" of the Corporation (as defined in Section 280G of the
Code) equals or exceeds three times a recipient's "base amount"
(typically such recipient's average annual compensation for the
five years preceding the change in control), then, subject to
certain exceptions, the payments may be treated as parachute
payments under Section 280G of the Code. In such event, a
portion of the payments would be nondeductible to the Corporation
and the recipient would be subject to a 20% excise tax on such
portion of the payments under Section 4999 of the Code.
The 1996 ESPP is not qualified under the provisions of
Section 401(a) of the Code and is not subject to any of the
provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
The closing sales price of the Common Stock as reported on
the NASDAQ National Market on March 10, 1995 was $15 1/8. On the
basis of current salaries, an aggregate of 3,400 shares would be
subject to options to be issued to the executive officers of the
Corporation as follows:
Lawrence M. Kimbrough 1,380
Robert O. Bratton 1,020
Robert G. Fox 1,000
All current executive officers as
a group 3,400
All employees, including
non-executive officers 42,090
Pursuant to applicable law, approval of the 1996 Employee
Stock Purchase Plan requires the affirmative vote of the holders
of a majority of the Common Stock present in person or by proxy
and entitled to vote at the Annual Meeting. Accordingly,
abstentions from voting with respect to this matter will have the
effect of a negative vote with respect to this matter, but broker
non-votes, if any, will not. The Board of Directors recommends a
vote FOR approval of the 1996 Employee Stock Purchase Plan.
APPROVAL OF THE RESTRICTED STOCK AWARD PROGRAM
The Board of Directors recommends approval by the
shareholders of the First Charter Corporation Restricted Stock
Award Program (the "Restricted Stock Program"). The text of the
Restricted Stock Program is set forth as Exhibit B to this Proxy
Statement, and this description thereof is qualified by reference
thereto. The Restricted Stock Program is designed to provide an
incentive to key employees to maintain the Corporation's
continued financial success through the acquisition of an equity
interest in the Corporation. A maximum of 300,000 shares of
Common Stock may be awarded and issued to participants under the
Restricted Stock Program, with proportionate adjustments of such
amount in the case of stock dividends, stock splits or other
reclassifications of the Corporation's Common Stock.
The Restricted Stock Program provides for the award and
issuance from time to time by the Board Committee (hereinafter
defined) to key employees of the Corporation and its subsidiaries
of shares of Common Stock of the Corporation. Such shares will
be subject to certain vesting conditions and other terms and
conditions as set forth in an agreement between the Corporation
and a participant (an "Agreement"). These vesting conditions may
include, among other restrictions, lapse of time or the
achievement of individual or corporate performance goals (the
"Restrictions"). A participant's shares of Common Stock will
vest from time to time based on the achievement of vesting
conditions during the vesting period established for such shares
in the participant's agreement.
Any shares that have not vested prior to the end of the
vesting period shall be forfeited and shall revert to the
Corporation. Furthermore, upon termination of employment for any
reason other than death, disability or retirement with the
consent of the Corporation, all shares which are not vested at
such time shall be forfeited and revert to the Corporation. Upon
such forfeiture, the participant shall cease to have any rights
with respect to such shares.
If a participant dies or becomes disabled, or if a
participant retires with the consent of the Corporation, or if a
change in control (hereinafter described) occurs with respect to
the Corporation, all shares not otherwise vested shall
immediately vest. Under the Restricted Stock Program, a change
in control is defined generally as a merger or similar
transaction involving the Corporation in which the Corporation's
shareholders receive less than 50% of the voting stock of the
surviving corporation, the sale or transfer of substantially all
of the Corporation's assets, certain acquisitions of more than
20% of the Common Stock by any person or group other than a
person or group who owns more than 5% of the Common Stock as of
the effective date of the Restricted Stock Program unless prior
approval of the Board is received, certain instances in which the
composition of the Corporation's Board of Directors changes by
more than 50% during a two year period, or any other transaction
that would constitute a change in control required to be reported
by the Corporation in a proxy statement or the acquisition of
control of the Corporation under applicable federal banking laws.
Until shares have vested, the participant will not be
permitted to sell, transfer, assign, pledge, hypothecate or
otherwise dispose of, grant a security interest in or encumber
such shares. However, a participant will be entitled to receive
dividends with respect to such unvested shares and to vote such
shares on matters presented to the shareholders. Any shares
issued by the Corporation in respect of any unvested shares
pursuant to a stock dividend or stock split shall be subject to
the same vesting conditions and other terms and conditions
applicable to the unvested shares in respect of which the shares
are issued.
The Restricted Stock Program will be administered by a
committee of the Board of Directors consisting of all directors
who constitute "disinterested persons" under Section 16 of the
Exchange Act (the "Board Committee"). For purposes of the
Corporation, in effect this Board Committee will include all
directors who are not also employees of the Corporation or the
Bank. Subject to the express provisions of the Restricted Stock
Program, the Board Committee will have the authority to determine
which key employees of the Corporation or the Bank or any other
subsidiary will be awarded shares under the Restricted Stock
Program, any Restrictions applicable to a participant, the number
of shares to be awarded to a participant, the Restrictions to be
applicable to a particular award of shares and all other terms of
the award. The numbers of shares awarded to participants, if
any, and the vesting conditions, terms and conditions applicable
to such awards may differ among participants. The Board
Committee will have the authority to amend, modify, terminate or
suspend the Restricted Stock Program and to make all other
determinations necessary or advisable for administering the
Restricted Stock Program. However, the Board Committee may not
increase the number of shares of Common Stock that may be awarded
under the Restricted Stock Program, nor may it reduce the amount
of any benefit or adversely change the terms and conditions
specified in a participant's Agreement without such participant's
consent. Furthermore, the Restricted Stock Program is designed
to meet the requirements of Rule 16b-3 under the Exchange Act
with respect to participation by insiders of the Corporation,
and, in accordance therewith, certain amendments may require the
approval of the Corporation's shareholders.
If a participant receiving an award of shares under the
Restricted Stock Program makes an election with respect to such
shares under Section 83(b) of the Code, not later than 30 days
after the date shares are transferred to such participant
pursuant to such award, such participant will recognize ordinary
income at the time of transfer in an amount equal to the fair
market value of the shares covered by the award (determined
without regard to any vesting conditions or other restrictions
other than a restriction which by its terms will never lapse) at
the time of such transfer. In the absence of such election, the
participant will recognize ordinary income at the time at which
the Restrictions lapse, in an amount equal to the fair market
value of such shares at such time. The ordinary income
recognized by an employee with respect to the shares awarded
pursuant to the Restricted Stock Program will be subject to both
wage withholding and employment taxes.
