Document:

_________________________________________________

GUARANTEE AGREEMENT

by and between

FIRST
CHARTER CORPORATION

and

WILMINGTON TRUST COMPANY

Dated as of June 28, 2005

_________________________________________________

GUARANTEE AGREEMENT

            This GUARANTEE AGREEMENT (this "Guarantee"), dated as of
June 28, 2005, is executed and delivered by First Charter Corporation, a
North Carolina corporation (the "Guarantor"), and Wilmington Trust Company, a
Delaware banking corporation, as trustee (the "Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Capital
Securities (as defined herein) of First Charter Capital Trust I, a
Delaware statutory trust (the "Issuer").

            WHEREAS, pursuant to an Amended and Restated Declaration
of Trust (the "Declaration"), dated as of the date hereof among Wilmington
Trust Company, not in its individual capacity but solely as institutional
trustee, the administrators of the Issuer named therein, the Guarantor, as
sponsor, and the holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing on the date hereof those
undivided beneficial interests, having an aggregate liquidation amount of
$35,000,000.00 (the "Capital Securities"); and

WHEREAS, as
incentive for the Holders to purchase the Capital Securities, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in
this Guarantee, to pay to the Holders of Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms
and conditions set forth herein; 

NOW,
THEREFORE, in consideration of the purchase by each Holder of the Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit
of the Holders.

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.1.     Definitions and Interpretation.  In this
Guarantee, unless the context otherwise requires:

(a)        capitalized terms used in this
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;

(b)        a term defined anywhere in
this Guarantee has the same meaning throughout;

(c)        all references to "the
Guarantee" or "this Guarantee" are to this Guarantee as modified, supplemented
or amended from time to time;

(d)        all references in this
Guarantee to "Articles" or "Sections" are to Articles or Sections of this
Guarantee, unless otherwise specified;

(e)        terms defined in the
Declaration as at the date of execution of this Guarantee have the same
meanings when used in this Guarantee, unless otherwise defined in this
Guarantee or unless the context otherwise requires; and

(f)        a reference to the singular
includes the plural and vice versa.

"Affiliate"
has the same meaning as given to that term in Rule 405 of the Securities
Act of 1933, as amended, or any successor rule thereunder.

"Beneficiaries"
means any Person to whom the Issuer is or hereafter becomes indebted or liable.

 

"Capital
Securities" has the meaning set forth in the recitals to this Guarantee.

"Common
Securities" means the common securities issued by the Issuer to the
Guarantor pursuant to the Declaration.

"Corporate
Trust Office" means the office of the Guarantee Trustee at which the
corporate trust business of the Guarantee Trustee shall, at any particular
time, be principally administered, which office at the date of execution of
this Guarantee is located at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware  19890-1600,
Attention:  Corporate Trust
Administration.

"Covered
Person" means any Holder of Capital Securities.

"Debentures"
means the debt securities of the Guarantor designated the Floating Rate Junior
Subordinated Deferrable Interest Debentures due 2035 held by the Institutional
Trustee (as defined in the Declaration) of the Issuer.

"Declaration
Event of Default" means an "Event of Default" as defined in the
Declaration.

"Event of
Default" has the meaning set forth in Section 2.4(a).

"Guarantee
Payments" means the following payments or distributions, without
duplication, with respect to the Capital Securities, to the extent not paid or
made by the Issuer:  (i) any
accrued and unpaid Distributions (as defined in the Declaration) which are
required to be paid on such Capital Securities to the extent the Issuer shall
have funds available therefor, (ii) the Redemption Price to the extent the
Issuer has funds available therefor, with respect to any Capital Securities
called for redemption by the Issuer, (iii) the Special Redemption Price to
the extent the Issuer has funds available therefor, with respect to Capital
Securities redeemed upon the occurrence of a Special Event, and (iv) upon
a voluntary or involuntary liquidation, dissolution, winding-up or termination
of the Issuer (other than in connection with the distribution of Debentures to
the Holders of the Capital Securities in exchange therefor as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid Distributions on the Capital Securities to the date
of payment, to the extent the Issuer shall have funds available therefor, and
(b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution").

"Guarantee
Trustee" means Wilmington Trust Company, until a Successor Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Guarantee and thereafter means each such Successor Guarantee
Trustee.

"Guarantor"
means First Charter Corporation and each of its successors and assigns.

"Holder"
means any holder, as registered on the books and records of the Issuer, of any
Capital Securities; provided, however, that, in determining
whether the Holders of the requisite percentage of Capital Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.

"Indemnified
Person" means the Guarantee Trustee, any Affiliate of the Guarantee
Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.

"Indenture" means the Indenture dated as of the date hereof
between the Guarantor and Wilmington Trust Company, not in its individual
capacity but solely as trustee, and any indenture 

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supplemental thereto pursuant to which the Debentures are to be issued to the
institutional trustee of the Issuer.

"Issuer"
has the meaning set forth in the opening paragraph to this Guarantee.

"Liquidation
Distribution" has the meaning set forth in the definition of "Guarantee
Payments" herein.

"Majority
in liquidation amount of the Capital Securities" means Holder(s) of
outstanding Capital Securities, voting together as a class, but separately from
the holders of Common Securities, of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Capital Securities
then outstanding.

"Obligations"
means any costs, expenses or liabilities (but not including liabilities related
to taxes) of the Issuer other than obligations of the Issuer to pay to holders
of any Trust Securities the amounts due such holders pursuant to the terms of
the Trust Securities.

"Officer's
Certificate" means, with respect to any Person, a certificate signed by one
Authorized Officer of such Person. Any Officer's Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee shall include:

(a)        a
statement that the officer signing the Officer's Certificate has read the
covenant or condition and the definitions relating thereto;

(b)        a
brief statement of the nature and scope of the examination or investigation
undertaken by the officer in rendering the Officer's Certificate;

(c)        a
statement that the officer has made such examination or investigation as, in
such officer's opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

(d)        a
statement as to whether, in the opinion of the officer, such condition or covenant
has been complied with.

"Person"
means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.

"Redemption
Price" has the meaning set forth in the Indenture.

"Responsible
Officer" means, with respect to the Guarantee Trustee, any officer within
the Corporate Trust Office of the Guarantee Trustee including any Vice
President, Assistant Vice President, Secretary, Assistant Secretary or any
other officer of the Guarantee Trustee customarily performing functions similar
to those performed by any of the above designated officers and also, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.

"Special
Event" has the meaning set forth in the Indenture.

"Special
Redemption Price" has the meaning set forth in the Indenture.

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"Successor
Guarantee Trustee" means a successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 3.1.

"Trust
Securities" means the Common Securities and the Capital Securities.

ARTICLE II

POWERS, DUTIES AND RIGHTS OF

GUARANTEE TRUSTEE

Section 2.1.     Powers and Duties of the Guarantee Trustee.

(a)        This Guarantee shall be held
by the Guarantee Trustee for the benefit of the Holders of the Capital Securities,
and the Guarantee Trustee shall not transfer this Guarantee to any Person
except a Holder of Capital Securities exercising his or her rights pursuant to
Section 4.4(b) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee.  The right, title and interest
of the Guarantee Trustee shall automatically vest in any Successor Guarantee
Trustee, and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.

(b)        If an Event of Default
actually known to a Responsible Officer of the Guarantee Trustee has occurred
and is continuing, the Guarantee Trustee shall enforce this Guarantee for the
benefit of the Holders of the Capital Securities.

