EXHIBIT 10.1

TRANSITION AGREEMENT AND RELEASE

      THIS TRANSITION AGREEMENT AND RELEASE (the “Agreement”) made and entered
into by and between LAWRENCE M. KIMBROUGH (the “Executive”) and FIRST CHARTER
CORPORATION, a North Carolina corporation (“First Charter”) (collectively
defined and referred to as the “Parties”);

WITNESSETH:

      WHEREAS, since in or about 1986, Executive has been and is currently
employed by First Charter as President and Chief Executive Officer, and is
highly knowledgeable about the business and operations of First Charter, the
banking industry and its customers;

      WHEREAS, Executive has indicated his desire to retire from First Charter,
effective January 31, 2006;

      WHEREAS, First Charter and Executive desire to enter into this Agreement
to conclude their employment relationship, provide for an orderly transition of
Executive’s responsibilities and resolve all matters by and among them,
including but not limited to, any matters relating to Executive’s employment
relationship with and separation from First Charter;

      WHEREAS, the Parties acknowledge and agree that this Agreement is
supported by valuable consideration and is entered into voluntarily by the
Parties;

      NOW, THEREFORE, in exchange for the promises and mutual covenants
contained in this Agreement, the Parties, intending legally to be bound, agree
as follows:

      1. Transition and Separation from Employment. The Parties agree that
Executive’s initial transition from his role as President and Chief Executive
Officer of First Charter shall start on April 28, 2005. Despite Executive’s
transition from his position, the Parties further agree that following
Executive’s signing of this Agreement, and provided all conditions of this
Agreement are met by Executive, after April 28, 2005, Executive shall:
(a) continue to be employed by First Charter as President and Chief Executive
Officer for a period through June 30, 2005 (the “Role Transition Date”), and
(b) voluntarily relinquish his duties and responsibilities as President and
Chief Executive Officer and as a Director on the Board of Directors of First
Charter (the “Board”) and the Board of Directors of First Charter Bank but
continue to be employed by First Charter as President Emeritus for a period
beginning July 1, 2005 through January 31, 2006, upon which Executive’s official
employment with First Charter shall end, effective January 31, 2006 (the
“Separation Date”) (collectively defined and referred to as the “Transition
Period”).

      The Parties agree that during the Transition Period, Executive will
reasonably cooperate with First Charter in the completion of financial and other
records and the transition of his position responsibilities during regular
business hours, including but not limited to work on other specific project
assignments and transition issues that may arise with respect to subject matters
that are within the current scope of his job duties, responsibilities and
expertise.

 

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      The Parties expressly acknowledge and agree that this Agreement is and
will be enforceable and First Charter will be in compliance with this provision
1 provided Executive is paid his applicable regular compensation and benefits as
modified below through January 31, 2006, whether or not he is actually required
to perform complete, full-time services for First Charter during the Transition
Period. Except for Executive’s opportunity to obtain continuation medical
coverage as allowed by and pursuant to COBRA or as otherwise set forth in
provisions 3 and 4 below, Executive’s rights to his regular salary and benefits
shall cease effective January 31, 2006, except that Executive shall not forfeit
any vested deferred compensation benefits as set forth below, or vested 401(k),
pension or stock benefits earned by him during his employment with First
Charter, if any.

      Executive and First Charter further acknowledge and agree that except for
Executive’s confidentiality, return of records and covenant not to compete
obligations under the December 19, 2001 Employment Agreement between Executive
and First Charter (the “Employment Agreement”), which confidentiality and
covenant not to compete obligations shall continue to remain in full force and
effect, (a) the Employment Agreement shall be terminated effective January 31,
2006, and shall be of no further force and effect; and (b) any and all past and
ongoing respective obligations between the Parties under the Employment
Agreement (including obligations that would otherwise survive the termination or
end of such Employment Agreement), are hereby terminated and forever released,
acquitted and discharged. Executive further acknowledges and agrees that a
breach by him of such confidentiality, return of records and covenant not to
compete obligations shall constitute a breach by him of this Agreement.

      2. Nature of Separation. The Parties agree that the end of the employment
relationship between the Parties shall be treated as a voluntary retirement in
the personnel records of First Charter.

      3. Transition Period Compensation. The Parties agree that following the
Effective Date of this Agreement (as defined in provision 16 below), and
provided all conditions of this Agreement are met by Executive, First Charter
shall provide Executive with the following general compensation and other
benefits and services during the Transition Period (the “Transition Period
Compensation):

      a. Base Salary. During the Transition Period through Executive’s final
Separation Date, First Charter shall continue to pay Executive a base salary as
compensation for services rendered at Executive’s current bi-weekly base rate of
$14,423.07 (the “Base Salary”), payable to Executive by First Charter at the
same time and in the same manner as Executive’s current salary payout with First
Charter, less applicable deductions required by law.

      b. Bonuses. During the Transition Period through Executive’s final
Separation Date, Executive shall be eligible to continue participation and shall
participate in the First Charter Annual Incentive Plan for fiscal year 2005
(ending December 31, 2005) in accordance with the terms and conditions of such
plan. However, Executive and First Charter acknowledge and agree that
Executive’s final award payout under such plan, if and as awarded by the Board,
shall be prorated for Executive’s active service as President and Chief
Executive Officer through June 30, 2005, as set forth in provision 4.f. below.

