SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 30, 1997
FIRST CHARTER CORPORATION
(Exact name of registrant as specified in its charter)
North Carolina 0-15829 56-1355866
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
22 Union Street, North, Concord, North Carolina 28026-0228
(Address, including zip codes, of principal executive offices)
(704)786-3300
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Item 5 Other Events.
On June 30, 1997, First Charter Corporation ("FCC") and
Carolina State Bank ("CSB") entered into a Letter of Intent (the
"Letter of Intent") for the acquisition of CSB by FCC (the
"Acquisition"). In the Acquisition, FCC will acquire all of the
outstanding shares of common stock, $4.50 par value per share,
of CSB (the "CSB Common Stock") in exchange for 1.023 shares of
common stock, $5.00 par value per share, of FCC (the "FCC Common
Stock") for each share of CSB Common Stock. Pursuant to the
Letter of Intent, FCC and CSB will negotiate a definitive
agreement (the "Merger Agreement") providing for the Acquisition
and containing customary terms and conditions of closing. As of
June 30, 1997, 1,662,192 shares of CSB Common Stock were issued
and outstanding, and there were outstanding employee stock
options to purchase 58,600 shares.
The Acquisition is intended to qualify as a tax-free
reorganization and is anticipated to be accounted for as a
pooling of interests. Consummation of the Acquisition is subject
to certain additional conditions, including but not limited to
(i) the negotiation of the Merger Agreement;(ii) the approvals of
the shareholders of FCC and CSB; (iii) the approvals of
applicable banking regulatory authorities; and (iv) the
effectiveness of a registration statement related to the FCC
Common Stock to be issued in the Acquisition.
Immediately following the execution of the Letter of Intent,
FCC and CSB entered into a Stock Option Agreement dated June 30,
1997, pursuant to which CSB granted FCC an irrevocable option to
purchase up to 330,776 shares of CSB Common Stock (19.9% of the
CSB Common Stock outstanding, before giving effect to the
exercise of the option) at a price of $13.25 per share (the
"Option"). The number of shares of CSB Common Stock subject to
the Option will be increased to the extent that CSB issues
additional shares of CSB Common Stock (otherwise than pursuant to
an exercise of the Option) such that the number of shares of CSB
Common Stock subject to option continues to equal 19.9% of the
CSB Common Stock then issued and outstanding, without giving
effect to the issuance of shares pursuant to an exercise of the
Option. The Option was granted by CSB as a condition of and in
consideration for FCC's offer and entering into the Letter of
Intent. The Option is exercisable only upon the occurrence of
certain events generally related to a change in control of or a
material business combination by CSB. The Option also allows the
holder thereof to require that CSB repurchase (at a price
determined as specified in the Stock Option Agreement) the Option
or the shares of CSB Common Stock acquired pursuant to the
exercise of the CSB Option if certain conditions are met.
The descriptions of the Letter of Intent and the Stock
Option Agreement are qualified in their entirety to the copies of
such agreements included as Exhibits 99.1 and 99.2, respectively,
which are incorporated herein by reference.
CSB is a North Carolina state-chartered commercial bank with
four banking offices in Gaston, Cleveland and Rutherford
Counties, North Carolina. As of March 31, 1997, CSB had total
assets of approximately $139 million, total deposits of
approximately $120 million and shareholders' equity of
approximately $13 million.
Item 7 Financial Statements and Exhibits.
(c) The following exhibits are filed herewith
Exhibit No. Description
99.1 Letter of Intent between First Charter
Corporation and Carolina State Bank,
dated June 30, 1997
99.2 Stock Option Agreement between First
Charter Corporation, as grantee, and
Carolina State Bank, as issuer, dated
June 30, 1997
99.3 Joint news release disseminated on June 30,
1997 by First Charter Corporation and Carolina
State Bank
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
FIRST CHARTER CORPORATION
By: /s/ ROBERT O. BRATTON
Robert O. Bratton
Executive Vice President and
Chief Financial Officer
Dated: July 1, 1997