M&F BANCORP, INC.


 


 


 


 


and


 


 


 


 


AMERICAN STOCK TRANSFER & TRUST
COMPANY, LLC


as Rights Agent


 


 


 


 


RIGHTS AGREEMENT


 


Dated as of September 23, 2014


 




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TABLE OF CONTENTS


 


	1.	Certain Definitions	2
	2.	Appointment of Rights Agent	8
	3.	Right Certificates	8
	4.	Form of Right Certificates	10
	5. 	Countersignature and Registration	10
	6.  	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates; Uncertificated Rights	11
	7.	Exercise of Rights; Purchase Price; Expiration Date of Rights	12
	8.  	Cancellation and Destruction of Right Certificates	13
	9. 	Availability of Shares of Preferred Stock	14
	10. 	Preferred Stock Record Date	15
	11. 	Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights; Calculation of Price	15
	12. 	Certificate of Adjusted Purchase Price or Number of Shares	22
	13. 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	22
	14. 	Fractional Rights and Fractional Shares	25
	15. 	Rights of Action	26
	16. 	Agreement of Right Holders	27
	17. 	Right Certificate Holder Not Deemed a Shareholder	27
	18. 	Concerning the Rights Agent	28
	19.	Merger or Consolidation or Change of Name of Rights Agent	28
	20. 	Duties of Rights Agent	29
	21. 	Change of Rights Agent	31
	22. 	Issuance of New Right Certificates	32
	23. 	Redemption and Termination	32
	24. 	Exchange	33
	25. 	Notice of Certain Events	34
	26. 	Notices	35
	27. 	Supplements and Amendments	36
	28. 	Determination and Actions by the Board of Directors, Etc.	36
	29. 	Successors	37
	30. 	Benefits of this Agreement	37
	31. 	Severability	37
	32. 	Governing Law	37
	33. 	Counterparts	37
	34. 	Force Majeure	37




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M&F BANCORP, INC. SHAREHOLDER RIGHTS
AGREEMENT


 


This SHAREHOLDER
RIGHTS AGREEMENT, made and entered into as of September 23, 2014 (as amended, restated or otherwise modified from time to time
in accordance herewith, this “Agreement”), by and between M&F Bancorp, Inc., a North Carolina corporation
(together with its successors, the “Company”), and American Stock Transfer & Trust Company, LLC, a New York
limited liability trust company, as Rights Agent (together with its permitted successors in such capacity, the “Rights
Agent”).


 


R E C I T A L S


 


WHEREAS, the Board
of Directors of the Company (the “Board”) has adopted resolutions creating a series of preferred stock, $0.01
par value per share of the Company, having the preferences, limitations and relative rights set forth in the Certificate of Designation
of Preferences, Limitations and Relative Rights attached hereto as Exhibit A (the “Preferred Stock”);


 


AND WHEREAS, the
Board has authorized and declared a dividend of a certain purchase right (as more fully defined below, a “Right”)
for each share of common stock, no par value per share, of the Company (the “Common Stock”) outstanding at the
Close of Business (as defined below) on October 6, 2014 (the “Record Date”);


 


AND WHEREAS, the
Board has authorized and directed the issuance of one Right (subject to adjustment as provided herein) with respect to each share
of Common Stock issued and outstanding as of the Close of Business on the Record Date, each Right initially evidencing the right
to purchase one one-hundredth (1/100th) of a share of Preferred Stock, upon the terms and subject to the conditions
herein set forth;


 


AND WHEREAS, the
Board has further authorized and directed the issuance of one Right (subject to adjustment as provided herein) with respect to
each share of Common Stock that shall be issued and become outstanding between the Record Date and the earlier of the Distribution
Date and the Expiration Date (as such terms are hereinafter defined); provided, however, that Rights may be issued with respect
to shares of Common Stock that shall become outstanding after the Distribution Date and prior to the Expiration Date in accordance
with Section 22;


 


 


NOW, THEREFORE,
in consideration of the premises and the mutual agreements herein set forth, the parties hereto hereby agree as follows:


 


		1.	Certain Definitions.



 


For purposes of this Agreement,
the following terms have the meaning indicated:



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(a)           “Acquiring
Person” shall mean any Person (as such term is hereinafter defined) who or which shall be the Beneficial Owner (as such
term is hereinafter defined) of 10.0% or more of the shares of Common Stock then outstanding, but shall not include an Exempt Person
(as such term is hereinafter defined); provided, however, that


 


