Exhibit 10.6



 





AMENDED AND RESTATED




EMPLOYMENT AGREEMENT




     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into
effective as of the 2nd day of November, 2007 by and between First Charter Corporation
(“First Charter”), a North Carolina corporation with its principal place of business in Charlotte,
North Carolina, and Robert E. James (“Executive”), an individual residing in Mecklenburg County,
North Carolina. (the Executive and First Charter may be referred to hereinafter as the “Parties”).



WITNESSETH:




     WHEREAS, Executive is currently employed as President and Chief Executive Officer of First
Charter and is highly knowledgeable about the business and operations of First Charter’s
subsidiaries and other affiliated organizations and the respective markets and customers that they
serve;



     WHEREAS, Executive is a valued executive of First Charter and its wholly owned subsidiary,
First Charter Bank (the “Bank”), and, in order to induce Executive to continue employment with
First Charter and to enhance Executive’s job security, First Charter desires to enter into this
Agreement that will provide compensation to Executive in certain events, including but not limited
to Executive’s termination of employment following a change in control of First Charter, as
hereinafter provided;




     WHEREAS, because Executive has become familiar with and will continue to gain extensive
knowledge regarding First Charter and Bank products, relationships, trade secrets and confidential
information relating to First Charter, the Bank and their respective customers’ business, products,
processes and developments and has generated and will continue to generate confidential information
in the course of his duties, First Charter wishes to protect its long-term interests by having
Executive enter into certain non-disclosure and non-competition covenants set forth in this
Agreement; and



     WHEREAS, First Charter desires to continue to employ Executive, and Executive desires to
continue to be employed by First Charter, subject to the terms and conditions set forth in this
Agreement, which the Parties agree shall hereby supersede and replace Executive’s prior (i) July
21, 1999 Employment Agreement and (ii) December 19, 2001 Amended and Restated Employment Agreement
with First Charter.




     NOW, THEREFORE, in consideration of the terms contained herein, including the compensation
First Charter agrees to pay to Executive upon certain events, Executive’s continued employment with
First Charter, Executive’s covenants and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, First Charter and Executive agree as follows:



 









 





     1. Employment and Duties.




     a. During the Employment Term (as defined in Section 3 below), First Charter hereby
employs Executive, and Executive hereby agrees to serve, as President and Chief Executive
Officer of First Charter. As such, Executive shall have responsibilities, duties and
authority reasonably accorded to, expected of, and consistent with Executive’s position as
President and Chief Executive Officer of First Charter. Executive shall also perform the
duties and exercise the powers and functions that from time to time may be assigned or
vested in him by the Board of Directors of First Charter (the “Board”) and/or the Board of
Directors of First Charter’s subsidiaries in relation to: (i) First Charter; and/or (ii) any
subsidiary or affiliated company of First Charter, including general responsibility for the
management and operations of the Bank. Executive hereby accepts this employment upon the
terms and conditions herein contained and, subject to Section 1(c), agrees to devote
substantially all of his business time, attention and best efforts to promote and further
the business of First Charter and the Bank.




     b. Executive shall faithfully adhere to, execute and fulfill all lawful requests,
instructions and policies made by the Board or its authorized agent(s).




     c. Except as specifically authorized in advance by the Board, Executive shall not,
during the Employment Term (as defined in Section 3 below), be engaged as an employee or
otherwise in any other business or commercial activity pursued for gain, profit or other
pecuniary advantage. The foregoing limitations also shall not be construed as prohibiting
Executive from making personal investments in such form or manner as will neither require
his services in the operation or affairs of the companies or enterprises in which such
investments are made nor violate the terms of Section 3 hereof, provided, however, that
during the Employment Term (as defined in Section 3 below), Executive may not beneficially
own the stock or options to acquire stock totaling more than 5% of the outstanding shares of
any corporation or entity, or otherwise acquire or agree to acquire a significant present or
future equity or other proprietorship interest, whether as a stockholder, partner,
proprietor, or otherwise, with any enterprise, business or division thereof, that is engaged
in Competitive Activity (as defined in Section 8 below) with First Charter and/or the Bank.



     2. Compensation. For all services rendered by Executive during the Employment Term
(as defined in Section 3 below), First Charter shall compensate Executive as follows:




     a. Base Salary. During the Employment Term (as defined in Section 3 below), First
Charter will pay Executive a biweekly base salary as compensation for Executive’s services
hereunder of $14,807.69, equivalent to $385,000.00 per year (the “Base Salary”), payable on
a regular basis in accordance with First Charter’s standard payroll procedures but not less
than monthly, less applicable deductions required by law. On at least an annual basis
thereafter during the Employment Term (as defined in Section 3 below), the Board will review
Executive’s performance and, based upon the recommendations of the Compensation Committee,
may increase such Base Salary if, in



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its discretion, such adjustment is warranted, with any such adjustment to be effective
beginning January 1 of the next following year.