If a Section 83(b) election is made, dividends received on
shares which are subject to Restrictions will be treated as
dividend income. If a participant does not make an election
under Section 83(b), dividends received on the shares prior to
the time the Restrictions on such shares lapse will be treated as
additional compensation, and not dividend income, for federal
income tax purposes, and will be subject to wage withholding and
employment taxes.
A participant's tax basis in shares received pursuant to
the Restricted Stock Program will be equal to the amount of
ordinary income recognized by such participant in connection with
the transfer of such shares or the lapse of Restrictions thereon,
as the case may be. The participant's holding period for such
shares for purposes of determining gain or loss on a subsequent
sale will begin immediately after the transfer of such shares to
the participant, if an Section 83(b) election is made with
respect to such shares, or immediately after the Restrictions on
such shares lapse, if no section 83(b) election is made.
In general, a deduction will be allowed to the
Corporation, for federal income tax purposes, in an amount equal
to the ordinary income recognized by a participant with respect
to shares awarded pursuant to the Restricted Stock Program,
provided that such amount constitutes an ordinary and necessary
business expense of the Corporation and is reasonable, and
provided further that the Corporation satisfies its withholding
obligation with respect to such income.
If (i) a Section 83(b) election is made and (ii) before
the Restrictions on the shares lapse, the shares which are
subject to such election are forfeited to the Corporation, then
(A) no deduction would be allowed to such participant for the
amount included in the income of such participant by reason of
such Section 83(b) election, and (B) the participant would
realize a loss in an amount equal to the excess, if any, of the
ordinary income previously recognized by the participant with
respect to such shares over the value of such shares at the time
of forfeiture. Such loss would be a capital loss if the shares
are held as a capital asset at such time. In such event, the
Corporation would be required to include in its income the amount
of any deduction previously allowable to it in connection with
the transfer of such shares.
As described above, upon a change in control of the
Corporation, all shares will automatically vest in the
participant. In general, if the total amount of payments in the
nature of compensation that are contingent upon a "change in
control" of the Corporation (as defined in Section 280G of the
Code) equals or exceeds three times a recipient's "base amount"
(typically such recipient's average annual compensation for the
five years preceding the change in control), then, subject to
certain exceptions, the payments may be treated as parachute
payments under Section 280G of the Code. In such event, a
portion of the payments would be nondeductible to the Corporation
and the recipient would be subject to a 20% excise tax on such
portion of the payments under Section 4999 of the Code.
The Restricted Stock Program is not qualified under the
provisions of Section 401(a) of the Code and is not subject to
any of the provisions of ERISA.
The closing sales price of the Common Stock as reported on
the NASDAQ National Market on March 10, 1995 was $15 1/8.
Because the grant of shares under the Restricted Stock Program is
in the discretion of the Board Committee, no determination can be
made of the amount of awards, if any, that would have been made
to participants for the most recent year if the Restricted Stock
Program had been in effect during such year.
Pursuant to applicable law, approval of the Restricted
Stock Award Program requires the affirmative vote of the holders
of a majority of the Common Stock present in person or by proxy
and entitled to vote at the Annual Meeting. Accordingly,
abstentions from voting with respect to this matter will have the
effect of a negative vote with respect to this matter, but broker
non-votes, if any, will not. The Board of Directors recommends a
vote FOR approval of the Restricted Stock Award Program.
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick,
independent public accountants, as its auditors for the fiscal
year 1995. KPMG Peat Marwick has acted in this capacity since
1983. The Corporation has been advised by KPMG Peat Marwick that
neither the firm nor any of its members or associates has any
direct financial interest or material indirect financial interest
in the Corporation or the Bank other than as its auditors.
Although the selection and appointment of the independent
auditors are not required to be submitted to a vote of the
shareholders, the Board of Directors deems it advisable to obtain
the shareholders' ratification of this appointment. The Board of
Directors understands that a representative from KPMG Peat
Marwick will be present at the shareholders' meeting, will have
the opportunity to make a statement if he desires to do so and
will be available to respond to appropriate questions. The Board
of Directors recommends a vote FOR ratification of the
appointment of this firm as independent auditors of the
Corporation for the 1995 fiscal year. Should the shareholders
not ratify the appointment of KPMG Peat Marwick, the Board of
Directors will consider a change in auditors for the next fiscal
year.
ANNUAL REPORT
The 1994 Annual Report of the Corporation, including
financial statements, accompanies this Proxy Statement.
SHAREHOLDER PROPOSALS FOR CONSIDERATION
AT THE 1996 ANNUAL MEETING
Written shareholder proposals for consideration for the
1996 Annual Meeting of Shareholders should be addressed to the
Corporate Secretary, 22 Union Street, North, Concord, North
Carolina 28025, and received by the Corporation no later than
November 17, 1995.
FORM 10-K
COPIES OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1994, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, EXCLUDING EXHIBITS, ARE AVAILABLE WITHOUT
CHARGE UPON WRITTEN REQUEST TO FIRST CHARTER CORPORATION, 22
UNION STREET NORTH, CONCORD, NORTH CAROLINA 28025, ATTENTION:
ROBERT O. BRATTON, CHIEF FINANCIAL OFFICER. COPIES OF EXHIBITS
ARE AVAILABLE UPON PAYMENT OF $25.00 TO COVER THE COSTS OF
REPRODUCTION.
OTHER BUSINESS
The Board of Directors knows of no other matter to come
before the meeting. However, if any other matter requiring a
vote of the shareholders should arise, it is the intention of the
persons named in the enclosed proxy to vote such proxy in
accordance with their best judgment.
By Order of the Board of Directors
James W. Townsend, Jr.
Secretary
DATED: March 16, 1995<PAGE>
EXHIBIT A
FIRST CHARTER CORPORATON
1996 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I. PURPOSES:
This First Charter Corporation 1996 Employee Stock
Purchase Plan (hereinafter called the "Plan") is intended to be
an employment incentive and to encourage stock ownership by all
eligible employees, including officers, of First Charter
Corporation (hereinafter called the "Corporation") and its
subsidiary corporations (the "Subsidiaries"), as that term is
defined in Section 424(f) of the Internal Revenue Code of 1986,
as now in force or hereafter amended (the "Code"), in order to
increase their proprietary interest in the Corporation's success
and to encourage them to remain in the employ of the Corporation
or a Subsidiary. It is further intended that options issued
pursuant to this Plan (hereinafter called "Options") shall
constitute options issued pursuant to an "employee stock purchase
plan" within the meaning of Section 423 of the Code and that the
Plan shall satisfy the requirements of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
ARTICLE II. ADMINISTRATION:
The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Corporation (the
"Committee"). No member of the Board of Directors who is not
otherwise employed by the Corporation shall be eligible to
receive an Option. The Committee shall at all times be composed
of "disinterested persons" within the meaning of Rule 16b-3 of
the Exchange Act. Subject to the provisions of the Plan, the
Committee may, from time to time, prescribe rules and regulations
for the administration of the Plan and may decide questions which
may arise with respect to the interpretation or application of
said Plan.
