UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the
Registrant
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Filed by a
Party other than the Registrant
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Check the
appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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M & F Bancorp, Inc.
(Name of registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which the transaction applies:
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(2)
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Aggregate number of securities to which the transaction applies:
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(3)
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Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4)
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Proposed maximum aggregate value of the transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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M&F BANCORP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 8, 2010
TO OUR STOCKHOLDERS:
You are invited to attend the 2010 annual meeting of stockholders (the Annual Meeting) of M&F Bancorp, Inc. (the
Corporation) to be held at its principal executive offices located at the M&F Bank Corporate Center Auditorium, 2634 Durham Chapel Hill Boulevard, Durham, North Carolina 27707 on Tuesday, June 8, 2010 at 6:00 p.m. local time. At
the Annual Meeting, you will be asked to:
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1.
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Elect eight people to serve on the Board of Directors of the Corporation until the 2011 annual meeting of stockholders or until their successors are elected and
qualified;
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2.
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Consider and vote upon a non-binding advisory resolution to approve the compensation of our named executive officers;
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3.
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Ratify the appointment of Grant Thornton, LLP as the independent registered public accounting firm for the Corporation for the fiscal year ending December 31,
2010; and
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4.
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Consider any other business that may properly be brought before the Annual Meeting or any adjournment thereof. The Board of Directors does not know of any other
business to be considered at the Annual Meeting.
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Stockholders of record at the close of business on April 1, 2010 are
entitled to vote at the Annual Meeting or any adjournment thereof. In the event there are not sufficient shares present in person or by proxy to constitute a quorum or to approve or ratify any proposal at the time of the Annual Meeting, the Annual
Meeting may be adjourned in order to permit further solicitation of proxies by the Corporation.
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BY ORDER OF THE BOARD OF DIRECTORS
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Kim D. Saunders
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President and Chief Executive Officer
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Durham, North
Carolina
April 30, 2010
You may vote your shares at the Annual Meeting via the internet, by telephone, by mail or in person. A form of proxy is enclosed to enable you to vote
your shares by mail. Alternatively, instructions for electronic and telephone voting are provided on the form of proxy. You are urged, regardless of the number of shares you hold, to register your proxy promptly by following the instructions on the
enclosed proxy card. A return envelope, which requires no postage if mailed in the United States, is enclosed for your convenience if you choose to vote by mail.
M&F BANCORP, INC.
2634 Durham Chapel Hill Blvd.
Durham, North Carolina 27707
(919) 687-7800
PROXY
STATEMENT
This Proxy Statement is being furnished to stockholders of M&F Bancorp, Inc. (the Corporation) in connection with the solicitation by
the Board of Directors of the Corporation (the Board of Directors or the Board) of proxies to be used at the 2010 annual meeting of stockholders (the Annual Meeting) and at any adjournments of the Annual Meeting.
This Proxy Statement and the enclosed proxy are being mailed to stockholders on or about April 30, 2010.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING TO BE HELD ON JUNE 8, 2010.
The Notice, Proxy Statement and the Annual Report to Stockholders for the year ended
December 31, 2009 are also available at:
http://www.snl.com/Irweblinkx/docs.aspx?iid=4050540.
You may also access the above off-site website by going to
www.mfbonline.com and clicking on the links.
INFORMATION ABOUT THE ANNUAL MEETING
When and Where is the Annual Meeting?
The Annual Meeting will be held at 6:00 p.m. local time on June 8, 2010 at the M&F Bank Corporate Center Auditorium, 2634 Durham Chapel Hill
Boulevard, Durham, North Carolina 27707.
What Matters Will be Voted on at the Annual Meeting?
At the Annual Meeting, you will be asked to:
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Elect eight people to serve on the Board of Directors until the annual meeting of stockholders in 2011 or until their successors are elected and
qualified;
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Consider and vote upon a non-binding advisory resolution to approve the compensation of our named executive officers (the Say-on-Pay
Proposal);
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Ratify the appointment of Grant Thornton, LLP (Grant Thornton) as the Corporations independent registered public accounting firm for
the fiscal year ending December 31, 2010; and
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Consider and vote upon any other business that may properly come before the Annual Meeting or any adjournment thereof.
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Who is Entitled to Vote?
Only
stockholders of record at the close of business on the record date, April 1, 2010 are entitled to receive notice of and to vote at the Annual Meeting. On April 1, 2010 there were 2,031,337 shares of the Corporations common stock
outstanding and there were approximately 990 stockholders of record, not including stockholders whose stock is held in nominee or street name. Each share of the Corporations common stock is entitled to one vote on each matter
considered at the Annual Meeting, except that stockholders can cumulate their votes in the election of directors.
What Constitutes a Quorum?
The presence at the Annual Meeting, in person or by proxy, of a majority of the outstanding shares eligible to vote at the Annual Meeting is required for
a quorum. Abstentions, broker non-votes and votes withheld from any director nominee count as shares present at the Annual Meeting for purposes of determining a quorum.
What Vote is Required to Approve Each Proposal?
Election of Directors.
The eight nominees for election as directors who receive the greatest number of votes will be elected directors.
Votes may be cast in favor of some or all of the nominees or withheld as to some or all of the nominees. Stockholders can cumulate their votes in the election of directors.
Say-on-Pay Proposal.
The Say-on-Pay Proposal is advisory only. Approval of this proposal will require the affirmative vote of the holders
of a majority of the shares of common stock voted on the proposal. The Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.
Ratification of Independent Registered Public Accounting Firm.
The Audit Committee of the Board of Directors has appointed Grant Thornton
to act as the independent registered public accounting firm for the Corporation for the year ending December 31, 2010. Ratification of this proposal will require the affirmative vote of the holders of a majority of the shares of common stock
voted on the proposal.
Other Matters.
Any other matters presented for consideration at the Annual Meeting or any adjournment
thereof will require the affirmative vote of the holders of a majority of the shares of common stock voted on the matter. Management currently knows of no other matters to be presented at the Annual Meeting.
Abstentions and Broker Non-Votes.
Abstentions and broker non-votes are not counted as votes cast. Accordingly,
abstentions and broker non-votes will have no effect on the proposals. A broker non-vote occurs when a nominee or broker holding shares for a beneficial owner does not vote on a particular proposal because the nominee or
broker has not received instructions from the beneficial owner and does not have discretionary voting power for that particular item. Please note that whereas previously the uncontested election of directors was deemed a routine matter
for which a nominee or broker could exercise discretionary voting power, the uncontested election of directors is now deemed non-routine, and as such, nominees or brokers may not exercise discretionary voting power.
You should
therefore provide your nominee or broker with instructions as to how to vote your shares.
How Do I Vote?
Stockholders are requested to submit their proxy by following the instructions on the enclosed proxy card. Stockholders may vote in person, by mail via
the enclosed proxy, by telephone or via the internet. Any stockholder may vote for or withhold his or her vote as to some or all of the nominees in the election of directors; and may vote for, against or abstain with respect to any other matter to
come before the Annual Meeting. If the proxy is properly completed and voted via the internet, by telephone or in writing, and not revoked, it will be voted in accordance with the instructions given.
If the proxy is returned with no instructions
given, the proxy will be voted
FOR
all the proposals described in this Proxy Statement. If instructions are given for some but not all proposals, the instructions that are given will be followed and the proxy will be voted
FOR
the
proposals on which no instructions are given.
If any other matters are properly presented at the Annual Meeting for consideration, the persons named in the proxy will have discretion to vote on those matters according to their best judgment.
Street name stockholders who wish to vote in person at the Annual Meeting will need to obtain a proxy form from the institution that holds their shares.
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Can I Change My Vote After I Submit My Proxy?
Yes. Even after you have submitted your proxy, your proxy can be withdrawn at any time before it is voted by:
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delivering written notice to the Corporate Secretary, M&F Bancorp, Inc., 2634 Durham Chapel Hill Boulevard, Durham, North Carolina 27707, before
the vote at the Annual Meeting,
or
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completing and returning a later dated proxy,
or
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re-voting via telephone before the cut-of time indicated on the proxy card,
or
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re-voting via the internet before the cut-of time indicated on the proxy card,
or
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attending the Annual Meeting and voting in person.
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Who Pays the Cost of Soliciting Proxies?
The Corporation will pay the cost of preparing, printing and mailing materials in connection with this solicitation of proxies. In addition to
solicitation by mail, our officers, directors (including those nominees for election as a director) and employees, as well as those of Mechanics and Farmers Bank (the Bank), may make solicitations personally, by telephone or otherwise
without additional compensation for doing so. While the Corporation has no current contractual relationship with a proxy solicitation firm, it reserves the right to engage a proxy solicitation firm to assist in the solicitation of proxies for the
Annual Meeting. The Corporation will, upon request, reimburse brokerage firms, banks and others for their reasonable out-of-pocket expenses in forwarding proxy materials to beneficial owners of stock or otherwise in connection with this solicitation
of proxies.
STOCK OWNERSHIP
Who are the Owners of the Greatest Percentage of the Corporations Common Stock?
The following table shows all persons or groups, as defined in the Securities Exchange Act of 1934, as amended (the Exchange
Act), who are known to the Corporation to beneficially own more than 5% of the Corporations common stock as of April 1, 2010:
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Name and Address of
Beneficial Owner
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Amount and Nature of
Beneficial
Ownership
1
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Percent of Outstanding
Common
Stock
2
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Dr. Vivian M.
