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EXHIBIT 99
AGREEMENT OF REORGANIZATION AND PLAN OF EXCHANGE
AGREEMENT OF REORGANIZATION AND PLAN OF EXCHANGE dated February 16,
1999 (the "Agreement"), between Mechanics and Farmers Bank, Durham, North
Carolina, a North Carolina commercial bank (the "Bank") and M&F Bancorp, Inc.,
a North Carolina corporation (the "Corporation").
The Boards of Directors of the Bank and the Corporation desire to
establish a holding company structure whereby the Bank will become a
wholly-owned subsidiary of the Corporation. The Boards of Directors of the Bank
and the Corporation have deemed advisable an exchange of shares between the Bank
and the Corporation in order to establish the Bank as a wholly-owned subsidiary
of the Corporation in the manner and upon the terms and conditions herein set
forth.
Accordingly, in consideration of the mutual agreements, covenants,
and provisions herein contained, the Bank and the Corporation hereby agree as
follows:
1. Exchange of Shares. On the Effective Date (as hereinafter
defined), each of the issued and outstanding shares of Common Stock of the
Bank, $5 par value per share (the "Bank Shares"), shall be exchanged for one
share of Common Stock of the Corporation, no par value per share (the
"Corporation Shares"), in a statutory share exchange and reorganization
transaction (the "Reorganization") under the authority of Section 55-11-02 of
the North Carolina Business Corporation Act (the "North Carolina Code"). As a
result of the Reorganization, the Corporation shall become the sole stockholder
of the Bank, and the holders of all of the issued and outstanding Bank Shares,
except stockholders who exercise dissenters' rights, shall become the holders
of all of the issued and outstanding Corporation Shares.
2. Effective Date. The Reorganization shall become effective at the
date and time at which the Articles of Share Exchange are filed with the State
of North Carolina and all other state and federal regulatory approvals have
been obtained unless a later Effective Date is requested.
3. Manner of Exchange. On the Effective Date, each Bank Share issued
and outstanding at the Effective Date shall be deemed to be exchanged for one
Corporation Share in accordance with this Agreement, subject to dissenters'
rights.
4. Rights of Objecting Stockholders. Each holder of Bank Shares who
objects to the Agreement and Reorganization and perfects appraisal rights
pursuant to the provisions of Sections 55-13-01 et seq. of the North Carolina
Code shall be entitled to receive from the Bank in cash the value of such Bank
Shares determined in accordance with provisions of such Sections.
5. Conditions. Consummation of the Reorganization provided for herein
shall, except as may be waived by the Board of Directors of both parties
hereto, whether before or after approval by the shareholders of the Bank, be
subject to the fulfillment of each of the following conditions:
(a) the Board of Governors of the Federal Reserve System shall
have approved an application for the Corporation to become a bank
holding company;
(b) any approvals from the State of North Carolina shall have been
obtained;
(c) the stockholders of the Bank shall have approved this
Agreement by the requisite vote and in the manner required by the
Bank's charter and the North Carolina Code.
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6. Termination and Abandonment. The Agreement may be terminated
without liability to either party hereto and the transactions abandoned at any
time prior to the Effective Date, whether before or after approval by the
stockholders of the Bank:
(a) by the Board of Directors of either the Bank or the
Corporation in the event that the conditions referred to in Section 5
hereof have not been fulfilled or waived on or prior to December 31,
1999;
(b) if the number of shares of capital stock of the Bank voted
against the Agreement and Reorganization or that formally dissented
from the transaction should make consummation of the transaction
contrary to the best interest of the Bank in the sole discretion of
the Board of Directors;
(c) if any action, suit, proceeding or claim has been instituted,
made, pursued, or threatened relating to the proposed Reorganization
which shall make the consummation of the Reorganization inadvisable or
impractical in the sole discretion of the Board of Directors of the
Bank; or
(d) by mutual agreement of the Boards of Directors of the Bank and
the Corporation if for any other reason consummation of the
Reorganization is inadvisable in the opinions of the respective
Boards.
IN WITNESS WHEREOF, the Bank and the Corporation have caused the
Agreement to be duly executed and attested as of the date first above written.
ATTEST: MECHANICS AND FARMERS BANK
/s/Fohliette X. Xxxxxx By: /s/Xxxxx X. Xxxxxx
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Fohliette X. Xxxxxx, Secretary Xxxxx X. Xxxxxx, Chairman,
President and CEO
ATTEST: M&F BANCORP, INC.
/s/Fohliette X. Xxxxxx By: /s/Xxxxx X. Xxxxxx
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Fohliette X. Xxxxxx, Secretary Xxxxx X. Xxxxxx, Chairman,
President and CEO