<PAGE> 1
As filed with the Securities and Exchange Commission on February 1, 2000.
Registration No. _______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
----------------------------------
M&F BANCORP, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-1980549
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification number)
2634 CHAPEL HILL BLVD., DURHAM, NORTH CAROLINA 27707
(Address, including zip code and telephone number, including
area code of registrant's principal executive offices)
M&F BANCORP, INC. AND MECHANICS AND FARMERS BANK
INCENTIVE STOCK OPTION PLAN OF 1999
(Full title of the plan)
JULIA W. TAYLOR
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
M&F BANCORP, INC.
2634 CHAPEL HILL BLVD.
DURHAM, NORTH CAROLINA 27707
(919) 683-1521
Copies of communications to:
JEFFREY C. GERRISH, ESQ.
GERRISH & MCCREARY, P.C.
700 COLONIAL ROAD - SUITE 200
MEMPHIS, TENNESSEE 38117
(901) 767-0900
(Name, address, including zip code and telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum
Title of Securities to be Amount to be Maximum Offering Price Aggregate Offering Amount of
Registered Registered(1) Per Share(2) Price Registration Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 85,500 shares $19.09 $1,632,195 $430.90
no par value
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------------
(1) The Registration Statement also includes an indeterminable number of
additional shares that may become issuable as a result of terminated, expired or
surrendered options for Common Stock, or pursuant to the antidilution provisions
of the plan. This Registration Statement covers, pursuant to Rule 416(a), any
increases in the number of shares offered under the Plan to prevent dilution
resulting from stock splits, stock dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h), based upon the book value of the Company on
December 31, 1999.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information required by PART I of this
Registration Statement on Form S-8 (the "Registration Statement") will be sent
or given to Plan participants as specified by Rule 428(b)(1) under the
Securities Act of 1933, as amended. Such documents and the documents
incorporated by reference herein pursuant to ITEM 3 of PART II hereof, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed with the Federal Deposit
Insurance Corporation by Mechanics and Farmers Bank (the "Bank"), the sole
subsidiary of M&F Bancorp, Inc. (the "Company") prior to the time the Company
was formed and are incorporated herein by reference and made a part hereof:
1. The Bank's Annual Report on Form 10-KSB for the year ended
December 31, 1998, provided that any information included or
incorporated by reference in response to Items 402(a)(8), (i),
(k) or (l) of Regulation S-K of the Securities and Exchange
Commission shall not be deemed to be incorporated herein and is
not a part of the Registration Statement.
2. All reports filed by the Bank and the Company pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 since the end
of the fiscal year covered by the financial statements in the
Annual Report on Form 10-KSB referred to in paragraph 1 above.
3. All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934
subsequent to the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by
reference herein and to be part hereof from the date of the
filing of such documents. Any statement contained in a document
incorporated by reference herein and filed prior to the filing
hereof shall be deemed to be modified or superseded for purposes
of this Registration Statement to the extent that a statement
contained herein modifies or supersedes such statement, and any
statement contained herein or in any other document incorporated
by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a
statement contained in any other subsequently filed document
which also is incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
The following documents have been filed with the Securities and
Exchange Commission by the Company and are incorporated herein by reference and
made a part hereof:
1. The Company's Current Report on Form 8-K12G3 dated September 1,
1999 which provided as notice that it is the successor issuer to
Bank.
2. The Company's Quarterly Report on Form 10-QSB and the Company's
Amended Quarterly Report on Form 10-QSB/A for the quarter ended
September 30, 1999.
2
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES
Company common stock to be issued under the M&F Bancorp, Inc. and
Mechanics and Farmers Bank Incentive Stock Option Plan of 1999 is being
registered hereunder.
The authorized capital stock of the Company consists of 1,000,000
shares of Common Stock, no par value per share of which 853,800 shares are
issued and outstanding. Holders of Company Stock are entitled to one vote per
share held of record on all matters submitted to a vote of shareholders.
Shareholders are entitled to vote cumulatively in the election of directors.