(i)           if the Board determines
that a Person who would otherwise be an “Acquiring Person” became the Beneficial Owner of a number of shares of Common
Stock such that the Person would otherwise qualify as an “Acquiring Person” inadvertently (including, without limitation,
because (A) such person was unaware that it beneficially owned that number of shares of Common Stock that would otherwise cause
such Person to be an “Acquiring Person” or (B) such Person was aware of the extent of its Beneficial Ownership of Common
Stock but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and without any intention
of obtaining, changing or influencing control of the Company, then such Person shall not be deemed to be or to have become an “Acquiring
Person” for any purposes under this Agreement unless and until such Person shall have failed to divest itself, as soon as
practicable (as determined by the Board), of Beneficial Ownership of a sufficient number of shares of Common Stock so that such
Person would no longer otherwise qualify as an “Acquiring Person”;


 


(ii)           if, as of the date
hereof or prior to the first public announcement of the adoption of this Agreement, any Person is or becomes the Beneficial Owner
of 10.0% or more of the shares of Common Stock outstanding, such Person shall not be deemed to be or to become an “Acquiring
Person” unless and until such time as such Person shall, after the first public announcement of the adoption of this Agreement,
become the Beneficial Owner of any additional shares of Common Stock (other than pursuant to a dividend or distribution paid or
made by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding Common Stock), unless,
upon becoming the Beneficial Owner of such additional shares of Common Stock, such Person is not then the Beneficial Owner of 10.0%
or more of the shares of Common Stock then outstanding;


 


(iii)           no Person shall
become an “Acquiring Person” solely as a result of any unilateral grant of any security by the Company or through the
exercise of any options, warrants, rights or similar interests (including restricted stock) granted by the Company to its directors,
officers and employees;


 


(iv)           no Person shall become
an “Acquiring Person” solely as the result of an acquisition of shares of Common Stock by the Company which, by reducing
the number of shares of Common Stock Outstanding, increases the proportion of the shares of Common Stock beneficially owned by
such Person to 10.0% or more of the Common Stock then outstanding; provided, however, that if a Person shall become
the Beneficial Owner of 10.0% or more of the shares of Common Stock then outstanding by reason of such share acquisitions by the
Company and shall thereafter become the Beneficial Owner of any additional shares of Common Stock (other than pursuant to a dividend
or distribution paid or made by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding
Common Stock), then such Person shall be deemed to be an “Acquiring Person” unless, upon becoming the Beneficial Owner
of such additional shares of Common Stock, such Person does not beneficially own 10.0% or more of the shares of Common Stock then
outstanding; and


 



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(v)           no Person shall become
an “Acquiring Person” solely as the result of the acquisition by such Person of Beneficial Ownership of shares of Common
Stock from an individual who, on the later of the date hereof and the first public announcement of this Agreement, is the Beneficial
Owner of 10.0% or more of the Common Stock then outstanding if such shares of Common Stock are received by such Person upon such
individual’s death pursuant to such individual’s will or pursuant to a charitable trust created by such individual
for estate planning purposes unless and until such time as such Person shall become the Beneficial Owner of any additional shares
of Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock
or pursuant to a split or subdivision of the outstanding Common Stock), unless, upon becoming the Beneficial Owner of such additional
shares of Common Stock, such Person is not then the Beneficial Owner of 10.0% or more of the shares of Common Stock then outstanding.


 


With respect to any Person, for all purposes
of this Agreement, any calculation of the number of shares of Common Stock outstanding at any particular time, including for purposes
of determining the particular percentage of the outstanding shares of Common Stock of which such Person is the Beneficial Owner,
shall include the number of shares of Common Stock not outstanding at the time of such calculation that such Person is otherwise
deemed to beneficially own for purposes of this Agreement, but the number of shares of Common Stock not outstanding that such Person
is otherwise deemed to beneficially own for purposes of this Agreement shall not be included for the purpose of computing the percentage
of the outstanding shares of Common Stock beneficially owned by any other Person (unless such other Person is also otherwise deemed
to beneficially own for purposes of this Agreement such shares of Common Stock not outstanding).


 


(b)           “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act (as such term is hereinafter defined).


 


 (c)            “Agreement” shall have the meaning set forth in the preamble.