(c)        The Guarantee Trustee,
before the occurrence of any Event of Default and after curing all Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Guarantee, and no implied covenants shall be
read into this Guarantee against the Guarantee Trustee.  In case an Event of Default has occurred
(that has not been waived pursuant to Section 2.4) and is actually known
to a Responsible Officer of the Guarantee Trustee, the Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Guarantee, and use
the same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.

(d)        No provision of this
Guarantee shall be construed to relieve the Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:

(i)         prior to the occurrence of any Event of
Default and after the curing or waiving of all such Events of Default that may
have occurred:

  

(A)       the duties and obligations of the
Guarantee Trustee shall be determined solely by the express provisions of this
Guarantee, and the Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Guarantee, and no implied covenants or obligations shall be read into this
Guarantee against the Guarantee Trustee; and

(B)       in the absence of bad faith on the
part of the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee Trustee
and conforming to the requirements of this Guarantee; but in the 

    

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case of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee;

  

(ii)        the Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible Officer of
the Guarantee Trustee, unless it shall be proved that such Responsible Officer
of the Guarantee Trustee or the Guarantee Trustee was negligent in ascertaining
the pertinent facts upon which such judgment was made;

(iii)       the Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith in
accordance with the written direction of the Holders of not less than a
Majority in liquidation amount of the Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee, or relating to the exercise of any trust or power conferred
upon the Guarantee Trustee under this Guarantee; and

(iv)       no provision of this Guarantee shall
require the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds is not
reasonably assured to it under the terms of this Guarantee or security and
indemnity, reasonably satisfactory to the Guarantee Trustee, against such risk
or liability is not reasonably assured to it.

Section 2.2.     Certain Rights of Guarantee Trustee.

(a)        Subject to the provisions of
Section 2.1:

(i)         The Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from acting upon,
any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.

(ii)        Any direction or act of the Guarantor
contemplated by this Guarantee shall be sufficiently evidenced by an Officer's
Certificate.

(iii)       Whenever, in the administration of this
Guarantee, the Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officer's Certificate of the Guarantor which, upon
receipt of such request, shall be promptly delivered by the Guarantor.

(iv)       The Guarantee Trustee shall have no duty
to see to any recording, filing or registration of any instrument (or any
re-recording, refiling or re-registration thereof).

(v)        The Guarantee Trustee may
consult with counsel of its selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any 

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of its Affiliates and may include any of its employees.  The Guarantee
Trustee shall have the right at any time to seek instructions concerning the
administration of this Guarantee from any court of competent jurisdiction.

(vi)       The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Guarantee at the request or direction of any Holder, unless such Holder shall
have provided to the Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the Guarantee Trustee's
agents, nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances as
may be requested by the Guarantee Trustee; provided, however,
that nothing contained in this Section 2.2(a)(vi) shall relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Guarantee.

(vii)      The Guarantee Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit.

(viii)      The Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the Guarantee
Trustee shall not be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it hereunder.

(ix)       Any action taken by the Guarantee Trustee
or its agents hereunder shall bind the Holders of the Capital Securities, and
the signature of the Guarantee Trustee or its agents alone shall be sufficient
and effective to perform any such action. 
No third party shall be required to inquire as to the authority of the
Guarantee Trustee to so act or as to its compliance with any of the terms and
provisions of this Guarantee, both of which shall be conclusively evidenced by
the Guarantee Trustee's or its agent's taking such action.

(x)        Whenever in the administration of this
Guarantee the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Capital Securities,
(ii) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be protected
in conclusively relying on or acting in accordance with such instructions.

(xi)       The Guarantee Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Guarantee.

(b)        No provision of this
Guarantee shall be deemed to impose any duty or obligation on the Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it, in any jurisdiction in which it shall be
illegal or in which the Guarantee Trustee shall be unqualified or incompetent
in accordance with applicable law to perform any such act or acts or to
exercise any such right, power, duty or obligation.  No permissive power or authority available to the Guarantee
Trustee shall be construed to be a duty.

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Section 2.3.     Not Responsible for Recitals or Issuance of
Guarantee.  The recitals
contained in this Guarantee shall be taken as the statements of the Guarantor,
and the Guarantee Trustee does not assume any responsibility for their
correctness.  The Guarantee Trustee
makes no representation as to the validity or sufficiency of this Guarantee.

Section 2.4.     Events of Default; Waiver.

(a)        An Event of Default under
this Guarantee will occur upon the failure of the Guarantor to perform any of
its payment or other obligations hereunder.

(b)        The Holders of a Majority in
liquidation amount of the Capital Securities may, voting or consenting as a class,
on behalf of the Holders of all of the Capital Securities, waive any past Event
of Default and its consequences.  Upon
such waiver, any such Event of Default shall cease to exist, and shall be
deemed to have been cured, for every purpose of this Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.

Section 2.5.     Events of Default; Notice.

(a)        The Guarantee Trustee shall,
within 90 days after the occurrence of an Event of Default, transmit by mail,
first class postage prepaid, to the Holders of the Capital Securities and the
Guarantor, notices of all Events of Default actually known to a Responsible
Officer of the Guarantee Trustee, unless such defaults have been cured before
the giving of such notice, provided, however, that the Guarantee
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Capital
Securities.

(b)        The Guarantee Trustee shall
not be deemed to have knowledge of any Event of Default unless the Guarantee
Trustee shall have received written notice from the Guarantor or a Holder of
the Capital Securities (except in the case of a payment default), or a
Responsible Officer of the Guarantee Trustee charged with the administration of
this Guarantee shall have obtained actual knowledge thereof.

ARTICLE III

GUARANTEE TRUSTEE

Section 3.1.     Guarantee Trustee; Eligibility.

(a)        There shall at all times be
a Guarantee Trustee which shall:

(i)         not be an Affiliate of the Guarantor,
and

(ii)        be a corporation organized and doing
business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or Person authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority.  If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above, then,
for the purposes of this Section 3.1(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.

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(b)        If at any time the Guarantee
Trustee shall cease to be eligible to so act under Section 3.1(a), the
Guarantee Trustee shall immediately resign in the manner and with the effect
set out in Section 3.2(c).

(c)        If the Guarantee Trustee has
or shall acquire any "conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Guarantee Trustee shall either eliminate
such interest or resign to the extent and in the manner provided by, and
subject to this Guarantee.

Section 3.2.     Appointment, Removal and Resignation of Guarantee Trustee.

(a)        Subject to Section 3.2(b),
the Guarantee Trustee may be appointed or removed without cause at any time by
the Guarantor except during an Event of Default.

(b)        The Guarantee Trustee shall
not be removed in accordance with Section 3.2(a) until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Guarantee Trustee and delivered to the Guarantor.

(c)        The Guarantee Trustee
appointed to office shall hold office until a Successor Guarantee Trustee shall
have been appointed or until its removal or resignation.  The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by an instrument in writing
executed by such Successor Guarantee Trustee and delivered to the Guarantor and
the resigning Guarantee Trustee.

(d)        If no Successor Guarantee
Trustee shall have been appointed and accepted appointment as provided in this
Section 3.2 within 60 days after delivery of an instrument of removal
or resignation, the Guarantee Trustee resigning or being removed may petition
any court of competent jurisdiction for appointment of a Successor Guarantee
Trustee.  Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.

(e)        No Guarantee Trustee shall
be liable for the acts or omissions to act of any Successor Guarantee Trustee.

(f)        Upon termination of this
Guarantee or removal or resignation of the Guarantee Trustee pursuant to this
Section 3.2, the Guarantor shall pay to the Guarantee Trustee all amounts owing
to the Guarantee Trustee under Sections 7.2 and 7.3 accrued to the date of
such termination, removal or resignation.

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ARTICLE IV

GUARANTEE

Section 4.1.     Guarantee.