     b. Bonus. In addition to the Base Salary set forth above, during the Employment Term
(as set forth in Section 3 below) and as long as Executive remains actively employed by
First Charter, Executive may receive an annual bonus from one or more arrangements including
but not limited to the Annual Incentive Plan, as such may be in effect from time to time
(collectively, the “Bonus”), the amount of which shall be determined in the sole discretion
of the Board. In making its determination of the amount of the Bonus, if any, to be paid,
the Board may take into account, among other things: (i) Executive’s qualifications and
experience; (ii) the duties and responsibilities of Executive; (iii) the services performed
and the contributions of Executive to the success of First Charter and/or the Bank; (iv)
compensation patterns in similar businesses for similar executives; (v) First Charter’s
financial resources to pay the bonus; and (vi) such other factors as the Board shall deem to
be relevant.




     c. Executive Perquisites, Benefits and Other Compensation. During the Employment Term
(as defined in Section 3 below), Executive shall be entitled to receive additional benefits
and compensation from First Charter in such form and to such extent as specified below:




     i. Payment of all or a portion of premiums for coverage for Executive and his
dependent family members under health, hospitalization, disability, dental, life and
other insurance plans that First Charter may have in effect from time to time.
Benefits provided to Executive under this Section 2(c)(ii) will require Executive to
pay the same proportion of premiums for, and shall provide benefits at least equal
to, the benefits then provided to First Charter’s other executive employees.




     ii. Reimbursement for all business travel and other out-of-pocket expenses
reasonably incurred by Executive in the performance of his services pursuant to this
Agreement. All reimbursable expenses shall be appropriately documented in
reasonable detail by Executive upon submission of any request for reimbursement, and
in a format and manner consistent with First Charter’s expense reporting policy.




     iii. First Charter shall provide Executive with other employee perquisites as
may be available to or deemed appropriate for Executive by the Board and
participation in all other company-wide employee benefits, including but not limited
to, any qualified and/or nonqualified retirements plans sponsored by First Charter,
as such are available from time to time. Such current additional perquisites are
listed on Schedule A, which is attached hereto and incorporated herein, and may be
amended from time to time in the discretion of the Board. In addition, Schedule B,
which is attached hereto and incorporated herein, lists those other supplemental
benefits in which Executive is currently entitled to participate, and may be amended
or modified from time to time with the consent of the Parties.



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     3. Term of Agreement. The Parties intend that the term of this agreement provide the
Executive with a three year contract that will expire when the Executive attains age 65, unless the
Agreement is terminated sooner as provided in Section 4. Therefore, upon execution of this
Agreement by Executive, the initial term of Executive’s employment under this Agreement shall be
deemed to have commenced on the date hereof and shall continue until September 30, 2010 unless
sooner terminated as provided in Section 4. In addition, on the last day of each calendar month
after December 31, 2007 until October 31, 2012, this Agreement shall be deemed to have been
automatically renewed and extended for an additional one (1) month on the same terms and conditions
contained herein in effect as of the time of renewal, unless either party shall give written notice
of nonextention to the other party at least fifteen (15) days before the last day of a month.
Following October 31, 2015, this Agreement may be renewed and extended on terms and conditions
mutually agreed upon by the Parties. In addition, Executive’s total term of employment with First
Charter during the initial and any extended term is collectively defined and referred to under this
Agreement as the “Employment Term.”



     4. Termination. In addition to the provisions set forth in Section 3 above, the
Employment Term shall terminate immediately upon the occurrence of any of the following events: (a)
immediately upon the retirement or death of Executive; (b) upon the end of the time period
specified in the First Charter Corporation Omnibus Stock Option Plan following the Disability of
Executive (as defined below); (c) upon the effective date of Resignation by Executive Without Good
Reason (as defined below); (d) upon the effective date of Resignation by Executive For Good Reason
(as defined below); (e) upon the 60th day following the date the Board gives Executive notice of
Termination Without Cause (as defined below); or (f) upon the close of business on the date the
Board gives Executive notice of Termination for Cause (as defined below).




     a.
Retirement. “Retirement by Executive” shall mean any voluntary retirement by
Executive with the consent of the Board.




     b. Disability. “Disability” shall mean the inability of the Executive to engage in his
profession by reason of any medically determinable physical or mental impairment which can
be expected to result in death or which is to last or can be expected to last for a
continuous period of not less than twelve months, as determined by the Board in its sole
discretion upon certification thereof by qualified physicians selected by the Board after
such physician examines the Executive.




     c. Resignation Without Good Reason. “Resignation Without Good Reason” shall mean any
voluntary termination or resignation by Executive for any reason other than the retirement
or death of Executive, “Disability” or “Resignation for Good Reason”. Executive is required
to give at least 60 days advance written notice of Resignation Without Good Reason to the
Board, and First Charter is entitled upon receiving such notice, in its discretion, to
accept such resignation as effective on: (i) the resignation date proposed by Executive, or
(ii) such other earlier date designated by First Charter. In addition, First Charter will
be required to pay Executive his regular salary and benefits only through Executive’s final
resignation date as agreed to or revised by the Board, regardless of whether Executive is
actually permitted to perform any services for First Charter during that period.