 


(d)           A Person shall be
deemed the “Beneficial Owner” of, shall be deemed to have “Beneficial Ownership” of and shall
be deemed to “Beneficially Own” any securities:


 


(i)           which such Person
or any of such Person's Affiliates or Associates is deemed to beneficially own, directly or indirectly, within the meaning of Rule
13d-3 of the General Rules and Regulations under the Exchange Act;


 



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(ii)           which such Person
or any of such Person’s Affiliates or Associates has: (A) the right or obligation to acquire (whether such right is exercisable
or such obligation is required to be performed immediately or only after the passage of time, compliance with regulatory requirements,
upon the satisfaction of conditions (whether or not within the control of such Person) or otherwise) pursuant to any agreement,
arrangement or understanding (whether or not in writing) (other than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of securities), or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, (w) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person
or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase, (x) securities
which such Person has a right to acquire upon the exercise of Rights at any time prior to the time that any Person becomes an Acquiring
Person, (y) securities issuable upon the exercise of Rights from and after the time that any Person becomes an Acquiring Person
if such Rights were acquired by such first Person or any of such first Person’s Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(a) or Section 22 hereof (“Original Rights”) or pursuant to Section 11 with respect to
an adjustment to Original Rights, or (z) securities which such Person or any of such Person’s Affiliates or Associates may
acquire, does or do acquire or may be deemed to have the right to acquire, pursuant to any merger or other acquisition agreement
between the Company and such Person (or one or more of such Person’s Affiliates or Associates) if such agreement has been
approved by the Board prior to such Person’s becoming an Acquiring Person; or (B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided, however, that a Person shall not be deemed the Beneficial Owner
of, or to beneficially own, any security by reason of such agreement, arrangement or understanding if the agreement, arrangement
or understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to
a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor
report); or





 


(iii)           which are beneficially
owned, directly or indirectly, by any other Person (or any Affiliate or Associate of such other Person) and with respect to which
such first Person or any of such first Person’s Affiliates or Associates has (x) any agreement, arrangement or understanding
(whether or not in writing) (other than customary agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated
by the proviso to Section 1(d)(ii)(B)) or disposing of such securities or (y) any agreement, arrangement or understanding (whether
or not in writing) to cooperate in obtaining, changing or influencing control of the issuer of such securities;


 


provided, however, that no Person
who is an officer, director or employee of an Exempt Person shall be deemed, solely by reason of such Person’s status or
authority as such, to be the “Beneficial Owner” of, to have “Beneficial Ownership” of or to “beneficially
own” any securities that are “beneficially owned” (as defined in this Section l(d)), including, without limitation,
in a fiduciary capacity, by an Exempt Person or by any other such officer, director or employee of an Exempt Person.


 


 (e)           “Board” shall mean the Board of Directors of the Company.








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(f)           “Business
Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of North
Carolina are authorized or obligated by law or executive order to close.


 


(g)           “Close
of Business” on any given date shall mean 5:00 p.m., New York time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 p.m., New York time, on the next succeeding Business Day.


 


(h)           “Common
Stock” when used with reference to the Company or without reference shall mean shall mean the common stock, no par value
per share, of the Company. “Common Stock” when used with reference to any Person other than the Company, shall mean
the common stock (or, in the case of any entity other than a corporation, the equivalent equity interest), with the greatest voting
power of such other Person or, if such other Person is a Subsidiary (as such term is hereinafter defined) of another Person, the
Person or Persons which ultimately control such first mentioned Person.


 


(i)           “Common
Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii) hereof.


 


(j)           “Company”
shall have the meaning set forth in the preamble.


 


(k)          “Current
Market Price” means, with respect to any Security, the current market price thereof determined in accordance with Section
11(d)(i).


 


(l)           “Current
Value” shall have the meaning ascribed to such term in Section 11(a)(iii).


 


(m)         “Distribution
Date” shall have the meaning set forth in Section 3(a) hereof.


 


(n)           “Equivalent Preferred Shares” shall have the meaning set forth in Section 11(b)
hereof.


 


(o)           “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.


 


(p)           “Exchange
Ratio” shall have the meaning set forth in Section 24(a) hereof.


 


(q)           “Exempt
Person” shall mean the Company or any Subsidiary of the Company, in each case including, without limitation, in its fiduciary
capacity, or any employee benefit plan of the Company or of any Subsidiary of the Company, or any entity or trustee holding (or
acting in a fiduciary capacity in respect of) Common Stock for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of the Company or of any Subsidiary of the Company.


 


(r)            “Expiration
Date” shall have the meaning set forth in Section 7(a) hereof.


 


(s)           “Final
Expiration Date” shall mean September 22, 2024.






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(t)            “Flip-In
Event” shall have the meaning set forth in Section 11(a)(ii) hereof.


 


(u)           “Initial
Purchase Price” shall mean Ten US Dollars ($10.00).


 


(v)           “Issuable
Securities” and “Issuable Shares” shall mean (i) before a Flip-In Event, shares of Preferred Stock,
and (ii) thereafter, shares of Preferred Stock and Common Stock, Common Stock Equivalents or other debt or equity securities or
equivalents of the Company for which a Right may be exercised.