ARTICLE III. ELIGIBILITY:
Each employee of the Corporation and of its Subsidiaries
(including officers) shall be granted as of a date to be
determined by the Board of Directors (the "Option Date"), but in
no instance more than twelve (12) months after the shareholders
of the Corporation have approved the Plan, which shareholder
approval shall be considered to be the Plan's adoption within the
meaning of Section 423 of the Code, an Option under this Plan to
purchase the Corporation's authorized but unissued $5.00 par
value Common Stock (herein sometimes called "Common Stock"),
except that there shall be excluded: (i) employees whose
customary employment is under twenty (20) hours per week; (ii)
employees whose customary employment is for not more than five
(5) months in any calendar year; and (iii) any employee who, if
having received an Option hereunder, would own, immediately after
the Option was granted, stock possessing five percent (5%) or
more of the total combined voting power or value of any classes
of stock of the Corporation, or of any of its Subsidiaries. For
purposes of determining stock ownership of an employee under
(iii) hereof, the rules of Section 424(d) of the Code and Section
1.423-2(d) of the Treasury Regulations thereunder shall apply,
and Common Stock which the employee may purchase under any
outstanding options shall be treated as owned by the employee.
ARTICLE IV. STOCK:
The stock subject to the Options to be issued hereunder
shall be the Corporation's Common Stock. The maximum number of
such shares to be issued upon the exercise of the Options hereby
granted shall be an aggregate of 150,000 shares.
An eligible employee (hereinafter called "Optionee") shall
receive an option to purchase up to the largest whole number of
shares obtained by dividing Optionee's Annual Compensation (as
hereinafter defined) by One Hundred Dollars ($100.00). The term
"Annual Compensation" as used herein is defined as regular fixed
basic annual compensation at the rate in effect on the Option
Date, and does not include any bonus, overtime payment, sales
commission, contribution to an employee benefit plan or other
similar payment or contribution.
Except as expressly provided otherwise in Article V
hereof, payment for Common Stock purchased under the Option shall
be made only by payroll deductions over the designated Purchase
Period (as hereinafter defined).
Notwithstanding the foregoing provisions of this Plan, no
Option shall permit an Optionee to purchase in any single
calendar year a number of shares which, together with all other
shares in the Corporation and any Subsidiaries which such
Optionee may be entitled to purchase in such year pursuant to
Options issued under any employee stock purchase plan, has an
aggregate fair market value (determined in each case as of the
date such options are granted) in excess of $25,000. This
limitation applies only to Options granted under "employee stock
purchase plans" as defined by Section 423 of the Code, and does
not limit the amount of stock which an Optionee may purchase
under any other stock option or bonus plans then in effect.
ARTICLE V. TERMS AND CONDITIONS OF OPTIONS:
Options granted hereunder shall be evidenced by a Notice
of the Grant of an Option to each Optionee, which notice shall:
(i) be in such form as the Board of Directors shall determine;
(ii) incorporate, by reference, the terms and provisions of this
Plan; and (iii) be issued to each Optionee on or about the Option
Date.
Subject always to the requirement that, except as
otherwise specified in Article IV hereof, all Optionees shall
have the same rights and privileges, such Options shall be
subject to the following terms and conditions:
(a) OPTION PRICE: The price of shares purchased under
any Option issued hereunder (the "Option Price") shall be an
amount equal to ninety (90%) percent of the fair market value of
the Common Stock on the Option Date but not less than the par
value of such stock. For so long as shares of the Common Stock
of the Corporation are listed on a national securities exchange
or the NASDAQ National Market, "fair market value" as of a given
date shall mean, for purposes of this Plan, the mean between the
high and low sales prices of the Common Stock on that date, said
mean to be based on the sale of a minimum of 100 shares of said
stock; or if less than 100 shares of said stock are sold on such
date or if no sales prices are quoted, "fair market value" shall
mean the average of the closing bid and asked prices for such
stock in the over-the-counter market as reported by the NASDAQ
Stock Market. If the Common Stock is not listed on a national
securities exchange or reported on the NASDAQ National Market or
quoted in the over-the-counter market, "fair market value" shall
be the fair value thereof determined in good faith by the Board
of Directors. In making such determination, the Board of
Directors shall consider the financial condition of the
Corporation and its recent operating results, values of
publicly-traded securities of other financial institutions giving
effect to the relative book values and earnings of such
institutions and the lack of liquidity of the Corporation's
shares, and such other factors as the Board in its discretion
deems relevant.
(b) TERM OF OPTIONS: The term of each Option shall
extend for a period of twenty-four (24) months commencing with
the Option Date with respect to such Option, said term being
hereinafter called the "Purchase Period."
(c) PURCHASE ACCOUNT: Each Optionee shall notify the
Corporation, on such forms as shall be provided by the
Corporation, within seven (7) days following actual receipt by
the Optionee of such forms, of the number of shares which the
Optionee wishes to have the right to purchase as of the last day
of the Purchase Period (hereinafter referred to as the "Purchase
Date"), which election may be for either all or any part of the
shares subject to the Option (such shares, so elected, shall be
hereinafter called the "Elected Shares").
Although, as more fully provided hereinafter, on the
Purchase Date an Optionee may decline to purchase all or any part
of the Optionee's Elected Shares, such Optionee, in the event the
Optionee's Elected Shares are less than all of the shares subject
to the Option, may not purchase more than the Optionee's Elected
Shares on the Purchase Date.
Except as provided in subsection (h) of this Article V,
each Optionee shall authorize the Corporation and its
Subsidiaries to withhold from the Optionee's after tax
compensation, beginning as soon as practicable following the
making of the election described above as to Elected Shares and
continuing throughout the duration of the Option, amounts
sufficient to accumulate over such period (with allowances for
interest as provided for herein) the aggregate Purchase Price of
the Optionee's Elected Shares. Such withheld amounts may be used
by the Corporation for general corporate purposes, but the
Corporation shall maintain a record of each Optionee's funds as a
"Purchase Account." Such funds so accumulated within said
Purchase Account may be withdrawn, paid or applied toward the
Purchase Price of Elected Shares only pursuant to the provisions
contained in this Plan.
