TRANSITION AGREEMENT AND RELEASE

THIS TRANSITION AGREEMENT AND RELEASE (the "Agreement") made and entered into by
and between RICHARD A. MANLEY (the "Executive") and FIRST CHARTER CORPORATION, a
North Carolina corporation ("First Charter") (collectively defined and referred
to as the "Parties");

WITNESSETH:

WHEREAS, Executive has been and is currently employed by First Charter Bank as
Executive Vice President, Chief Banking Officer, and by First Charter as
Executive Vice President, Chief Banking Officer, and is highly knowledgeable
about the business and operations of First Charter, First Charter Bank, the
banking industry and First Charter's and First Charter Bank's customers;

WHEREAS, First Charter and Executive desire to enter into this Agreement to
conclude his employment relationship with First Charter, First Charter Bank and
their related subsidiaries, 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 and First Charter Bank;

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 Executive Vice President, Chief
Banking Officer of First Charter Bank and Executive Vice President, Chief
Banking Officer of First Charter shall start on September 22, 2006 (the
"Transition Date").  Despite Executive's transition from his positions, the
Parties agree that following Executive's signing of this Agreement, and provided
all conditions of this Agreement are met by Executive, after the Transition
Date, Executive shall continue to be employed by First Charter and First Charter
Bank for a period through, and his official employment with First Charter, First
Charter Bank and/or their related subsidiaries in all capacities shall end
effective October 6, 2006 (the "Separation Date") (collectively defined and
referred to as the "Transition Period"). 

The Parties agree that during the Transition Period, Executive will consult and
reasonably cooperate with First Charter and its officers and employees as needed
and requested in providing limited advice and consulting assistance regarding
the transition of his position responsibilities and with respect to any other
issues regarding the subject matters that are within the current scope of his
job duties and responsibilities, including but not limited to work on specific
transition issues that may arise.  The Parties further acknowledge and agree
that during the Transition Period, Executive's primary responsibility shall be
to look for and obtain other employment. 

The Parties 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 through the Separation Date,
whether or not he is actually required to perform

 

--------------------------------------------------------------------------------

 complete, full-time services for First Charter during the Transition Period. 
In addition, 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 on the Separation Date, 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. 

2.         Nature of Separation.  The Parties agree that for purposes of
Executive's participation in First Charter's Omnibus Stock Option Award Plan and
First Charter's Comprehensive Stock Plan, including Executive's Performance
Shares Award Agreement under First Charter's Omnibus Stock Option Award Plan,
Executive's transition and the end of the employment relationship between the
Parties shall be treated as an involuntary separation without "Cause", as
defined in such plans.  However, the Parties further agree that, at Executive's
election, Executive's transition and the end of the employment relationship
between the Parties shall be treated as a voluntary resignation in the personnel
records of First Charter for purposes of employment references and any
subsequent job search by Executive.

3.         Transition Period Compensation.  The Parties agree that following the
Effective Date of this Agreement (as defined in provision 15 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 $7,884.61 (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.        Bonus.  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
2006 (ending December 31, 2006) 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 Executive Vice President,
Chief Banking Officer, as set forth in provision 4.f. below.

            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 policies 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, Executive must receive advance authorization from
First Charter's then Chief Executive Officer or his designee for business and
First Charter-related travel expenses incurred by Executive. 

                                                                                           
2

--------------------------------------------------------------------------------

 

            d.         Company Car.  Executive shall continue to have the use of
the automobile owned or leased by First Charter and currently used by Executive
(the "Company Car") during the Transition Period through his final Separation
Date (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 Chief Executive Officer 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. 