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      c. Expenses. During the Transition Period through Executive’s final
Separation Date, upon submission of proper vouchers to First Charter by
Executive, First Charter shall continue to pay or reimburse Executive for all
normal and reasonable business expenses, including authorized travel expenses,
incurred by Executive in connection with Executive’s performance of his
responsibilities with First Charter in accordance with the terms of applicable
First Charter policy and procedures then in effect concerning the same as they
may be established or amended from time to time in the absolute discretion of
First Charter. However, Executive and First Charter agree that during the
Transition Period after the June 30, 2005 Role Transition Date, Executive must
receive advance authorization from First Charter’s then CEO or his/her designee
for business and Company-related travel expenses incurred by Executive.

      d. Company Car. Executive shall continue to have the use of the Buick Park
Avenue owned by First Charter and currently used by Executive (the “Company
Car”) during the Transition Period through June 30, 2005 (the “Car Return
Date”). Executive agrees that he shall return the Company Car to First Charter
on or before the Car Return Date. Executive also acknowledges and agrees that,
unless otherwise authorized by First Charter’s then CEO for specified First
Charter business, his authorization for travel and other expenses associated
with the use of the Company Car shall be discontinued as of the Car Return Date.
However, First Charter agrees that following the Effective Date of this
Agreement (as defined in provision 16 below), and provided all conditions of
this Agreement are and continue to be met by Executive, Executive shall be
allowed to purchase the Company Car at the lesser of the depreciated book value
or the then present NADA “blue book” market value as of June 30, 2005 on or
within ten (10) business days following the Car Return Date.

      e. Leave Accrual. Executive shall be eligible to continue to accrue PTO
days and all other paid leave time during the Transition Period through the
June 30, 2005 Role Transition Date, after which the Parties agree that any such
further accrual shall cease. Executive, in turn, agrees promptly and accurately
to account for all such time used by Executive during such period.

      f. Benefits. With the exception of the PTO/leave limitations set forth in
provision 3.e. above and the benefits and payments set forth in provision 4
below, during the Transition Period through Executive’s final Separation Date,
First Charter shall continue to provide to Executive (at the same level of
shared expense) those general benefits that Executive received and/or in which
Executive participated with First Charter immediately prior to Executive’s
execution of this Agreement, including 401(k) plan participation, and all group
health, hospitalization, disability, dental, life and other insurance and
employee welfare benefit plans, as they may be established, amended, replaced or
terminated from time to time in the absolute and sole discretion of the Company
and provided Executive otherwise remain eligible to participate in such plans
and policies by their terms.

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      g. Club/Membership Fees. First Charter agrees that it shall continue to
pay and/or reimburse Executive for Executive’s general membership dues, fees and
assessments related to Executive’s membership in River Run Country Club and the
Charlotte City Club during the Transition Period through Executive’s final
Separation Date, less applicable deductions required by law. The Parties also
acknowledge and agree First Charter shall continue to pay and/or reimburse
Executive for customary local, state and national professional organizations to
which a public financial institution President and Chief Executive Officer
regularly belongs and charges for membership in other local civic
organizations/clubs during the Transition Period through the June 30, 2005 Role
Transition Date, after which the Parties agree that such payments and
reimbursements shall cease. The Parties further acknowledge and agree that the
continued, authorized payments set forth in this provision 3.g. shall not
include any payments or reimbursements for service charges, dining charges,
donations, golf fees and other non-business expenses related to such
memberships.

      h. Other Perquisites. With the exception of the OPT Capital Plan (in which
Executive currently is not deferring compensation during 2005) or as otherwise
set forth or modified above, during the Transition Period through Executive’s
final Separation Date, First Charter shall also continue to provide to Executive
(at the same level of shared expense) those other perquisites that Executive
received and/or in which Executive participated with First Charter immediately
prior to Executive’s execution of this Agreement as set forth in Schedule B to
Executive’s current Employment Agreement, including Money Purchase Pension Plan,
Employee Stock Purchase Plan and Supplemental Agreement for Deferred
Compensation participation, as such plans may be established, amended, replaced
or terminated from time to time in the absolute and sole discretion of the
Company and provided Executive otherwise remain eligible to participate in such
plans and policies by their terms.