(d) INTEREST PAYABLE ON THE PURCHASE ACCOUNT: Except as
provided in Article XI hereof, the Corporation shall credit to
Purchase Accounts simple interest based on the First Charter
National Bank Prime Rate in effect from time to time, computed on
a 365-day basis, on the amount deducted from the Optionees'
salary payments and contributed to the Purchase Account annually.
Such interest shall be credited annually on a date determined by
the Committee. The Optionee is responsible for all income taxes
associated with the interest credited to the optionee's Purchase
Account.
(e) DATES ON WHICH OPTION SHALL BE EXERCISED: Except as
provided in subsections (h) and (i) of this Article V, each
Option which is exercised shall be exercised as of the Purchase
Date.
(f) MANNER OF EXERCISING OPTION: Except as provided in
subsections (h) and (i) of this Article V, each Optionee shall,
on such forms as shall be provided by the Corporation, at least
five (5) business days prior to the Purchase Date, notify the
Corporation of the Optionee's election either to: (i) exercise
the Option to purchase all or any part of the Elected Shares or,
in lieu thereof, (ii) decline to so exercise the Option, which
election, in either event, shall be effective as of said Purchase
Date.
In the event the Optionee so exercises the Option, the
Optionee shall tender to the Corporation all funds then on
deposit in the Optionee's Purchase Account, including interest,
along with such other amounts as may be necessary to purchase all
or any part of the Optionee's Elected Shares. Any excess of
funds over the required purchase price shall be paid to the
Optionee and the Purchase Account closed.
In the event the Optionee declines to so exercise the
Option, all funds, including interest, then in the Optionee's
Purchase Account, shall be paid to said Optionee and the Purchase
Account closed.
Should the Optionee fail to deliver the notification form
referred to in this subsection (f), such failure shall be deemed
an election by said Optionee to decline to exercise the Option.
(g) TERMINATION OF OPTION: An Optionee may at any time
on or before the Purchase Date terminate the Option in its
entirety by written notice of such termination delivered in the
manner set forth in Article X hereof. Such termination shall
become effective upon receipt of such notice by the Corporation.
Upon such termination, all funds, including interest credited,
then in the Optionee's Purchase Account shall be paid to the
Optionee and the Optionee's Purchase Account closed, and all
rights and privileges of the Optionee granted pursuant to this
Plan and the Option granted hereunder shall be terminated. Any
interest accrued but not credited to the Purchase Account will be
forfeited.
(h) TERMINATION OF EMPLOYMENT: In the event that an
Optionee's employment by the Corporation or a Subsidiary is
terminated other than by retirement with the consent of the
Corporation, medical disability (determined in accordance with
the Corporation's long term disability plan then in effect) or by
death, all rights and privileges of Optionee granted pursuant to
the Plan and of the Option granted hereunder shall terminate, and
all funds, including interest, then on deposit on the Optionee's
Purchase Account shall be paid to the Optionee and the Optionee's
Purchase Account closed. If any termination of employment is due
to retirement with the consent of the Corporation, the Optionee
shall have the right within thirty (30) days thereafter, but not
later than five (5) business days prior to the Purchase Date, to
exercise the Option to purchase all or any part of the Optionee's
Elected Shares. If the Optionee shall become medically disabled
or die while in the employment of the Corporation or any
Subsidiary of the Corporation during the term of the Option, the
Optionee's estate, personal representative or beneficiary shall
have the right, at any time, within twelve (12) months from the
date of the Optionee's medical disability or death, but not later
than five (5) business days prior to the Purchase Date, to
exercise the employee's Option to purchase all or any part of the
Elected Shares. Options exercised pursuant to the terms of this
subsection (h) of this Article V may be exercised (during the
specified times) as to all or any part of the Elected Shares by
written notice delivered in the manner set forth in Article X
hereof and tendering with such notice payment of any or all
funds, including amounts credited to said Optionee's Purchase
Account and such other amounts as may be necessary to aggregate
the required purchase price, and shall be deemed exercised as of
the date such notice is delivered, except if such notice is
delivered less than ten (10) business days prior to the Purchase
Date, they shall be deemed exercised as of the Purchase Date.
Failure to deliver such notice and payment within the time
provided shall be deemed an election not to exercise the Option,
which shall terminate, and all funds, including interest then in
the Optionee's Purchase Account, shall be paid to the Optionee or
his estate and the Purchase Account closed.
Retirement of an Optionee at the Optionee's Normal
Retirement Date in accordance with the provisions of any
Retirement Plan adopted by the Corporation or by any Subsidiary
shall be deemed to be a retirement with the consent of the
Corporation. Whether any other terminations of employment
(either at an Optional Retirement Date in accordance with the
provision of any such Retirement Plan or otherwise) are to be
considered retirements with the consent of the Corporation and
whether authorized leaves of absence or absences on military or
government service or for other reasons shall constitute a
termination of employment for the purposes of the Plan, shall be
determined by the Committee, the determination of which shall be
final and conclusive. Employment by the Corporation or any
Subsidiary shall be deemed to be continuous and not to terminate
during any uninterrupted period in which an employee is in the
employment of the Corporation or any Subsidiary, but only if and
so long, in the case of employment by a Subsidiary, as employment
by such Subsidiary will, under the applicable provisions of the
Code as then in effect, result in the same tax treatment as would
be accorded if such Optionee were an employee of the Corporation.
(i) ADJUSTMENT OF OPTIONS; EXERCISABILITY UPON CERTAIN
EVENTS: In the event of reorganization, recapitalization, stock
split, stock dividend, combination of shares, merger,
consolidation, offering of rights or any other change in the
structure of shares of Common Stock of the Corporation, the total
amount of shares on which options may be granted under the Plan
and options rights (both as to the number of shares and the
option price) shall be appropriately adjusted for any increase or
decrease in the number of outstanding shares of Common Stock;
provided, however, that any fractional shares resulting from any
such adjustment shall be eliminated.