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
Final Separation Date, after which the Parties agree that any such further
accrual shall cease.  Executive, in turn, agrees to review and confirm with
Human Resources his PTO balance and past activity during the last 12-month
period for general accuracy. 

f.          Benefits.  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 all group medical,
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 First
Charter and provided Executive otherwise remain eligible to participate in such
plans and policies by their terms.

g.         Other Perquisites.  Except 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, including Option Plan Trust Deferred Compensation
Plan, Retirement Savings Plan and Employee Stock Purchase Plan participation, as
such plans may be established, amended, replaced or terminated from time to time
in the absolute and sole discretion of First Charter 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 his final
Separation Date, 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.  In addition, the Parties agree that Executive
will not accrue and will not be entitled to receive any additional PTO days
during any period that he is receiving severance payments under this Agreement.

b.         Expense Reimbursement. Regardless of whether Executive signs this
Agreement, the Parties agree that the total expense reimbursements due Executive
for

                                                                                       
3

--------------------------------------------------------------------------------

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

c.         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 First Charter's Option Plan Trust Deferred Compensation
Plan (the "OPT"), if and as applicable.  The Parties further agree that
Executive will not accrue any additional awards, credits, contributions or
benefits under the OPT following Executive's final Separation Date.  In
addition, regardless of whether Executive signs this Agreement, Executive's
rights to, and First Charter's obligations concerning, vested benefits that
Executive has accrued under the OPT through his Separation Date and
distributions to Executive arising under the same shall be governed by and made
in accordance with the terms and conditions of such plan and applicable law.  

The Parties further specifically acknowledge that because Executive is a
"specified employee" as such term is defined in section 409A of the Internal
Revenue Code upon his Separation Date, payment of awards and other benefits to
Executive under the OPT will be required to be postponed for a period of six (6)
months following Executive's final Separation Date or such other time as may be
legally required to comply with section 409A. 

d.         Stock Options.  Executive and First Charter agree that 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/or First Charter's Comprehensive Stock Plan, including options granted
pursuant to   Executive's Performance Shares Award Agreement under the Omnibus
Stock Option Award Plan (collectively, the "Share Options") shall 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.

>              In addition, a schedule listing such Share 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 Executive's signing of this Agreement is attached
> as Exhibit A. 

e.         Severance Pay.  First Charter agrees that following the Effective
Date of this Agreement (as defined in provision 15 below), and provided all
conditions of this Agreement are and continue to be met by Executive, First
Charter shall pay severance to Executive in equal bi-weekly,
pre-withholding/deduction installments of $7,884.61 each for a period of twelve
(12) months, equivalent to a total amount of $205,000  (collectively, the
"Severance Pay"), retroactive to the Separation Date beginning on the next
regular payday after the Effective Date of this Agreement or the Separation
Date, whichever is later.  All payments to Executive pursuant to this provision
4.e. shall be made by First Charter via direct deposit on the same dates as
First Charter's regular, bi-weekly payroll for its active,

                                                                                         
4

--------------------------------------------------------------------------------

 salaried employees, less appropriate deductions required by law for the payment
of wages, including for state and federal taxes and FICA.

f.          Bonus.  First Charter agrees that despite Executive's transition
from active employment as Executive Vice President, Chief Banking Officer
effective upon the Transition Date, following the Effective Date of this
Agreement (as defined in provision 15 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 2006 (ending December 31, 2006) through September 30, 2006 (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, if upon calculation of the Annual Incentive Bonus amounts for
employees after the end of fiscal year 2006 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 9/12th of such amount as a
Pro-Rata Annual Incentive Bonus = .75 x $10,000 = $7,500.

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/March 2007.  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 2006 Annual Incentive Plan amounts set
forth in this provision 4.f.

g.         Outplacement.  First Charter agrees that following the Effective Date
of this Agreement (as defined in provision 15 below), and provided all
conditions of this Agreement are and continue to be met by Executive, First
Charter shall provide Executive with individual outplacement services by and
through Lee Hecht Harrison (see www.lhh.com) or DBM, Inc. (see www.dbm.com), at
Executive's election, as coordinated through First Charter's Human Resources
Department, up to a maximum amount of $20,000.  Executive must initiate
participation in this outplacement program no later than within 60 days of the
final Separation Date.  In addition, such outplacement services, once initiated
and begun by Executive as described below, shall be made available to Executive
for a maximum period of up to twelve (12) months following Executive's
initiation of service.  First Charter and Executive agree that the expenses for
the outplacement agency services set forth in this provision 4.g. shall be paid
directly to the agency by First Charter.  First Charter and Executive further
agree that all outplacement services and expenses must be reviewed and approved
by First Charter Human Resources prior to payment.