Sansom
3
1521 Cross Link Road
Raleigh, NC 27610
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180,798
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8.9
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%
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Mrs. Selena W. Wheeler
2029 Heritage Pines Drive
Cary, NC 27519
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163,234
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8.0
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%
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North Carolina Mutual Life Insurance
Company (NC Mutual)
411 West Chapel Hill Street
Durham, NC 27701
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186,040
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9.2
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%
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Ms. Julia W.
Taylor
4
2029 Heritage Pines Drive
Cary, NC 27519
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211,712
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10.4
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%
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1
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Unless otherwise noted, all shares are owned directly of record by the named persons, their spouses and minor children, or by other entities controlled
by the named persons.
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Based upon a total of 2,031,337 shares of common stock outstanding as of April 1, 2010.
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3
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Pursuant to a Power of Attorney, Dr. Sansoms sons, Joseph M. Sansom and James E. Sansom, each have voting and investment powers over
Dr. Sansoms shares of common stock. Excluding Dr. Sansoms shares, as of April 1, 2010, Joseph M. Sansom and James M. Sansom each beneficially owned 1,848 shares.
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Includes 163,234 shares of common stock owned by Mrs. Wheeler, for whom Ms. Taylor serves as attorney-in-fact pursuant to a Power of Attorney
and, as such, has certain voting and investment powers over these shares. Excluding Mrs. Wheelers shares, Ms. Taylor beneficially owns 48,478 shares of common stock or approximately 2.4% of the outstanding common stock.
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How Much Stock Do Directors, Nominees and Executive Officers of the Corporation and the Bank Own?
Set forth below is certain information, as of April 1, 2010 regarding shares of common stock owned beneficially by the members of the Board, nominees
to the Board, members of the board of directors of the Bank (the Bank Board), certain executive officers of the Corporation and the Bank, and the directors, nominees and executive officers as a group.
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Name and Address of
Beneficial Owner
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Amount and Nature of
Beneficial
Ownership
1
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Percent of Outstanding
Common
Stock
2
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William V. Bell
Director of the Bank
1003 Huntsman Drive
Durham, NC 27713
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1,500
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*
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George W. Brooks
Director of the Bank
1301 Alamance Church Rd.,
Greensboro, NC 27406
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500
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*
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Willie T. Closs, Jr.
Director of the Corporation and the Bank
411 West Chapel Hill Street
Durham, NC 27701
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1,000
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*
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Lyn Hittle
Senior Vice President and Chief Financial
Officer of the Corporation and the Bank
2634 Durham Chapel Hill Boulevard, Suite 101
Durham, NC 27707
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0
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*
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Michael L. Lawrence
Director of the Corporation and the Bank
2634 Durham Chapel Hill Boulevard, Suite 206
Durham, NC 27707
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1,040
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*
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Cedric L. Russell
Director of the Bank
822 Carl Russell Avenue
Winston-Salem, NC 27101
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704
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Joseph M.
Sansom
3
Director of the Corporation and the Bank
2701 Little John Road
Raleigh, NC 27610
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182,646
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9.0
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%
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4
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Name and Address of
Beneficial Owner
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Amount and Nature of
Beneficial
Ownership
1
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Percent of Outstanding
Common
Stock
2
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Kim D. Saunders
President, Chief Executive Officer and Director
of the Corporation and the Bank
2634 Durham Chapel Hill Boulevard, Suite 101
Durham, NC 27707
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2,486
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*
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Aaron L.
Spaulding
4
Director of the Corporation and the Bank
116
Legacy Lane
Durham, NC 27713
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33,784
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1.7
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%
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James H. Speed,
Jr.
5
Director of the Corporation and the Bank
411
West Chapel Hill Road
Durham, NC 27701
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1,000
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*
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Lenny F. Springs
Director of
the Bank
1914 JN Pease Place, Suite 132
Charlotte, NC 28262
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500
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*
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James A. Stewart
Director of
the Corporation and the Bank
3604 Shannon Road, Suite 103
Durham NC 27707
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33,347
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1.6
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%
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Connie J.
White
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Nominee Director of the Corporation
Director of
the Bank
P. O. Box 555
Durham, NC
27702
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2,224
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*
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Directors, Nominees and Executive
Officers as a group (13 people)
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260,731
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12.8
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%
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*
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Represents less than 1% of the Corporations outstanding common stock.
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Unless otherwise noted, all shares of common stock are owned directly of record by the named individuals, their spouses and minor children, or by other
entities controlled by the named individuals. None of the named individuals has pledged any shares of common stock as security.
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Based upon a total of 2,031,337 shares of common stock of the Corporation outstanding as of April 1, 2010.
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Includes 180,798 shares of common stock held by Mr. Sansoms mother, Dr. Vivian M. Sansom, and over which Mr. Sansom has power
of attorney to exercise voting and investment powers. Excluding Dr. Sansoms shares, Mr. Sansom beneficially owns 1,848 shares of common stock or less than 1% of the outstanding common stock.
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Includes 1,784 shares of common stock held by the Estate of Mr. Spauldings late mother, for whom Mr. Spaulding serves as Executor and,
as such, has certain voting and investment powers over these shares.
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Mr. Speed is President and Chief Executive Officer of NC Mutual, a significant stockholder. Mr. Speed is not deemed to beneficially own NC
Mutuals stock.
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Includes 24 shares of common stock held jointly with her brother.
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PROPOSAL 1: ELECTION OF DIRECTORS
General
The Corporations Articles
of Incorporation authorize the Board to fix the number of directors from time to time within a range of no fewer than three or more than nine people. The Board has fixed the number of directors for the coming year at eight.
Directors are nominated and elected for one year terms. The individuals elected as directors at this Annual Meeting will hold office until the 2011
annual meeting of stockholders or until their successors are elected and qualified.
Each nominee for director has indicated that he or she is
able and willing to serve on the Board. If any nominee becomes unable to serve, the common stock represented by all properly completed proxies will be voted for the election of a substitute nominee recommended by the Board. At this time, the Board
knows of no reason why any nominee might be unavailable to serve or why a substitute nominee would be required.
Nominees for Election at
the Annual Meeting
Each of the nominees for director bring special skills and attributes to the Board through a variety of levels of
education, business experience, director experience, banking experience, philanthropic interests, and community involvement. Information about the nominees for election at the Annual Meeting is presented below, along with a brief discussion of the
specific experience, qualifications, attributes or skills that led the Corporate Governance and Nominating Committee to recommend and our Board to nominate these individuals for election at the Annual Meeting:
Willie T. Closs, Jr.
, age 54, has served as a director of the Corporation since 2002, and of the Bank since
2005. He has served on a variety of committees of both the Corporation and the Bank, and presently serves as Chairman of the Audit Committee. Mr. Closs is a certified public accountant, with over 20 years experience in corporate accounting. He
is retired from NC Mutual but continues to serve NC Mutual on a consulting basis. Previously, Mr. Closs was a director, Executive Vice President and Controller of NC Mutual, and prior to that, was an auditor with both Deloitte & Touche
and Arthur Andersen, CPAs. He is a graduate of the North Carolina Bank Directors College (Directors College) and has attended courses at the North Carolina Commissioner of Banks Advanced Directors College
(Advanced Directors College). Mr. Closs has attended the North Carolina Bankers Association Bank Directors Assembly (Directors Assembly). He earned a Bachelor of Arts degree in Accounting from Morehouse
College and a Masters in Business Administration from Duke University. Mr. Closs has a total of 12 years of banking experience.
Michael L. Lawrence
, age 39, has served as a director of the Corporation since 2006, and of the Bank since
2005. He has served on a variety of committees of both the Corporation and the Bank, and presently serves as Vice-Chairman of the Audit Committee, and Chairman of the Information Systems Committee. Mr. Lawrence is a certified public accountant,
with over 17 years experience in accounting. Since 2003, he has been the Chief Financial Officer of NCM Capital Management Group, Inc. Between 1993 and 2003, Mr. Lawrence was an auditor with Deloitte & Touche serving the financial
services industry. He is a graduate of the Directors College, and has attended courses at the Advanced Directors College. He earned a Bachelor of Arts degree in Accounting from North Carolina State University. Mr. Lawrence has
served on the Self-Help Credit Union Board since 2005. Mr. Lawrence has a total of 17 years of banking experience.
Joseph M. Sansom
, age 66, has served as a director of the Corporation since 1999, and of the Bank since December, 2008, and
between 1987 and June, 2008. He has served on a variety of committees of both the Corporation and the Bank. Mr. Sansom is Managing Partner of Sansom Associates, LLC, a real estate holding company, and is Partner/Owner of the Southgate Plaza
Shopping Center, Raleigh, NC. Between 1996 and 2002, Mr. Sansom was Deputy State Treasurer/Assistant to NC State Treasurer. Between 1965 and 1995 he was a financial analyst at IBM Corporation. He is a graduate of the Directors College and
has attended courses at the Advanced Directors College. He earned a Bachelor of Arts degree in Business Administration/ Economics from Morehouse College.
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Mr. Sansom is the Membership Chairman of the Raleigh-Wake Citizens Association, and a member of various
boards, committees and other community organizations including the Wake County Economic Development Commission, the Southeast Raleigh Assembly, Shaw University UNCF Steering Committee, the Board of Advisors of the Greater Raleigh Chamber of
Commerce, the Wake County Public School Building Program Committee, the Wake County Salvation Army Advisory Board, and the Board of the Downtown Raleigh Alliance. He is also a Volunteer Consultant with the Raleigh Business and Technology Center, and
a Senior Project Advisor with Passage Home, Inc. Mr. Sansom has a total of 30 years of banking experience.
Kim D.