 


(w)           “NASDAQ”
shall mean The NASDAQ Stock Market, LLC.


 


(x)           “Person”
shall mean any individual, firm, corporation, partnership, limited liability company, trust or other entity, and shall include
any successor (by merger or otherwise) to such entity.


 


(y)           “Preferred
Stock” shall have the meaning set forth in the recitals hereto. Any reference in this Agreement to a share of Preferred
Stock shall be deemed to include any authorized fraction of a share of Preferred Stock, unless the context otherwise requires.


 


(z)             “Principal
Party” shall have the meaning set forth in Section 13(b) hereof.


 


(aa)           “Purchase
Price” shall have the meaning set forth in Section 4 hereof.


 


(bb)           “Record
Date” shall have the meaning set forth in the recitals hereto.


 


(cc)           “Redemption
Date” shall have the meaning set forth in Section 7(a) hereof.


 


(dd)           “Redemption
Price” shall have the meaning set forth in Section 23(a) hereof.


 


(ee)           “Right”
shall have the meaning set forth in the recitals hereto.


 


(ff)            “Rights
Agent” shall have the meaning set forth in the preamble hereto.


 


(gg)          “Right
Certificate” shall have the meaning set forth in Section 3(a) hereof.


 


(hh)           “Security”
shall have the meaning set forth in Section 11(d) hereof.


 


(ii)             “Section
11(a)(ii) Trigger Date” shall have the meaning set forth in Section 11(a)(iii) hereof.


 


(jj)             “Securities
Act” shall mean the Securities Act of 1933, as amended.


 


(kk)           “Spread”
shall have the meaning set forth in Section 11(a)(iii) hereof.


 



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(ll)             “Stock
Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such, or such earlier date as a majority of the Board shall become aware of the existence of an Acquiring
Person.


 


(mm)           “Subsidiary”
of any Person shall mean any corporation or other entity of which securities or other ownership interests having ordinary voting
power sufficient to elect a majority of the board of directors or other persons performing similar functions are beneficially owned,
directly or indirectly, by such Person, and any corporation or other entity that is otherwise controlled by such Person.


 


(nn)           “Substitution
Period” shall have the meaning set forth in Section 11(a)(iii) hereof.


 


(oo)           “Summary
of Rights” shall have the meaning set forth in Section 3(b) hereof.


 


(pp)           “Trading
Day” shall mean a day on which the principal national securities exchange, trading market or automated quotation system
on which the Security is listed, admitted to trading or quoted is open for the transaction of business or, if the Security is not
listed, admitted to trading or quoted on any national securities exchange, trading market or automated quotation system, a Business
Day.


 


		2.	Appointment of Rights Agent.



 


The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable
(the term “Rights Agent” being used herein to refer, collectively, to the Rights Agent together with any such co-Rights
Agents), upon ten (10) days prior written notice to the Rights Agent. In the event the Company appoints one or more co-Rights Agents,
the respective duties of the Rights Agent and any co-Rights Agents shall be as the Company shall determine. The Rights Agent shall
have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such co-Rights Agent.


 


3.            Right Certificates.


 


(a)            Until the Close of Business on
the earlier of (i) the tenth Business Day after the Stock Acquisition Date or (ii) such date (prior to such time as any Person
becomes an Acquiring Person), if any, as may be determined by action of the Board after the date of the commencement by any Person
(other than an Exempt Person) of, or of the first public announcement of the intention of any Person (other than an Exempt Person)
to commence, a tender or exchange offer the consummation of which would result in any Person (other than an Exempt Person) having
beneficial ownership or becoming the Beneficial Owner of 10.0% or more of the shares of Common Stock then outstanding (the earlier
of such dates being herein referred to as the “Distribution Date”, provided, however, that the
Distribution Date shall in no event be prior to the Record Date), (x) the Rights will be evidenced (subject to the provisions of
Sections 3(b) and 3(c) hereof) by the certificates representing the Common Stock registered in the names of the holders thereof
and not by separate Right Certificates, and (y) the Rights will be transferable only in connection with the transfer of Common
Stock. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign
and the Company will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, insured, postage-prepaid
mail, to each record holder of Common Stock as of the Close of Business on the Distribution Date (other than any Acquiring Person
or any Associate or Affiliate of an Acquiring Person), at the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a “Right Certificate”), evidencing one Right
(subject to adjustment as provided herein) for each share of Common Stock so held. As of the Distribution Date, the Rights will
be evidenced solely by such Right Certificates. 