(a)        The Guarantor irrevocably
and unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense (except the defense of payment by the Issuer),
right of set-off or counterclaim that the Issuer may have or assert.  The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer to pay such amounts to
the Holders.

(b)        The Guarantor hereby also
agrees to assume any and all Obligations of the Issuer and in the event any
such Obligation is not so assumed, subject to the terms and conditions hereof,
the Guarantor hereby irrevocably and unconditionally guarantees to each
Beneficiary the full payment, when and as due, of any and all Obligations to
such Beneficiaries.  This Guarantee is
intended to be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received notice hereof.

Section 4.2.     Waiver of Notice and Demand.  The Guarantor
hereby waives notice of acceptance of this Guarantee and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.

Section 4.3.     Obligations Not Affected.  The
obligations, covenants, agreements and duties of the Guarantor under this
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:

(a)        the release or waiver, by
operation of law or otherwise, of the performance or observance by the Issuer
of any express or implied agreement, covenant, term or condition relating to
the Capital Securities to be performed or observed by the Issuer;

(b)        the extension of time for
the payment by the Issuer of all or any portion of the Distributions,
Redemption Price, Special Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Capital Securities or the extension
of time for the performance of any other obligation under, arising out of or in
connection with, the Capital Securities (other than an extension of time for
payment of Distributions, Redemption Price, Special Redemption Price,
Liquidation Distribution or other sum payable that results from the extension
of any interest payment period on the Debentures or any extension of the
maturity date of the Debentures permitted by the Indenture);

(c)        any failure, omission, delay
or lack of diligence on the part of the Holders to enforce, assert or exercise
any right, privilege, power or remedy conferred on the Holders pursuant to the
terms of the Capital Securities, or any action on the part of the Issuer
granting indulgence or extension of any kind;

(d)        the voluntary or involuntary
liquidation, dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other similar
proceedings affecting, the Issuer or any of the assets of the Issuer;

9

(e)        any invalidity of, or defect
or deficiency in, the Capital Securities;

(f)        the settlement or compromise
of any obligation guaranteed hereby or hereby incurred; or

(g)        any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge or
defense of a guarantor, it being the intent of this Section 4.3 that the
obligations of the Guarantor hereunder shall be absolute and unconditional
under any and all circumstances.

There shall be
no obligation of the Holders to give notice to, or obtain consent of, the
Guarantor with respect to the happening of any of the foregoing.

Section 4.4.     Rights of Holders.

(a)        The Holders of a Majority in
liquidation amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under this Guarantee; provided,
however, that (subject to Section 2.1) the Guarantee Trustee shall
have the right to decline to follow any such direction if the Guarantee Trustee
being advised by counsel determines that the action or proceeding so directed
may not lawfully be taken or if the Guarantee Trustee in good faith by its
board of directors or trustees, executive committees or a trust committee of
directors or trustees and/or Responsible Officers shall determine that the
action or proceedings so directed would involve the Guarantee Trustee in
personal liability.

(b)        Any Holder of Capital
Securities may institute a legal proceeding directly against the Guarantor to enforce
the Guarantee Trustee's rights under this Guarantee, without first instituting
a legal proceeding against the Issuer, the Guarantee Trustee or any other
Person.  The Guarantor waives any right
or remedy to require that any such action be brought first against the Issuer,
the Guarantee Trustee or any other Person before so proceeding directly against
the Guarantor.

Section 4.5.     Guarantee of Payment.  This Guarantee
creates a guarantee of payment and not of collection.

Section 4.6.     Subrogation.  The Guarantor
shall be subrogated to all (if any) rights of the Holders of Capital Securities
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee, if, after giving effect to any such
payment, any amounts are due and unpaid under this Guarantee.  If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to hold such amount
in trust for the Holders and to pay over such amount to the Holders.

Section 4.7.     Independent Obligations.  The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Capital Securities and that the Guarantor
shall be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 4.3
hereof.

Section 4.8.     Enforcement by a Beneficiary.  A Beneficiary
may enforce the obligations of the Guarantor contained in Section 4.1(b)
directly against the Guarantor and the Guarantor waives any right or remedy to
require that any action be brought against the Issuer or any other person or
entity  

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before proceeding against the Guarantor.  The Guarantor shall be subrogated to all rights (if any) of any
Beneficiary against the Issuer in respect of any amounts paid to the
Beneficiaries by the Guarantor under this Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee, if at the
time of any such payment, and after giving effect to such payment, any amounts
are due and unpaid under this Guarantee.

ARTICLE V

LIMITATION OF TRANSACTIONS; SUBORDINATION

Section 5.1.     Limitation of Transactions.  So long as any
Capital Securities remain outstanding, if (a) there shall have occurred
and be continuing an Event of Default or a Declaration Event of Default or
(b) the Guarantor shall have selected an Extension Period as provided in
the Declaration and such period, or any extension thereof, shall have commenced
and be continuing, then the Guarantor shall not and shall not permit any
Affiliate to (x) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Guarantor's or such Affiliate's capital stock (other than payments of
dividends or distributions to the Guarantor) or make any guarantee payments
with respect to the foregoing or (y) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Guarantor or any Affiliate that rank pari passu in all respects with or junior in interest to the
Debentures (other than, with respect to clauses (x) and (y) above, (i) repurchases,
redemptions or other acquisitions of shares of capital stock of the Guarantor
in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Guarantor (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into
prior to the occurrence of the Event of Default, Declaration Event of Default
or Extension Period, as applicable, (ii) as a result of any exchange or
conversion of any class or series of the Guarantor's capital stock (or any capital
stock of a subsidiary of the Guarantor) for any class or series of the
Guarantor's capital stock or of any class or series of the Guarantor's
indebtedness for any class or series of the Guarantor's capital stock,
(iii) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) any declaration
of a dividend in connection with any stockholders' rights plan, or the issuance
of rights, stock or other property under any stockholders' rights plan, or the
redemption or repurchase of rights pursuant thereto, (v) any dividend in
the form of stock, warrants, options or other rights where the dividend stock
or the stock issuable upon exercise of such warrants, options or other rights
is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock
and any cash payments in lieu of fractional shares issued in connection
therewith, or (vi) payments under this Guarantee).

Section 5.2.     Ranking.  This Guarantee
will constitute an unsecured obligation of the Guarantor and will rank
subordinate and junior in right of payment to all present and future Senior
Indebtedness (as defined in the Indenture) of the Guarantor.  By their acceptance thereof, each Holder of
Capital Securities agrees to the foregoing provisions of this Guarantee and the
other terms set forth herein.

The right of the Guarantor to participate in any distribution of assets of
any of its subsidiaries upon any such subsidiary's liquidation or reorganization
or otherwise is subject to the prior claims of creditors of that subsidiary,
except to the extent the Guarantor may itself be recognized as a creditor of
that subsidiary.  Accordingly, the Guarantor's obligations under this
Guarantee will be effectively 

11

 

subordinated to all existing and future liabilities of the Guarantor's
subsidiaries, and claimants should look only to the assets of the Guarantor for
payments hereunder.  This Guarantee does not limit the incurrence or
issuance of other secured or unsecured debt of the Guarantor, including Senior
Indebtedness of the Guarantor, under any indenture that the Guarantor may enter
into in the future or otherwise.

ARTICLE VI

TERMINATION

Section 6.1.     Termination.  This Guarantee
shall terminate as to the Capital Securities (i) upon full payment of the
Redemption Price or Special Redemption Price of all Capital Securities then
outstanding, (ii) upon the distribution of all of the Debentures to the
Holders of all of the Capital Securities or (iii) upon full payment of the
amounts payable in accordance with the Declaration upon dissolution of the
Issuer.  This Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder of Capital Securities must restore payment of any sums paid under the
Capital Securities or under this Guarantee.