With certain exceptions, an amendment to the Company's charter, including a
provision to increase the authorized capital stock of the Company, may be
effected if the amendment is recommended to the Company's shareholders by the
Board of Directors and if the votes cast by those shareholders in favor of the
amendment exceed the votes cast opposing the amendment. In general, North
Carolina law requires that any merger, share exchange, voluntary liquidation or
transfer of substantially all of the assets (other than in the ordinary course
of business) of a business corporation be recommended to the corporation's
shareholders by its board of directors and be approved by the affirmative vote
of at least a majority of all outstanding shares of the corporation's voting
common stock. Holders of the Company's Stock are entitled, upon dissolution or
liquidation, to participate ratably in the distribution of assets legally
available for distribution to shareholders after payment of debts. The Company's
shareholders have preemptive rights to acquire a pro rata amount of other or
additional shares which might be issued by the Company.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The North Carolina Business Corporation Act, North Carolina General
Statutes Chapter 55, authorizes indemnification of directors, officers and
employees under certain circumstances. The Company's Bylaws provide, among other
things, for the indemnification of directors, and authorize the Board to pay
reasonable expenses incurred by, or to satisfy a judgment or fine against, a
current or former director in connection with any personal legal liability
incurred by the individual while acting for the Company within the scope of his
or her employment so long as the director acted in good faith and his or her
conduct was in the best interest of the Company or at least not opposed to the
Company's best interests The Company has purchased an officers' and directors'
liability insurance policy which provides insurance coverage for directors and
officers of the Company against certain liabilities that they may incur in their
capacities as such.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
5.1 Opinion of Gerrish & McCreary, P.C., as to the legality of the
securities being registered (including consent of counsel) (filed
herewith),
23.1 Consent of Deloitte & Touche, L.L.P. (filed herewith),
24.1 Power of Attorney pursuant to which certain directors have signed
this Form S-8 Registration Statement (filed herewith),
99.1 M&F Bancorp, Inc. and Mechanics and Farmers Bank Incentive Stock
Option Plan of 1999 (filed herewith).
3
<PAGE> 4
ITEM 9. UNDERTAKINGS
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement;
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in
this Registration Statement or any material change to
such information in this Registration Statement;
Provided, however, that paragraph (a)(1)(i) and
(a)(1)(ii) shall not apply if the Registration Statement
is on Form S-3, Form S-8 or Form F-3 and the information
required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports
filed by the Company pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new Registration Statement relating
to the securities offered therein and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Company's Annual Report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions or otherwise, the Company has been advised that, in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or
controlling persons of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer
or controlling persons in connection with the securities being
registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Durham, State of North Carolina, on February 1, 2000.
M&F BANCORP, INC.
(Registrant)
By: /s/ Julia W. Taylor
-------------------------------------------------
Julia W. Taylor
Chairman, President and Chief Executive Officer
5
<PAGE> 6
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated, on February 1, 2000.
<TABLE>
<CAPTION>
Signature Title
<S> <C>
/s/ Julia W. Taylor Chairman, President and Chief Executive Officer
- ------------------------------- (Principal Executive Officer)
Julia W. Taylor
/s/ Lee Johnson, Jr. Executive Vice President/Chief Financial Officer
- -------------------------------
Lee Johnson, Jr.
</TABLE>
Julia W. Taylor, by signing her name hereto, does hereby sign this
document in her capacity as a director and on behalf of the persons named below,
such persons constituting at least a majority of the directors of the
Registrant, pursuant to powers of attorney duly executed by the persons named
and filed with the Securities and Exchange Commission as an exhibit to this
document, all in the capacities and on the date stated.
Julia W. Taylor Director
Benjamin S. Ruffin Director
Joseph M. Sansom Director
Aaron L. Spaulding Director
/s/ Julia W. Taylor
---------------------------------------
Julia W. Taylor
Attorney-in-Fact
6
<PAGE> 7
EXHIBIT INDEX
TO REGISTRATION STATEMENT ON FORM S-8
<TABLE>
<S> <C>
5.1 Opinion of Gerrish & McCreary, P.C., as to the legality of the
securities being registered (including consent of counsel).*
23.1 Consent of Deloitte & Touche, L.L.P.*
24.1 Power of Attorney pursuant to which certain directors have
signed this Form S-8 Registration Statement.*
99.1 M&F Bancorp, Inc. and Mechanics and Farmers Bank Incentive
Stock Option Plan of 1999.*
</TABLE>
- -----------------------------
* Filed herewith.
7
<PAGE> 1
EXHIBIT 5.1
January 31, 2000
M&F Bancorp, Inc.