Saunders
, age 49, has served as a director of the Corporation since 2009, and of the Bank since 2007. She has served on a variety of committees of both the Corporation and the Bank, as both a full member and in an ex-officio capacity.
Ms. Saunders has served as President and Chief Executive Officer of the Corporation and the Bank since 2007. Between 2003 and 2007, Ms. Saunders served as the President and Chief Executive Officer of Consolidated Bank and Trust Company, in
Richmond, Virginia. Between 1998 and 2003, Ms. Saunders served as Executive Vice President and Chief Lending Officer of City First Bank of D.C., in Washington, D.C. She is a graduate of the Directors College and has attended courses at
the Advanced Directors College, and has also attended the Directors Assembly. She earned a Bachelor of Science in Economics from the Wharton School of Finance and Commerce at the University of Pennsylvania. In 2007, Ms. Saunders was
awarded an Honorary Doctorate degree in Humane Letters from Shaw University.
Ms. Saunders is a member of the Board of Directors and
Executive Committee of the Greater Durham Chamber of Commerce, and is a member of the Board of Directors of the United Way of the Greater Triangle and NC Museum of Art Foundation. She was appointed by Virginia (VA) Governor Kaine to the
Virginia Port Authority Board; and by VA Governor Warner to the Virginia Fair Housing Board. Ms. Saunders has also served on the boards of a number of other organizations, including Saint Catherines School, Richmond, VA, the Greater
Richmond Chamber of Commerce, the National Association of Urban Bankers, the VA Bio-Technology Research Park Corporation and the Hampton University Business School Advisory Board, to name but a few. Ms. Saunders has a total of 27 years of
banking experience.
Aaron L. Spaulding
, age 66, has served as a director of the Corporation since 1999, and of
the Bank since 1994. He is Vice-Chairman of the Board. He has served on a variety of committees of both the Corporation and the Bank, and presently serves as Chairman of the Corporate Governance and Nominating Committee, Chairman of the Asset
Liability Committee, and Vice-Chairman of the Strategic Issues and Planning Committee. Mr. Spaulding is Chairman, President and Chief Executive Officer of The Galaxy Travel Group, Inc. d/b/a Prestige Travel/American Express. Mr. Spaulding
has extensive financial expertise, having held the position of Principal-in-Charge of Investment Banking at the Wall Street firm of WR Lazard & Company (NYC). Previously, he held the position of Vice President and Manager, Reinvestment
Unit/Finance Department and Vice President of the Municipal Department at Salomon Brothers, Inc. (NYC). During his 13 years on Wall Street he was involved in the structuring of various transactions for the financial and mortgage banking industries,
as well as various state and local governmental agencies.
Earlier in his professional career, Mr. Spaulding served in the Administration
of President Gerald R. Ford as Associate Director of the Presidential Personnel Office, and as Comptroller of the John F. Kennedy Center for the Performing Arts, Washington, DC. He served as Director of Business Development and Consultant for
B&C Associates in its Washington, DC office, and as Executive Director of the Board of Directors Services division of the Boyden International Group, Inc., management consultants. Additionally, he served as an Economic Development Analyst for
Rev. Leon H Sullivans Progress Management and Economic Development Project in Philadelphia, PA. In 1969, he was commissioned as a U.S. Naval Reserve Officer, serving on active duty until 1972. While on active duty he served as a Supply Corp
Officer, assigned to the Naval Command Systems Support Activity in Washington, DC, and served as a White House Military Social Aide.
He is a
graduate of the Directors College and has attended courses at the Advanced Directors College. He earned a Bachelor of Science degree from North Carolina Central University, and a Masters in Business Administration degree from the Wharton
School of Finance and Commerce at the University of Pennsylvania.
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He recently served on the Board of Advisors for North Carolina Central University School of Law. Previously
he served as a member of the North Carolina Central University Foundation Board, the North Carolina Central University Hospitality Industry Advisory Board and the Fayetteville State University Board of Trustees. Mr. Spaulding has also served as
a Director of Utendahl Capital Partners (NYC) and as a Member of the North Carolina Savings Institutions Commission Board (Raleigh, NC). Mr. Spaulding has a total of 32 years of banking experience.
James H. Speed, Jr.
, age 56, has served as a director of the Corporation and the Bank since 2009. He has served on a
variety of committees of both the Corporation and the Bank, and presently serves as Chairman of the Compensation Committee. Mr. Speed is a certified public accountant, with over 29 years accounting experience. Mr. Speed has been President
and Chief Executive Officer of NC Mutual since 2004, and before that served as Chief Financial Officer of NC Mutual. Prior to joining NC Mutual, Mr. Speed was employed by Hardees Food Systems, Inc. as Senior Vice President, Chief
Financial Officer and Treasurer between 1997 and 2000, as Senior Vice President and Controller between 1995 and 1997, and as Vice President and Controller between 1991 and 1994. Prior to joining Hardees, Mr. Speed spent 12 years with
Deloitte & Touche, where he was a partner-candidate at his departure in 1991.
He is a graduate of the Directors College. He
earned a Bachelor of Science degree in Accounting from North Carolina Central University, and a Masters in Business Administration from Atlanta University. He is a graduate of The IMASCO Limited Senior Management Development Program at McGill
University, Quebec Canada. He serves on the boards of the Federal Reserve Bank of Richmond Charlotte Branch, NC Mutual, UNC Healthcare System Inc., Nottingham Investment Trust II, Hillman Fund Capital Management, Tilson Investment Trust, New
Providence Investment Trust and Starboard Investment Trust. In addition, he serves as the Chairman of the United Way of the Greater Triangle. Mr. Speed also serves on the boards of the North Carolina Community Initiative, Central Children Home
of North Carolina and the Board of Visitors North Carolina Central University School of Business. Mr. Speed has a total of 16 years of banking experience.
James A. Stewart
, age 61, has served as a director of the Corporation since 2008, and of the Bank since 2002.
He is Chairman of the Board and the Bank Board. He has served on a variety of committees of both the Corporation and the Bank, and presently serves as Chairman of the Strategic Issues and Planning Committee, the Executive Committee and the
Nominating Committee. Mr. Stewart is a commercial real estate broker/consultant, and is associated with the following firms: Stewart Investment Properties, Inc. (Principal); MAJAJA, Inc. and Clearview Housing Corporation (President); Clearview
Commercial Properties, LLC and Camellia Associates, LLC (Member/Manager); and MAJAJA Siler City, LLC (Manager). He previously was a real estate broker with Anthony & Company. He is a graduate of the Directors College, and has attended
courses at the Advanced Directors College. He earned a Bachelor of Science degree in Mechanical Engineering and a Masters in Business Administration, both from NC State University. Mr. Stewart serves on the boards of Triangle Community
Foundation, Majaja Inc., and Clearview Housing Corporation. Mr. Stewart has a total of 8 years of banking experience.
Connie J. White
, age 57, has served as a director of the Bank since 2002. She is Vice Chair of the Bank Board and has
served on a variety of committees of the Bank, and presently serves as Chair of the Directors Loan Committee. Since 2002, Ms. White has been an independent management consultant. Prior to that, she spent over 25 years in positions with Price
Waterhouse, Burroughs Corporation and US WEST and its subsidiaries. She held positions in Pension Investment and Cash Management, Strategic Planning and Marketing. She was Vice President of Marketing Operations for Genrobot Corp, before becoming
Product Director for Small Business Telephony at AT&T Broadband in 2000. Her career experiences have included positions at the Corporate, Division and Operating Unit levels.
She is a graduate of the Directors College and has attended additional courses at the Advanced Directors College. She also has received the
Certificate of Education from the National Association of Corporate Directors. She earned a Bachelors of Science degree from Hampton University and a Masters in Business Administration from the University of Wisconsin-Madison. Ms. White serves
on the boards of the Durham County ABC Board and the NC Legislative Black Caucus Foundation. Ms. White has a total of 8 years of banking experience.
8
Independence
The Board has determined that each of the above named nominee directors, except for Ms. Saunders and Mr. Sansom, are independent, as
determined pursuant to the Nasdaq listing standards. Mr. Sansom was considered to be independent until the appointment on February 4, 2008 of his brother, James E. Sansom, as the Banks Senior Vice-President and Chief Lending Officer.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR
THE ELECTION OF THESE EIGHT NOMINEES AS DIRECTORS OF THE CORPORATION FOR
THE COMING YEAR.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
How Often Did the Board of Directors Meet During 2009?
During the year ended December 31, 2009 the Board of Directors held 10 meetings. All of the current directors of the Corporation attended at least
75% of the aggregate number of meetings of the Board of Directors and committees of the Board on which they served during the year.
How
Often Did the Bank Board Meet During 2009?
During the year ended December 31, 2009 the Bank Board held 17 meetings. All of the
current directors of the Bank attended at least 75% of the aggregate number of meetings of the Bank Board and Bank Board committees on which they served during the year.
What is the Corporations Policy for Director Attendance at Annual Meetings?
Although it is customary for all members of the Board to attend, the Corporation has no formal policy in place with regard to Board members
attendance at its annual meetings of stockholders. All Board members attended the Corporations 2009 annual meeting of stockholders, which was held on June 9, 2009.
How Can a Stockholder Communicate with the Board or its Members?
The Corporation does not have a formal procedure for stockholder communication with the Board. In general, the Board members and executive officers are
easily accessible by telephone, postal mail or electronic mail. Any matter intended for the Board, or for any individual member or members of the Board, can be directed to Kim D. Saunders, the Corporations President and Chief Executive
Officer, or Valerie M. Quiett, the Corporations Secretary at the following address with a request to forward the same to the intended recipient: M&F Bancorp, Inc., 2634 Durham Chapel Hill Boulevard, Durham, North Carolina 27707.
