Exhibit 99.1
SEPARATION AGREEMENT AND GENERAL
RELEASE
This Separation Agreement and
General Release (“Agreement”) is entered into between
M&F Bancorp, Inc., a holding company and corporation organized
under the laws of the State of North Carolina
(“Bancorp”) and its subsidiary, Mechanics &
Farmers Bank, a corporation organized under the laws of the State
of North Carolina (the “Bank”) (collectively referred
to as “Employer”), and Ronald Wiley
(“Executive”).
WHEREAS, Executive was previously
employed by Employer in the position of President and Chief
Executive Officer; and
WHEREAS, Executive previously served
on the Board of Directors for Bancorp and Bank; and
WHEREAS, Executive was a party to an
Executive Employment Agreement with Bancorp and Bank dated
May 9, 2005 (“Employment Agreement”);
and
WHEREAS, Executive’s
employment will terminate effective January 22, 2007,
(“Separation Date”); and
WHEREAS, Executive will resign as a
Director for Bancorp and Bank effective January 22, 2007;
and
WHEREAS, Employer and Executive
agree that it is in the best interest of each party that the terms
and conditions of Executive’s separation from employment be
expressly set forth.
NOW, THEREFORE, in consideration of
the agreement and mutual covenants of the parties as contained in
this Agreement, the parties agree as follows:
1. Severance Payments . In
exchange for the promises made by Executive in this Agreement and
his performance of those promises, Employer will pay Executive his
salary at Executive’s current base pay through
December 31, 2007, subject to applicable withholdings
(“Severance Payments”). Employer shall pay such
Severance Payments on its regularly scheduled paydays, the first of
which to be paid on the next regularly scheduled pay day following
the eighth day after Executive’s execution of this
Agreement.
2. COBRA Continuation .
Subject to Executive’s full acceptance of this Agreement,
Employer will pay all expenses associated with the continuation of
Executive’s health plan coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”)
through December 31, 2007, unless Executive secures comparable
coverage through another employer prior to such time. If Executive
declines to accept this Agreement, Executive will still have all
rights under COBRA; however, Executive will be responsible for
paying all expenses associated with the continuation of health plan
coverage.
3. Vacation Pay . Employer
will pay Executive for all earned, but unused vacation on the next
regularly scheduled payday after the Separation Date. As vacation
is accrued under the Bank’s employment policies and Executive
accrues at the rate of 1.67 days per month, and Executive has taken
1 day of vacation during calendar year 2007 thus far, Executive
will be paid for .67 days of vacation.
4. Public Announcement and
Reference Letter . The parties agree to make a public statement
regarding Executive’s departure from employment with the Bank
and Bancorp which states “Ron Wiley has submitted his
resignation from the Bank and Bancorp to pursue other
opportunities.” The Bank will provide Executive with a
reference letter in the form attached hereto as Exhibit A for his
use in pursuing other employment opportunities.
5. Release from Non-Competition
Covenant . Bank and Bancorp hereby release Executive from the
non-competition covenant contained in Paragraph VII of the
Employment Agreement.
6. Assistance with 2006 Year-End
Financial and Other Reporting Requirements for Bancorp . With
respect to the preparation and filing of Bancorp’s year-end
financial statements (including its Form 10-KSB), if asked to do
so, Executive will review and comment upon the Form 10-KSB and
provide Bancorp with customary upwards certifications. Such
certifications shall be qualified to cover only matters
within Executive’s knowledge, as principal executive
officer during the 2006 reporting year, and designed to give the
certifying principal executive officer reasonable assurances as to
matters known by Executive. In exchange for Executive’s
post-employment cooperation and participation as set forth in this
Paragraph and considering that Executive currently benefits from
certain indemnification pursuant to the Employment Agreement, and
further considering that the obligations undertaken in this
Paragraph are substantially similar to his obligations under the
Employment Agreement, Employer agrees to indemnify and hold
harmless Executive with respect to the obligations undertaken in
this Paragraph to the same extent as he is currently indemnified
under the Employment Agreement.
7. Consulting Services .
Executive agrees to provide the Bank and Bancorp with consulting
services on a reasonable basis through the end of February
2007.
8. Financial Obligations .
Other than the payments set forth in Paragraphs 1, 2, and 3,
Employer shall have no other financial obligations to Executive
under any contract, agreement, compensation or benefit plans,
programs, practices, or policies and his participation in all
compensation and benefit plans, programs, practices, and
policie