ARTICLE VII

INDEMNIFICATION

Section 7.1.     Exculpation.

(a)        No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Guarantor
or any Covered Person for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
in accordance with this Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's negligence or willful misconduct with respect to such
acts or omissions.

(b)        An Indemnified Person shall
be fully protected in relying in good faith upon the records of the Issuer or
the Guarantor and upon such information, opinions, reports or statements
presented to the Issuer or the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who, if selected by such Indemnified
Person, has been selected with reasonable care by such Indemnified Person,
including information, opinions, reports or statements as to the value and
amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Capital Securities might properly be paid.

Section 7.2.     Indemnification.

(a)        The Guarantor agrees to
indemnify each Indemnified Person for, and to hold each Indemnified Person
harmless against, any and all loss, liability, damage, claim or expense
incurred without negligence or willful misconduct on the part of the
Indemnified Person, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including, but not limited to,
the costs and expenses (including reasonable legal fees and expenses) of the
Indemnified Person defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of the
Indemnified Person's powers or duties hereunder.  The obligation to indemnify as set forth in this Section 7.2
shall survive the resignation or removal of the Guarantee Trustee and the
termination of this Guarantee.

12

(b)        Promptly after receipt by an
Indemnified Person under this Section 7.2 of notice of the commencement of
any action, such Indemnified Person will, if a claim in respect thereof is to
be made against the Guarantor under this Section 7.2, notify the Guarantor
in writing of the commencement thereof; but the failure so to notify the
Guarantor (i) will not relieve the Guarantor from liability under
paragraph (a) above unless and to the extent that the Guarantor did not
otherwise learn of such action and such failure results in the forfeiture by
the Guarantor of substantial rights and defenses and (ii) will not, in any
event, relieve the Guarantor from any obligations to any Indemnified Person
other than the indemnification obligation provided in paragraph (a)
above.  The Guarantor shall be entitled
to appoint counsel of the Guarantor's choice at the Guarantor's expense to
represent the Indemnified Person in any action for which indemnification is
sought (in which case the Guarantor shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the Indemnified Person or
Persons except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the Indemnified Person.  Notwithstanding the Guarantor's election to
appoint counsel to represent the Guarantor in an action, the Indemnified Person
shall have the right to employ separate counsel (including local counsel), and
the Guarantor shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the Guarantor to
represent the Indemnified Person would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any
such action include both the Indemnified Person and the Guarantor and the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it and/or other Indemnified Person(s) which are different
from or additional to those available to the Guarantor, (iii) the
Guarantor shall not have employed counsel satisfactory to the Indemnified
Person to represent the Indemnified Person within a reasonable time after
notice of the institution of such action or (iv) the Guarantor shall
authorize the Indemnified Person to employ separate counsel at the expense of
the Guarantor.  The Guarantor will not,
without the prior written consent of the Indemnified Persons, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Persons are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Person from all liability arising out of such claim,
action, suit or proceeding.

Section 7.3.     Compensation; Reimbursement of Expenses.  The Guarantor
agrees:

(a)        to pay to the Guarantee
Trustee from time to time such compensation for all services rendered by it
hereunder as the parties shall agree to from time to time (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust); and

(b)        except as otherwise
expressly provided herein, to reimburse the Guarantee Trustee upon request for
all reasonable expenses, disbursements and advances incurred or made by it in
accordance with any provision of this Guarantee (including the reasonable
compensation and the expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable to its
negligence or willful misconduct.

For purposes
of clarification, this Section 7.3 does not contemplate the payment by the
Guarantor of acceptance or annual administration fees owing to the Guarantee
Trustee for services to be provided by the Guarantee Trustee under this
Guarantee or the fees and expenses of the Guarantee Trustee's counsel in
connection with the closing of the transactions contemplated by this Guarantee.  The provisions of this Section 7.3
shall survive the resignation or removal of the Guarantee Trustee and the
termination of this Guarantee.

13

 

ARTICLE VIII

MISCELLANEOUS

Section 8.1.     Successors and Assigns.  All guarantees
and agreements contained in this Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Capital Securities then outstanding.  Except in connection with any merger or
consolidation of the Guarantor with or into another entity or any sale,
transfer or lease of the Guarantor's assets to another entity, in each case, to
the extent permitted under the Indenture, the Guarantor may not assign its
rights or delegate its obligations under this Guarantee without the prior
approval of the Holders of at least a Majority in liquidation amount of the
Capital Securities.

Section 8.2.     Amendments.  Except with
respect to any changes that do not adversely affect the rights of Holders of
the Capital Securities in any material respect (in which case no consent of
Holders will be required), this Guarantee may be amended only with the prior
approval of the Holders of not less than a Majority in liquidation amount of
the Capital Securities.  The provisions
of the Declaration with respect to amendments thereof apply to the giving of
such approval.

Section 8.3.     Notices.  All notices
provided for in this Guarantee shall be in writing, duly signed by the party
giving such notice, and shall be delivered, telecopied or mailed by first class
mail, as follows:

(a)        If given to the Guarantee
Trustee, at the Guarantee Trustee's mailing address set forth below (or such
other address as the Guarantee Trustee may give notice of to the Holders of the
Capital Securities and the Guarantor):

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware  19890-1600

Attention:  Corporate Trust Administration

Telecopy:  302-636-4140

(b)        If given to the Guarantor,
at the Guarantor's mailing address set forth below (or such other address as
the Guarantor may give notice of to the Holders of the Capital Securities and
to the Guarantee Trustee):

First Charter Corporation

10200 David Taylor Drive

Charlotte, North Carolina  28262-2373

Attention:  Charles A. Caswell

Telecopy:  704-688-4670

(c)        If given to any Holder of
the Capital Securities, at the address set forth on the books and records of
the Issuer.

All such
notices shall be deemed to have been given when received in person, telecopied
with receipt confirmed, or mailed by first class mail, postage prepaid, except
that if a notice or other document is refused delivery or cannot be delivered
because of a changed address of which no notice was given, such notice or other
document shall be deemed to have been delivered on the date of such refusal or
inability to deliver.

14

 

Section 8.4.     Benefit.  This Guarantee
is solely for the benefit of the Beneficiaries and, subject to Section 2.1(a),
is not separately transferable from the Capital Securities.

Section 8.5.     Governing Law.  THIS GUARANTEE
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF
(OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

Section 8.6.     Counterparts.  This Guarantee
may be executed in one or more counterparts, each of which shall be an
original, but all of which taken together shall constitute one and the same
instrument.

Section 8.7       Separability.  In case one or
more of the provisions contained in this Guarantee shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Guarantee, but this Guarantee shall be construed as if such invalid or illegal
or unenforceable provision had never been contained herein.

Signatures appear on the following page

15

THIS GUARANTEE
is executed as of the day and year first above written.

 

  
  	FIRST CHARTER CORPORATION, as Guarantor

 
	By:  /s/ CHARLES A. CASWELL

     Name:  Charles A. Caswell

     Title:  EVP, Chief Financial Officer

 
	WILMINGTON TRUST COMPANY, as Guarantee

 
	By:  /s/ CHRISTOPHER J. MONIGLE

     Name:  Christopher J. Monigle

     Title:  Assistant Vice President

  
  16Exhibit 4(b) 

SENIOR STAFF SHARE
APPRECIATION RIGHTS PLAN
OF ICI AMERICAN HOLDINGS INC. 