Alternatively, stockholders may direct correspondence to the Board, or any of its members, care of the Corporation at the above address. In addition, stockholders may contact the Board via the Corporations website at www.mfbonline.com or by
telephone, using the Corporations toll-free number, 1-800-433-8283. The Board has delegated to the Secretary, or her designee, responsibility for determining in her discretion whether the communication is appropriate for director, committee or
Board consideration. According to the policy adopted by the Board, the Secretary is required to direct all communications regarding personal grievances, administrative matters, the conduct of the Banks ordinary business operations, billing
issues, product or service related inquires, order requests, and similar issues to the appropriate individual within the Corporation or the Bank. All other communications are to be submitted to the Board as a group, to the particular director or
committee to whom it is directed or, if appropriate, to the director or committee the Corporate Secretary believes to be the most appropriate recipient, as the case may be.
What Board Committees Have Been Established?
The Board has four standing committees, the Audit Committee, Strategic Issues and Planning Committee, Corporate Governance and Nominating Committee, and
the Compensation Committee.
9
Audit Committee.
The Audit Committee reviews the engagement of the Corporations
independent registered public accounting firm, reviews quarterly and annual consolidated financial statements, considers matters relating to accounting policy and internal controls, discusses significant accounting estimates with management and with
the independent registered public accounting firm, reviews whether non-audit services provided by the independent registered public accounting firm affect the accountants independence and reviews the scope of the annual audits in accordance
with its written charter.
The Audit Committee consists of directors Willie T. Closs, Jr., Chairman of the Committee, Michael L. Lawrence,
Vice-Chairman of the Committee, and Aaron L. Spaulding. There were 21 meetings of the Audit Committee during the year ended December 31, 2009.
The Board has determined that each member of the Audit Committee: (i) satisfies the Nasdaqs independence standards and the independence
standards established by the Securities and Exchange Commission (the SEC); (ii) is financially literate and has accounting or related financial management expertise, in each case as required by the Nasdaqs corporate governance
standards applicable to audit committee composition; and (iii) has the requisite attributes of an audit committee financial expert as defined by regulations promulgated by the SEC and that such attributes were acquired through
relevant education and/or experience.
The Committee has adopted a written charter which is reviewed annually, and was reviewed and restated
on February 18, 2009 and again on January 25, 2010. A copy of the charter is available on the Investor Relations Governance Documents page of the Corporations website at www.mfbonline.com.
Report of Audit Committee
.
The Audit Committee has reviewed and discussed the Corporations audited financial statements with
management and has discussed with Grant Thornton, the Corporations independent registered public accounting firm for the year ended December 31, 2009 the matters required to be discussed by the Statement on Auditing Standards No. 61,
as amended (AICPA, Professional Standards, Vol. 1 AU Section 380), as adopted by the Public Company Accounting Oversight Board (the PCAOB) in Rule 3200T. In addition, the Committee has received the written disclosures and the letter
from Grant Thornton required by applicable requirements of the PCAOB regarding the independent accountants communications with the Committee concerning independence, and has discussed with Grant Thornton the firms independence in
providing audit services to the Corporation. Based upon these reviews and discussions, the Committee recommended to the Board that the audited consolidated financial statements be included in the Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2009. The Committee also appointed Grant Thornton as the Corporations independent registered public accounting firm for the fiscal year ending December 31, 2010 and the Board concurred in the
appointment.
Members of the Audit Committee
Willie T. Closs, Jr., Chairman
Michael L. Lawrence, Vice-Chairman
Aaron L. Spaulding
Strategic Issues and Planning Committee
.
The Strategic Issues and Planning Committee assists in influencing the future direction of
the Corporation. The Committee recommends planning issues and policies to the Board, monitors the planning activities of the Corporations officers, and makes recommendations as appropriate, to the officers and directors of the Corporation.
The Strategic Issues and Planning Committee consists of the entire Board, and is chaired by James A. Stewart. There were two meetings of the
Committee during the year ended December 31, 2009.
Corporate Governance and Nominating Committee.
The Corporate Governance
and Nominating Committee establishes corporate governance principles, evaluates qualifications and candidates for positions on the Board, nominates new and replacement members for the Board and recommends Board committee composition. In addition,
the Committee facilitates an annual evaluation by Board members of the Board and individual director performance.
10
The Corporate Governance and Nominating Committee consists of directors Aaron L. Spaulding, Chairman of the
Committee, Willie T. Closs, Jr., and James A. Stewart. There were two meetings of this Committee during the year ended December 31, 2009.
The Committee has adopted a written charter which is reviewed annually, and was reviewed on January 22, 2009 and again on February 23, 2010.
Additionally, the Corporation has established Corporate Governance Policies which are reviewed annually, and were reviewed on January 22, 2009 and again on February 23, 2010. Copies of this charter and the Corporate Governance Policies are
available on the Investor Relations Governance Documents page of the Corporations website at www.mfbonline.com.
Process for Nominating Directors.
The Corporate Governance and Nominating Committee reviews the qualifications of, and approves and
recommends to the Board, those individuals to be nominated for positions on the Board and submitted to stockholders for election at each annual meeting of stockholders. The Committee identifies director nominees from various sources such as
officers, directors, and stockholders.
The Committee currently has no written policy with regard to the consideration of director candidates
recommended by stockholders, however, as a matter of practice the Committee will consider and evaluate a director candidate recommended by a stockholder in the same manner as a Committee-recommended nominee. Any stockholder who wishes to recommend a
candidate for consideration by the Committee should submit his or her recommendation in writing to the Corporations Secretary not later than December 17, 2010, and provide the Secretary with such information as the Committee may
reasonably require to properly consider the candidates suitability. The Committee assesses all director nominees taking into account several factors including, but not limited to, issues such as the current needs of the Board and the
nominees: (i) integrity, honesty and accountability; (ii) successful leadership experience and strong business acumen; (iii) forward-looking, strategic focus; (iv) collegiality; (v) independence and absence of
conflicts of interests; (vi) ability to devote necessary time to meet director responsibilities; and (vii) ability to commit to Corporation stock ownership. Where appropriate, the Committee will ultimately recommend nominees whom it
believes will enhance the Boards ability to oversee and direct, in an effective manner, the affairs and business of the Corporation. Additional factors the Committee may consider in evaluating candidates include: (i) relevant business
experience; (ii) judgment, skill and reputation; (iii) number of other boards on which the candidate serves; (iv) other business and professional commitments; (v) lack of potential conflicts of interest with other pursuits;
(vi) whether the candidate is a party to any action or arbitration adverse to the Corporation; (vii) financial and accounting background to enable the Committee to determine whether the candidate would be suitable for Audit Committee
membership or qualify as an audit committee financial expert; (viii) executive compensation background, to enable the Committee to determine whether a candidate would be suitable for Compensation Committee membership; and
(ix) the size and composition of the existing Board. In evaluating candidates, the Committee also seeks to achieve a balance of knowledge, experience and capability on the Board.
The Committee is committed to diversified membership, and the Corporate Governance Policies expressly provide that the Committee may not discriminate on
the basis of race, color, national origin, gender, religion or disability in selecting nominees. The Committee believes that diversity with respect to viewpoint, skills and experience is an important factor in the composition of the Board. The
Committee ensures that diversity considerations are discussed in connection with each potential nominee, as well as on a periodic basis in connection with the composition of the Board as a whole. At least annually, the Committee is required to
evaluate its own performance, and submit a written report to the Board, which report is to include analysis of whether the Committee met its goals, including its commitment to diversity.
Before nominating a current director for re-election at an annual meeting, the Committee considers the directors performance on the Board and
whether the directors re-election will be consistent with any corporate governance policies of the Corporation. Connie J. White was recommended to the Committee by Chairman Stewart. In 2009, it did not retain the services of any third party
consultants to assist in identifying and evaluating potential nominees.
Compensation Committee.
The Committee determines
the compensation of the Banks executive officers. The salary of each of the executive officers is determined based upon the executive officers contributions to the overall profitability of the Corporation and the Bank, maintenance of
regulatory compliance standards, professional
11
leadership, and management effectiveness in meeting the needs of day-to-day operations. The Committee also compares the compensation of the Banks executive officers with compensation paid
to executives of comparable financial institutions in North Carolina and executives of other businesses in the Banks market areas. In addition, the Committee receives the recommendations of the Banks Personnel/Compensation Committee and
the Chief Executive Officer for the compensation to be paid to executive officers (other than the Chief Executive Officer), and after due deliberation determines the compensation of such executive officers and the Chief Executive Officer. This
process is designed to ensure consistency throughout the executive compensation program.
The Committee is also responsible for determining
the compensation of members of the Board and the Bank Board. The Committee seeks to reward directors based on their respective contributions to the Corporation and the Bank, based upon their participation in meetings of the Board, Bank Board and
committees. From time to time, the Committee compares the compensation of members of the Board and the Bank Board with compensation paid to directors of comparable financial institutions in North Carolina and directors of other businesses in the
Banks market areas.
The Committees charter allows the Committee to delegate such of its duties and responsibilities as it deems
appropriate and advisable to a subcommittee of not less than two members. The charter also allows the Committee to retain compensation consulting firms to assist in evaluating executive compensation. The Corporation did not engage any compensation
consulting firms during 2009.