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     d. Resignation For Good Reason. “Resignation For Good Reason” shall mean any voluntary
termination or resignation by Executive for: (i) a material reduction in Executive’s
position, duties, responsibilities or status, or a change in Executive’s title resulting in
a material reduction in his responsibilities or position with First Charter, in either case
without Executive’s consent, but excluding for this purpose any isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied promptly by First Charter
after receiving notice from Executive and further excluding any such reductions or changes
made in good faith to conform with generally accepted industry standards for Executive’s
position; (ii) a reduction in the rate of Executive’s Base Salary or a decrease in any Bonus
to which Executive was entitled pursuant to the First Charter Corporation Annual Incentive
Plan or incentive plans at the end of the most recently concluded fiscal year, in either
case without Executive’s consent; provided, however, that a decrease in Executive’s
Bonus amount shall not constitute “Good Reason” and nothing herein shall be construed to
guarantee such bonus awards if performance, either by First Charter or Executive, is below
such targets as may reasonably and in good faith be set forth in the First Charter
Corporation Annual Incentive Plan or other incentive arrangements; or (iii) the relocation
of Executive, without his consent, to a location outside a fifty (50) mile radius of
Charlotte, North Carolina.




     Executive is required to give at least fifteen (15) days advance written notice of
Resignation For Good Reason to the Board, and First Charter is entitled upon receiving such
notice, in its discretion, to accept such resignation as effective on the resignation date
proposed by Executive, or such other earlier date designated by the Board.




     e. Termination Without Cause. “Termination Without Cause” shall mean any termination
of the employment of Executive by First Charter for any reason other than termination due to
the retirement or death of Executive, “Disability” or “Termination for Cause”.




     f. Termination For Cause. “Termination for Cause” shall mean termination of the
employment of Executive by First Charter as the result of Executive’s: (i) willful
misconduct of a material nature in connection with the performance of his duties as an
employee; (ii) use of alcohol during working hours beyond that customarily authorized in the
performance of Executive’s job duties, repeated use of alcohol after working hours that
materially interferes with Executive’s duties under this Agreement, use of illegal drugs, or
violation of First Charter’s drug and/or alcohol policies; (iii) conviction, guilty plea or
plea of nolo contendere for any crime involving moral turpitude or for any felony; (iv)
embezzlement or theft from First Charter, the Bank or any of their respective customers and
employees; (v) gross inattention to or dereliction of duty; (vi) commission or omission of
any act of fraud or dishonesty in connection with Executive’s employment with First Charter
or the Bank; (vii) breach of any fiduciary duty to First Charter or the Bank, including the
duty of loyalty; (viii) breach of the obligations set forth in Sections 7-9 of this
Agreement; (ix) breach, threatened breach or failure to perform any other provision of this
Agreement; or (x) performance of any other willful act(s) which Executive knew or reasonably
should have known would be materially detrimental to First Charter or the Bank.



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     5. Rights Upon Termination. Following the termination of the Employment Term for any
reason, (i) Executive shall be entitled to any earned but unpaid Base Salary, if any, due at the
time of termination of the Employment Term, (ii) Executive shall have the general right to elect
certain coverage continuation under COBRA, and (iii) Executive will not forfeit any vested stock
options or vested 401(k) or pension benefits with First Charter and the Bank, if any. Thereafter,
except for any benefits or payments which may be due as set forth in Section 5(a), 5(b), 5(d), 5(e)
and Section 6(a), 6(b), 6(c) and 6(d) below, Executive shall not be entitled to receive any
additional compensation, wages, bonuses, incentive pay, commissions, severance pay, consideration
and/or benefits of any kind from First Charter and/or the Bank hereunder upon the termination of
the Employment Term.




     a. Death. If termination of the Employment Term occurs at any time due to the death of
Executive, then Executive’s personal representative shall be paid all earned but unpaid Base
Salary and accrued Bonus (as those terms are described in Section 2) and an
additional amount representing one (1) year’s Base Salary, such amounts to be paid in the
same manner as provided in Section 2. In addition, all supplemental benefits, awards,
grants and options under any First Charter or Bank supplemental agreement, stock option or
grant will be fully vested notwithstanding any other provision in such plan or grant.




     b. Disability. If termination of the Employment Term occurs at any time due to the
Disability of Executive, then Executive shall be entitled to receive all earned but unpaid
Base Salary and accrued Bonus (as those terms are described in Section 2) and an
additional amount representing one (1) year’s Base Salary, such amounts to be paid in the
same manner as provided in Section 2, less any amounts which Executive receives from
First Charter’s long-term disability plan. In addition, all supplemental benefits, awards,
grants and options under any First Charter or Bank supplemental agreement, stock option or
grant will be fully vested notwithstanding any other provision in such plan or grant.