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(b)            On the Record Date, or as soon
as practicable thereafter, the Company will send a copy of a “Summary of Rights to Purchase Shares of Preferred Stock”,
in substantially the form of Exhibit C hereto (the “Summary of Rights”), by first-class, postage-prepaid
mail, to each record holder of Common Stock as of the Close of Business on the Record Date (other than any Acquiring Person or
any of its Associates and Affiliates), at the address of such holder shown on the records of the Company. With respect to certificates
representing Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with the Summary of Rights. Until the Distribution Date (or,
if earlier, the Expiration Date), the surrender for transfer of any such certificate representing Common Stock outstanding as of
the Record Date, without a copy of the Summary of Rights, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby.


 


(c)            Rights shall, without any further
action, be issued in respect of all shares of Common Stock issued or disposed of by the Company after the Record Date but prior
to the earlier of the Distribution Date and the Expiration Date, or in certain circumstances provided in Section 22 hereof, after
the Distribution Date. Certificates issued for Common Stock after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date, or in certain circumstances provided in Section 22 hereof, after the Distribution Date shall have
impressed on, printed on, written on or otherwise affixed to them the following legend:


 


This certificate also evidences and entitles
the holder hereof to certain rights as set forth in a Rights Agreement, made and entered into as of September 23, 2014 (as amended,
supplemented or otherwise modified from time to time, the “Rights Agreement”), between M&F Bancorp, Inc.,
a North Carolina corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, a New York
limited liability trust company, as Rights Agent (together with its successors in such capacity, the “Rights Agent”),
the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices
of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of its mailing, without charge after receipt of a written request therefor. UNDER CERTAIN CIRCUMSTANCES,
AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED
IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.


 



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With respect to such certificates
containing the foregoing legend, until the Distribution Date, the Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone, and the surrender for transfer of any shares of Common Stock represented by such
certificate shall also constitute the transfer of the Rights associated with the Common Stock represented thereby.


 


Notwithstanding this paragraph
(c), neither the omission of a legend nor the failure to deliver the notice of such legend required hereby shall affect the enforceability
of any part of this Agreement or the rights of any holder of the Rights.


 


(d)           In the event that the Company purchases
or otherwise acquires any shares of Common Stock after the Record Date but prior to the Distribution Date, any Rights associated
with such shares of Common Stock shall be deemed canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the shares of Common Stock which are no longer outstanding.


 


4.             Form
of Right Certificates.


 


The Right Certificates
(and the forms of election to purchase and assignment, to be printed on the reverse thereof) shall be substantially in the form
set forth in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may
be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange, trading market or interdealer quotation system on which the Rights may from time to time be listed, traded
or quoted, or to conform to usage. Subject to the provisions of this Agreement, each Right Certificate shall entitle the holder
thereof to purchase such number of one one-hundredths (1/100ths) of a share of Preferred Stock as shall be set forth therein at
the price per share of Preferred Stock set forth therein (such price per share, as adjusted from time to time as provided herein,
the “Purchase Price”); provided, however, that amount and type of Securities purchasable upon the exercise
of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein.


 


5.            Countersignature and Registration.


 


(a)            The Right Certificates shall be
executed on behalf of the Company by the President or a Vice President and by the Secretary or Treasurer or an Assistant Secretary
or an Assistant Treasurer of the Company under its corporate seal (which may be in the form of a facsimile of the seal of the Company);
provided that each signature may, but need not, be a facsimile signature imprinted or otherwise reproduced on the Rights Certificates.
The Right Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature, and shall not be
valid for any purpose unless countersigned. In case any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates nevertheless may be countersigned by the Rights Agent and issued and delivered by the Company with the
same force and effect as though the Person who signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any Person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution
of this Agreement any such Person was not such an officer.


 



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(b)            Following the Distribution Date,
the Rights Agent will keep or cause to be kept, at an office or agency designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of
the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the
Right Certificates.


 


6.            Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates; Uncertificated Rights.


 


(a)            Subject to the provisions of this
Agreement, at any time after the Distribution Date, and prior to the Expiration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have become null and void pursuant to Section 11(a)(ii) hereof or that
have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase a like number of shares of Preferred Stock as the Right Certificate
or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificates to be transferred, split up, combined or exchanged at the office or agency of the Rights
Agent designated for such purpose. Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.


 


(b)            Subject to the provisions of this
Agreement, at any time after the Distribution Date, and prior to the Expiration Date upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company’s request,
reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.



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(c)            If any Right Certificate to be
issued under this Agreement represents any Rights which are null and void pursuant to Section 11(a)(ii) hereof, the Rights Agent
shall: (i) if all of such Rights are so null and void, not issue such Right Certificate, and (ii) otherwise, issue such Right Certificate
evidencing only the Rights which are not so null and void.