TABLE OF CONTENTS 

	ARTICLE I	    PURPOSE AND EFFECTIVE DATE	  0
	    1.1	Purpose	  0
	    1.2	Effective Date	  0
	ARTICLE II	    DEFINITIONS	  1
	    2.1	Acquiring Company	  1
	    2.2	Annual Salary Related Limit	  1
	    2.3	Base Salary	  1
	    2.4	Board	  1
	    2.5	Business Day	  1
	    2.6	Cause	  2
	    2.7	Code	  2
	    2.8	Committee	  2
	    2.9	Company	  2
	    2.10	Control	  2
	    2.11	Designated Beneficiary	  2
	    2.12	Discharge	  2
	    2.13	Fair Market Value	  3
	    2.14	Grant Date	  3
	    2.15	Grant Price	  3
	    2.16	ICI ADR	  3
	    2.17	ICI Group	  3
	    2.18	Initial SAR Award	  3
	    2.19	Key Employee	  3
	    2.20	Participant	  4
	    2.21	Performance Condition	  4
	    2.22	Plan	  4
	    2.23	Plan Year	  4
	    2.24	Scheme Period	  4
	    2.25	Shareholder	  4
	    2.26	Spread	  4
	    2.27	Stock Appreciation Right or SAR	  4
	    2.28	SAR Award	  5
	    2.29	Total Permanent Disability	  5
	    2.30	Trust	  5
	    2.31	Trustee	  5
	    2.32	UK Option Scheme	  5
	    2.33		  5
	ARTICLE III	    ELIGIBILITY	  6
	    3.1	Eligibility Criteria	  6
	    3.2	Cessation of Eligibility	  6
	ARTICLE IV	    GRANTING OF SARS	  8
	    4.1	Rules Relating to Grant of SARs	  8
	    4.2	Limitations	  9
	ARTICLE V	    EXERCISE OF SAR	11

i 

			
	    5.1	Right to Exercise	11
	    5.2	Lapse	11
	    5.3	Cessation of Employment	12
	    5.4	Death	13
	    5.5	Takeovers	13
	    5.6	Scheme of Arrangement	14
	    5.7	Demergers and Other Significant Distributions	14
	    5.8	Voluntary Winding-up	15
	    5.9	Loss of Ownership	15
	    5.10	Mechanics of Exercise	15
	    5.11	Blackout Rules	16
	    5.12	Priority	16
	ARTICLE VI	    EXCHANGE OF SARS	17
	    6.1	Application	17
	    6.2	Exchange	17
	    6.3	Period for Substitution	18
	    6.4	Consequences of Exchange	18
	ARTICLE VII	    FUNDING AND CONTRIBUTIONS	19
	    7.1	Trustee's Obligation	19
	    7.2	Funding of Trust	19
	ARTICLE VIII	    WITHDRAWAL OF ICI GROUP MEMBER	20
	    8.1	Mandatory Withdrawal	20
	    8.2	Voluntary Withdrawal	20
	    8.3	Continued Obligation	20
	ARTICLE IX	    ADMINISTRATION	21
	    9.1	Rules and Regulations	21
	    9.2	Benefits of Committee Members	21
	ARTICLE X	    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION	22
	    10.1	Adjustments	22
	ARTICLE XI	    AMENDMENT AND TERMINATION	23
	    11.1	Amendment	23
	    11.2	Termination	23
	ARTICLE XII	    MISCELLANEOUS	24
	    12.1	Unfunded Obligations	24
	    12.2	Non-alienation Provision	24
	    12.3	Tax Withholding	24
	    12.4	No Employment Contract	24
	    12.5	Construction	24
	    12.6	Limitation of Liability	25
	    12.7	Headings	25

ii 

ARTICLE I

PURPOSE AND EFFECTIVE
DATE 

        1.1
Purpose. The Plan is intended to provided certain senior Key Employees of the
Company an incentive to achieve the Company’s goals and to encourage such Key
Employees to acquire a proprietary interest in the Company’s progress and growth. 

        1.2
     Effective Date.  This Plan document is effective January 1, 1995. 

ARTICLE II

DEFINITIONS 

        2.1
Acquiring Company means a company which obtains Control of the Shareholder or
becomes bound or entitled to acquire the ordinary shares of the Shareholder. 

        2.2
Annual Salary Related Limit means with respect to the first Plan Year that a
Participant receives a grant of an SAR under this Plan an amount equal to the product of
1.40 multiplied by Base Salary, determined as of the Grant Date. With respect to each Plan
Year thereafter, the Annual Salary Related Limit means an amount equal to the product of
0.40 multiplied by Base Salary, determined as of the Grant Date. 

        2.3
Base Salary means the base salary rate of a Participant, inclusive of the salary
deferrals under Section 401(k) of the Code, salary reduction under Section 125 of the
Code, and salary reduction under a nonqualified deferred compensation plan. In the case of
an Expatriate Key Employee, the base salary rate shall be the rate that would apply if his
base compensation were paid entirely by the Company. Base Salary shall not include
overtime, bonus, commissions, car allowance, or incentive compensation. 

        2.4
     Board means the Board of Directors of ICI American Holdings Inc. 

        2.5
     Business Day means a day on which the New York stock exchange is open for the
transaction of business. 

        2.6
Cause mean a Discharge on account of dishonesty, insubordination, flagrant
violation of rules and regulations, negligence, misconduct, or commission of a crime. 

        2.7
     Code means the Internal Revenue Code of 1986, as amended. 

        2.8
     Committee means the Executive Plans Committee of ICI American Holdings appointed by
the Board. 

        2.9
Company means any member of the ICI Group which (i) is incorporated in the United
States, and (ii) is designated by the Board as a participating company. 

        2.10
Control means eighty percent (80%) or more ownership, direct or indirect, of the
voting power or value of any entity. 

        2.11
Designated Beneficiary means the person (to include a trust) designated by the
Participant as his beneficiary in the case of death. Such designation shall be made in
writing and in the form and within the time prescribed by the Committee. If no designation
is made, the Participant’ s spouse shall be deemed the Designated Beneficiary,
provided that if there is no spouse at the time of death, the estate of the Participant
shall be deemed to be the Designated Beneficiary. 

        2.12
Discharge means the involuntary termination of employment with the ICI Group by
action of the Company. A voluntary resignation or termination by mutual consent shall be
deemed a Discharge where such resignation or termination occurs prior to the last day of
the third (3rd) month following the calendar month in which one of the following events
occurs: 

	 	        (i)       
Reduction in Participant’s Base Salary; 

	 	        (ii)       
Demotion in Participant’s grade level; or  

	 	        (iii)       
Significant reduction in Participant’s job responsibilities.  

        2.13
Fair Market Value means the closing price of an ICI ADR on the New York Stock
Exchange as of the trading date immediately preceding the date an SAR is exercised. 

        2.14
    Grant Date means the day during a Plan Year, selected by the Committee, on which the
SAR is granted.  

        2.15
Grant Price means the average of the New York Stock Exchange closing prices of ICI
ADRs on the five (5) Business Days preceding the Grant Date. 

        2.16
    ICI ADR means an Imperial Chemical Industries PLC American Depositary Receipt. 

        2.17
ICI Group shall mean the Shareholder and any entity in which the Shareholder,
directly or indirectly, holds at least a 50% ownership interest of total combined voting
power or value. 

        2.18
Initial SAR Award shall mean a one time SAR Award made at the discretion of the
Committee to a newly eligible Participant. 