In the event of (i) the adoption of a plan of merger,
consolidation, share exchange or similar transaction of the
Corporation with any other corporation as a result of which the
holders of the Common Stock of the Corporation in the aggregate
would receive less than 50% of the voting capital stock of the
surviving or resulting corporation; (ii) the approval by the
Board of Directors of an agreement providing for the sale or
transfer (other than as security for obligations of the
Corporation) by the Corporation of a majority of the stock of a
significant subsidiary of the Corporation or substantially all of
the assets of the Corporation or of a significant subsidiary of
the Corporation; (iii) the acquisition of more than 20% of the
Corporation's voting capital stock by any person within the
meaning of Section 13(d)(3) of the Exchange Act, other than a
person, or group including a person, who beneficially owned, as
of the Option Date, more than 5% of the Corporation's securities,
in the absence of a prior expression of approval of the Board of
Directors of the Corporation; (iv) during any period of two
consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Corporation cease
for any reason to constitute at least a majority thereof unless
the election, or the nomination for election by the Corporation's
shareholders, of each new director was approved by the vote of at
least two-thirds of the directors then still in office who were
directors at the beginning of the period; or (v) any other change
in control of the Corporation of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A under the Exchange Act or the acquisition of
control, within the meaning of Section 2(a)(2) of the Bank
Holding Company Act of 1956, as amended, or Section 602 of the
Change in Bank Control Act of 1978, of the Corporation by any
person, company or other entity, then any Option granted
hereunder shall become immediately exercisable as to the
Optionee's Elected Shares and shall remain exercisable, subject
to all of the terms hereof not inconsistent with subsection (i)
of this Article V.
Anything contained herein to the contrary notwithstanding,
upon the dissolution or liquidation of the Corporation or the
consummation of a merger or consolidation in which the
shareholders of the Corporation receive less than 50% of the
voting capital stock of the surviving or resulting corporation,
each Option granted under the Plan shall terminate, but the
Optionee shall have the right, following the adoption of a plan
of dissolution or liquidation or a plan of merger or
consolidation and in any event prior to such dissolution,
liquidation, merger or consolidation, to exercise his Option to
purchase his Elected Shares, subject to all of the other terms
hereof not inconsistent with this subsection (i) of this Article
V.
The grant of an Option pursuant to this Plan shall not
affect in any way the right or power of the Corporation to make
adjustments, reclassifications, reorganizations, or changes of
its capital or business structure, or to merge or consolidate, or
to dissolve, liquidate or sell, or transfer all or any part of
the business or assets.
(j) ASSIGNABILITY: No Option granted hereunder shall be
assignable or transferable except by will or by the laws of
descent and distribution and shall be exercisable, during the
lifetime of Optionee, only by said Optionee.
(k) RIGHTS AS A SHAREHOLDER: No Optionee shall have any
rights as a shareholder with respect to shares purchased pursuant
to the Options to be granted hereunder until full payment has
been made for such shares and a stock certificate for such shares
has been actually issued to said Optionee. No adjustment will be
made for dividends or other rights for which the record date is
prior to the date of such issuance.
(l) REGISTRATION: Each Option under the Plan shall be
granted on the condition that a registration statement under the
Securities Act of 1933, as amended, with respect to the Common
Stock subject to such Option has become effective and a copy of
the Prospectus has been delivered to the Optionee.
ARTICLE VI. TERM OF PLAN:
The term of said Plan shall be for a period commencing on
the Option Date, and ending on the Purchase Date.
ARTICLE VII. AMENDMENTS:
The Committee may, from time to time, alter, amend,
suspend or discontinue the Plan at any time without notice,
provided that no Optionee's existing rights are adversely
affected thereby; provided further, upon any such amendment or
modification, all Optionees shall continue to have the same
rights and privileges as other Optionees (except as otherwise
provided for in Article IV hereof); and provided further, that no
such amendment of the Plan shall, except as provided in
subsection (i) of Article V hereof: (a) increase above one
hundred fifty thousand (150,000) the total number of shares which
may be offered; (b) change the formula by which the price for
which the Common Stock shall be sold is determined; or (c)
increase the maximum number of shares which any Optionee may
purchase. The Board of Directors shall submit any amendments to
the shareholders of the Corporation for approval to the extent
necessary to maintain compliance with the requirements of Rule
16b-3 of the Exchange Act.
ARTICLE VIII. APPLICATION OF FUNDS:
The proceeds received by the Corporation from the sale of
its Common Stock pursuant to Options granted under this Plan,
except as otherwise provided herein, will be used for general
corporate purposes.
<PAGE>
ARTICLE IX. NO OBLIGATION TO PURCHASE SHARES:
The granting of an Option pursuant to this Plan shall
impose no obligation upon the Optionee to purchase any shares
covered by such Option.
ARTICLE X. NOTICES:
Any notice which the Corporation or Optionee may be
required or permitted to give to each other shall be in writing
and shall be deemed given when delivered personally or deposited
in the U.S. Mail, first class postage prepaid, addressed as
follows: Chief Financial Officer, First Charter Corporation, 22
Union Street, North, Concord, North Carolina 28026-0228, or as
such other address as the Corporation, by notice to the Optionee,
may designate in writing from time to time; and to the Optionee,
at the address shown on the records of the Corporation, or at
such other address as the Optionee, by notice to the Corporation,
may designate in writing from time to time.
ARTICLE XI. CLOSING OF PURCHASE ACCOUNT:
In the event that under any provision hereof an Optionee's
Purchase Account is to be closed and any balance not applied to
the purchase of all or any part of such Optionee's Elected Shares
is to be paid to Optionee, such payment shall be made within
thirty (30) days following the date that the right to such
payment accrues and shall include interest payable up to such
date, after which no additional interest shall accrue.
ARTICLE XII. THE RIGHT OF THE COMPANY TO TERMINATE EMPLOYMENT:
Nothing contained in the Plan or in any Option granted
pursuant to the Plan shall confer upon any Optionee any right to
be continued in the employment of the Company or one of its
Subsidiaries, or shall interfere in any way with the right of the
Company or any of its Subsidiaries, as the case may be, to
terminate his or her employment at any time for any reason.
ARTICLE XIII. EFFECTIVENESS OF THE PLAN:
The Plan shall become effective only if:
(a) The Plan shall have been adopted by the Board of
Directors of the Corporation; and
(b) The Plan shall have been approved by the affirmative
vote of the holders of at least a majority of shares of Common
Stock present, or represented, and entitled to vote at the
shareholders' meeting at which the Plan is considered.
<PAGE>
EXHIBIT B
FIRST CHARTER CORPORATION
RESTRICTED STOCK AWARD PROGRAM
THIS RESTRICTED STOCK AWARD PROGRAM (the "Program") is
adopted on the 25th day of April, 1995 by First Charter
Corporation (the "Corporation"), a corporation organized and
existing under the laws of the State of North Carolina and having
its principal place of business in Cabarrus County, North
Carolina, to provide an incentive to certain key employees,
including employees who also serve as directors of the
Corporation or a Subsidiary (as hereinafter defined), through the
acquisition of an equity interest in the Corporation. When
selecting the employees eligible to participate in this Program
the Named Fiduciary (as defined in Section 11(c) hereof) will
consider, among other criteria, the position and responsibilities
of the employee, the value of the employee's services to the
Corporation and other such factors as the Named Fiduciary deems
pertinent, and each employee selected to participate in the
Program (individually referred to hereafter as a "Participant")
will enter into a separate written agreement between the
Corporation and the Participant (hereinafter referred to as an
"Agreement").