The Compensation Committee also oversees the Corporations compliance with the restrictions on executive
compensation and other rules and regulations related to the Corporations participation in the U.S. Department of the Treasury (Treasury) Capital Purchase Program (CPP), which is part of the Troubled Asset Relief Program
(TARP) established pursuant to the Emergency Economic Stabilization Act of 2008 (EESA). These restrictions on executive compensation are discussed in more detail under the heading Executive and Director Compensation
Capital Purchase Program: Restrictions on Executive Compensation
The Compensation Committee consists of directors James H.
Speed, Jr., Chairman of the Committee, Willie T. Closs, Jr., Aaron L. Spaulding and James A Stewart. A copy of the Committees charter is available on the Investor Relations Governance Documents page of the Corporations
website at www.mfbonline.com. The Compensation Committee met four times during the year ended December 31, 2009.
What Bank Board
Committees Have Been Established?
The Bank Board has several standing committees, including the Executive Committee and the
Personnel/Compensation Committee.
Executive Committee.
The Executive Committee of the Bank may act, between meetings of the
Bank Board, with all the authority of the full Bank Board. The membership of the Committee consists of the Chairman and Vice-Chairman of the Bank Board, the Chief Executive Officer and the chairmen of the committees of the Bank Board. The members of
the Executive Committee are James A. Stewart, Chairman of the Committee, Willie T. Closs, Jr., Michael L. Lawrence, Kim D. Saunders, Aaron L. Spaulding, James H. Speed, Jr., Lenny F. Springs, II and Connie J. White. There were five meetings of the
Executive Committee during the year ended December 31, 2009.
Personnel/Compensation Committee.
The Personnel/Compensation
Committee reviews and recommends to the Compensation Committee of the Board compensation arrangements for senior management of the Bank. The members of this Committee are James H. Speed, Jr., Chairman of the Committee, Aaron L. Spaulding and James
A. Stewart. The Committee met four times during the year ended December 31, 2009.
Board Leadership Structure and Risk Oversight
The Board is led by James A. Stewart, who has served as Chairman of the Corporation since December, 2008 and Chairman of the Bank since 2006.
In the absence of Mr. Stewart, the Board is led by the Vice-Chairman, Aaron L. Spaulding.
12
The ultimate authority to oversee the business of the Corporation rests with the Board, which appoints the
Chairman. The role of the Board is to effectively govern the affairs of the Corporation for the benefit of its stockholders and, to the extent appropriate under North Carolina corporate law, other constituencies including employees, customers,
suppliers and the communities in which it does business. The Board appoints the Corporations officers, who have responsibility for management of the Corporations operations. The Banks officers, other than the President/Chief
Executive Officer, are appointed by the President/Chief Executive Officer of the Bank. Once appointed, the President/Chief Executive Officer of the Bank notifies the Bank Board of such appointments. It is the Chairmans responsibility to lead
the Board. The President/Chief Executive Officer is responsible for leading the Corporations management team and the Corporations employees, and operating the Corporation.
While the Corporations Bylaws permit the Board to appoint the Corporations President/Chief Executive Officer as Chairman, we believe it is
beneficial to have an independent Chairman whose sole responsibility is Board leadership. By having an independent director serve as Chairman of the Board, our President/Chief Executive Officer is able to focus all of her energy on managing the
operations of the Corporation. By clearly delineating the role of the office of the Chairman, we believe we have ensured no duplication of effort between the President/Chief Executive Officer and the Chairman. We believe this governance structure
results in strong, independent leadership of our Board, while positioning our President/Chief Executive Officer as the leader of the Corporation in the eyes of our customers, employees and stockholders.
The Board currently consists of five independent members and two non-independent members, our President/Chief Executive Officer, Ms. Saunders, and
Mr. Sansom. A number of our independent directors are currently serving or have served as members of senior management of other companies and have served as directors of other companies. We have three Board committees comprised solely of
independent directors, each with a different independent director serving as chair of the committee. We believe that the number of independent, experienced directors that make up our Board, along with the independent leadership of the Board by the
non-executive Chairman, benefits our Corporation and our stockholders.
The Board oversees the Corporations general risk management
strategy and ensures that risks undertaken are consistent with the Boards established risk tolerance. Management is responsible for the day-to-day risk management processes. Risk assessment reports are provided to the Board by management on a
regular and timely basis.
Board committees share risk monitoring responsibilities and capabilities. The Committees include: Audit, Corporate
Governance and Nominating, and Compensation. The Audit Committee, charged by the Board with the primary oversight responsibility for risk management, also oversees the integrity of financial reporting, compliance with laws and regulations, and the
structure of internal control. The Compensation Committee provides oversight for executive compensation as well as other compensation programs for associates and Bank officers. The Corporate Governance and Nominating Committee establishes corporate
governance principles, and provides leadership over corporate governance matters. In addition, the Executive Committee may exercise, during intervals between meetings of the Board, all the powers and authority of the Board in directing the
management of the business and affairs of the Corporation, except as otherwise provided in the Bylaws of the Corporation or as limited by North Carolina law. Also, the Bank Board has established the Asset Liability Committee. The Asset Liability
Committee, made up of members of management and the Bank Board, monitors loan, investment, and liability portfolios to ensure comprehensive management of liquidity, interest rate risk and capital adequacy, and reports under guidelines established by
management, the Bank Board and regulators. Additionally, the Information Systems Committee monitors risks associated with the Banks information systems, and the Directors Loan Committee is responsible for ensuring compliance with banking
regulations concerning loans to insiders.
The Corporations Director Code of Business Conduct and Ethics, Code of Ethics for Principal
Executive and Senior Financial Professionals, and Corporate Governance Policies (together the Governance Policies) outline appropriate behavior for all directors and senior employees. In addition, on August 22, 2009 the Corporation
adopted an Excessive and Luxury Expenditures Policy (the Luxury Policy) setting forth the Corporations policy that directors and employees of the Corporation and the Bank utilize corporate assets in a prudent manner and do not
engage in excessive or luxury expenditures. Copies of the Governance Policies and the Luxury Policy are available on the Investor Relations Governance Documents page of the Corporations website at www.mfbonline.com.
13
In the day-to-day management of risk, management has established and implemented appropriate policies,
procedures and risk assessment tools, and a defined organization and reporting structure. With respect to the organization and reporting structure, a hierarchy has been created which divides responsibilities efficiently and effectively into specific
processes. The structure is further enhanced by providing the Internal Audit and Loan Review functions independent functional reporting responsibilities to their respective Board committees. Risk assessments have been created to properly identify
and monitor risk for the Corporation either at an entity level or within specific lines of business as appropriate.
The Board believes that
the foundation for risk management is well-established and understood throughout the Corporation from the Board level down throughout the organization.
EXECUTIVE AND DIRECTOR COMPENSATION
Executive Officers
The following table
provides information about certain executive officers of the Corporation and the Bank during the year ended December 31, 2009.
|
|
|
|
|
|
|
Name
|
|
Age
1
|
|
Positions Held During Past
Five Years
|
|
Has Served the
Corporation or
the Bank Since
|
Kim D. Saunders
|
|
49
|
|
President/Chief Executive Officer of the Corporation and the Bank since February, 2007. Previously, she was President/Chief Executive Officer of Consolidated Bank and Trust Company
from December, 2003 to February, 2007.
|
|
2007
|
|
|
|
|
Lyn Hittle
|
|
57
|
|
Senior Vice President/Chief Financial Officer of the Corporation and the Bank since May 2008. Also, Director of Human Resources since July 1, 2009. Previously, she was Senior Vice
President/Chief Accounting Officer of Capital Bank from August, 2007 to May, 2008; Vice President Finance/ Controller of Eos Airlines, Inc. from January, 2006 to May, 2007; and Senior Vice President/Chief Financial Officer/Controller/Director
of Human Resources of Harrington Bank from October, 2001 to January, 2006.
|
|
2008
|
1
|
Ages are given as of April 1, 2010.
|
Summary Compensation Table
.
The following table shows, for the years indicated, the cash compensation earned by, as well as certain
other compensation paid or accrued, for Kim D. Saunders, the President and Chief Executive Officer of the Corporation and the Bank, and Lyn Hittle, Senior Vice President, Chief Financial Officer and Director of Human Resources of the Corporation and
the Bank (together, the named executive officers). Cash compensation is paid by the Bank, not the Corporation.
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and
Principal Position
|
|
Year
|
|
Salary
|
|
Bonus
1
|
|
All Other
Compensation
2
|
|
Total
|
Kim D. Saunders
President/Chief Executive
Officer of the Corporation and the Bank
|
|
2009
2008
|
|
$
$
|
247,500
236,250
|
|
$
$
|
5,414
507
|
|
$
$
|
5,950
8,407
|
|
$
$
|
258,864
245,164
|
Lyn Hittle
Senior Vice President/Chief
Financial Officer/Director of
Human Resources of
the Corporation and the Bank
|
|
2009
2008
|
|
$
$
|
150,000
96,058
|
|
$
$
|
740
15,254
|
|
$
$
|
3,863
4,416
|
|
$
$
|
154,613
115,728
|
1
|
For Ms. Saunders for 2009, this represents a bonus for the purpose of purchasing common stock. (This bonus was awarded before the Corporation
participated in the CPP.) For Ms. Hittle, for 2009, this represents a holiday bonus. For Ms. Saunders, for 2008, this represents a holiday bonus of $507. For Ms. Hittle, for 2008, this represents (i) a signing bonus of $15,000,
and (ii) a holiday bonus of $254.
|
2
|
This represents 401(k) employer matching contributions and group insurance premiums.
|
Capital Purchase Program: Restrictions on Executive Compensation
In June, 2009, the Corporation participated in the CPP by selling 11,735 shares of preferred stock to the Treasury for an aggregate purchase price of
$11.7 million. As a result, the Corporation became subject to certain executive compensation restrictions under EESA, the America Reinvestment and Recovery Act of 2009 (ARRA) and related Treasury regulations and guidance (together the
CPP Restrictions).