      4. Separation Benefits. In addition to the above, following the end of
Executive’s employment with First Charter on the Separation Date, First Charter
will provide Executive with the following separation benefits:

      a. Paid Time Off. Regardless of whether Executive signs this Agreement,
Executive shall receive payment for all unused PTO days as of June 30, 2005,
payable by First Charter to Executive in a lump sum amount on or before the next
available payday following the Separation Date, less appropriate deductions
required by law for the payment of wages, including for state and federal taxes
and FICA. Executive agrees that he shall review and confirm with Human Resources
his PTO balance and past activity during the last 6-month period for general
accuracy. The Parties further acknowledge that First Charter will report such
payment as W-2 income for the applicable tax year in which it is received.

      b. Expense Reimbursement. Regardless of whether Executive signs this
Agreement, the Parties agree that the total expense reimbursements due Executive
for reasonable and authorized expenses incurred by him during his employment
with First Charter through the final Separation Date but not yet reimbursed to
him shall be payable by First Charter to Executive on the next available payday
following the Separation Date

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and the submission of appropriate receipts and other reimbursement information
from Executive to First Charter concerning the same, whichever is later.

      c. Health/Dental Insurance Benefits. Regardless of whether Executive signs
this Agreement, following the Separation Date, First Charter and/or its
applicable carriers will notify Executive of his rights to elect continuation of
health and dental benefits for him and his eligible dependents under the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In addition, the
Parties acknowledge and agree that, for purposes of COBRA, the date of
Executive’s “qualifying event” is and will be January 31, 2006. Executive
further agrees that all conversion, buy-out and other fees, premiums, payments
and other expenses related to such coverage continuation under COBRA or
otherwise shall be the absolute and sole obligation of Executive, and that First
Charter shall have no premium, payment or financial obligation for such coverage
continuation, if and as elected.

      d. Deferred Compensation. The Parties agree that following Executive’s
Separation Date, Executive shall cease to be an active participant in the awards
and other benefits under: (1) First Charter’s Amended and Restated Supplemental
Agreement for Deferred Compensation with Executive dated December 19, 2001 (the
“SERP”), and (2) First Charter’s Option Plan Trust Deferred Compensation Plan
(the “OPT”), if and as applicable. The Parties further agree that except for any
applicable First Charter in-kind 401(k) match traditionally contributed by First
Charter to the OPT for and on behalf of Executive in or about February 2006,
Executive will not accrue any additional awards, credits, contributions or
benefits under the SERP or the OPT following January 31, 2006. Executive’s
rights to, and First Charter’s obligations concerning, vested benefits that
Executive has accrued under the SERP and the OPT through January 31, 2006 and
distributions to Executive arising under the same shall be governed by and made
in accordance with the terms and conditions of such plans and applicable law.

      e. Stock Options. First Charter agrees that following the Effective Date
of this Agreement (as defined in provision 16 below), and provided all
conditions of this Agreement are and continue to be met by Executive, the
vesting of any current unexercised, non-vested options previously granted to
Executive by First Charter in accordance with the terms of First Charter’s
Omnibus Stock Option Award Plan and First Charter’s Comprehensive Stock Plan
(collectively, the “Share Options”) shall be accelerated, and all such
unexercised, non-vested options shall automatically and fully vest, effective
January 31, 2006. In addition, Executive and First Charter agree that except as
otherwise set forth in this provision 4.e., the Share Options remain subject to,
and governed by, those certain rules and restrictions of the First Charter
Omnibus Stock Option Award Plan and First Charter’s Comprehensive Stock Plan, as
applicable, as such plans may be amended from time to time.

      Executive acknowledges and agrees that as set forth in First Charter’s
Omnibus Stock Option Award Plan and First Charter’s Comprehensive Stock Plan
documents, if he desires, Executive will be required to exercise all
outstanding, non-lapsed vested stock options with First Charter within ninety
(90) days following his separation from employment with the Company, effective
January 31, 2006. In addition, a schedule

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listing the outstanding, non-lapsed stock options granted to Executive under any
First Charter stock option award agreement, First Charter’s Omnibus Stock Option
Award Plan, First Charter’s Comprehensive Stock Plan, or otherwise prior to
January 31, 2006 is attached as Exhibit A.

      f. Incentive Compensation Payment. First Charter agrees that despite
Executive’s transition from active employment as President and Chief Executive
Officer of First Charter effective upon the Role Transition Date, following the
Effective Date of this Agreement (as defined in provision 16 below), and
provided all conditions of this Agreement are met by Executive, First Charter
shall pay Executive a pro-rated bonus as a participant in the First Charter
Annual Incentive Plan for fiscal year 2005 (ending December 31, 2005) through
the June 30, 2005 Role Transition Date (the “Pro-Rata Annual Incentive Bonus”).
Such Pro-Rata Annual Incentive Bonus shall be based upon achievement of
established corporate and individual goals and objectives and subject to funding
criteria being met, as determined by the Board. In addition, Executive’s ongoing
active participation in such plan shall end as of the Separation Date.