2634 Chapel Hill Blvd.
Durham, NC 27707
Re: Legality of Securities to be Issued
Ladies and Gentlemen:
We have acted as your counsel in connection with the registration by M&F
Bancorp, Inc. (the "Company") under the Securities Act of 1933, as amended (the
"Act"), of up to 85,500 shares of the Company's Common Stock, no par value (the
"Shares"), to be issued by the Company pursuant to the exercise of options or
awards under the M&F Bancorp, Inc. and Mechanics and Farmers Bank Incentive
Stock Option Plan of 1999 (the "Plan"). The shares will be sold in the manner
set forth in the Registration Statement on Form S-8 ("Registration Statement")
that is being filed under the Act with respect to the offering of the Shares.
In connection with the offering of the shares, we have examined (1) the
Company's Amended and Restated Articles of Incorporation, (2) the Registration
Statement, (3) the Plan, and (4) such other documents as we have deemed
necessary to form the opinion expressed below. As to various questions of fact
independently established, we have relied upon statements of officers of the
Company.
Based on this examination, we advise you that, in our opinion, the shares to be
issued upon exercise of Options have been duly authorized and, when issued by
the Company in the manner described in the Registration Statement and the Plan,
will be validly issued, fully paid and non-assessable.
The foregoing opinion is limited to the federal laws of the United States and
the laws of the State of North Carolina and we express no opinion as to the
effect of the laws of any other jurisdiction.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference in the prospectus delivered pursuant to Form S-8
to this firm under the caption "Legal Matters" as having passed upon the
validity of the shares. In giving this consent, we do not admit that we come
within the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Securities and Exchange Commission
adopted under the Act.
Very truly yours,
GERRISH & McCREARY, P.C.
/s/ GERRISH & McCREARY, P.C.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
M&F Bancorp, Inc. on Form S-8 of our report dated January 19, 1999, incorporated
by reference in the Annual Report on Form 10-KSB of Mechanics and Farmers Bank
for the year ended December 31, 1998.
/s/ Deloitte & Touche LLP
- ----------------------------------
Raleigh, North Carolina
January 31, 2000
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
Each director of M&F Bancorp, Inc. (the "Company") whose signature
appears below, hereby appoints Julia W. Taylor, as his or her attorney to sign,
in his or her name and behalf and in any and all capacities stated below, the
Company's Registration Statement on Form S-8 (the "Registration Statement(s)")
for the registration of interests in connection with the participation of
employees and management in and acquisition of securities through the Company's
Incentive Stock Option Plan and likewise to sign any and all amendments and
other documents relating thereto as shall be necessary to cause the Registration
Statement(s) to become effective (including post-effective amendments) and to
sign any and all such documents upon the advice of legal counsel to carry out
the exercise and sale of the option shares, each such person hereby granting to
each such attorney power to act with or without the other and full power of
substitution and revocation and hereby ratifying all of that any such attorney
or his substitute may do by virtue hereof. This Power of Attorney has been
signed by the following persons in the capacities indicated on the 14th day of
December, 1999.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ Julia W. Taylor Director
- ------------------------------------
Julia W. Taylor
/s/ Benjamin S. Ruffin Director
- ------------------------------------
Benjamin S. Ruffin
/s/ Joseph M. Sansom Director
- ------------------------------------
Joseph M. Sansom
/s/ Aaron L. Spaulding Director
- ------------------------------------
Aaron L. Spaulding
</TABLE>
<PAGE> 1
EXHIBIT 99.1
MECHANICS AND FARMERS BANK
INCENTIVE STOCK OPTION PLAN OF 1999
1. Purpose of Plan
The purpose of this Stock Option Plan ("Plan") is to aid Mechanics and
Farmers Bank (the "Bank") in securing and retaining top management Key Employees
of outstanding ability by making it possible to offer them an increased
incentive, in the form of a proprietary interest in the Bank, to join or
continue in the service of the Bank and to increase their efforts for its
welfare and success.