     c.
Termination “For Cause” or Resignation
“Without Good Reason”. If termination of the
Employment Term occurs at any time due to termination by First Charter “For Cause” or due to
resignation by Executive “Without Good Reason”, then Executive shall be entitled only to
receive all earned but unpaid Base Salary, unreimbursed expenses and/or accrued, vested
stock options and vested 401(k) or pension benefits through the effective date of the
Termination “For Cause” or Resignation “Without Good Reason”.




     d.
Termination “Without Cause” or Resignation
“For Good Reason”. If termination of the
Employment Term occurs at any time due to termination by First Charter “Without Cause” or
due to resignation by Executive “For Good Reason”, then Executive shall be entitled to (i)
all accrued, unpaid Base Salary and unreimbursed expenses through the date of such
termination; (ii) any prior year annual incentive bonus earned but not yet paid; (iii)
continued payment of Executive’s Base Salary for the greater of the remainder of the
Employment Term or two (2) years; (iii) an annual Bonus amount (calculated as the average of
the three most recent Bonuses) for the greater of the remainder of the Employment Term or
two (2) years; (iv) continuation of health and welfare benefit coverage (including coverage
for Executive’s dependents to the extent such coverage is provided by First Charter for its
employees generally) under such plans



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and programs to which an Executive was entitled to participate immediately prior to the
date of the end of his employment for the greater of the remainder of the Employment Term or
two (2) years, provided such continued participation is possible under the terms and
provisions of such plans and programs; and (v) acceleration of vesting of all supplemental
benefits, including but not limited to all awards, grants, and options under any First
Charter or Bank supplemental agreement, stock option plan or grant notwithstanding any other
provision in such plan or grant.




     e. Retirement With the Consent of First Charter. If Executive retires with the consent
of First Charter, then Executive shall be entitled to receive all earned but unpaid Base
Salary and accrued Bonus (as those terms are described in Section 2) and an
additional amount representing one (1) year’s Base Salary, such amounts to be paid in the
same manner as provided in Section 2. In addition, all awards, grants and options under any
First Charter or Bank stock option or grant will be fully vested notwithstanding any other
provision in such plan or grant.




     f. Deductions. All payments set forth in this Section 5 to Executive and/or his
personal representative, if any, shall be made subject to applicable withholdings as
required by law.



     6. Termination Following a Change in Control.




     a. The Parties agree that if, during the Employment Term, a Change in Control (as
defined in Section 6.a.ii. hereof) occurs and if, on or before December 31, 2007, the
employment of Executive is terminated by First Charter Without Cause (as defined in Section
4.e. hereof), Executive’s Compensation (as defined in Section 6.a.iii. below) shall continue
to be paid in monthly installments, subject to applicable withholdings, by First Charter for
a period of thirty-five (35) months following such termination of employment. Furthermore,
if, following the Change in Control (but on or before December 31, 2007), the employment of
Executive is terminated by Executive for Good Reason, Executive’s Compensation (as defined
in Section 6(a)(iii) below) shall continue to be paid in monthly installments, subject to
applicable withholdings, by First Charter for the greater of the remainder of the Employment
Term or two (2) years.




     The parties also agree that, if, during the Employment Term, a Change in Control (as
defined in Section 6.a.ii. hereof) occurs and if, within one (1) year following the Change
in Control (but not before January 1, 2008), the employment of Executive is terminated by
First Charter Without Cause (as defined in Section 4.e. hereof), First Charter shall pay to
Executive in a lump sum an amount equal to the present value of Executive’s Compensation (as
defined in Section 6.a.iii. below) for a period of thirty-five (35) months. Furthermore,
if, within one (1) year following the Change in Control (but not before January 1, 2008),
the employment of Executive is terminated by Executive for Good Reason, First Charter shall
pay to Executive in a lump sum an amount equal to the present value of Executive’s
Compensation (as defined in Section 6.a.iii. below) for the greater of the remainder of the
Employment Term or two (2) years. The lump sum shall be subject to applicable withholdings
and shall be paid within thirty (3) days of the termination of Executive’s employment under
circumstances entitling Executive to



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Compensation hereunder, subject to Section 16.d. The calculation of the amount due shall be
made by the independent accounting firm then performing First Charter’s independent audit,
and such calculation, including but not limited to any discount factor used to determine
present value, shall be conclusive.




     (i) Good Reason. For purposes of this Section 6, termination by
Executive for “Good Reason” shall mean those reasons set forth as “Good
Reason” in Section 4(d) of this Agreement, except that the change in
Executive’s position, duties, responsibilities, status, title, Base Salary
or Bonus shall be measured for such matters as they were in effect
immediately preceding the Change in Control.