 


(d)           Notwithstanding any other provision
hereof, the Company and the Rights Agent may amend this Agreement to provide for uncertificated Rights in addition to or in place
of Rights evidenced by Right Certificates, to the extent permitted by applicable law.


 


7.           Exercise of Rights; Purchase Price; Expiration
Date of Rights.


 


(a)            Except as otherwise provided herein,
the Rights shall become exercisable on the Distribution Date, and thereafter the registered holder of any Right Certificate (other
than Right Certificates representing Rights that have become null and void pursuant to Section 11(a)(ii) hereof or that have been
exchanged pursuant to Section 24 hereof) may, subject to Section 11(a)(ii) hereof and except as otherwise provided herein, exercise
the Rights evidenced thereby in whole or in part upon surrender of the Right Certificate, with the “Form of Election to
Purchase” on the reverse side thereof duly executed, to the Rights Agent at the office or agency of the Rights Agent
designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of one one-hundredth
of a share of Preferred Stock (or other securities, cash or other assets, as the case may be) as to which the Rights are exercised,
at or prior to the earliest of (i) the Close of Business on the Final Expiration Date, (ii) the time at which the Rights are redeemed
as provided in Section 23 hereof (the “Redemption Date”), (iii) the closing of any merger or other acquisition
transaction involving the Company pursuant to an agreement of the type described in Section 1(d)(ii)(A)(z) hereof, at which time
the Rights are terminated, or (iv) the time at which such Rights are exchanged as provided in Section 24 hereof (such earliest
time, the “Expiration Date”).


 


(b)           The Purchase Price for each one
one-hundredth (1/100th) of a share of Preferred Stock purchasable upon the exercise of a Right shall initially be the Initial Purchase
Price. The Purchase Price and the number of shares of Preferred Stock or other securities or property to be acquired upon exercise
of a Right shall be subject to adjustment from time to time as provided in Sections 11 and 13, and shall be payable in lawful money
of the United States of America in accordance with paragraph (c) of this Section 7.


 


(c)            Except as otherwise provided herein,
upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied
by payment of the aggregate Purchase Price for the number of shares of Preferred Stock (or other securities, cash or other assets
as the case may be) to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9(d) hereof, in cash or by certified check, cashier’s check or money order payable
to the order of the Company, the Rights Agent shall thereupon promptly: (i) (A) requisition from any transfer agent of the Preferred
Stock (or make available, if the Rights Agent is the transfer agent for the Preferred Stock) a certificate or certificates for
the number of shares of Preferred Stock (or other securities, cash or other assets as the case may be) to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) requisition from a depositary
agent appointed by the Company depositary receipts representing interests in such number of shares of Preferred Stock (or other
securities, cash or other assets as the case may be) as are to be purchased (in which case certificates represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the amount of cash, if any, to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii) promptly after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name
or names as may be designated by such holder and (iv) when appropriate, after receipt thereof, promptly deliver such cash, if any,
to or upon the order of the registered holder of such Right Certificate.


 



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(d)            Except as otherwise provided herein,
in case the registered holder of any Right Certificate shall exercise less than all of the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to the provisions of Section 14.


 


(e)           Notwithstanding anything in this
Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to
a registered holder of Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to Section 6 hereof
or as set forth in this Section 7 unless such registered holder shall have (i) completed and signed the Certificate contained in
the “Form of Assignment” or “Form of Election to Purchase” set forth on the reverse side
of the Right Certificate surrendered for such transfer or exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) thereof as the Company shall reasonably request.


 


8.            Cancellation and Destruction of Right Certificates.


 


All Right Certificates surrendered for
the purpose of exercise, transfer, split up, combination or exchange shall, and any Right Certificate representing Rights that
have become null and void pursuant to Section 11(a)(ii) surrendered for any purpose shall, if surrendered to the Company or to
any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent
shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Right Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company. Subject
to applicable law and regulation, the Rights Agent shall maintain in a retrievable database electronic records of all canceled
or destroyed Right Certificates which have been canceled or destroyed by the Rights Agent. The Rights Agent shall maintain such
electronic records for the term of this Agreement and any additional time period required by applicable law and regulation. Upon
written request of the Company (and at the expense of the Company), the Rights Agent shall provide to the Company or its designee
copies of such electronic records relating to Right Certificates canceled or destroyed by the Rights Agent and shall certify to
the Company the accuracy of such records. 



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9.            Availability of Shares of Preferred Stock.


 


(a)           The Company covenants and agrees
that it will use its best efforts to cause to be reserved and kept available out of its authorized and unissued shares of Preferred
Stock, the number of shares of Preferred Stock that will be sufficient to permit the exercise in full of all outstanding Rights.