2. Definitions
As used in this Plan, the following words shall have the following
meanings:
(a) "Board" means the Board of Directors of the Bank;
(b) "Code" means the Internal Revenue Code of 1986, as amended;
(c) Intentionally deleted;
(d) "Common Stock" means the $5.00 par value common stock of Mechanics
and Farmers Bank;
(e) "Bank" means the Mechanics and Farmers Bank;
(f) Intentionally deleted;
(g) "Disability" means the Participant's inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than twelve (12)
months;
(h) "Incentive Stock Option" means a stock option to purchase shares of
Common Stock, which is intended to qualify as an incentive stock option defined
in Code Section 422A;
(i) "Key Employee" means any person in the regular full-time common law
employment of the Corporation or any Subsidiary, as an executive or
non-executive officer thereof, who in the opinion of the Board, is or is
expected to be primarily responsible for the management, growth or protection of
some part or all of the business of the Corporation;
(j) "Option" means an Incentive Stock Option;
(k) "Parent" means any corporation in an unbroken chain of corporations
if each of the corporations owns stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain;
(l) "Participant" means a person to whom an Option is granted that has
not expired and ceased to be exercisable under the Plan; and
(m) "Subsidiary" means any corporation other than the Bank in an
unbroken chain of corporations beginning with the Bank if each of the
corporations other than the last corporation in the unbroken chain owns fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
1
<PAGE> 2
3. Administration of Plan
The Plan shall be administered by the Board. In the event that a
director of the Board is eligible to be selected for the grant of an Option,
during such membership as a director, such director shall recuse himself and not
participate in the discussion nor vote on the award of the Option to him or her.
The Board shall have the power and authority to administer, construe and
interpret the Plan, to make rules for carrying it out and to make changes in
such rules.
4. Granting of Options and $100,000 Limitation
The Board may from time to time grant Options under the Plan to such
Key Employees and subject to the limitations of paragraph (a) of Section 7, for
such number of shares as the Board may determine after receiving recommendations
from the compensation committee or the executive officers of the Bank that
employs the Participant. Subject to the provisions of the Plan, the Board may
impose such terms and conditions as it deems advisable on the grant of an
Option. Any of the foregoing to the contrary notwithstanding, the following
limitations shall apply to the grant of any Incentive Stock Option:
(a) The aggregate fair market value, determined at the time the
Incentive Stock Option is granted, of the stock exercised by a Participant for
the first time during any calendar year shall not exceed $100,000.
(b) Any Option granted to a Participant, who immediately before such
grant owns stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock either of the Bank or any Subsidiary shall
not be an Incentive Stock Option, unless (i) at the time such Option is granted
the Option price per share is not less than one hundred ten percent (110%) of
the optioned stock's then fair market value; and (ii) the Option shall not be
exercisable after the expiration of five (5) years from the date of the grant of
the Option.
5. Terms of Options
The terms of each Option granted under the Plan shall be as determined
from time to time by the Board and shall be set forth in an Incentive Stock
Option Agreement in a form attached hereto as Exhibit "A" and approved by the
Board; provided, however, the terms of such agreement shall not exceed the
following limitations:
(a) Subject to paragraph (b) of Section 4 with regard to 10% owners,
the Option price per share shall not be less than one hundred percent (100%) of
the fair market value of the optioned stock at the time the Option is granted.
(b) Subject to paragraph (e) of this Section, the Option shall be
exercisable in whole or in part from time to time during the period beginning on
date of grant of the Option, and ending no later than the expiration of ten (10)
years from the date of grant of the Option, unless an earlier expiration date
shall be stated in the Option or the Option shall cease to be exercisable
pursuant to paragraph (d) of this Section 5.
(c) Payment in full of the Option price for shares purchased pursuant
to an Option shall be made upon exercise of the Option (in whole or in part) and
shall be made in cash.
(d) If a Participant's employment with the Bank terminates, the
following rules shall apply:
(i) If a Participant's employment with the Bank terminates other
than by reason of the Participant's death, disability or retirement after
reaching age 65, the Participant's Option shall thereupon expire and cease to be
exercisable upon the expiration of the earlier of ten (10) years from the date
of grant of the Option, or three (3) months from the date of such termination.
(ii) If the Participant's employment with the Bank terminates by
reason of his death, the Participant's Option shall terminate and cease to be
exercisable upon the expiration of the earlier of ten (10) years from the date
of grant of the Option, or one (1) year from the date of death. Such Option may
be exercised by the duly appointed personal representative of the deceased
Participant's estate.
2
<PAGE> 3
(iii) If a Participant's employment with the Bank terminates by
reason of Disability, the Participant's Option shall terminate and cease to be
exercisable upon the expiration of the earlier of ten (10) years from the date
of grant of the Option, or one (1) year from the date of such termination in the
case of disability.