        2.19
Key Employee shall mean an employee of the Company who is a member of a select
group of (i) management and/or (ii) highly compensated employees. A Key Employee who
is transferred to a member of the ICI Group which has not adopted this Plan shall continue
to be a Key Employee if any part of his base compensation is paid by the Company. 

        2.20
    Participant shall mean a Key Employee who satisfies the eligibility criteria of
Article III. 

        2.21
    Performance Condition means a condition imposed by the Shareholder with respect to
the exercise of an SAR. 

        2.22
Plan means the Senior Staff Share Appreciation Rights Plan of ICI American Holdings Inc.  

        2.23
    Plan Year means the calendar year. 

        2.24
Scheme Period means the period commencing January 1, 1995, and ending on December
31, 2004. 

        2.25
Shareholder means Imperial Chemical Industries PLC, an English Capital Stock
Company, Millbank, London SW1P 3JF, England. 

        2.26
Spread shall mean the difference between the Grant Price of an SAR and the Fair
Market Value of an ICI ADR on the date the SAR is exercised. If notice of exercise is
given in accordance with the rules established by the Committee and this Plan by noon, the
New York Stock Exchange closing price on the preceding Business Day is used to determine
Fair Market Value. If said notice of exercise is given after noon, the New York Stock
Exchange closing price on the date of exercise shall be used to determine Fair Market
Values. 

        2.27
Stock Appreciation Right or SAR shall mean the right to receive cash and/or ICI
ADRs equal to the appreciation in value of one ICI ADR between the Grant Date and the date
the SAR is exercised. 

        2.28
    SAR Award shall mean an award of SARs by the Committee to a Participant under Article
IV. 

        2.29
Total Permanent Disability means that the Participant is permanently not able to
perform his then current job position with the Company by reason of injury or disease. The
determination of Total and Permanent Disability shall be made by the Committee based upon
medical evidence submitted to the Committee by the Participant and the Company. The
decision of the Committee shall be conclusive. 

        2.30
    Trust means the Declaration of Trust for the Long Term Incentive Plans of ICI
American Holdings Inc.  

        2.31
    Trustee means the trustee under the Trust. 

        2.32
    UK Option Scheme means the Senior Staff Share Option Scheme of 1994 established by
Imperial Chemical Industries PLC. 

        2.33
Pronouns, whenever used, shall be deemed to include both plural and singular as well as
masculine and feminine. 

ARTICLE III

ELIGIBILITY 

        3.1
     Eligibility Criteria.  A Key Employee shall become a Participant in this Plan if he
or she: 

	 	        (i)                      Is
selected for participation in this Plan by the Committee;  

	 	        (ii)                      is
hay grade 43 or higher; and  

	 	        (iii)                      does
not own, directly or indirectly, ten percent or more of the voting power of
               any member of the ICI Group.  

        3.2
     Cessation of Eligibility.  Eligibility to participate in this Plan shall cease upon
the earlier of:  

	 	        (i)                      The
date the Participant terminates employment with the Company for any reason;  

	 	        (ii)                      the
date the Participant ceases to be a Key Employee;  

	 	        (iii)                      the
date the Participant receives notice from the Committee that he is no longer
               eligible to participate;  

	 	        (iv)                      the
date the employer of the Participant withdraws from this Plan; or  

	 	        (v)                      the
date Participant first acquires direct or indirect ownership of ten percent
               (10%) or more of the combined voting power of any member of the ICI Group.  

Notwithstanding the above, if a
Participant ceases to be eligible but remains employed by a member of the ICI Group, he
shall retain the rights of a Participant with respect to unexercised SARs granted to him
prior to the date he ceased to be eligible. 

ARTICLE IV

GRANTING OF SARs 

        4.1
Rules Relating to Grant of SARs. 

	 	        4.1.1
Grant of SAR. Subject to Section 4.2 and Section 9.2, the Committee may, during the
Scheme Period, in its absolute discretion, grant to any Participant a SAR Award for such
number of SARs as the Committee may determine at the Grant Price. With the exception of
the Initial SAR Award, no SAR Award may be granted during a Plan Year to an individual who
was not eligible to participate on April 1 of said Plan Year. 

	 	        4.1.2
Time When SARs May Be Granted. SARs may be granted within 42 days commencing on any
of the following: 

          		    (i)       
               the day immediately following the day on which the Shareholder makes an
               announcement of its results for the last preceding financial year, half year or
               quarter year or other period; 

               

          		    (ii)       
               any day on which the Committee, with consent of the Shareholder, resolves that
               exceptional circumstances exist which justify the grant of SARs; and 

               

          		    (iii)       
               with respect to an Initial SAR Award, any date selected by the Committee which
               is in the Plan Year that the Participant was first eligible to participate in
               the Plan. 

               

If the grant of any SAR is prevented
by statute, order, regulation or government directive, then the Committee may grant SARs
within the period of 42 days after the lifting of such restrictions. 

	 	        4.1.3
Performance Condition. The Committee may grant an SAR on the basis that it may not
be exercised, in whole or in part, until certain conditions set by the Shareholder have
been satisfied. The Performance condition must be objective and described in the Grant
Certificate described in subsection 4.1.4. The Committee may, with the consent of the
Shareholder or designated representative of the Shareholder, waive, vary or amend the
Performance Condition. 

	 	        4.1.4
Grant Certificate. Each recipient of an SAR Award shall be issued a certificate
(the “Grant Certificate”), on or as soon as practicable after the Grant Date, in
such form as the Committee shall prescribe. The Grant Certificate shall set out the number
of SARs covered by the SAR Award, the Grant Date, the Grant Price, and the date the SARs
are first exercisable (absent a cessation of Employment). 

	 	        4.1.5
Disclaimer of SAR. Any recipient of an SAR Award, by notice in writing to the
Committee, within 30 days after the Grant Date, disclaim in whole or in part the SARs
covered by the SAR Award, and in such case the SAR shall be deemed never to have been
granted under the Plan. No consideration shall be payable by the Company for any
disclaimer. 

	 	        4.1.6
Transfer Restrictions. Except for the transfer of an SAR on death by will or the
laws of descent and distribution, neither an SAR nor any rights in respect of it may be
transferred, assigned or otherwise disposed of by the recipient of an SAR Award to any
other person. 

	 	        4.1.7
Administrative Errors. If any SAR Award is granted under the Plan on terms which
exceed the limits prescribed in Section 4.2, the SAR Award shall be deemed limited by
Section 4.2. 

        4.2
Limitations. 

	 	        4.2.1
   Scheme Period Limit.  The total number of SARs awarded during the Scheme Period may
         not exceed five million. 

	 	        4.2.2
Application of Annual Salary Related Limit. Except for the Initial SAR Award, the
total number of SARs granted to a Participant during a Plan Year may not exceed the Annual
Salary Related Limit divided by the Grant Price, rounded down to the next whole SAR. If
the number of SARs awarded is less than the maximum, the Annual Salary Related Limit for
any future grants made in the same Plan Year is reduced by the aggregate Grant Price of
the SARs previously granted during the Plan Year. 

	 	        4.2.3
Initial SAR Award Limit. The number of SARs in an Initial SAR Award may not exceed
Base Salary, determined as of the Grant Date, divided by the Grant Price and rounded down
to the next whole SAR. 

ARTICLE V

EXERCISE OF SAR 

        5.1
Right to Exercise. 

	 	        5.1.1
Unless otherwise specified in this Plan, a Participant may first exercise an SAR on or
after the later of: 

		    (i)                        the
third anniversary of its Grant Date; or  

		    (ii)                        on
the satisfaction or waiver of any Performance Condition.  

	 	        5.1.2
Except as otherwise provided under this Article V, an SAR shall only be exercisable by a
Participant while he is, or was at the date of death, employed by the ICI Group. 