W I T N E S S E T H:
WHEREAS, each Participant is currently, and will be at the
date of an award, employed by the Corporation or First Charter
National Bank, a wholly owned subsidiary of the Corporation, or
such other subsidiary of the Corporation as may be in existence
at such time (each, a "Subsidiary"), as an executive and
management employee and, as such, is considered to be a member of
a select group of management of the Corporation or a Subsidiary
and/or a highly compensated employee; and
WHEREAS, the Corporation desires to provide deferred
compensation to the Participants, the amount of which is directly
related to the Corporation's continued financial success, in
order to provide an additional incentive to the Participants;
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and conditions as will be set forth in the
respective Agreements and hereinafter set forth, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Corporation hereby states:
A. PURPOSE. The purpose of the Program is to provide
deferred compensation and additional equity participation to each
Participant based upon the award of shares of the Corporation's
common stock, $5.00 par value (the "Common Stock"). The shares
of Common Stock that may be granted to the Participants hereunder
are referred to collectively as the "Restricted Stock". The
Program is also intended to benefit the Corporation by creating
an additional incentive for the Participants. The awards of
Restricted Stock hereunder are a matter of separate inducement
and are not in lieu of any salary or other compensation for the
service of any key employee.
B. SHARES. The aggregate amount of Common Stock that
may be awarded to Participants under the Program is 300,000
shares. Any grant of shares of Restricted Stock will be made
from authorized but unissued shares of Common Stock of the
Corporation.
C. EFFECTIVE DATE. The Effective Date for this Program
is April 25, 1995, or such other date as the Program may be
approved by the shareholders of the Corporation. The Effective
Date for each individual Participant is the Participant's
Effective Date as indicated in the Agreement signed by each
Participant, which is incorporated herein and made an integral
part of this Program.
D. GRANT AND VESTING OF RESTRICTED STOCK.
1. GRANT. The Named Fiduciary may from time to time
grant to a Participant shares of Restricted Stock, with the
number of any such shares so granted and the terms and conditions
of such grant being indicated in such Participant's Agreement.
The Restricted Stock will be granted based upon and at all times
subject to the provisions, conditions and restrictions in such
Participant's Agreement and shall entitle the Participant to the
rights set forth in this Program.
2. VESTING. Subject at all times to the
provisions of Section 4.4, the Restricted Stock may vest in a
Participant on the basis of the number of Vesting Credits which
such Participant accumulates during the Vesting Period. A
Vesting Credit shall accrue on the basis of the Corporation's
fiscal year, or the fiscal year plus one or more other factors,
or any combination of factors, as indicated in the Participant's
Agreement.
For purposes of this Program the following definitions shall
control:
"Vested Percentage" shall be a percentage determined on the
basis of the number of the Participant's Vesting Credits as
specified in the Participant's Agreement.
A "Vesting Credit" shall accrue for each Year beginning with
the first Year ending after the Participant's Effective Date at
the end of which the Participant is serving as a full-time
employee of the Corporation or a Subsidiary and during which the
Participant meets the business performance requirements, if any,
as specified in the Participant's Agreement.
"Vesting Period" shall mean the Years during which a
Participant may accrue one or more Vesting Credits. No
additional vesting shall accrue after the expiration of the
Vesting Period, and all unvested Shares shall become the property
of the Corporation pursuant to Section 4.3 at the end of the
Vesting Period.
"Year" shall mean the fiscal year utilized by the
Corporation for federal income tax purposes.
3. UNVESTED SHARES. All Shares in which the
Participant does not become vested pursuant to Sections 4.2 and
4.4 hereof shall be the property of the Corporation upon the
first to occur of the end of the Participant's employment with
the Corporation or a Subsidiary or the expiration of the Vesting
Period, and the Participant shall cease to have any rights with
respect thereto.
4. ACCELERATED VESTING. In the event that a
Participant's employment with the Corporation ends due to the
Participant's death, disability (as defined in the First Charter
Corporation Comprehensive Stock Option Plan) or retirement with
the consent of the Corporation, or because the Corporation
undergoes a "Change in Control" (as hereinafter defined), then
the Participant's Vested Percentage shall be one hundred percent
(100%), regardless of the Participant's Vesting Credit. For
purposes of this Program, a "Change in Control" shall mean (i)
the consummation of a merger, consolidation, share exchange or
similar transaction of the Corporation with any other corporation
as a result of which the holders of the voting capital stock of
the Corporation as a group would receive less than 50% of the
voting capital stock of the surviving or resulting corporation;
(ii) the sale or transfer (other than as security for obligations
of the Corporation) of substantially all the assets of the
Corporation; (iii) in the absence of a prior expression of
approval by the Board of Directors of the Corporation, the
acquisition of more than 20% of the Corporation's voting capital
stock by any person within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
other than a person, or group including a person, who
beneficially owned, as of the effective date of the Program, more
than 5% of the Corporation's securities; (iv) during any period
of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Corporation
cease for any reason to constitute at least a majority thereof
unless the election, or the nomination for election by the
Corporation's shareholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period; or (v)
any other change in control of the Corporation of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A under the Exchange Act or the
acquisition of control, within the meaning of Section 2(a)(2) of
the Bank Holding Company Act of 1956, as amended, or Section 602
of the Change in Bank Control Act of 1978, of the Corporation by
any person, company or other entity.
E. RIGHTS IN UNVESTED SHARES OF RESTRICTED STOCK.
Prior to the vesting of shares of Restricted Stock, a Participant
may not sell, transfer, assign, pledge, hypothecate or otherwise
dispose of, grant a security interest in or encumber any of such
shares of Restricted Stock, and any such attempted disposition or
encumbrance shall be void and unenforceable against the
Corporation. Subject to the provisions of Section 4.3 hereof, a
Participant shall, however, be entitled to any voting rights with
respect to such shares of Restricted Stock and shall be entitled
to receive any cash dividends made with respect to such shares of
Restricted Stock. Any shares issued by the Corporation pursuant
to a stock dividend or stock split in respect of shares of
Restricted Stock prior to the vesting of such shares of
Restricted Stock shall be subject to the same vesting and other
restrictions, terms and conditions under the Program and the
Participant's Agreement as the shares of Restricted Stock in
respect of which the shares are issued.