                                                                               
5

--------------------------------------------------------------------------------

 

h.         Club/Membership Fees.  First Charter agrees that following the
Effective Date of this Agreement (as defined in provision 15 below), and
provided all conditions of this Agreement are and continue to be met by
Executive, First Charter 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 from Executive's Transition Date through
December 31, 2006, less applicable deductions required by law. 

i.          Medical/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
medical and dental benefits for him and his eligible dependents under the
Consolidated Omnibus Budget Reconciliation Act ("COBRA").  In addition,
following the Effective Date of this Agreement (as defined in provision 15
below), and provided all conditions of this Agreement are and continue to be met
by Executive, First Charter agrees to pay Executive's monthly COBRA premium at
the same level of Executive's current shared coverage expense during the twelve
(12) month period following the Separation Date or such earlier time that
Executive becomes eligible for coverage under another group plan, as
applicable.  If Executive wishes to continue his COBRA coverage beyond the end
of such period, he will then be responsible for paying the full premiums for
such coverage during the remainder of his potential COBRA coverage eligibility. 

Executive will be notified by First Charter's insurance carrier regarding his
rights under COBRA and the costs and conditions of that option.  All other
insurance coverage provided to Executive by First Charter, including but not
limited to First Charter's group life insurance and short and long-term
disability benefits, will terminate and cease to be in effect as of the
Separation Date, except as otherwise noted in provisions 4.j and 4.k below.  In
addition, failure by Executive to timely elect medical/dental coverage, to
timely pay any required premiums or to make any required payments, or to remain
eligible for COBRA coverage continuation will terminate First Charter's
obligations with respect to such COBRA payments. 

j.          Supplemental Disability and Life Insurance Benefits.  Regardless of
whether Executive signs this Agreement, following the Separation Date, Executive
shall cease to be an eligible participant in First Charter's group long-term
disability and group life insurance plans.  However, in accordance with the
terms of Executive's current Supplemental Disability Insurance Plan (the
"Supplemental Disability Policy") and current Supplemental Life Insurance Plan
(the "Supplemental Life Policy"), Executive may have the option to maintain all
or a portion of his coverage under the Supplemental Disability Policy and/or
Supplemental Life Policy as an individual policy or policies following his final
Separation Date.  Executive may elect such coverage continuation and/or
conversion, as applicable and otherwise eligible, through the applicable carrier
for the same.  However, Executive and First Charter agree that all conversion
and buy-out fees, premiums and other expenses regarding Executive's coverage
continuation and/or conversion rights for the Supplemental Disability Policy and
Supplemental Life Policy shall be the absolute and sole obligation of
Executive. 

>              k.         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
> 
> 
>                                                                                            
> 6
> 
> --------------------------------------------------------------------------------
> 
> 
> 
>  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 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.   The Parties also acknowledge and
> agree that the separation payments, benefits and other compensation outlined
> in this provision 4 are not and shall not be deemed to be compensation for
> purposes of any employee plan or benefit sponsored by First Charter or First
> Charter Bank, including but not limited to First Charter's Retirement Savings
> Plan.

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, restricted shares,
deferred compensation, dividends, PTO pay, vacation pay, sick 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 terms of Executive's 2001 Change-In-Control Agreement with First
Charter, 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 and conflict of interest obligations previously
agreed to by him with First Charter 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 11 below.