     (ii) Change in Control. For purposes of this Section 6, Change in Control”
shall mean (A) the consummation of a merger, consolidation, share exchange or
similar transaction of First Charter with any other corporation as a result of which
the holders of the voting capital stock of First Charter as a group would receive
less than 50% of the voting capital stock of the surviving or resulting corporation;
(B) the sale or transfer (other than as security for obligations of First Charter)
of substantially all the assets of First Charter; (C) in the absence of a prior
expression of approval by the Board, the acquisition of more than 20% of First
Charter’s voting capital stock by any person within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than
a person, or group including a person, who beneficially owned, as of the date of
this Agreement, more than 5% of First Charter’s securities; (D) during any period of
two consecutive years, individuals who at the beginning of such period constitute
the Board cease for any reason to constitute at least a majority thereof unless the
election, or the nomination for election by First Charter’s shareholders, of each
new director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period; or (E) any other
change in control of First Charter of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act or the acquisition of control, within the meaning of Section 2(a)(2) of
the Bank Holding Company Act of 1956, as amended, or Section 602 of the Change in
Bank Control Act of 1978, of First Charter by any person, company or other entity.




     (iii) Compensation. For purposes of this Section 6, Executive’s Compensation
shall consist of the following: (A) Executive’s Base Salary in effect immediately
preceding the Change in Control, plus (B) an annual bonus equal to the average bonus
(including, but not limited to, the “Bonus”, as that term is defined in Section 2(b)
hereof and calculated as a percentage of Base Salary, without regard to vesting
schedules or restrictions on the bonus compensation and converting all
post-employment payments in stock and stock options to a cash present value) paid by
First Charter for each one-year performance period to Executive for the three (3)
most recent fiscal years ending prior to such Change in Control pursuant to First
Charter’s incentive and bonus plans or, if a relevant bonus program has not existed
for three (3) years preceding



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the Change of Control, an amount equal to the estimated average bonus as
calculated by the independent accounting firm then performing First Charter’s
independent audit, which calculation shall be conclusive.




     b. Upon termination of Executive’s employment entitling Executive to Compensation set
forth in Section 6(a) above, First Charter shall maintain in full force and effect for the
continued benefit of Executive for such thirty-five month period health insurance (including
coverage for Executive’s dependents to the extent dependent coverage is provided by First
Charter for its employees generally) under such plans and programs in which Executive was
entitled to participate immediately prior to the date of such termination of employment,
provided that Executive’s continued participation is possible under the general terms and
provisions of such plans and programs. In the event that participation in any such plan or
program is barred, First Charter shall arrange to provide Executive with health insurance
benefits at First Charter’s expense for such thirty-five month period substantially similar
to those which Executive would otherwise have been entitled to receive under such plans and
programs from which his continued participation is barred. However, in no event will
Executive receive from First Charter the health insurance contemplated by this Section 6(b)
if Executive receives comparable insurance from any other source.




     c. Upon termination of Executive’s employment entitling Executive to Compensation as
set forth in Section 6(a) above, Executive will become immediately vested in his benefits
under his Supplemental Agreement (as such was effective December 19, 2001), and in any and
all stock options and shares of restricted stock previously granted to him by First Charter
notwithstanding any provision to the contrary of any plan under which the options or
restricted stock are granted. Executive may exercise such options only at the times and in
the method described in such options. All restrictions on shares of First Charter’s stock
granted under any plan shall lapse upon a Change of Control. First Charter will amend such
options or plans in any manner necessary to facilitate the provisions of this Section 6(c).




     d. It is the intention of First Charter and Executive that Executive receive the full
benefits available under this Section 6 in the event of a Change in Control. If a Change of
Control occurs and a determination is made by legislation, regulation, ruling directed to
Executive or First Charter, or court decision that the aggregate amount of any payment made
to Executive hereunder, or pursuant to any plan, program or policy of First Charter in
connection with, on account of, or as a result of, such Change in Control constitutes
“excess parachute payments” as defined in Internal Revenue Code (the “Code”) section 280G
(as well as any successor or similar sections thereof), subject to the excise tax provisions
of Code section 4999 (as well as any successor or similar sections thereof), Executive shall
be entitled to receive from First Charter, in addition to any other amounts payable
hereunder, a lump sum payment equal to 100% of such excise tax, 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. The amounts under this Section 6(d)
shall be paid to Executive as soon as may be practicable after such final determination is
made and in all events shall be made no later than the end of Executive’s taxable year next
following his taxable year in which he remitted the



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related taxes. Executive and First Charter shall mutually and reasonably determine
whether or not such determination has occurred or whether any appeal to such determination
should be made.




