8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 31, 2015

CORNERSTONE BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Tennessee	000-30497	62-1173944
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

835 Georgia Avenue, Chattanooga, Tennessee 37402

(Address of principal executive offices)           (zip code)

(423) 385-3000

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 3.03 Material Modification to Rights of Security Holders.

On July 31, 2015, Cornerstone Bancshares, Inc. (“Cornerstone”) distributed notice of redemption to all holders of record of Cornerstone’s outstanding Series A Convertible Preferred Stock (the “Series A Preferred Stock”), regarding Cornerstone’s redemption of all 600,000 outstanding shares of Series A Preferred Stock on August 31, 2015 (the “Redemption Date”) at a redemption price of $26.042 per share (the “Redemption Price”). Pursuant to the terms of the Cornerstone Amended and Restated Charter, as amended (the “Charter”), the per share Redemption Price is calculated as the sum of (i) the original issue price per share of $25.00 plus (ii) the amount of accumulated and unpaid dividends to, but excluding, the Redemption Date.

Under the terms of the Charter, the Company expects to deposit in trust with the American Stock Transfer and Trust Company, LLC, for the account of the holders of the Series A Preferred Stock to be redeemed, the moneys necessary for such redemption by the Redemption Date. As a result, as of the Redemption Date, the Series A Preferred Stock, whether or not yet surrendered for cancellation, will deemed to be no longer outstanding for any purpose, and all rights with respect to such shares shall have ceased and will be terminated except for the right of the holders of the Series A Preferred Stock to receive the Redemption Price per share.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits
	4.1	Form of Notice of Redemption of Series A Preferred Stock

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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 hereunto duly authorized.

	CORNERSTONE BANCSHARES, INC.
Date:     July 31, 2015	By:	/s/ Nathaniel F. Hughes
		Nathaniel F. Hughes
		President and Chief Executive Officer

INDEX TO EXHIBITS

Exhibit No.	Description
4.1	Form of Notice of Redemption of Series A Preferred Stock

EX-4.1

Exhibit 4.1

July 31, 2015

Via First Class Mail, Postage Prepaid

Re: Notice of Redemption for Series A Convertible Preferred Stock, Issued by Cornerstone Bancshares, Inc.

Dear Sir or Madam:

This letter serves as a notice of redemption in connection with the anticipated redemption by Cornerstone Bancshares, Inc. (the “Company”) of its Series A Convertible Preferred Stock (the “Series A Preferred Stock”), pursuant to the terms of the Company’s Amended and Restated Charter, as amended (the “Charter”), setting forth the relative rights, preferences, and privileges of the Series A Preferred Stock.

Pursuant to Part 6(c) of Section 3(a) of the Charter, this notice states as follows:

1. The redemption date is August 31, 2015;

2. The aggregate number of shares of Series A Preferred Stock to be redeemed by the Company is 600,000 (the “Redeemed Shares”), which constitutes all of the shares of Series A Preferred Stock outstanding as of the date of this notice;

3. Under the Charter, the per share redemption price for the Series A Preferred Stock is calculated as the sum of: (i) the original issue price per share of $25.00 plus (ii) the amount of accumulated and unpaid dividends to, but excluding, the date fixed for redemption. Based on a redemption date of August 31, 2015, the per share redemption price for the Redeemed Shares, therefore, is $26.042 per share; and

4. The place where certificates and the attached letter of transmittal for the Redeemed Shares are to be surrendered for payment of the redemption price is:

By hand, mail, express mail, courier, or other expedited service:

American Stock Transfer & Trust Company, LLC
6201 - 15^th Avenue
Brooklyn, New York 11219
Attention: Reorganization Department

To receive payment of the redemption price, please fully complete the attached letter of transmittal and return it, along with certificates representing your Redeemed Shares, if your shares are certificated, to the foregoing address.

Thank you for your support of the Company. If you have any questions related to this matter, please feel free to call the undersigned at (423) 385-3000.

Sincerely,

Nathaniel F. Hughes

President and CEO