        5.2
     Lapse.  An SAR shall lapse on the earlier of: 

	 	        (i)                      the
date the Participant ceases to be an employee of a member of the ICI Group
               (unless any of the provisions in Section 5.3 through 5.9 apply);  

	 	        (ii)                      any
date specified in Sections 5.3 through 5.9 as a date for the SAR to lapse;  

	 	        (iii)                      any
date specified as a date for the SAR to lapse in the Performance Condition;
               or  

	 	        (iv)                      the
tenth (10th) anniversary of the Grant Date.  

        5.3
Cessation of Employment. 

	 	        5.3.1
   If a Participant ceases to be an employee of any member of the ICI Group: 

	 	        (i)                      by
reason of resignation on account of Total and Permanent Disability;  

	 	        (ii)                      by
reason of Discharge for reasons other than Cause;  

	 	        (iii)                      by
reason of retirement on or after age 65, which is not in connection with a
               Discharge for Cause;  

	 	        (iv)                      by
reason of retirement with the approval of the Committee at an age prior to 65
               at which he is eligible to receive an immediate pension from a defined
benefit                pension plan maintained by the Company which is qualified under
Section 401(a)                of the Code;  

	 	        (v)                      by
reason of the employer of the Participant ceasing to be a member of the ICI
               Group;  

	 	        (vi)                      by
reason of the business, plant site, product line, function, or any part
               thereof, in which the Participant works being sold or transferred to a
person                who is not a member of the ICI Group; or  

	 	        (vii)                      for
any other reason if the Committee so decides in its absolute discretion
               within 90 days of said cessation,  

he shall be entitled to exercise all
his SARs, subject to Sections 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9.  

	 	        5.3.2
To the extent that a Participant ceases to be employed by the ICI Group for one of the
reasons set out in subsection 5.3.1, SARs which are not exercised by the earlier of the
second anniversary of the cessation of employment or the tenth anniversary of the Grant
Date shall lapse. 

        5.4
Death. If a Participant dies, an SAR may, subject to Sections 5.5, 5.6, 5.7 and 5.8
(when the SAR may lapse earlier), be exercised by his personal representative, for the
benefit of such persons who take by the will or the law of descent and distribution not
later than the earlier of the expiration of one year after the date of death. 

        5.5
     Takeovers. 

	 	        5.5.1
If any person obtains Control of the Shareholder as a result of making an offer to acquire
its ordinary shares, which is either unconditional or is made on a condition such that if
it is satisfied the person making the offer will have Control of the Shareholder, an SAR
may be exercised within the earlier of: 

          		    (i)       
               six months of the time when the person making the offer has obtained Control of
               the Shareholder; and 

               

          		    (ii)       
               the period referred to in subsection 5.5.2. 

               

	 	
For
the purpose of this subsection 5.5.1, a person shall be deemed to have obtained Control if
he and others acting in concert with him have together obtained Control of the
Shareholder. 

	 	
SARs
shall lapse on the expiration of the six month period unless the Board of Directors of the
Shareholder shall give reasonable notice to the Participants before the end of the six
month period that the SARs shall not lapse. 

	 	        5.5.2
If, following the change of Control referred to in subsection 5.5.1, any notice or written
communication is given under Sections 429(1) or (2) and 430A(1), (2) or (3) of the United
Kingdom Companies Act 1985 to an option holder of ordinary shares of the Shareholder (or
any notice or written communication should have been given in compliance with those
provisions), all unvested SARs shall vest and may be exercised within 28 days after the
date of the giving of the first notice or written communication (or if there has been a
failure to give the appropriate notice or written communication the last date when the
first notice or written communication should have been given). SARs not exercised within
that period shall lapse on the expiration of the period referred to in subsections 6.3(i)
and 6.3(iii), whichever is appropriate or if both are appropriate, whichever is the later. 

        5.6
Scheme of Arrangement. If a court of the United Kingdom shall direct that a meeting
of the holders of the ordinary shares of the Shareholder be convened pursuant to Section
425 of the Companies Act 1985 for the purposes of considering a scheme of arrangement
involving the reconstruction of the Shareholder or its amalgamation with any other company
or companies: 

	 	        (i)                      an
SAR may be conditionally exercised from the date of the court hearing to 12
               noon on the day immediately preceding the date of the shareholders’               meeting.
Any SAR not exercised by the end of that period shall cease to be
               exercisable and shall lapse on the expiration of the six month period
following                the court’s sanction of such scheme of arrangement.  

	 	        (ii)                      the
Directors of the Shareholder shall endeavor to procure that the proposals,
               so far as they relate to the holders of the shares, shall be extended to
each                Participant who shall have conditionally exercised his SARs prior to
12 noon on                the day immediately preceding the date of the shareholders’ meeting.  

        5.7
Demergers and Other Significant Distributions. If the Committee becomes aware that
the Shareholder is or is expected to be affected by any demerger, dividend, super dividend
or other transaction which, in the opinion of the Committee, would have a significant
effect on the current or future value of any SARs and the option holders in the UK Option
Scheme have been permitted to exercise their options by reason of such event, the
Committee may, in its absolute discretion, allow, to the extent permissible under the
Securities laws of the United States, all or part of such SARs to be exercised. The
Committee shall specify the period in which such SARs shall be exercisable and whether
such SARs shall lapse at the end of the specified period. 

The Committee shall notify any
Participant who is affected by the Committee exercising their discretion under this
Section. 

        5.8
Voluntary Winding-up. If notice is given of a general meeting of the Shareholder at
which a resolution will be proposed for the voluntary winding-up of the Shareholder
(within the meaning of Section 86 of the United Kingdom Insolvency Act 1986): 

	 	        (i)                      Subject
to U.S. bankruptcy and insolvency laws, an SAR may be conditionally
               exercised from the date of the notice to 12 noon on the day immediately
               preceding the commencement of the winding-up. Any SAR not exercised by the
end                of that period shall lapse on the commencement of the winding-up; and  

	 	        (ii)                      SARs
conditionally exercised within the period referred to in (i) above, shall
               take effect as to the commencement of the winding-up.  

        5.9
Loss of Ownership. Where the Participant is deprived of the legal or beneficial
ownership of an SAR by operation of law, otherwise than upon death, or does anything or
omits to do anything which caused him to be so deprived or becomes bankrupt, all his SARs
shall lapse. 

        5.10
Mechanics of Exercise. A Participant may exercise an SAR by filing a written
election with the Committee in the manner prescribed by the Committee. Such election shall
be null and void unless received by the Committee or its designated representative prior
to 5:00 p.m., Wilmington, Delaware time, on the exercise date or such earlier time
selected by the Committee. As soon as practicable after the exercise date, the Committee
shall direct the Trustee to distribute cash and ICI ADRs equal to the Spread. The cash
portion of the distribution shall be equal to two thirds (2/3) of the Spread. The ICI ADR
portion of the distribution shall be the number of whole ICI ADRs that can be purchased
with cash equal to one third (1/3) of the Spread. If allocation of one third (1/3) of the
Spread to the ICI ADR portion of the distribution would result in a fractional ICI ADR,
cash equal to such fractional share will be added to the cash portion of the distribution. 

        5.11
Blackout Rules. A Participant may not exercise his SARs during the thirty (30) day
period preceding the publication of the quarterly results of the Shareholder or during the
sixty (60) day period preceding the publication of the annual results of the Shareholder. 

        5.12
Priority. In the event of any conflict between any of the provisions of this
Article 5, the Committee shall determine which provision shall prevail. 