     e. Except as elected by Executive with the prior consent of First Charter, all payments
provided for under this Section 6 shall be paid in cash (including the cash values of stock
options or restricted stock, if any) from the general funds of First Charter, and no special
or separate fund shall be established, and no other segregation of assets shall be made to
assure payment, except as provided to the contrary in funded benefits plans. Executive
shall have no right, title or interest whatsoever in or to any investments that First
Charter may make to aid First Charter in meeting its obligations under this Section 6.
Nothing contained herein, and no action taken pursuant to the provisions hereof, shall
create or be construed to create a trust of any kind or a fiduciary relationship between
First Charter and Executive or any other person. To the extent that any person acquires a
right to receive payments from First Charter hereunder, such right shall be no greater than
the right of an unsecured creditor of First Charter.




     f. All payments set forth in this Section 6 to Executive, if any, shall be made subject
to applicable withholdings as required by law.



     7. Covenant Not to Disclose Confidential Information.




     a. Executive understands that his position with First Charter is one of trust and
confidence because of Executive’s access to trade secrets and confidential and proprietary
business information. Executive pledges his best efforts and utmost diligence to protect
and keep confidential the trade secrets and confidential or proprietary business information
of First Charter.




     b. Unless required by First Charter in connection with his employment or with First
Charter’s express written consent, Executive agrees that he will not, either during his
employment or afterwards, directly or indirectly, use, misappropriate, disclose or aid
anyone else in disclosing to any third party for Executive’s own benefit or the benefit of
another: (1) all or any part of any of First Charter’s or its subsidiaries’ trade secrets or
confidential or proprietary information, whether or not the information is acquired,
learned, or developed by Executive alone or in conjunction with others; or (2) the details
of any contracts, business transactions or negotiations to which First Charter or its
subsidiaries are a party or of any tenders, offer or proposals submitted to or to be
submitted by First Charter and/or its subsidiaries in connection with their business.
Executive makes the same pledge with regard to the confidential information of First
Charter’s and its subsidiaries’ customers, contractors, or others with whom First Charter or
its subsidiaries have a business relationship.




     c. Executive understands that trade secrets and confidential or proprietary
information, for purposes of this Agreement, shall include, but not be limited to, any and
all versions of First Charter’s or its subsidiaries’ computer software, hardware, and
documentation; all methods, processes, techniques, practices, product designs, pricing
information, billing histories, customer requirements, customer lists, account data, loan



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records, employee lists and salary/commission information, personnel matters, financial
data, operating results, plans, contractual relationships, and projections for business
opportunities for new or developing business of First Charter or its subsidiaries; and all
other confidential or proprietary information, patents, ideas, know-how and trade secrets
which are in the possession of First Charter or its subsidiaries, no matter what the source,
including any such information that First Charter or its subsidiaries obtain from a
customer, contractor or another party or entity and that First Charter treats or designates
as confidential or proprietary information, whether or not such information is owned or was
developed by First Charter.




     d. Executive also agrees that all notes, records (including all computer and electronic
records), software, drawings, handbooks, manuals, policies, contracts, memoranda, sales
files, customer lists, employee lists or other documents that are made or compiled by
Executive, or which were available to Executive while he was employed at First Charter, in
whatever form, including but not limited to all such documents and data concerning any
processes, inventions, services or products used or developed by Executive during his
employment, shall be the property of First Charter. Executive further agrees to deliver and
make available all such documents and data to First Charter, regardless of how stored or
maintained and including all originals, copies and compilations thereof, upon the separation
of his employment, for any reason, or at any other time at First Charter’s request.




     e. Executive understands that First Charter expects him to respect any trade secrets of
confidential information of any of Executive’s former employers, business associates, or
other business relationships. Executive also agrees to respect First Charter’s express
direction to Executive not to disclose to First Charter, its officers, or any of its
employees any such information so long as it remains confidential.



     8. Covenant Not to Compete. For and in consideration of this Agreement, the change in
control protection contained herein and Executive’s continued employment with First Charter,
Executive agrees that, unless specifically authorized by First Charter in writing, Executive will
not for a period of two (2) years after his employment with First Charter has terminated or ended
(whatever the reason for the end of the employment relationship):




     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”; or




     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 customer, a joint venturer or other business partner of First Charter (hereinafter
referred to as an “affiliate”), or from a potential customer identified through



11









 







leads or relationships developed during the last two (2) years of Executive’s
employment with First Charter, within the “Restricted Territory”.



     Furthermore, Executive will not during his employment with First Charter and for a period of
three (3) years after his employment with First Charter has terminated or ended (whatever the
reason for the end of the employment relationship) solicit or hire for employment or as an
independent contractor any employee of First Charter, the Bank or any of First Charter’s
affiliates, or solicit, assist, induce, recruit, or assist or induce anyone else to recruit, or
cause another person in the employ of First Charter, the Bank or any of First Charter’s affiliates
to leave his employment with First Charter, the Bank or First Charter’s affiliate 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 during
Executive’s employment with First Charter, 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 and/or the Bank 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 Metropolitan Statistical Area (as defined by
the United States Department of Commerce) from which First Charter generated at least ten percent
(10%) of its gross annual revenue during the last two calendar years before the end of Executive’s
employment with First Charter.