The Corporation has fully complied with the CPP Restrictions, including the following:
|
|
|
Prohibition on Certain Types of Compensation.
The Corporation is prohibited from providing incentive compensation arrangements that encourage
its senior executive officers (SEOs) to take unnecessary and excessive risks that threaten the value of the financial institution. The Corporation is also prohibited from implementing any compensation plan that would encourage
manipulation of the reported earnings in order to enhance the compensation of any of its employees.
|
|
|
|
Risk Review.
The Compensation Committee is required to meet with the Corporations senior risk officer at least semiannually to discuss and
evaluate employee compensation plans in light of an assessment of any risk to the Corporation posed by such plans. The review is intended to better inform the Committee of the risks posed by the plans, and ways to limit such risks.
|
|
|
|
Bonus Prohibition.
The Corporation is prohibited from making payments of any bonus, retention award, or incentive compensation to
its most highly-compensated employee. The prohibition includes several limited exceptions, including payments under enforceable agreements that were in existence as of February 11, 2009 and limited amounts of long-term restricted
stock.
|
|
|
|
Golden Parachutes.
The Corporation may not make any severance payment to its two SEOs or any of the next five most highly compensated employees
upon termination of employment for any reason. There is an exception for amounts that were earned or accrued prior to termination, such as normal retirement benefits.
|
|
|
|
Clawback.
The Corporation must recover any bonus or other incentive payment paid to its two SEOs or any of the next 20 most highly compensated
employees on the basis of materially inaccurate financial or other performance criteria.
|
|
|
|
Shareholder Say-on-Pay Proposal Required.
The EESA and rules promulgated by the Securities and Exchange Commission (SEC)
require TARP recipients with securities registered under the federal securities laws to provide a separate non-binding stockholder vote to approve the compensation of their named executive officers. The Say-on-Pay Proposal is included as Item 2
in this Proxy Statement.
|
15
|
|
|
Policy on Luxury Expenditures.
The Corporation is required to implement a company-wide policy regarding excessive or luxury expenditures,
including excessive expenditures on entertainment or events, office and facility renovations, aviation or other transportation services.
|
|
|
|
Reporting and Certification.
The Corporations Chief Executive Officer and Chief Financial Officer are required to provide a written
certification of compliance with the CPP Restrictions in the Annual Report on Form 10-K. Additionally, the Compensation Committee is required to annually submit certain disclosures and certifications to Treasury.
|
Risk Framework
.
The Corporation has
established a low risk tolerance in connection with the operation of its business, including its compensation policies and practices. Adherence to a low risk tolerance is ensured by the Corporations system of internal processes and validated
by independent groups, including Corporate Audit Services, Asset Liability Management, Credit Administration and to some extent, the Corporations independent registered public accounting firm.
In addition to the overarching risk framework which limits risks, the CPP Restrictions place additional controls around employee compensation policies
and practices that effectively discourage and limit unnecessary and excessive risks. As discussed above, the Compensation Committee is required to meet with the Corporations senior risk officer at least semiannually to discuss and evaluate
employee compensation plans in light of an assessment of any risk to the Corporation posed by such plans. Related to these semiannual reviews, the Committee is required to annually submit certain disclosures and certifications to Treasury.
Employment Agreements
In
January, 2007, the Corporation and the Bank (together the Employer) entered into an employment agreement with Ms. Saunders in connection with her appointment as President and Chief Executive Officer of the Corporation and the Bank.
Ms. Saunders employment agreement provides for an initial term of employment of three years, beginning February 26, 2007. At the end of the initial term, the term of employment will be automatically extended for additional terms of
one year (each an Additional Term), unless a notice of termination is given by the Employer to Ms. Saunders not less than 120 days prior to the end of the initial term, or the Additional Term, as applicable.
In June, 2009, to permit the Corporation to participate in the CPP, Ms. Saunders entered into an agreement with the Employer amending her
employment agreement to the extent necessary to comply with the CPP Restrictions, discussed above. Ms. Saunders also executed a waiver, waiving any claims against Treasury or the Corporation for any changes in her compensation benefits related
to the CPP Restrictions.
Accordingly, the severance, bonus and other provisions in her employment agreement that are in conflict with the CPP Restrictions do not apply while Treasury continues to hold debt or equity in the Corporation.
The employment agreement provides for an annual base salary of $225,000, which was increased to $247,500 in July, 2008. The employment
agreement also provides that Ms. Saunders is eligible to receive an annual bonus of up to 50% of her annual base salary, to be determined by the Employers Boards; however, as discussed above, the payment of a bonus to Ms. Saunders is
presently prohibited by the CPP Restrictions. The employment agreement also provides for reimbursement of all reasonable business expenses and participation in all retirement, welfare, health and other benefit plans or programs currently offered by
the Employer to other executive officers or which may be later offered to other executive officers. Further, Ms. Saunders is also entitled to receive all other fringe benefits, which are now or may be provided to the Employers executive
officers, subject to the CPP Restrictions.
The employment agreement provides that Ms. Saunders may be terminated by the Employer for
cause, as defined in the employment agreement, in which event she shall only be entitled to receive payment of sums due her as base salary and/or reimbursement of expenses incurred through the date of termination. In the event that
Ms. Saunders is terminated without cause, or is terminated as the result of a change of control of either the Bank or the Corporation, the employment agreement provides that she shall be entitled to receive payment of severance compensation
equal
16
to 100% of her then monthly base salary for 12 months following the date of termination; however, as discussed above, the payment of severance compensation to Ms. Saunders is presently
prohibited by the CPP Restrictions. Also, Ms. Saunders may choose to terminate her employment at any time upon giving the Employer not less than 60 days notice.
In the event of Ms. Saunders disability (as defined in the employment agreement) for a period of 180 days, the Employer may
terminate the employment agreement at its option. The employment agreement provides that in such an event, the Employer shall pay Ms. Saunders an amount equal to her current base salary, less any benefits received from any disability benefit or
pension plan, until she becomes eligible for benefits under any long-term disability plan or disability insurance program provided by the Corporation; however, as discussed above, the payment of severance compensation to Ms. Saunders is
presently prohibited by the CPP Restrictions. In addition, Ms. Saunders shall receive any bonus earned or accrued through the date of termination; however, as discussed above, the payment of a bonus to Ms. Saunders is presently prohibited
by the CPP Restrictions. In the event of Ms. Saunders death during the term of the employment agreement, the employment agreement shall be terminated. In the event of Ms. Saunders death, the employment agreement provides that
her estate will be entitled to all sums due her as base salary and/or reimbursement of expenses through the end of the month during which her death occurred, plus any bonus earned or accrued through the date of death; however, as discussed above,
this is subject to the CPP Restrictions.
Ms. Hittle does not have a written employment agreement. As an SEO, Ms. Hittle is also
subject to the CPP Restrictions. In connection with the Corporations participation in the CPP, Ms. Hittle also executed a waiver, waiving any claims against Treasury or the Corporation for any changes in her compensation benefits related
to the CPP Restrictions.
Incentive Compensation Program
In 2004, the Bank adopted an Incentive Compensation Program (the Program) for its employees. The Program is composed of separate incentive
compensation plans (Group Plans) for different groups of employees: President and Chief Executive Officer, Executive Officers, Senior Management, City Executives, Loan Production Personnel, Branch Customer Staff and Corporate Support.
The Program is administered by the President and Chief Executive Officer under the supervision of the Banks Compensation Committee. Each Group Plan in the Program describes eligibility for incentive awards and the basis for payments (annual or
quarterly). Participants in the various Group Plans are rewarded based on performance in key components of the Banks success, both in terms of size and profitability. Individual awards are determined by a formula set under each Group Plan for
different groups of employees that link attainment of the Banks strategic objectives with attainment of individual goals and objectives. The Program was inactive during 2009, and has not been reactivated for 2010. The Program and the Group
Plans are subject to the CPP Restrictions. No bonuses have been paid or accrued for 2009.
Bank-Owned Life Insurance (BOLI)
The type of BOLI held by the Bank and the Corporation involves the purchase of single premium, variable-rate life insurance policies,
covering the lives of a number of employees, usually senior officers and members of the Board and the Bank Board. The purpose of this type of investment is to increase after-tax earnings on the invested funds as a means to offset costs associated
with employee benefit plans or provide additional benefits for employees and to compensate members of the Board and the Bank Board for their services. During the fourth quarter of 2002, after having completed an evaluation of BOLI arrangements, the
Bank invested $3,926,000 and the Corporation invested $103,000 in BOLI, covering the lives of the then-executive officers and select members of the Board and the Bank Board. The Bank and the Corporation are owners of the policies and are entitled to
the full cash surrender value of the policies. The primary goal of these investments is to help offset increased pension costs associated with the Banks Supplemental Executive Retirement Plan and other unqualified benefit programs of the
Corporation and the Bank. Certain of the BOLI policies have an associated split dollar death benefit. Upon the insureds death, the net split dollar death benefit is divided between the insureds named beneficiary and the Bank. The
aggregate death benefit for former and current officers of the Bank as of December 31, 2009 is $8,290,062, and the split dollar benefit payable to those individuals beneficiaries is $1,284,709, made up of the following: Mr. Lee
Johnson, Jr., former CEO ($516,184), Ms Ethel Small, former Executive Vice President/Operations Group Executive ($347,463), and Mr. Walter Harrington, Chief Credit Officer ($421,062). The split dollar benefit decreases as the cash surrender
value of each policy increases.