(iv) If a Participant's employment with the Bank terminates by
reason of retirement after reaching age 65 (other than for Disability), the
Participant's Option shall expire and cease to be exercisable upon the
expiration of the earlier of ten (10) years from the date of grant of the
Option, or three (3) months from the date of such termination.
(v) Notwithstanding anything contained herein to the contrary, if a
Participant's employment with the Bank is terminated for cause (fraud,
embezzlement, failure to perform job responsibilities, etc.) as determined by
the Board, in the Board's sole discretion, or if a Participant competes with the
Bank, any Option granted to that Participant shall be immediately revoked and
terminated and the Participant shall have no further rights under this Plan. For
purposes of this Plan, competition with the Bank shall include direct or
indirect ownership of a financial services business (specifically excluding,
however, any ownership of 5% or less of the outstanding shares of such financial
services business) or employment within six months of termination with a
financial services business located within a 100 mile radius of any office
operated by the Bank or any of its subsidiaries.
(e) Notwithstanding any other provision herein, the options granted
hereunder may vest and be exercisable on a cumulative basis as may be set forth
in the Incentive Stock Option Agreement under a vesting schedule determined by
the Board in the Board's sole discretion.
In the event that the Bank has a change of control in which more
than 50% of the stock of the Bank is acquired or the Bank sells substantially
all of the assets of the Bank, or the Bank which employs the Participant is
merged or consolidated with another Bank not owned over 50% by the shareholders
who own the Bank immediately before the merger, then immediately prior to any
such transaction, the vesting schedule provided for above shall not be
applicable and the holder of any options granted hereunder shall be 100% vested
in such options, subject to the other terms and conditions herein. In the event
the Bank forms a bank holding company ("BHC") and that BHC has a change in
control in which more than 50% of the stock of the BHC is acquired or the BHC is
merged or consolidated with another corporation in an acquisition transaction,
or the BHC sells substantially all of its assets, then immediately prior to any
such transaction, the vesting schedule provided for above shall not be
applicable and the holder of any options granted hereunder shall be 100% vested
in such options, subject to he other terms and conditions herein.
In the event a bank holding company is formed to own the stock of
the Bank, the options granted hereunder shall be converted to options to
purchase BHC stock as provided in Section 9; however, there shall be no increase
in any vesting schedule provided for herein.
6. Exercise of Options
The holder of an Option who decides to exercise the Option in whole or
in part shall give notice to the Secretary of the Bank of such exercise in
writing on a form approved by the Board. Any exercise shall be effective as of
the date specified in the notice of exercise, but not earlier than the date the
notice of exercise and payment in full of the Option price is actually received
and in the hands of the Secretary of the Bank.
7. Limitations and Conditions
(a) The total number of shares of Common Stock that may be optioned as
Incentive Stock Options under the Plan is Fifty-seven Thousand (57,000) shares
of Mechanics and Farmers Bank's $5.00 par value common stock. Such total number
of shares may consist, in whole or in part, of unissued shares or reacquired
shares. The foregoing numbers of shares may be increased or decreased by the
events set forth in Section 9.
(b) There shall be no limitations on the amount of shares of Common
Stock that may be optioned as Incentive Stock Options under the Plan as set
forth in Section 7(a) above, on an annual basis. The amount of shares to be
optioned, within the total limitation set forth in Section 7(a) above, shall be
determined solely at the discretion of the Board as set forth herein. If there
is a proposed acquisition, merger, change of control or other takeover of the
Bank
3
<PAGE> 4
that employs the Participant as defined in Section 5(e) of this Plan, the Board,
at its sole discretion, may issue any options authorized under this Plan but
unissued prior to such time.
(c) Any shares that have been optioned that cease to be subject to an
Option (other than by reason of exercise of the Option) shall again be available
for option and shall not be considered as having been theretofore optioned.
(d) No Option shall be granted under the Plan after May 20, 2009, (10
years after the effective date), and the Plan shall terminate on such date, but
Options theretofore granted may extend beyond that date in accordance with the
Plan. At the time an Option is granted or amended or the terms or conditions of
an Option are changed, the Board may provide for limitations or conditions on
the exercisability of the Option.
(e) An Option shall not be transferable by the Participant otherwise
than by Will or by the laws of descent and distribution. During the lifetime of
the Participant, an Option shall only be exercisable by the Participant.