 


(b)            So long as the shares of Preferred
Stock issuable and deliverable upon the exercise of the Rights may be listed or admitted to trading or quoting on any national
securities exchange, trading market or automated quotation system, the Company shall use all reasonable efforts to cause, from
and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed, admitted to trading or
quoted on such exchange, market or quotation system upon official notice of issuance upon such exercise.


 


(c)            The Company covenants and agrees
that it will take all such action as may be necessary to ensure that all shares of Preferred Stock delivered upon exercise of Rights
shall, at the time of delivery of the certificates evidencing such shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and non-assessable shares or securities.


 


(d)            The Company further covenants and
agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect
of the issuance or delivery of the Right Certificates or of any shares of Preferred Stock (or other securities of the Company)
upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary
receipts for the Preferred Stock (or other securities of the Company) in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or deliver any certificates or depositary receipts for
Preferred Stock (or other securities of the Company) upon the exercise of any Rights until any such tax shall have been paid (any
such tax being payable by that holder of such Right Certificate at the time of surrender) or until it has been established to the
Company’s reasonable satisfaction that no such tax is due.


 


(e)            From and after such time as the
Rights become exercisable, the Company shall use its best efforts, if then necessary to permit the issuance of shares of Preferred
Stock upon the exercise of Rights, to register and qualify such shares of Preferred Stock under the Securities Act and any applicable
state securities or “Blue Sky” laws (to the extent exemptions therefrom are not available), cause such registration
statement and qualifications to become effective as soon as possible after such filing and keep such registration and qualifications
effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of the date as of which
the Rights are no longer exercisable for such securities and the Expiration Date. The Company may temporarily suspend, for a period
of time not to exceed 120 days, the exercisability of the Rights in order to prepare and file a registration statement under the
Securities Act and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension
is no longer in effect. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction unless the requisite qualification in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act shall have been declared effective, unless an exemption therefrom is available.






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10.            Preferred Stock Record Date.


 


Each Person in whose name
any certificate for Preferred Stock is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder
of record of the shares of Preferred Stock (or other securities of the Company) represented thereby on, and such certificate shall
be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the date of such surrender and payment is
a date upon which the applicable transfer books of the Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the applicable transfer
books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not
be entitled to any rights of a holder of Preferred Stock (or other securities of the Company) for which the Rights shall be exercisable,
including, without limitation, the right to vote or to receive dividends or other distributions, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.


 


11.            Adjustment of Purchase Price, Number and Kind
of Shares and Number of Rights; Calculation of Price.


 


The Purchase Price, the
number of shares of Preferred Stock or other securities or property purchasable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this Section 11.


 


(a) (i)            In the event the Company shall
at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Stock payable in shares of Preferred
Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares
of Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the number and kind of shares of capital stock issuable upon exercise of a
Right as of the record date for such dividend or the effective date of such subdivision, combination or reclassification shall
be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time
when the Preferred Stock transfer books of the Company were open, the holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or reclassification.






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(ii)           Subject
to Section 24 of this Agreement, in the event any Person becomes an Acquiring Person (the first occurrence of such event being
referred to hereinafter as the “Flip-In Event”), then (A) the Purchase Price shall be adjusted to be the Purchase
Price in effect immediately prior to the Flip-In Event multiplied by the number of one one-hundredths (1/100ths) of a share of
Preferred Stock for which a Right was exercisable immediately prior to such Flip-In Event, whether or not such Right was then
exercisable, and (B) each holder of a Right, except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof,
shall thereafter have the right to receive, upon exercise thereof at a price equal to the Purchase Price (as so adjusted), in
accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of Common Stock as
shall equal the result obtained by dividing the Purchase Price (as so adjusted) by 50% of the Current Market Price of the Common
Stock (determined pursuant to Section 11(d) hereof) on the date of such Flip-In Event; provided, however, that the
Purchase Price (as so adjusted) and the number of shares of Common Stock so receivable upon exercise of a Right shall, following
the Flip-In Event, be subject to further adjustment as appropriate in accordance with Section 11(f) hereof. Notwithstanding anything
in this Agreement to the contrary, however, from and after the Flip-In Event, any Rights that are beneficially owned by (x) any
Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (y) a transferee of any Acquiring Person (or of any
such Affiliate or Associate) who becomes a transferee after the Flip-In Event or (z) a transferee of any Acquiring Person (or
of any such Affiliate or Associate) who became a transferee prior to or concurrently with the Flip-In Event pursuant to either
(I) a transfer (whether or not for consideration) from the Acquiring Person to holders of its equity securities or to any Person
with whom it has any continuing agreement, arrangement or understanding (whether or not in writing) regarding the transferred
Rights or (II) a transfer which the Board has determined is part of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of this paragraph, and subsequent transferees, either direct transferees or transferees through
one or more intermediate transferees, of such Persons, shall be null and void without any further action and any holder of such
Rights shall thereafter have no rights whatsoever with respect to such Rights under any provision of this Agreement. The Company
shall use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of its failure to make any determinations with respect
to an Acquiring Person, its Affiliates or Associates or its or their transferees hereunder. From and after the Flip-In Event,
no Right Certificate shall be issued pursuant to Section 3 or Section 6 hereof that represents Rights that are or have become
null and void pursuant to the provisions of this paragraph, and any Right Certificate delivered to the Rights Agent that represents
Rights that are or have become null and void pursuant to the provisions of this paragraph shall be canceled. From and after the
occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore have not been exercised pursuant to this
Section 11(a)(ii) shall thereafter be exercisable only in accordance with Section 13 and not pursuant to this Section 11(a)(ii).