17
401(k) Plan
The Bank has established a contributory savings plan (the 401(k) Plan) for its employees, which meets the requirements of Section 401(k)
of the Internal Revenue Code of 1986, as amended (the Code). All employees who have completed 90 days of service and who are at least 21 years of age may elect to contribute up to 12% of their compensation to the 401(k) Plan each year,
subject to certain maximums imposed by federal law. The Bank is obligated under the terms of the 401(k) Plan to match 100% of each eligible employees pre-tax contributions (excluding the employees pre-tax contributions in excess of 6% of
compensation). Participants are fully vested in amounts that they contribute to the 401(k) Plan. Participants are fully vested in amounts contributed to the 401(k) Plan on their behalf by the Bank as employer matching contributions or as
discretionary contributions after six years of service according to the following schedule: two years - 20%; three years - 40%; four years - 60%; five years - 80%; and six years - 100%.
Benefits under the 401(k) Plan are payable in the event of the participants retirement, death, disability or termination of employment. Normal
retirement age under the 401(k) Plan is 65 years of age.
The named executive officers are entitled to participate in the 401(k) Plan on the
same basis as all other eligible employees of the Bank. Both of the named executive officers participated in the 401(k) Plan during 2009.
Equity Compensation Plans
The
Corporations equity compensation plan, and all grants thereunder, expired during the year ended December 31, 2009. Neither of the named executive officers were granted any equity awards under the plan.
Director Compensation
How are
Directors Compensated?
Directors who are officers or employees of the Corporation or the Bank receive no additional compensation for
service on the Board, the Bank Board or their committees. In addition to the annual retainers and meeting fees, discussed below, directors are also reimbursed for reasonable travel expenses incurred to attend meetings.
Board.
During 2009, the Corporations non-employee directors each received an annual retainer of $2,000, and meeting
fees of $600 for each Board meeting attended; $500 for each Audit Committee meeting attended; and $450 for each other committee meeting attended. In addition, non-employee committee chairmen received a $1,500 annual retainer for each committee
chaired, and the Chairman of the Board received a $5,000 annual retainer.
Bank Board.
During 2009, the
Bank paid its non-employee chairman an annual retainer of $5,000, its other non-employee directors an annual retainer of $2,500, and all non-employee directors $600 for each Bank Board meeting attended in person and $300 for each Bank Board meeting
attended via conference call. In addition, non-employee directors received $600 for each Executive Committee meeting attended in person, $450 for each other committee meeting attended in person, and $200 for each committee meeting attended via
conference call. In addition, non-employee committee chairmen received an annual retainer of $1,500.
18
Director Compensation Table.
The following table shows, for the fiscal year ended
December 31, 2009 the cash compensation paid by the Corporation and the Bank, as well as certain other compensation paid or accrued for that year, to the members of the Board of Directors.
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Name
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Fees Earned
or Paid in
Cash
1
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Stock
Awards
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Option
Awards
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Non-Equity
Incentive Plan
Compensation
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Nonqualified
Deferred
Compensation
Earnings
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All Other
Compensation
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Total
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Willie T. Closs, Jr.
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$
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43,983.47
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$
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43,983.47
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Michael L. Lawrence
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$
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36,458.11
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$
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36,458.11
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Joseph M. Sansom
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$
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18,013.42
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$
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18,013.42
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Kim D.
Saunders
2
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$
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0
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$
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0
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Aaron L. Spaulding
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$
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49,100.00
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$
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49,100.00
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James H. Speed,
Jr.
3
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$
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21,674.89
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$
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21,674.89
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James A. Stewart
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$
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42,753.70
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$
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42,753.70
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1
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Unless otherwise indicated, this category sets forth the directors fees related to the directors service on the Board, the Bank Board and
their committees.
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2
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Ms. Saunders did not receive any additional compensation for serving as a director and attending Board, Bank Board and committee meetings. For
details of compensation earned or paid to Ms. Saunders in 2008 and 2009, see the Summary Compensation Table, above.
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3
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Mr. Speed was elected to the Board and the Bank Board in February, 2009.
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Indebtedness of and Transactions with Related Persons
The Bank provides loans and other credit facilities in the ordinary course of its business to certain persons who beneficially own more than 5% of the
Corporations common stock, Corporation and Bank directors, director-nominees and employees, including executive officers, and businesses in which the foregoing have direct or indirect interests, as well as the immediate family of the foregoing
(Related Persons). In accordance with Federal Reserve Regulation O, the Bank has adopted a policy which sets forth the requirements applicable to such loans and other credit facilities. These loans and other credit facilities are made
using the same credit and underwriting standards as are applicable to the general public, and such loans and other credit facilities do not involve more than the normal risk of collectability or present other unfavorable features. Pursuant to this
policy, loans and other credit facilities to Related Persons are made on the same terms, including interest rates and collateral, as those prevailing for comparable transactions with nonaffiliated persons.
The Audit Committee is charged with reviewing and approving all transactions of the Corporation or the Bank with Related Persons, other than transactions
subject to Federal Reserve Regulation O, discussed above. All material facts of each transaction and the Related Persons interest are discussed by all disinterested directors and a decision made about whether the transaction is fair to the
Corporation and the Bank. A majority vote of all disinterested directors is required to approve the transaction.
19
The Bank entered into a one-year lease on January 19, 2010 under which Emerald CEEDS, LLC leases
approximately 146 square feet of office space in the Banks Winston-Salem branch office. Monthly lease payments to the Bank are $300. Bank Board member, Cedric L. Russell is the member-manager of Emerald CEEDS, LLC.
The Corporation entered into a lease on December 31, 2003 under which NCM Capital Advisers, Inc. leases space in the Corporations corporate
offices. The lease was amended in 2004 to include additional office space. The lease was amended again on December 18, 2008 pursuant to which the term was extended to May 31, 2014. Currently, annual lease payments to the Corporation are
approximately $161,736 and will total approximately $1.6 million over the full term of the lease. Former Board Chairman Maceo K. Sloan serves as Chairman, Chief Executive Officer and Chief Investment Officer, and is a 66% stockholder of NCM Capital
Advisors, Inc. Current Board member, Michael L. Lawrence is Chief Financial Officer of NCM Capital Management Group, an affiliate of NCM Capital Advisors, Inc.
The Corporation entered into a ground lease with Vivian M. Sansom (a significant stockholder) and her late husband in 1976, under which the Corporation
leases land at Rock Quarry Road, Raleigh, North Carolina for a branch office. Currently the annual lease payment to Dr. Sansom is $6,000.
PROPOSAL 2: SAY-ON-PAY PROPOSAL
The EESA and rules promulgated by the SEC require TARP recipients with securities registered under the federal securities laws to provide a separate
non-binding stockholder vote to approve the compensation of their named executive officers.
This Say-on-Pay Proposal gives our
stockholders an opportunity to endorse, or not endorse, the compensation paid or provided to our named executive officers, and our executive compensation policies and practices, as described in this Proxy Statement, by voting on the following
non-binding, advisory resolution:
Resolved, that the compensation paid or provided to the named executive officers of M&F Bancorp,
Inc. (M&F) and its subsidiary, and M&F and its subsidiarys executive compensation policies and practices, as described in the tabular and narrative compensation disclosures contained in M&Fs Proxy Statement for
its 2010 Annual Meeting, are hereby endorsed and approved.
The vote by our stockholders will be an advisory vote. As provided in the
ARRA, it will not be binding on the Board or Compensation Committee, or overrule or affect any previous action or decision by the Board or the Committee or any compensation previously paid or awarded. Neither will it create or imply any additional
duty on the part of the Board or the Committee. However, the Board and the Committee will take the results of the vote into account when considering future executive compensation matters.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR
THE APPROVAL OF THIS SAY-ON-PAY PROPOSAL.
PROPOSAL 3: RATIFICATION OF APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Change of Independent Registered Public Accounting Firm
On April 6, 2009 the Corporation advised McGladrey & Pullen, LLP (McGladrey) that it was being dismissed as the
Corporations independent registered public accounting firm. The decision to dismiss McGladrey was considered and approved by the Audit Committee on April 6, 2009. McGladreys reports on the Corporations consolidated financial
statements for the fiscal years ended December 31, 2008 and 2007 did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal years
ended December 31, 2008 and 2007 and through the period ended April 6, 2009 there were no disagreements with McGladrey on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures
which disagreements, if not resolved to McGladreys
20
satisfaction, would have caused McGladrey to make reference to the subject matter of the disagreements in connection with their report on the Corporation s consolidated financial
statements; in addition, there were no reportable events as listed in Item 304(a)(1)(v) of Regulation S-K. The Corporation has complied with Item 304(a)(3) of Regulation S-K.
On April 7, 2009 the Corporation appointed Grant Thornton as the Corporations independent registered public accounting firm for the fiscal
year ending December 31, 2009. Neither the Corporation nor anyone on its behalf has consulted with Grant Thornton during the last two fiscal years ended December 31, 2008 and 2007 or during any subsequent interim period preceding the date
of their appointment, regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Corporations consolidated financial
statements; and as such, no written report or oral advice was provided, and none was an important factor considered by the Corporation in reaching a decision as to the accounting, auditing or financial reporting issues; or (ii) any matter that
was either the subject of a disagreement or a reportable event, as there were none.