(f) No person shall have any rights of a stockholder as to shares under
option until, after proper exercise of the Option, such shares shall have been
recorded on the Bank's official stockholder records as having been issued or
transferred.
(g) The Bank shall not be obligated to deliver any shares until there
has been compliance with such laws or regulations as the Bank may deem
applicable. The Bank shall use its best efforts to effect such compliance. In
addition to the foregoing and not by way of limitation, the Bank may require
that the person exercising the Option represent and warrant at the time of such
exercise that any shares acquired by exercise are being acquired only for
investment and without any present intention to sell or distribute such shares,
if, in the opinion of counsel for the Bank, such a representation is required
under the Securities Act of 1933 or any other applicable law, regulation or rule
of any governmental agency.
8. Transfers and Leaves of Absence
For the purposes of the Plan: (a) a transfer of a Participant's
employment without an intervening period from the Bank to a subsidiary or vice
versa, or from one subsidiary to another or from parent to subsidiary or vice
versa, shall not be deemed a termination of employment, and (b) a Key Employee
who is granted in writing a leave of absence of no more than ninety (90) days,
or if more than ninety (90) days, which guarantees his employment with the Bank
at the end of such leave, shall be deemed to have remained in the employ of the
Bank during such leave of absence.
9. Stock Adjustments
In the event of any merger, consolidation, stock dividend, split-up,
combination or exchange of shares or recapitalization or change in
capitalization, the total number of shares set forth in paragraph (a) of Section
7 shall be proportionately and appropriately adjusted. In any such case, the
number and kind of shares that are subject to any Option (including any Option
outstanding after termination of employment) and the Option price per share
shall be proportionately and appropriately adjusted without any change in the
aggregate Option price to be paid therefor upon the exercise of the Option. The
determination by the Board as to the terms of any of the foregoing adjustments
shall be conclusive and binding.
10. Amendment and Termination
(a) The Board shall have the power to amend the Plan, including the
power to change the amount of the aggregate fair market value of the shares for
which any Key Employee may be granted Incentive Stock Options under Section 4 to
the extent provided in Code Section 422A. It shall not, however, except as
otherwise provided in the Plan, increase the maximum number of shares authorized
for the Plan, nor change the class of eligible employees to other than Key
Employees, nor reduce the basis upon which the minimum Option price is
determined, nor extend the period within which Options under the Plan may be
granted, nor provide for an Option that is exercisable during a period of more
than ten (10) years from the date it is granted. It shall have no power (without
the consent of the person or
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persons at the time entitled to exercise the Option) to change the terms and
conditions of any Option after the Option is granted in a manner that would
adversely affect the rights of such persons except to the extent, if any,
provided in the Option.
(b) The Board may suspend or terminate the Plan at any time. No such
suspension or termination shall affect Options then in effect.
11. No Employment Right
The grant of an Option hereunder shall not constitute an agreement or
understanding, expressed or implied, on the part of the Bank, any Parent or any
Subsidiary, to employ the Participant for any specified period and shall not
confer upon any employee the right to continue in the employment of the Bank,
any Parent or any Subsidiary, nor affect any right which the Bank, a Parent or
Subsidiary may have to terminate the employment of such employee.
12. Effective Date
The Plan is adopted on and shall be effective as of May 20, 1999 (the
date such Plan shall have been approved by the Bank's shareholders).
/s/ Fohliette W. Becote
-------------------------------------
Secretary
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ADDENDUM
TO
MECHANICS AND FARMERS BANK
INCENTIVE STOCK OPTION PLAN OF 1999
This Addendum to the Mechanics and Farmers Incentive Stock Option Plan of 1999
(the "Plan") has been created for the purpose of recognizing that the Plan has
been assumed by the newly formed holding company of Mechanics and Farmers Bank,
M&F Bancorp, Inc. Participants in the Plan who were to receive options
representing shares of common stock, $5.00 par value, of Mechanics and Farmers
Bank will now be eligible to receive the same number of shares of common stock,
no par value, of M&F Bancorp, Inc.
From this time forward, the Plan shall be known as the "M&F Bancorp, Inc. and
Mechanics and Farmers Bank Incentive Stock Option Plan of 1999".
ATTESTED:
/s/ Fohliette W. Becote /s/ Julia W. Taylor
- ---------------------------------- ------------------------------------
Secretary Julia W. Taylor,
Chairman, President and CEO