ARTICLE VI

EXCHANGE OF SARs 

        6.1
     Application.  This Section 6 applies where an Acquiring Company: 

	 	        (i)                 obtains
Control of the Shareholder as a result of making a general offer to           acquire:  

	 	        (a)                      the
whole of the issued ordinary share of the Shareholder (other than that which
               is already owned by it and its subsidiary or holding company) made on a
               condition such that, if satisfied, the Acquiring Company will have Control
of                the Shareholder; or  

	 	        (b)                      all
the Shares (or such Shares as are not already owned by the Acquiring Company
               or its subsidiary or holding company); or  

	 	        (ii)                      obtains
Control of the Shareholder in pursuance of a compromise or arrangement
               sanctioned by the court of the United Kingdom under Section 425 of the
United                Kingdom Companies Act 1985; or  

	 	        (iii)                      becomes
bound or entitled to acquire Shares under Sections 428 to 430F of the
               United Kingdom Companies Act 1985.  

        6.2
Exchange. A Participant may, at any time within the period referred to in Section
6.3, by agreement with the Acquiring Company, release his SAR in consideration of the
grant to him of a new SAR Award, which is equivalent. The new SAR Award shall reflect
shares in the Acquiring Company or a “parent” or “subsidiary” thereof,
as those terms are defined in Code Sections 424(e) and (f). 

        6.3
     Period for Substitution.  The period referred to in Section 6.2 is: 

	 	        (i)                      in
a case falling within Section 6.1(i), 6 months beginning with the time when
               the Acquiring Company obtains Control of the Company and any condition
subject                to which the offer is made is satisfied;  

	 	        (ii)                      in
a case falling within Section 6.1(ii), 6 months beginning with the time when
               the court sanctions the compromise or arrangement;  

	 	        (iii)                      in
a case falling within Section 6.1(iii), the period during which the Acquiring
               Company remains so bound or entitled.  

        6.4
Consequences of Exchange. With effect from the date of the release of an SAR in
accordance with this Article 6, the new SAR shall be construed as if references to the
Shareholder and Shares were references to the Acquiring Shareholder and shares in the
Acquiring Company or, as the case may be, the other company in respect of whose shares the
new SAR is granted. 

ARTICLE VII

FUNDING AND
CONTRIBUTIONS 

        7.1
Trustee’s Obligation. 

	 	        7.1.1
The Trustee shall purchase on the open market all ICI ADRs required for the operation of
the Plan. 

	 	        7.1.2
Subject to availability of sufficient funds, the Trustee shall, upon the
Participant’s exercise of an SAR, distribute cash and/or ICI ADRs to the Participant,
as directed by the Committee. 

        7.2
     Funding of Trust. 

	 	        7.2.1 There
is not obligation to fund an SAR until such SAR is exercised by the Participant.  

	 	        7.2.2
ICI Americas Inc. shall contribute to the Trust on behalf of the Company all funds
necessary for the operation of the Plan. All members of the ICI Group which have adopted
this Plan shall reimburse ICI Americas Inc. for any contributions or payments made on
account of a Participant employed at the time of exercise by such member of the ICI Group. 

ARTICLE VIII

WITHDRAWAL OF ICI GROUP
MEMBER 

        8.1
Mandatory Withdrawal. If a corporation, which has adopted this Plan ceases to be a
member of the ICI Group, such corporation shall be deemed to have withdrawn from this Plan
and shall cease to be included within the term “Company” as of that date. 

        8.2
Voluntary Withdrawal. Any ICI Group member which has adopted this Plan may withdraw
from the Plan upon submission of a duly executed resolution of its board of directors to
the Committee. Upon such withdrawal, the ICI Group member shall cease to be included
within the term “Company.” 

        8.3
Continued Obligation. Notwithstanding a withdrawal, such ICI Group member shall
remain obligated under this Plan for any contributions or payments relating to an employee
or former employee of such member or former member of the ICI Group, to include, without
limitation, payments and contributions due by reason of such withdrawal. 

ARTICLE IX

ADMINISTRATION 

        9.1
Rules and Regulations. Subject to the provisions of this Plan, the Committee shall
establish such rules and regulations as it may deem appropriate for the proper
administration of the Plan. The Committee’s determinations of eligibility and
benefits under and interpretations of the Plan and its rules and regulations shall be
conclusive. 

        9.2
Benefits of Committee Members. No member of the Committee may participate in any
decision affecting such member’s rights or benefits under this Plan other than a
decision that affects all Participants equally. SAR Awards granted to members of the
Committee are subject to review and modification prior to the Grant Date by a designated
representative of the shareholder. 

ARTICLE X

ADJUSTMENTS UPON
CHANGES IN CAPITALIZATION 

        10.1
Adjustments. Notwithstanding any other provisions of this Plan, the Committee may
at anytime make appropriate adjustment to SARs because of an increase or decrease in the
number of outstanding ICI ADRs or the value of such ICI ADRs resulting from a stock
dividend, subdivision or combination of shares of stock or a reclassification of stock.
Any such adjustments by the Committee shall be conclusive. 

ARTICLE XI

AMENDMENT AND
TERMINATION 

        11.1
Amendment. Except as or otherwise provided herein, the Board may suspend, modify or
amend the Plan at anytime. No suspension, modification or amendment of the Plan may,
without the consent of the Participant, affect the Participant’s rights under or to
any SAR which has been granted prior to the date of the suspension, modification, or
amendment of the Plan. The previous sentence shall not apply to any suspension,
modification, or amendment which is necessary for purposes of complying with the
securities or tax laws of the United States or the securities or tax laws of the United
Kingdom. 

        11.2
Termination. The Plan will automatically terminate at the end of the Scheme Period.
The Board may terminate the Plan prior to the end of the Scheme Period. SARs granted prior
the termination of the Plan shall continue to be valid and enforceable. No further rights
shall enure to a Participant under this Plan after termination. 

ARTICLE XII

MISCELLANEOUS 

        12.1
Unfunded Obligations. The right to any SAR under by this Plan shall be reflected on
the Company’s books of account as a general unsecured and unfunded obligation and no
trust in a Participant’s favor is intended or shall be implied prior to the exercise
of the SAR. 

        12.2
Non-alienation Provision. To the extent permitted by law, the right to receive
payment of amounts under the this Plan pursuant to any provision hereof shall not be
assignable, nor shall such right be subject to garnishment or attachment by
Participant’s creditors or beneficiaries except as such amounts become due and
payable according to the terms of this Plan. 

        12.3
Tax Withholding. The Company or Trustee may withhold the amount of any tax
attributable to any amount payable hereunder. The Company or Trustee may defer making any
payment with respect to which any tax question may be pending unless and until
satisfactorily indemnified by Participant or his beneficiary. 

        12.4
No Employment Contract. This Plan does not constitute an employment contract and
shall not constitute an undertaking, express or implied, by Participant to continue as an
employee of the Company nor by the Company to continue the employment of the Participant. 

        12.5
Construction. This Plan shall be construed under the internal laws of the State of
Delaware without regard to conflict of laws, except to the extent preempted by the
Employee Retirement Income Security Act of 1974. 

        12.6
Limitation of Liability. An individual who participates in the Plan waives all and
any rights to compensation and damages in consequence of the termination of his employment
with the Company for any reason insofar as those rights rise, or may arise, from his
ceasing to have rights under or be entitled to exercise any SAR under the Plan as a result
of such termination or from the loss or diminution in value of such rights or
entitlements. 

        12.7
Headings. The headings of titles of Articles and Sections are solely for
convenience of reference and shall not be deemed to modify or affect the meaning to which
appended.

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