F. CERTIFICATES, ETC. The Corporation shall issue a
certificate representing a Participant's shares of Restricted
Stock as soon as practicable following execution by such
Participant of his or her Agreement. The certificate
representing all of the unvested shares of Restricted Stock
issued to a Participant shall have endorsed across the face or
back thereof a legend substantially in the following form: "The
shares of stock represented by this certificate are subject to
the terms and conditions of the First Charter Corporation
Restricted Stock Award Program dated April 25, and a Restricted
Stock Award Agreement entered into between the Corporation and
the holder of this certificate, which program and agreement are
on file with the Secretary of the Corporation. The shares of
stock represented by this certificate may not be sold,
transferred, assigned, pledged, hypothecated or otherwise
disposed of or encumbered except in accordance with the
provisions of such program and agreement." Prior to the vesting
of such shares of Restricted Stock in accordance with the
provisions hereof and of the Participant's Agreement, the
certificate representing such shares may be held by the
Corporation or First Charter National Bank, as custodian, on
behalf of such Participant. The Named Fiduciary may require a
Participant to execute and deliver to the Corporation stock
powers with respect to the shares of Restricted Stock to be held
by the custodian.
The Corporation may issue such "stop transfer"
instructions as it determines to be necessary or appropriate to
implement the provisions of a Participant's Agreement with
respect to such Participant's Restricted Stock.
G. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The
total number of shares of Restricted Stock granted, or which may
be granted, under the Program shall be appropriately adjusted for
any increase or decrease in the number of outstanding shares of
Common Stock resulting from payment of a stock dividend on the
Common Stock, a subdivision or combination of shares of the
Common Stock or from a reclassification of the Common Stock.
Such adjustments shall be determined by the Board of Directors of
the Corporation in its sole discretion. Any such adjustment may
provide for the elimination of any fractional share which might
otherwise result. The grant or award of shares of Restricted
Stock under the Program shall not affect in any way the right or
power of the Corporation or any Subsidiary to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure or to merge or consolidate, or to dissolve,
liquidate or sell, or transfer all or part of its business or
assets.
H. ANNUAL STATEMENT. On or before ninety (90) days
after the end of each calendar year, the Corporation shall
furnish a written statement to each Participant indicating the
Vested Percentage of such Participant's Restricted Stock as of
the end of such calendar year.
I. INDEMNIFICATION AND EXPENSES. All expenses and
costs in connection with the administration of the Plan shall be
borne by the Corporation. In addition to and consistent with
such other rights of indemnification as they may have, any
individual or group of individuals appointed by the Corporation
to administer the Program shall be indemnified by the
Corporation, individually and jointly, against all costs and
expenses reasonably incurred by them or any of them in connection
with any action, suit or proceeding to which they or any of them
may be a party by reason of any action taken or failure to act
under or in connection with the Program or any award of
Restricted Stock granted pursuant thereto and against all amounts
paid by them in settlement thereof (provided such settlement is
approved by legal counsel selected by the Corporation) or paid by
them in satisfaction of the judgment in any action, suit or
proceeding; provided, that upon institution of any such action,
suit or proceeding, the person desiring indemnification shall
give the Corporation an opportunity, at the expense of the
Corporation to handle and defend the same.
J. COMPLIANCE WITH LAWS AND REGULATIONS. The shares
of Restricted Stock that may be granted hereunder and the
obligation of the Corporation to deliver such shares is subject
to all applicable federal and state laws, rules and regulations,
and to such approvals by any governmental or regulatory agencies
as may be required. With respect to persons subject to Section
16 of the Exchange Act, transactions under this Program are
intended to comply with all applicable conditions of Rule 16b-3
or any successor provision under the Exchange Act. To the extent
that any provision of the Program or a Participant's Agreement or
action by the Named Fiduciary fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed
advisable by the Named Fiduciary.
K. MISCELLANEOUS PROVISIONS.
(1) Nothing contained in this Program or in a
Participant's Agreement, and no action taken pursuant to the
provisions hereof or thereof by any party hereto or thereto,
shall create, or be construed to create, a trust of any kind, or
a fiduciary relationship between the Corporation or any
Subsidiary, on the one hand, and a Participant, any beneficiary
or any other person, on the other.
(2) Nothing contained in this Program or in a
Participant's Agreement shall be construed to be a contract of
employment for any term of years or as conferring upon a
Participant the right to continue in the employ of the
Corporation or a Subsidiary in any capacity. It is expressly
understood by the Corporation and each Participant that the
Program and such Participant's Agreement relate exclusively to
additional compensation for such Participant's services, payable
as set forth herein, and are not intended to be an employment
contract.
(3) The Program will be administered by a
committee of the Board of Directors of the Corporation consisting
of all members of such Board of Directors who constitute
"disinterested persons" within the meaning of Rule 16b-3 under
the Exchange Act, which committee shall be designated as the
Named Fiduciary of this Program. Subject to the provisions of
this Program, the Named Fiduciary will have authority, in its
sole discretion, to determine which key employees of the
Corporation and its Subsidiaries shall be Participants in the
Program; any individual or corporate performance goals applicable
to a Participant; the number of shares of Restricted Stock to be
awarded to a Participant, if any; the restrictions to be
applicable to such shares of Restricted Stock; and all other
terms of the award of Restricted Stock, which need not be the
same for all Participants. The Named Fiduciary also shall have
full power and authority to interpret, construe and administer
this Program. The Named Fiduciary shall, in no event, be liable
to any person for any action taken or omitted to be taken in
connection with the interpretation, construction, or
administration of this Program, so long as such action or
omission to act is made in good faith. Such committee, when
acting as the Named Fiduciary, shall operate in accordance with
the bylaws of the Corporation in all respects, including but not
limited to provisions regarding quorums and voting by the Board
of Directors or a committee thereof.
(4) The Corporation or a Subsidiary, as the case
may be, may deduct any taxes or other liabilities required by law
to be withheld with respect to the grant or vesting of any shares
of Restricted Stock hereunder. The grant or vesting of such
shares of Restricted Stock is subject to the condition that such
withholding tax or other withholding liabilities shall have been
satisfied in a manner acceptable to the Corporation. If so set
forth in a Participant's Agreement, a Participant may satisfy any
such withholding requirement by electing to have a number of
shares withheld from the shares of Restricted Stock otherwise
issuable upon the granting or vesting of such Restricted Stock,
as the case may be, equal in value to the aggregate withholding
tax or other liabilities. The value of a share of Restricted
Stock shall be determined by reference to the closing price of
the Common Stock (as of the date immediately preceding the date
as of which such withholding amount is required to be determined)
if the Common Stock is listed on a national securities exchange
or reported on the NASDAQ National Market; or the average of the
closing bid and asked prices for the Common Stock in the
over-the-counter market as reported by the NASDAQ Stock Market
for such date if the Common Stock is not listed on a national
securities exchange or the NASDAQ National Market; or the fair
value thereof determined in good faith by the Board of Directors
of the Corporation if the Common Stock is not listed on a
national securities exchange or reported or quoted on the NASDAQ
National Market or the NASDAQ Stock Market.