     Executive further agrees that except with the express written consent of the Board, Executive
will not engage in any Competitive Activity individually or with any entity or individual other
than First Charter, the Board or its subsidiaries during the Employment Term.



     9. Acknowledgments by Executive.




     a. Executive acknowledges that the restrictions placed upon him by Sections 7 and 8 of
this Agreement are reasonable given the nature of Executive’s 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. Specifically, Executive
acknowledges that the length of the Covenant Not to Disclose Confidential Information and
Covenant Not to Compete in Sections 7 and 8 are reasonable and that the definitions of
“Competitive Activity” and “Restricted Territory” are reasonable.




     b. Executive acknowledges that all of the provisions of the Agreement are fair and
necessary to protect the interests of First Charter. Accordingly, Executive agrees not to
contest the validity or enforceability of Sections 7 or 8 hereof.




     c. Executive understands that every provision of this Agreement is severable from each
other provision of this Agreement. Therefore, if any provision of this Agreement, including
but not limited to all provisions of Sections 7 and 8, is held invalid



12









 







or unenforceable, every other provision of this Agreement will continue to be fully
valid and enforceable. In the event that any provision of this Agreement is determined by a
court of competent jurisdiction to be void or unenforceable, Executive and First Charter
agree that such provision shall be enforced to the extent reasonable under the circumstances
and that all other provisions shall be enforceable to the fullest extent permissible by law.
Executive and First Charter further agree that, if any court makes such a determination,
such court 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.




     d. Executive understands that his obligations under Sections 7 and 8 of this Agreement
will continue whether or not his employment with First Charter is terminated voluntarily or
involuntarily, or with or without Cause or Good Reason.



     10. Breach by Executive. Executive agrees that in the event of any breach or
threatened breach of the provisions of Sections 7 and 8 hereof by Executive, First Charter’s
remedies at law would be inadequate, and First Charter shall be entitled to an injunction (without
any bond or other security being required), restraining such breach, and costs and attorneys’ fees
relating to any such proceeding or any other legal action to enforce the provisions of this
Agreement, but nothing herein shall be construed to preclude First Charter from pursuing any other
remedies at law or in equity available to it for any such breach or threatened breach. Moreover,
Executive also agrees that if Executive breaches any of Sections 8 or 9 above, Executive shall
forfeit at the time of the breach the right to any additional future payments or benefits under
this Agreement, except to the extent such benefits or payments are vested and earned. In such case,
Executive and First Charter agree that the confidential information and non-compete obligations
contained in this Agreement shall remain valid and enforceable based upon the consideration
actually paid.



     11. Assignment and Binding Effect. This Agreement shall be binding upon, and inure to
the benefit of, Executive and First Charter and the Bank and their respective permitted successors
and assigns. Neither this Agreement nor any right or interest hereunder shall be assignable by
Executive, his beneficiaries, or legal representatives without the First Charter’s prior written
consent. First Charter will require any successor (whether direct or indirect, by purchase, merger,
consolidation, share exchange or otherwise) to all or substantially all of the business and/or
assets of First Charter, by agreement in form and substance satisfactory to Executive, to expressly
assume and agree to perform all of First Charter’s obligations under this Agreement in the same
manner and to the same extent that First Charter would be required to perform it if no such
succession had taken place, and to perform all obligations to Executive as provided in Section 6.
Failure of First Charter to obtain such agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle Executive to compensation from First Charter
in the same amount and on the same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason, except that



13









 






     (1) for purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the date Executive’s employment was terminated and




     (2) if (A) such failure to assume and perform is the result of an event that is both a
Change in Control, as defined in Section 6(a) hereof, and a “change in control event” that
meets the requirements of such term in section 409A of the Code and (B) the failure to
assume and perform occurs after December 31, 2007, then the payment described in Section
2(a) hereof shall be a single sum equal to the present value of the referenced payments,
payable within thirty (30) days of the Change in Control. The calculation of such single
sum shall be made by the independent accounting firm then performing First Charter’s
independent audit, using a discount factor that such firm determines to be appropriate, and
such determination shall be conclusive.


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 executes and delivers the agreement
provided for in this Section 11 or that otherwise becomes bound by the all terms and provisions of
this Agreement by operation of law.