For example, based upon Executive’s June 30, 2005 Role Transition Date, if upon
calculation of the Annual Incentive Bonus amounts for employees after the end of
fiscal year 2005 Executive would have received a $10,000 bonus had Executive
remained actively employed with First Charter at the time of such bonus payout,
Executive would receive 6/12th of such amount as a Pro-Rata Annual Incentive
Bonus = .50 x $10,000 = $5,000.

      The applicable timing for making payments under the First Charter Annual
Incentive Plan will be governed by the terms and conditions of such plan, such
that Executive shall receive payment for Executive’s Pro Rata Annual Incentive
Bonus if and as eligible at the same time and in the same manner as other then
ongoing employee plan participants at First Charter, which payments generally
occur in or about February 2006. In addition, Executive and First Charter agree
that any such Pro-Rata Incentive Bonus payment will be subject to all required
withholdings and deductions, as appropriate. The Parties further agree that
despite any terms and conditions of such plan to the contrary, Executive’s
separation from employment with First Charter effective upon the Separation Date
will not result in a forfeiture of the 2005 Annual Incentive Plan amounts set
forth in this provision 4.f.

      g. Equipment. First Charter agrees that following the Effective Date of
this Agreement (as defined in provision 16 below), and provided all conditions
of this Agreement are and continue to be met by Executive, First Charter shall
allow Executive to retain possession of First Charter’s cellular telephone
currently issued to him.

      h. Effect of Separation on Other Existing Benefits. Except as otherwise
set forth in provisions 3 and 4 above, Executive shall cease to be an active
participant in First Charter’s benefit programs effective as of Executive’s
Separation Date, and Executive shall no longer be eligible to receive other
perquisite benefits from First Charter following such Separation Date. In
addition, following Executive’s separation from his employment with First
Charter, Executive’s rights to continue any benefits that

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he formerly received under First Charter’s benefit plans, to convert any such
benefits to personal policies, or to receive any vested or accrued benefits
under those plans will be governed by the applicable plan documents and law.

      i. Tax Penalty Protection. First Charter agrees that following the
Effective Date of this Agreement (as defined in provision 16 below), and
provided all conditions of this Agreement are and continue to be met by
Executive, in the event a determination is made by legislation, regulation,
ruling or administrative or court decision to Executive or First Charter that
the aggregate amount of any payment made to Executive under this Agreement and
any other payment to or for the benefit of Executive in the nature of
compensation whereby the receipt of which is contingent on a change in control
of First Charter as defined by the Internal Revenue Code of 1986, as amended
(the “Code”) constitute “excess parachute payments” as defined in Code
Sections 280G and 4999 (as well as any successor provisions or similar sections
thereof), Executive shall be entitled to receive from First Charter, in addition
to and separate from any other amounts payable under this Agreement, a lump sum
payment equal to 100% of any imposed and determined excise tax under Code
Section 4999, plus an amount equal to the federal and state income tax, FICA,
and Medicare taxes (based upon Executive’s projected marginal income tax rates)
on such lump sum payment, if and as applicable. The amounts under this provision
4.i. shall be paid to Executive as soon as may be practicable after such final
determination is made. First Charter and Executive further agree to mutually and
reasonably determine whether or not such excise tax determination has occurred
or whether any appeal to such determination should be made.

      5. No Other Payments or Benefits. Except for the payments and benefits
described above in this Agreement and Executive’s general right to elect certain
coverage continuation under COBRA, Executive acknowledges that he is not
entitled to any additional wages, pay, payments, bonuses, incentive pay,
commissions, compensation, severance pay, stock options, deferred compensation,
dividends, PTO pay, vacation pay, sick pay, sick reserve pay, Director fees,
consideration or benefits of any kind from First Charter, including but not
limited to any severance, change in control or other payments to Executive under
the Employment Agreement, except that Executive shall not forfeit any vested
deferred compensation, 401(k), pension or stock benefits earned by him during
his employment with First Charter, if any.

      6. Ongoing Obligations. Executive hereby acknowledges and agrees that in
addition to the obligations set forth in this Agreement, during the Transition
Period and following Executive’s separation from employment with First Charter,
Executive shall continue to honor all return of records and applicable
confidentiality, conflict of interest and non-compete obligations previously
agreed to by him with First Charter in the Employment Agreement or otherwise,
and/or in accordance with applicable federal or state law, and that such
obligations shall continue to remain in full force and effect for the relevant
term for each. Executive also acknowledges and agrees that any breach by him of
such obligations shall be deemed to be a breach by Executive of this Agreement,
which shall allow additional remedies in accordance with provision 12 below.