           In addition, for and in consideration of this Agreement, Executive
agrees that, unless specifically authorized by the Chief Executive Officer of
First Charter in writing, Executive will not during the Transition Period and
for a period of one (1) year following the Separation Date:

a.         Engage in any "Competitive Activity" (as defined below) within the
"Restricted Territory" (as defined below);

b.         Serve as an employee, director, owner, partner, contractor,
consultant or agent of, or own any interest in (except for beneficially owning
the stock or options to acquire stock totaling less than 5% of the outstanding
shares in a "public" competitor), any person, firm or corporation that engages
in "Competitive Activity" within the "Restricted Territory";

c.         Engage in any "Competitive Activity" with, for or towards or divert,
attempt to divert or direct others to divert any business of First Charter from
a then existing First Charter, First Charter Bank and/or any other First Charter
subsidiary customer that was a customer of such entities as of the Separation
Date, or from a potential customer identified

                                                                                 
7

--------------------------------------------------------------------------------

 through leads or relationships developed by Executive during the last year of
Executive's employment with First Charter preceding the Separation Date, within
the "Restricted Territory"; and/or

d.         Solicit or hire for employment or as an independent contractor any
employee of First Charter, First Charter Bank or any other First Charter
subsidiary, or solicit, assist, induce, recruit, or assist or induce anyone else
to recruit, or cause another person in the employ of First Charter, First
Charter Bank or any other First Charter subsidiary to leave his or her
employment with First Charter, First Charter Bank or First Charter's other
subsidiaries for the purpose of joining, associating, or becoming employed with
any business or activity with which Executive is or expects to be directly or
indirectly associated or employed.

             "Competitive Activity" means: (1) the business activities engaged
in by First Charter, First Charter Bank and/or First Charter's other
subsidiaries during the last year of Executive's employment with First Charter
preceding the Separation Date, including the sales, marketing, distribution and
provision of banking, financial and insurance services or other products or
services of the type of which Executive was involved during his employment with
First Charter; and/or (2) the performance of any other business activities
competitive with First Charter, First Charter Bank and/or First Charter's other
subsidiaries for or on behalf of any financial or insurance services entity.

              "Restricted Territory" means: (1) the geographic area encompassing
a twenty-five (25) mile radius of Charlotte, North Carolina; and/or (2) any
county in which First Charter Bank operates a branch within the State of North
Carolina as of the Separation Date.

              Executive acknowledges and agrees that the length and scope of the
restrictions placed upon him by this provision 6 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 this Agreement.  Executive also agrees that the
restrictions set forth in this provision 6 will not unduly impair his ability to
earn a living after his employment with First Charter ends.  Accordingly,
although the Parties acknowledge and agree that Executive shall retain the right
to contest the application or interpretation of this provision 6 to particular
facts/circumstances, Executive agrees not to contest the general validity or
enforceability of this provision 6, and agrees that if any court, agency,
arbitration panel or other body should hold any subsection of this provision to
be unenforceable, the remaining provisions will nonetheless be enforceable
according to their terms.  Further, if any subsection of this provision 6 is
held to be overbroad as written, Executive agrees that a court, agency,
arbitration panel or other body should view such subsections as separable and
uphold those separable subsections deemed to be reasonable. 

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

7.         Return of Documents/Data.  Executive acknowledges and agrees that:
(a) all files, customer records, customer lists, research and development data,
manuals, letters, contracts,