     12. Complete Agreement. This Agreement replaces any previous agreement relating to
the same or similar subject matter which the Executive and First Charter may have entered into with
respect to Executive’s employment by First Charter, including specifically the Employment
Agreements entered into between Executive and First Charter dated July 21, 1999 and December 19,
2001. Executive has no oral representations, understandings or agreements with First Charter or
any of its officers, directors or representatives covering the same subject matter as this
Agreement. This written Agreement is the final, complete and exclusive statement and expression of
the Employment Agreement between First Charter and Executive and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This written Agreement may not be later modified
except by a further writing signed by a duly authorized officer of First Charter and Executive, and
no term of this Agreement may be waived except by writing signed by the party waiving the benefit
of such term.



     13. Notice. Whenever any notice is required hereunder, it shall be given in writing
addressed as follows:



	 	 	 	 	 
	 

	 	To First Charter:
	 	Executive Vice President — Human Resources
	 

	 	 	 	First Charter Bank
	 

	 	 	 	P. O. Box 37937
	 

	 	 	 	Charlotte, North Carolina 28237-7937
	 
	 	 	 	 
	 

	 	To Executive:
	 	Robert E. James
	 

	 	 	 	2523 Monet Terrace
	 

	 	 	 	Charlotte, North Carolina 28226





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


14









 






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 Section 13.




     14. Headings. The section headings herein are for reference purposes only and are not
intended in any way to describe, interpret, define or limit the extent or intent of the Agreement
or of any part hereof.



     15. Governing Law. This Agreement shall in all respects be construed according to the
laws of the State of North Carolina.



     16. Section 409A Compliance.




     a. This Agreement is intended to comply with section 409A of the Code to the extent
that such section is applicable. Accordingly, notwithstanding any other provision of this
Agreement, First Charter may amend this Agreement at any time to the extent required to
comply with Code section 409A or to ensure that any portion, or all, of the compensation
provided under this Agreement will not be subject to section 409A, as First Charter may
determine to be necessary or appropriate.




     b. Each provision of this Agreement that involves the deferral of compensation that is
subject to Code section 409A shall be interpreted in a manner that complies with such
section, and each provision that conflicts with such requirements shall be neither valid nor
enforceable. This Agreement may not be amended in any way to accelerate the payment of any
amounts otherwise payable to Executive as of the effective date of such amendment, except as
may be permitted by Code section 409A.




     c. Notwithstanding any provision of this Agreement, First Charter may terminate this
Agreement at any time under any circumstances permitted by section 409A and, if First
Charter so desires, cause some or all payments hereunder to be paid out in lump sum payments
in cash as soon as practicable following such termination.




     d. First Charter and Executive further acknowledge that if Executive is determined to
be a “specified employee” as such term is defined in section 409A of the Code on the
termination of Executive’s employment, that certain payments to Executive under this
Agreement may be 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,
without interest, on the first day of the calendar month following the end of the required
postponement period.




     e. Executive acknowledges that any tax, interest and/or penalty resulting from
non-compliance with section 409A of the Code is his responsibility and not that of First
Charter or any successor.



15









 





     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first
above written.



	 	 	 	 	 	 	 
	 	 	FIRST CHARTER CORPORATION
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Josephine P. Sawyer
 

	 	 
	 

	 	Name:
	 	Josephine P. Sawyer	 	 
	 

	 	Title:
	 	Executive Vice President	 	 
	 

	 	 	 	Human Resources	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE
	 
	 	 	 	 	 	 
	 	 	/s/ Robert E. James
	 	 	 	 	 
	 	 	Robert E. James
	 	 	President and Chief Executive Officer






16









 





Schedule A





	•	 	Business related travel and entertainment expenses
	 
	•	 	Mobile telephone expenses
	 
	•	 	Country club membership dues
	 
	•	 	Civic club membership dues
	 
	•	 	Expenses related to business use of company provided car





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Schedule B





	•	 	Medical Insurance
	 
	•	 	Dental Insurance
	 
	•	 	Short-term Disability with a seven (7) day elimination period, and a benefit of at least
75% of base pay during illness for a maximum of one-hundred eighty (180) calendar days.
	 
	•	 	Long-term Disability with a one-hundred eighty (180) day elimination period and a benefit
of 60% of base salary, up to $5,000 per month, once approved by the Long-term Disability
carrier.
	 
	•	 	Life Insurance equivalent to two times base pay, with a $500,000 maximum benefit.
	 
	•	 	Accidental Death and Dismemberment Insurance equivalent to two times base pay, with a
$500,000 maximum benefit.
	 
	•	 	First Charter Retirement 401(k) Plan
	 
	•	 	Benefit Restoration Match for contributions limited under the First Charter Retirement
401(k) Plan
	 
	•	 	First Charter Money Purchase Pension Plan (merged into the First Charter Retirement 401(k)
Plan effective January 1, 2002)
	 
	•	 	OPT Capital Plan
	 
	•	 	Employee Stock Purchase Plan
	 
	•	 	Vacation of four (4) weeks
	 
	•	 	Supplemental Life Insurance policy
	 
	•	 	Supplemental Disability Income policy
	 
	•	 	Supplemental Agreement for Deferred Compensation






18