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      7. Return of Documents/Data. Executive acknowledges and agrees that:
(1) all files, customer records, customer lists, research and development data,
manuals, letters, contracts, agreements, proposals, notes, notebooks, records
(including all computer and electronic records), reports, memoranda and all
other First Charter materials, documents and data used, prepared or collected by
Executive as part of his employment with First Charter, in whatever form, and
(2) all Confidential Information (as defined in the Employment Agreement) and
records containing any Confidential Information that came into his possession
while an employee of First Charter, whether prepared by Executive or others, are
and will remain the property of First Charter. Upon the end of his employment
with First Charter, Executive will return and make available to First Charter
prior to the last day of Executive’s employment all such documents and
information, as well as all documents and other materials of any kind that
constitute or contain any Confidential Information, in Executive’s possession or
control, regardless of how stored or maintained, including all originals, copies
and compilations and all information stored or maintained on computer, tapes,
discs or any other electronic or other form of technology.

      8. Reasonableness. Executive acknowledges and agrees that during his
tenure with First Charter for the past 20+ years, he has had access to
comprehensive long-term strategy and confidential business data for First
Charter throughout its operations. Executive agrees that the restrictions placed
upon him by provision 6 of this Agreement are reasonable given the nature of his
current position with First Charter, the area in which First Charter markets its
products and services, and the consideration provided by First Charter to
Executive pursuant to the Employment Agreement and this Agreement, as
applicable. Specifically, Executive acknowledges and agrees that the length of
the covenant not to compete and other restricted activities set forth in the
Employment Agreement are reasonable and that the defined competitive activity
and restricted territory are reasonable. Accordingly, Executive agrees not to
contest the validity or enforceability of provision 6 of this Agreement or the
non-compete requirements contained in the Employment Agreement, and agrees that
if any court or arbitration panel should hold any provision of those sections to
be unenforceable, the remaining provisions will nonetheless be enforceable
according to their terms. Further, if any provision or subsection of the
non-compete requirements in the Employment Agreement is held to be overbroad as
written, Executive agrees that a court or arbitration panel should view such
provisions and subsections as separable and uphold those separable provisions
and subsections deemed to be reasonable.

      The restrictions and obligations in provision 6 of this Agreement and the
non-compete requirements contained in the Employment Agreement shall survive
Executive’s last day of employment with First Charter and shall be in addition
to any restrictions imposed upon Executive by statute or at common law. The
Parties further acknowledge and agree that the restrictions and obligations in
provision 6 of this Agreement and the non-compete requirements contained in the
Employment Agreement shall continue to be enforceable regardless of whether
there is a subsequent dispute between the Parties concerning any alleged breach
of this Agreement.

      9. Release. In consideration of the Transition Period, Executive’s
continued employment by First Charter through the Separation Date, and the
Transition Period Compensation, Pro-Rata Annual Incentive Bonus, accelerated
Share Option vesting, and other good and valuable consideration described in
this Agreement, Executive, for himself, his heirs, executors, legal
representatives, administrators, successors and assigns, hereby fully releases,
discharges and covenants not to sue First Charter, First Charter Bank, First
Charter Insurance

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Services, First Charter Realty Investment, First Charter Brokerage Services,
FCNB Real Estate, Inc., and all subsidiary and affiliate companies of such
entities, as well as such entities’ respective officers, directors, trustees,
employees, agents, predecessors, successors and assigns (collectively, the
“Releasees”), of and from any and all claims, actions, lawsuits, damages,
administrative charges, or demands of any kind whatsoever, whenever or wherever
they arose, that Executive has, may have or may have had at the time of or prior
to his execution of this Agreement arising out of or related to: (a) Executive’s
entering into this Agreement, or (b) Executive’s prior Employment Agreement
(collectively, the “Released Claims”), including but not limited to Released
Claims arising under the Age Discrimination in Employment Act of 1967, the North
Carolina Wage and Hour Act, the North Carolina Retaliatory Employment
Discrimination Act, the North Carolina Equal Employment Practices Act, and all
other federal, state and local civil rights acts, regulations, orders and
claims, whether under tort or contract, or under statute or otherwise. Executive
further agrees not to file, institute or pursue any lawsuit, claim or
administrative action against the Releasees relating to the Released Claims.

      The Parties, however, agree that this release shall not: (i) include any
claims relating to the obligations of First Charter under this Agreement;
(ii) affect Executive’s vested and accrued rights as a participant in any vested
deferred compensation, 401(k), pension or stock benefits of First Charter; or
(iii) affect any rights or claims that may arise out of events occurring after
the date this Agreement is signed. The Parties further expressly understand and
agree that this release is and shall continue to be enforceable regardless of
whether there is a subsequent dispute between the Parties concerning any alleged
breach of this Agreement.