                                                                                              
8

--------------------------------------------------------------------------------

 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 (b) all Confidential
Information (as defined per First Charter policy and/or applicable agreements)
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.         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, outplacement
services, COBRA continuation premium payments and continued club membership
reimbursement payments 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 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; (b) Executive's
prior employment relationship with First Charter or any other Releasee; (c)
Executive's separation from employment with First Charter or any other Releasee;
(d) Executive's 2001 Change-In-Control Agreement; (e) any claims for breach of
contract, implied or express, impairment of economic opportunity, intentional or
negligent infliction of emotional distress, prima facie tort, defamation, libel,
slander, negligent termination, wrongful discharge, or any other tort, whether
intentional or negligent; (f) any claims arising under Title VII of the Civil
Rights Act of 1964, as amended, 42 U.S.C. § 2000(e), et seq.; the Age
Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq.;
the Civil Rights Act of 1866, 1870, and 1971, 42 U.S.C. § 1981, et seq.;  the
Civil Rights Act of 1991, Publ. L. No 102-166, 105 Stat. 1071-1100; the Employee
Retirement Income Security Act of 1974, as amended, 29 U.S.C. §1001 et seq.; the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"), 29 U.S.C. § 1161 et
seq.; the Americans With Disabilities Act, 42 U.S.C. § 12191 et seq.; the Family
and Medical Leave Act, 29 U.S.C. § 2601 et seq.; the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. § 2101 et seq.; the United States
Constitution and any state constitution; and all applicable rules and
regulations under such acts, statutes and constitutions; (g) any claims arising
under the common law of any state, including but not limited to, the North
Carolina Handicapped Persons Protection Act, N.C.G.S. § 168A-1 et seq.; the
North Carolina Wage and Hour Act, N.C.G.S. § 95-25.1 et seq.; the North Carolina
Retaliatory Employment Discrimination Act, N.C.G.S. § 95-240 et seq.; the North
Carolina Workers' Compensation Act, N.C.G.S. § 97-1 et seq.; and the North
Carolina Equal Employment Practices Act, N.C.G.S. § 143-422.2; and (h) all other
federal, state and local civil rights acts, regulations, and orders relating to
any term, condition, or termination of employment, whether under tort or
contract, or under statute or otherwise.

                                                                                                  
9

--------------------------------------------------------------------------------

 

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.

9.         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 9 as though such disclosures
were made by him.  Executive further acknowledges and agrees that this provision
9 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 9 shall be deemed to be a breach by Executive of the Agreement.

10.       Cooperation/Community Support.  As an additional condition precedent
to the contemplated Transition Period and the Severance Pay described in this
Agreement, Executive agrees that during the Transition Period, he shall: (a)
positively assist in the transitioning of his job responsibilities, the
completion of necessary financial records, and the maintenance of general
customer, business partner and director relations through his Separation Date as
outlined in provision 1 above; and (b) abide by the non-disparagement and other
obligations described in this provision 10 below.  Failure adequately to meet
such expectations may result in Executive's immediate termination from
employment, at which time he would, accordingly, not be eligible for any
further, future Transition Period Compensation or Severance Pay.

Executive further 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

                                                                                            
10

--------------------------------------------------------------------------------

 such matters.  In addition, during the Transition Period, Executive agrees to
provide 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 Chief Executive Officer.

Executive further agrees that during the Transition Period and for a 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,
directors, the financial/insurance services community and other third party
individuals.  First Charter, in turn, agrees that during the Transition Period
and for a 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, directors, the
financial/insurance services community, and other third parties. 

Despite the above, and except as otherwise set forth in this provision 10 below,
the Parties agree that nothing in this provision 10 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 Severance Pay outlined above, he
shall not for a period of two (2) years following the Separation Date engage in
the following competitive activity:  (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 10.

11.              Breach.  The Parties acknowledge and agree that in the event of
Executive's breach of his ongoing obligations set forth in provisions 6.a. and
6.b. of this Agreement, Executive shall not be subject to or liable for
consequential damages, or any form of injunctive or equitable relief, resulting
from or relating to his breach or threatened breach of such provisions, and he
shall be allowed to engage in "Competitive Activity" (as defined in provision 6
above) within the "Restricted Territory" (as defined in provision 6 above);
provided that: (a) Executive abides and continues to abide by the
nonsolicitation obligations set forth in provisions 6.c. and 6.d. above, and (b)
Executive abides by the confidentiality, conflict of interest and return of
records/data obligations set forth or referenced in this Agreement. 