(5) The Program may be amended, modified,
terminated or suspended by the Named Fiduciary in its sole
discretion at any time and in any respect as deemed in the best
interest of the Corporation; provided that no such amendment or
modification hereto shall (i) increase the number of shares of
Common Stock which may be awarded as Restricted Stock under the
Program or (ii) without the consent of a Participant, reduce the
amount of any benefit or adversely change the terms and
conditions as specified in such Participant's Agreement with
respect to any outstanding shares of Restricted Stock. The Board
of Directors of the Corporation shall submit any amendments to
the Program to the shareholders of the Corporation for approval
to the extent necessary to maintain compliance with the
requirements of Rule 16b-3 of the Exchange Act.
(6) This Program shall be binding upon and inure
to the benefit of the Corporation and its successors and assigns
and each Participant, his or her successors, assigns, heirs,
personal representative, and beneficiaries.
(7) Any notice, consent, or demand required or
permitted to be given under the provisions of this Program shall
be in writing and shall be signed by the party giving or making
the same. If such notice, consent, or demand is mailed to a
party hereto, it shall be sent by United States certified mail,
postage prepaid, addressed, (i) if to the Named Fiduciary, to
First Charter Corporation, 22 Union Street, North, Concord, North
Carolina 28025, Attention: Chief Financial Officer; (ii) if to
the Participant, to the address shown in the Agreement; and (iii)
if to another party, to such party's last known address as shown
on the records of the Corporation. The date of such mailing
shall be deemed to be the date of the notice, consent or demand.
A party may designate a different address for notices by giving
the other party written notice to such effect in the manner
hereinabove prescribed.
(8) Words used herein in the masculine gender
shall be read in the feminine or neuter whenever the context so
requires.
(9) This Program and the rights of the
Corporation and Participant shall be governed by and construed in
accordance with the laws of the State of North Carolina.
(10) The underlying captions set forth in this
Program at the beginning of the various divisions hereof are for
convenience of reference only and shall not be deemed to define
or limit the provisions thereof or to affect in any way their
construction and application.
(11) A Participant may not assign any rights
hereunder.
(12) The invalidity of any provision of the
Program or any Agreement shall not in any manner affect the
validity of any other provisions contained herein or therein, and
each and every provision of the Program and any Participant's
Agreement shall be enforceable regardless of the invalidity, if
any, of any other provision contained therein. In the event that
it should be finally judicially determined at any time that the
Program, or a particular grant of Restricted Stock, is invalid
because of the length of its duration, then, in that event and in
that event only, the Program shall remain in full force and
effect for such period as, in view of all the circumstances,
shall be deemed reasonable by the court passing thereon.
(13) If, under any provision of the Program which
requires a computation of the number of Shares, the number so
computed is not a whole number, such number shall be rounded down
to the next whole number.
(14) The Program and each respective Agreement set
forth the entire understanding of the parties and supersede all
prior agreements, arrangements and communications, whether oral
or written, pertaining to the shares of Restricted Stock with
respect to each Participant.
(15) The Corporation represents that by proper
corporate action it has been authorized to enter into and be
bound by this Program.
<PAGE>
**************************************************************
APPENDIX
PROXY
This Proxy is Solicited on Behalf
of the Board of Directors of
FIRST CHARTER CORPORATION
Annual Meeting of Shareholders, April 25, 1995
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
Shareholder of First Charter Corporation, a North Carolina
corporation (the "Corporation"), hereby constitutes and appoints
Grady S. Carpenter, David Propst and Jane B. Brown, attorneys and
proxies with full power of substitution, for and on behalf of the
undersigned to act and vote as indicated below, according to the
number of shares of the Corporation's Common Stock held of record
by the undersigned on February 17, 1995, and as fully as the
undersigned would be entitled to act and vote if personally
present at the Annual Meeting of Shareholders to be held at the
Cabarrus Country Club, Weddington Road, Concord, North Carolina
at 3:00 p.m., April 25, 1995, and any adjournment or adjournments
thereof (the "Annual Meeting"), as follows:
1. ELECTION OF DIRECTORS
___ FOR electing the five
nominees listed
below for terms
expiring in 1998.
___ WITHHOLD AUTHORITY
to vote for election of all
nominees listed below.
(Instruction: To withhold authority to vote for any
individual nominee, strike a line through the nominee's
name in the list below.)
J. Knox Hillman, Jr.
Lawrence M. Kimbrough
Robert F. Lowrance
Robert L. Wall
James B. Widenhouse
2. ADOPTION OF THE 1996 FIRST CHARTER CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
__ FOR __ AGAINST __ ABSTAIN
3. ADOPTION OF THE FIRST CHARTER CORPORATION RESTRICTED
STOCK AWARD PLAN
__ FOR __ AGAINST __ ABSTAIN
<PAGE>
4. RATIFICATION OF SELECTION OF KPMG PEAT MARWICK AS
ACCOUNTANTS FOR 1995
__ FOR __ AGAINST __ ABSTAIN
(continued on reverse side)<PAGE>
(continued from front side)
5. In their discretion, the proxies are authorized to
act and vote upon any other business which may
properly be brought before said meeting or any
adjournment or adjournments thereof.
The undersigned hereby ratifies and confirms all that said
attorneys and proxies or any of them lawfully do or cause to be
done by virtue hereof. A majority of said attorneys and proxies
who shall be present and acting as such at the Annual Meeting or
any adjournment thereof, or if only one such attorney and proxy
be present and acting, then that one, shall have and may exercise
all powers hereby conferred.
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 IN FAVOR OF PROPOSALS
1, 2, 3 AND 4.
The undersigned hereby acknowledges receipt of the Notice
of Annual Meeting of Shareholders, dated March 16, 1995, the
Proxy Statement and the 1994 Annual Report to Shareholders
furnished therewith.
Dated this ____ day of ____________, 1995.
____________________________(SEAL)
____________________________(SEAL)
NOTE: Signature should agree with name
on stock certificate as printed thereon.
When shares are held by joint tenants,
both should sign. Executors,
administrators, trustees and other
fiduciaries, and persons signing on
behalf of corporations or partnerships,
should so indicate when signing.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY. THANK
YOU.