      10. Agreement Confidentiality. The Parties agree that the terms of this
Agreement, including the amounts of any payments made as outlined in provisions
3 and 4 above, shall remain confidential. The Parties, however, agree that:
(a) First Charter may disclose the terms of this Agreement to officers,
directors and management level employees of First Charter and First Charter
Bank, to professionals representing them, to their insurance agents and
carriers, and to affiliates and employees of the same with a need to know or in
order to give effect to this Agreement; and (b) Executive may disclose the terms
of this Agreement to his spouse, children, accountant or tax return preparer to
the extent necessary in preparing his tax returns or to receive relevant tax
advice, and attorney in a legally recognized privileged communication, provided
that such third parties comply with the confidentiality requirements set forth
above. In addition, the Parties agree that they are permitted to disclose the
terms of this Agreement to the IRS, the North Carolina Department of Revenue,
and other applicable state departments of taxation, if necessary, and as
otherwise required by law. The Parties further agree that First Charter may also
disclose the terms of this Agreement in its proxy statements or other public
securities filings as required by law.

      Executive agrees that he shall be responsible for any disclosure of the
terms of this Agreement by his spouse, children, accountant, tax return preparer
or attorney contrary to the terms of this provision 10 as though such
disclosures were made by him. Executive further acknowledges and agrees that
this provision 10 is a material provision of the Agreement and that any breach
by him or the individuals to whom he disclosed information regarding this
Agreement of this provision 10 shall be deemed to be a breach by Executive of
the Agreement.

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      11. Cooperation/Community Support. Executive agrees to cooperate with and
provide assistance to First Charter and its legal counsel in connection with any
present or future litigation (including arbitration or administrative hearings)
or investigation affecting First Charter in which, in the reasonable judgment of
First Charter’s counsel, Executive’s assistance or cooperation is needed.
Executive shall, when requested by First Charter, provide testimony or other
assistance and shall travel at First Charter’s request in order to fulfill this
obligation. Provided, however, that, in connection with such litigation or
investigation, First Charter shall attempt to accommodate Executive’s schedule,
shall provide him with reasonable notice in advance of the times in which his
cooperation or assistance is needed, and shall reimburse Executive for any
reasonable expenses incurred in connection with such matters. In addition,
during the Transition Period following the June 30, 2005 Role Transition Date
outlined in provision 1 above, Executive agrees to provide limited assistance to
First Charter in answering questions that may arise relating to business
activities previously performed by Executive for First Charter and in attending
reasonable, limited community and/or public relations events as a representative
for or on behalf of First Charter, if and as requested by First Charter’s then
CEO.

      Executive further agrees that during the Transition Period and for an
additional two (2) year period following the Separation Date, he will not make
or cause others to make, whether in writing or orally, disparaging statements
with respect to First Charter, or its subsidiaries, affiliate companies,
businesses, officers or employees, and that he will maintain a publicly cordial
relationship with First Charter and its employees in his conversations with
employees, customers, the financial/insurance services community and other third
party individuals. First Charter, in turn, agrees that during the Transition
Period and for an additional two (2) year period following the Separation Date,
the current individuals within First Charter’s Senior Executive Team will not
make or cause others to make, whether in writing or orally, disparaging
statements with respect to Executive or his prior employment with First Charter,
and that such Senior Executive Team members shall maintain a publicly cordial
relationship with Executive in their conversations with employees, customers,
the financial/insurance services community, and other third parties.

      Despite the above, and except as otherwise set forth in this provision 11
below, the Parties agree that nothing in this provision 11 shall be deemed to
interfere with Executive’s ordinary and regular rights as a shareholder of First
Charter, including but not limited to Executive’s right to engage in appropriate
communications with the Board of Directors of First Charter regarding general
issues affecting Executive’s status and rights as a shareholder. However,
Executive agrees that in consideration of the payments and other benefits
outlined above, the definition of “Competitive Activity” contained in his
Employment Agreement as referenced in provision 6 shall also include:
(a) acquiring, offering to acquire, or agreeing to acquire, directly or
indirectly and/or in concert with others, by purchase or otherwise, more than
one percent of the outstanding voting securities of First Charter or direct or
indirect rights to acquire more than one percent of the outstanding voting
securities of First Charter, or any assets of First Charter; or (b) directly or
indirectly and/or in concert with others making any public announcement with
respect to, submitting a proposal for, or offering of (with or without
conditions) any of the actions prohibited in subpart (a) above of this provision
11.

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      12. Breach. Executive agrees to submit to the jurisdiction of the courts
of North Carolina and agrees that, in the event of any breach or threatened
breach of provisions 6-11 of this Agreement by Executive, First Charter shall be
entitled to an injunction, without bond, restraining such breach. In addition,
Executive and First Charter agree that the prevailing party in any legal action
to enforce the terms of this Agreement, including but not limited to provisions
6-11 above, shall be entitled to costs and attorneys’ fees relating to any such
proceeding, but nothing herein shall be construed as prohibiting the Parties
from pursuing other remedies available to them for any breach or threatened
breach.