However, Executive expressly agrees that if he breaches ANY of provisions 6-10
above (including, but not limited to, provisions 6.a. and 6.b. of this
Agreement), Executive shall forfeit at the time of the breach the right to any
additional, future Severance Pay payments under provision 4.e. of this
Agreement.  In such case, Executive and First Charter agree that the remaining
obligations contained in provisions 6-10 of this Agreement shall remain valid
and enforceable based on the consideration actually provided. 

                                                                                           
11

--------------------------------------------------------------------------------

 

Executive further agrees to submit to the jurisdiction of the courts of North
Carolina and that, in the event of any breach or threatened breach of provisions
6-10 of this Agreement by Executive (with the exception of provisions 6.a. and
6.b. of this Agreement, provided (i) Executive abides and continues to abide by
the nonsolicitation obligations set forth in provisions 6.c. and 6.d. above, and
(ii) Executive abides by the confidentiality, conflict of interest and return of
records/data obligations set forth or referenced in this Agreement), 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 6-10 above, shall be entitled to costs and attorneys'
fees relating to any such proceeding, but except as otherwise set forth in this
Agreement, nothing herein shall be construed as prohibiting the Parties from
pursuing other remedies available to them for any breach or threatened breach. 

               12.       Taxes.  This Agreement is intended to comply with
Internal Revenue Code section 409A to the extent that section is applicable, and
it shall be interpreted in a manner that complies with such section to the
fullest extent possible.  In addition, the Parties agree that First Charter and
the Bank shall have the power to adjust the timing or other details relating
to the awards and/or payments described in this Agreement if First Charter and
the Bank determine that such adjustments are necessary in order to comply with
or become exempt from the requirements of section 409A.  The Parties further
specifically acknowledge that Executive is a "specified employee" as such term
is defined in section 409A of the Internal Revenue Code upon his Separation
Date, such that certain payments to Executive under this Agreement may be
legally required to be postponed to comply with section 409A.  Thus, the Parties
agree that, in such event, any payments that are so postponed will be paid to
Executive on the first day of the calendar month following the end of the
required postponement period.

             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 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 benefits set forth in provisions 3 and 4 of this
Agreement.

13.       Acknowledgment by Executive.  First Charter specifically advises
Executive of his right 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.

                                                                                                  
12

--------------------------------------------------------------------------------

  

14.       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 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.

15.       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. Jodie Sawyer, 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"). 

16.       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.   The Parties further
agree that in the event of Executive's death, the payments and other benefits
outlined in provisions 3 and 4 above will be paid to Executive's estate or legal
representative, in accordance with the above terms.

Executive also 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.

17.       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

                                                                                            
13

--------------------------------------------------------------------------------

 First Charter enters into this Agreement solely in recognition of Executive's
prior service and to resolve all matters between the Parties in an amicable
fashion.

18.       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. 

19.       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.

20.       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.

21.       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.

22.       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.

23.       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. 

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

                                                                                               
14

--------------------------------------------------------------------------------

 

To First Charter:                                   Jodie Sawyer
                                                                        EVP,
Human Resources
                                                                        First
Charter Corporation
                                                                        P.O. Box
37937
                                                                       
Charlotte, North Carolina 28237-7937

To Executive:                                        Richard A. Manley
                                                                        18324
Copeland Way
                                                                        
Davidson, North Carolina 28036

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 24.

IN WITNESS WHEREOF, the undersigned hereto set their hands and seals as of the
dates set forth below.

Executed and presented for consideration to Executive by First Charter, this the
27th day of September, 2006.

FIRST CHARTER CORPORATION

By: /s/ JODIE SAWYER__________(SEAL)
                                                                        Title:
EVP, Human Resources

Accepted and signed by Executive, this the 27th day of September, 2006.

EXECUTIVE

/S/ RICHARD A. MANLEY              
                                                                             
Richard A. Manley

Sworn to and subscribed before
me this the 27th day of
September, 2006.

________________________
Notary Public

My Commission Expires:
________________________