Ratification of Appointment of Independent Registered
Public Accounting Firm
A proposal to ratify the appointment of Grant Thornton is being submitted to the stockholders. Representatives of
Grant Thornton are expected to attend the Annual Meeting and will be available to respond to appropriate questions and will have the opportunity to make a statement.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR
RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON AS INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE CORPORATION FOR THE FISCAL YEAR ENDING DECEMBER 31, 2010.
Audit Fees Paid to Independent Registered Public
Accounting Firms
The following table represents fees for professional services rendered by the Corporations independent registered
public accounting firms for the audit of the Corporations annual consolidated financial statements for the years ended December 31, 2008 and 2009 and fees billed for audit-related services, tax services and all other services rendered by
the accounting firm for each of those fiscal years.
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Year ended December 31,
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2009
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2008
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Audit
Fees
1
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$
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141,531
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$
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252,440
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Audit-Related
Fees
2
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47,299
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Tax
Fees
3
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20,675
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Total Fees
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$
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141,531
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$
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320,414
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1
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These are fees paid for professional services rendered for the audit of the Corporations annual consolidated financial statements and for the
reviews of the consolidated financial statements included in the Corporations quarterly reports and for services normally provided in connection with statutory or regulatory filings or engagements.
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2
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These are fees
paid for assurance and related services that were reasonably related to the performance of the audit or review of our consolidated financial statements and that are not reported under Audit Fees above, including fees related to audits of
financial statements of employee benefit plans and any subsidiaries, and due diligence services.
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3
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These are fees paid for professional services rendered for tax compliance, tax planning and tax advice, including assistance in the preparation of the
Corporations various federal, state and local tax returns, tax credit consultation and franchise tax return amendments.
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Pre-Approval of Audit and Permissible Non-Audit Services
All audit-related services, tax services and other services rendered in 2008 and 2009 were pre-approved by the Audit Committee, which concluded that the
provision of those services by the Corporations independent registered public accounting firm was compatible with the maintenance of the firms independence in the conduct of its auditing
21
functions. The Committees charter provides for pre-approval of all audit and non-audit services to be provided by the Corporations independent registered public accounting firm. The
Charter authorizes the Committee to delegate to one or more of its members pre-approval authority with respect to permitted services, provided that any approvals using this procedure are presented to the Committee at its next scheduled meeting.
STOCKHOLDER PROPOSALS
It is presently anticipated that the 2011 annual meeting of stockholders will be held on June 7, 2011. In order for stockholder proposals to be
included in the proxy materials for that meeting, such proposals must be received by the Secretary of the Corporation at the Corporations main office (2634 Durham Chapel Hill Blvd., Durham, North Carolina 27707) not later than
December 31, 2010, and meet all other applicable requirements for inclusion in the 2011 proxy statement.
In the alternative, a
stockholder may commence his own proxy solicitation subject to the SECs rules on proxy solicitation and may present a proposal from the floor at the 2011 annual meeting of stockholders. In order to do so, the stockholder must notify the
Secretary of the Corporation, in writing, of his or her proposal at the Corporations main office no later than March 16, 2011. If the Secretary of the Corporation is not notified of the stockholders proposal by March 16, 2011,
the Board of Directors may vote on the proposal pursuant to the discretionary authority granted by the proxies solicited by the Board of Directors for the 2010 annual meeting of stockholders.
According to the Corporations Bylaws, any stockholder nomination of candidates for election to the Board at an annual meeting of stockholders must
be made in writing to the Corporations Secretary not fewer than 30 days nor more than 50 days prior to the date of the meeting at which such nominations will be made; provided, however, if less than 21 days notice of the meeting is given to
stockholders, such nominations must be delivered to the Secretary not later than the close of business on the seventh day following the day on which the notice of meeting was mailed.
Stockholder nominations must contain the following information, if known to the nominating stockholder:
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The name and address of each proposed nominee;
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The principal occupation of each proposed nominee;
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The total number of shares of common stock of the Corporation that will be voted for each proposed nominee;
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The name and address of the nominating stockholder; and
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The number of shares of common stock owned by the nominating stockholder.
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The Board may disregard any nominations that do not comply with these requirements. Upon the instruction of the Board, the inspector of voting for the
annual meeting of stockholders may disregard all votes cast for a nominee if the nomination does not comply with these requirements.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Corporations directors, executive officers and greater than 10% stockholders (Reporting
Persons) to file reports of their ownership and any changes in ownership of common stock with the SEC. Reporting Persons are required by regulation to provide the Corporation with a copy of any Section 16(a) reports they file. Based on
the Corporations review of copies of the reports received by it and written representations made to it by these persons, the Corporation believes that all Section 16(a) filing requirements applicable to its Reporting Persons were
satisfied during the year ended December 31, 2009.
22
OTHER MATTERS
Because no matters were presented to management on or prior to March 16, 2010 it is intended that the proxyholders named in the enclosed form of
proxy will vote the shares represented thereby on any matters properly coming before the Annual Meeting, according to their best judgment, pursuant to the discretionary authority granted therein. As of the date of this mailing, management knows of
no other matters to be presented for consideration at the Annual Meeting or any adjournments thereof.
MISCELLANEOUS
The Corporations annual report to stockholders for the year ended December 31, 2009 and Form 10-K, filed with the SEC, have been
mailed with this Proxy Statement to all stockholders of record as of April 1, 2010.
Any stockholder who has not received a copy of the annual report or Form 10-K may obtain a copy without charge by writing to the Corporation. Please make
your written request to the Secretary, M&F Bancorp, Inc., 2634 Durham Chapel Hill Blvd., Durham, North Carolina 27707.
The annual report and Form 10-K are not to be treated as part of this Proxy Statement or as a solicitation of proxies.
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BY ORDER OF THE BOARD OF DIRECTORS
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Kim D. Saunders
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President and Chief Executive Officer
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Durham, North Carolina
April 30, 2010
23
ANNUAL MEETING OF STOCKHOLDERS OF
M&F BANCORP, INC.
June 8, 2010
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, proxy statement and proxy card
are available at http://www.snl.com/lrweblinkx/docs.aspx?iid=4050540
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
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¡
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20833000000000000000 1
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060810
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR EACH OF THE LISTED PROPOSALS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
x
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1. Elect eight people to serve on the Board of Directors of the Corporation until the 2011
annual meeting of stockholders or until their successors are elected and qualified;
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FOR
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AGAINST
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ABSTAIN
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2.
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Approve a non-binding advisory resolution to approve the compensation of the Corporation's named executive officers.
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¨
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¨
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¨
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¨
¨
¨
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FOR ALL NOMINEES
WITHHOLD AUTHORITY
FOR ALL NOMINEES
FOR ALL EXCEPT
(See instructions
below)
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NOMINEES:
Willie T. Closs, Jr.
Michael L. Lawrence
Joseph M. Sansom
Kim D. Saunders
Aaron L. Spaulding
James H. Speed, Jr.
James A. Stewart
Connie J. White
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3.
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Ratify the appointment of Grant Thornton, LLP as the independent
registered public accounting firm for the Corporation for the fiscal year ending December 31, 2010;
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¨
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¨
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¨
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4.
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Consider any other business that may properly be
brought before the Annual Meeting or any adjournment thereof. The Corporation's Board of Directors does not know of any other business to be considered at the Annual Meeting.
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INSTRUCTIONS:
To withhold authority to vote for any individual nominee(s), mark
FOR ALL EXCEPT
and fill in the circle next to each nominee you wish to withhold, as shown here:
l
Shareholders may cumulate their votes for one or more directors. To cumulate votes, place the number of votes for a nominee on the line next to such
nominees name. The total votes cast for one or more nominees may not be more than eight (8). If you wish to cumulate your votes, you must vote by using the proxy card rather than voting by telephone or the Internet.
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The undersigned acknowledge(s) receipt from the
Corporation, prior to the election of this proxy, of a notice of Annual Meeting and a Proxy Statement dated April 30, 2010.
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To change the address on your account, please check the box at right and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account may not be submitted via this method.
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Signature of Stockholder
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Date:
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Signature of Stockholder
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Date:
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¡
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Note:
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized
person.
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¡
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M&F BANCORP, INC.
2634 Durham Chapel Hill Boulevard
P.O. Box 1932 (27702)
Durham, NC 27707
(919) 687-7800
As an alternative to completing this proxy card, you may enter your vote instruction by telephone at 1-800-PROXIES, or via the
Internet at WWW.VOTEPROXY.COM and follow the simple instructions. Use the Company Number and Account Number shown on your proxy card. If you wish to cumulate your votes in the election of directors, you must vote by using this proxy card rather than
voting by telephone or via the Internet.
This Proxy is solicited by the Board of Directors in connection
with the Annual Meeting of Stockholders of M&F BANCORP, INC. (the Corporation). The undersigned hereby appoints the M&F Bancorp, Inc. Board of Directors, as Proxies of the undersigned, with full power of substitution to vote, as
designated on the reverse side of this Proxy, the number of shares of common stock of the Corporation held of record by the undersigned on April 1, 2010 on the proposals set forth on the reverse and described in the accompanying Proxy Statement
at the Annual Meeting of Stockholders of the Corporation to be held on Tuesday, June 8, 2010, at 6:00 p.m. at the M&F Bank Corporate Center, 2634 Durham Chapel Hill Boulevard, Durham, NC 27707.
This Proxy will be voted as directed. If you execute and return this Proxy but do not specify otherwise, this Proxy will
be voted FOR all the nominees and FOR the proposals listed on the reverse, and, in the Proxies discretion, on any other matter that may properly come before the meeting. This Proxy is revocable prior to its exercise.
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(Continued and to be signed on the reverse side)
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14475
¢
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M and F Bancorp (PK) (USOTC:MFBP)
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