      Moreover, Executive also agrees that if Executive breaches any of
provisions 6-11 above, Executive shall forfeit at the time of the breach the
right to any additional future Transition Period Compensation or other payments
or benefits under provisions 3, 4.e., 4.f., 4.g. and 4.i. of this Agreement. In
such case, Executive and First Charter agree that the obligations contained in
provisions 6-11 of this Agreement shall remain valid and enforceable based on
the consideration actually provided. Moreover, Executive agrees that in the
event of any such breach, First Charter shall be entitled to costs and
reasonable attorneys’ fees relating to any proceeding to enforce or collect a
refund of the amounts set forth in this provision.

      13. Responsibility for Taxes. The Parties agree that First Charter will
report the above Transition Period Compensation under provision 3 and separation
benefits under provision 4 as W-2 income for the applicable tax year(s) in which
it they are received and/or legally accounted as taxable income, if and as
required by law. Executive understands and agrees that except as otherwise noted
in provision 4.i. above, he is responsible for any federal or state tax
liability, penalties, interest, tax payments or tax judgments against him that
could arise as a result of this Agreement. In addition, Executive agrees that he
has had the opportunity to consult with his own, independent accountant and/or
counsel regarding any and all tax issues related to this Agreement. Executive
also agrees that First Charter, the Releasees, and their respective officers,
employees, accountants, attorneys and agents are in no way indemnifying or
making any representation, statement or guarantee to Executive as to his past,
current or future tax liability or the ultimate position that the IRS or any
applicable state tax agency may take with respect to the tax treatment of such
prior or future wages, payments, compensation and benefits, including those
payments and provision set forth in provisions 3 and 4 of this Agreement.

      14. Acknowledgment by Executive. First Charter specifically advises
Executive to consult a lawyer before signing this Agreement concerning the terms
of this Agreement and his rights under the Age Discrimination in Employment Act,
29 U.S.C. § 621 et seq. Executive acknowledges that he has carefully read this
Agreement, that he knows and understands the contents of this Agreement, that he
has had ample opportunity to review the terms of this Agreement, that he is
under no pressure to execute this Agreement, that he has consulted with or had
the opportunity to consult with a lawyer regarding this Agreement, and that he
executes this Agreement of his own free will.

      15. Waiting Period. Executive hereby acknowledges and understands that
after receiving this Agreement from First Charter, he shall have at least
twenty-one (21) days to consider signing this Agreement, and is further aware of
his right to consult with an attorney prior to signing this Agreement. By
signing this Agreement, Executive acknowledges his right to consider whether to
sign this Agreement for a period of at least twenty-one (21) days. If Executive
elects not to take twenty-one (21) days to sign this Agreement, Executive
acknowledges that the period of time used by him prior to signing this Agreement
was ample

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time to consider and review this Agreement, it being expressly understood that
First Charter is imposing no requirement or duress on Executive to take less
than twenty-one (21) days to consider signing this Agreement. If Executive does
not sign this Agreement within twenty-one (21) days of presentation by First
Charter, he further acknowledges that First Charter has the option to withdraw
its offer set forth in this Agreement.

      16. Revocation Rights. Executive acknowledges and understands that he
shall have seven (7) days from the date this Agreement is signed by him to
revoke this Agreement, if he so chooses, by advising First Charter in writing of
the revocation. Any such revocation of this Agreement must be in writing, signed
by Executive, and delivered to Ms. Laura Blalock, Executive Vice President,
Human Resources, First Charter Corporation, P.O. Box 37937, Charlotte, North
Carolina 28237-7937. However, Executive acknowledges that the payments and other
benefits outlined in provisions 3 and 4 above will not become payable until:
(a) First Charter has received a signed copy of this Agreement from Executive;
and (b) the 7-day revocation period has passed without Executive’s revocation.
Otherwise, if this Agreement is not revoked within seven (7) days from the
signing of this Agreement by Executive, it shall become effective and
enforceable as to all Parties on the eighth day following the signing of this
Agreement by all Parties (the “Effective Date”).

      17. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of Executive, First Charter and its respective successors,
assigns, heirs and personal representatives; provided, that Executive may not
assign any of his rights, title or interest in this Agreement. The Parties,
however, agree that nothing in this Agreement shall preclude (a) Executive from
designating a beneficiary and/or trust to receive any benefit payable upon
Executive’s death, or (b) the executors, administrators or other legal
representatives of Executive or Executive’s estate from assigning any rights
hereunder to the person or persons entitled thereunto. Executive further
acknowledges and agrees that in the event of the transfer and/or assignment of
this Agreement to a successor or assignee of First Charter, this Agreement shall
remain valid and be fully enforceable by such entity. As used in this Agreement,
“First Charter” shall mean First Charter as defined herein and any successor to
its business and/or assets as aforesaid that expressly assumes the obligations
of this Agreement or that otherwise becomes bound by the terms and provisions of
this Agreement by operation of law.

      18. No Admissions. This Agreement does not constitute any admission by
First Charter or the Releasees of any violation by them of any contract,
agreement, plan, statute, ordinance, constitutional provision or other law, and
this Agreement shall in no manner be deemed an admission, finding, or indication
for any purpose whatsoever that First Charter or the Releasees have at any time,
including the present, committed any unlawful acts against Executive or treated
him unfairly or improperly in any way, and Executive further understands and
acknowledges that First Charter enters into this Agreement solely to resolve all
matters between the Parties in an amicable fashion.

      19. Governing Law. The Parties agree that this Agreement shall be deemed
to be a contract made under, and for all purposes shall be governed by and
construed in accordance with, the internal laws and judicial decisions of the
State of North Carolina, except as superseded by federal law.

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      20. Dissolution or Merger. In the event that First Charter consolidates or
merges into or with, or transfers all or substantially all of its assets to,
another entity, and such other entity assumes this Agreement, the term “First
Charter” as used herein shall mean such other entity, and the Parties agree that
this Agreement shall continue in full force and effect without any further
action on the part of either First Charter, its successor or assign, or
Executive.

      21. Waiver of Breach. No waiver of any breach of this Agreement shall
operate or be construed as a waiver of any subsequent breach by any party. No
waiver shall be valid unless in writing and signed by the party waiving any
particular provision.

      22. Severability. The Parties understand and agree that every provision of
this Agreement is severable from each other provision of this Agreement. Thus,
the Parties agree that if any part of the covenants or provisions contained in
this Agreement is determined by a court of competent jurisdiction or by any
arbitration panel to which a dispute is submitted to be invalid, illegal or
incapable of being enforced, then such covenant or provision, with such
modification as shall be required in order to render such covenant or provision
not invalid, illegal or incapable of being enforced, shall remain in full force
and effect, and all other covenants and provisions contained in this Agreement
shall, nevertheless, remain in full force and effect to the fullest extent
permissible by law. The Parties further agree that, if any court or panel makes
such a determination, such court or panel shall have the power to reduce the
duration, scope and/or area of such provisions and/or delete specific words and
phrases by “blue penciling” and, in its reduced or blue penciled form, such
provisions shall then be enforceable as allowed by law.

      23. Counterparts. This Agreement may be executed in duplicate
counterparts, each of which shall be deemed an original and all of which shall
constitute but one and the same instrument.

      24. Entire Agreement. Except as otherwise set forth in this Agreement,
this Agreement constitutes the entire agreement among the Parties pertaining to
the subject matter contained herein and supersedes any and all prior and
contemporaneous agreements, representations, promises, inducements and
understandings of the Parties. This written Agreement cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral or
written agreements. Moreover, this written Agreement may not be later modified
except by a further writing signed by a duly authorized officer of First Charter
and Executive. Notwithstanding the foregoing, nothing contained herein shall
prevent or restrain in any manner First Charter from instituting an action or
claim in court, or such other forum as may be appropriate, to enforce the terms
of any ongoing, post-employment confidentiality and other obligations of
Executive set forth and/or referenced in this Agreement or any similar agreement
relating to First Charter’s confidential or proprietary business information or
trade secrets.

      25. Notice. Except as otherwise set forth in this Agreement, whenever any
notice is required hereunder, it shall be given in writing addressed as follows:

         
To First Charter:
  Laura Nelson Blalock    

  EVP, Human Resources    

  First Charter Corporation    

  P.O. Box 37937    

  Charlotte, North Carolina 28237-7937    
 
       
To Executive:
  Lawrence M. Kimbrough    

  617 Ardrey Circle    

  Davidson, North Carolina 28036    

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      Notice shall be deemed given and effective on the earlier of three
(3) days after the deposit in the U.S. mail of a writing addressed as above and
sent first class mail, certified, return receipt requested, or when actually
received. Either party may change the address for notice by notifying the other
party of such change in accordance with this provision 25.

      IN WITNESS WHEREOF, the Board of Directors of First Charter has approved
this Agreement and caused it to be executed in its name by its Chairman and duly
attested to, at the April 27, 2005 meeting of the Board of Directors of First
Charter, and Lawrence M. Kimbrough has accepted this Agreement and has hereunto
set his hand and seal, as of the date set forth below.

[Signatures on Next Page]

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            FIRST CHARTER CORPORATION
      By:   /s/ James E. Burt, III (SEAL)         Name:   James E. Burt, III   
    Title:   Chairman, Board of Directors     

            ATTEST:
      By:   /s/ Stephen J. Antal         Name:   Stephen J. Antal       
Title:   Senior Vice President, General Counsel and Corporate Secretary     

Accepted and signed by Executive, this the 27th day of April, 2005.

            EXECUTIVE
      /s/ Lawrence M. Kimbrough       Lawrence M. Kimbrough           

Sworn to and subscribed before me
this the 27th day of April, 2005.

/s/ Judy E. Montague

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Notary Public
My Commission Expires: 6/3/05

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