 



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(iii)           The Company may at its option
substitute for a share of Common Stock issuable upon the exercise of Rights in accordance with the foregoing subparagraph (ii)
a number of shares of Preferred Stock or fraction thereof such that the Current Market Price of one (1) share of Preferred Stock
multiplied by such number or fraction is equal to the Current Market Price of one (1) share of Common Stock. In the event that
there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit the exercise
in full of the Rights in accordance with the foregoing subparagraph (ii), the Board shall, with respect to such deficiency, to
the extent permitted by applicable law and any material agreements then in effect to which the Company is a party, (A) determine
the excess (such excess, the “Spread”) of (1) the value of the shares of Common Stock issuable upon the exercise
of a Right in accordance with the foregoing subparagraph (ii) (the “Current Value”) over (2) the Purchase Price
(as adjusted in accordance with the foregoing subparagraph (ii)), and (B) with respect to each Right (other than Rights which have
become null and void pursuant to the foregoing subparagraph (ii)), make adequate provision to substitute for the shares of Common
Stock issuable in accordance with the foregoing subparagraph (ii) upon exercise of the Right and payment of the Purchase Price
(as adjusted in accordance therewith), (1) cash, (2) a reduction in such Purchase Price, (3) shares of Preferred Stock or other
equity securities of the Company (including, without limitation, shares or fractions of shares of preferred stock which, by virtue
of having dividend, voting and liquidation rights substantially comparable to those of the shares of Common Stock are determined
by the Board to have substantially the same value as the shares of Common Stock (such shares of Preferred Stock and shares or fractions
of shares of preferred stock are hereinafter referred to as “Common Stock Equivalents”, and, when used with reference
to any Person other than the Company, shall have a correlative meaning in respect of such Person’s Common Stock)), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the foregoing, having a value which, when added to the value
of the shares of Common Stock issued upon exercise of such Right, shall have an aggregate value equal to the Current Value (less
the amount of any reduction in such Purchase Price), where such aggregate value has been determined by the Board; provided,
however, that if the Company shall not make adequate provision to deliver value pursuant to clause (B) above within thirty
(30) days following the Flip-In Event (the date of the Flip-In Event being the “Section 11(a)(ii) Trigger Date”),
then the Company shall be obligated to deliver, to the extent permitted by applicable law and any material agreements then in effect
to which the Company is a party, upon the surrender for exercise of a Right and without requiring payment of such Purchase Price,
shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock
(to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If,
upon the occurrence of the Flip-In Event, the Board shall determine that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the Rights, then, if the Board so elects, the thirty (30) day period
set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek shareholder approval for the authorization of such additional shares (such thirty (30)
day period, as it may be extended, is herein called the “Substitution Period”). To the extent that the Company
determines that some action need be taken pursuant to the second and/or third sentence of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 11(a)(ii) hereof and the last sentence of this Section 11(a)(iii) hereof, that such action
shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution
to be made pursuant to such second sentence and to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the per share value
of the shares of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii)
Trigger Date and the per share or fractional value of any Common Stock Equivalent shall be deemed to equal the Current Market Price
of the Common Stock. The Board may, but shall not be required to, establish procedures to allocate the right to receive shares
of Common Stock upon the exercise of the Rights among the holders of Rights pursuant to this Section 11(a)(iii).           


 



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(b)           In case the Company shall fix a
record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having the same preferences,
limitations and relative rights as the Preferred Stock (“Equivalent Preferred Shares”)) or securities convertible
into shares of Preferred Stock or Equivalent Preferred Shares at a price per share of Preferred Stock or Equivalent Preferred Shares
(or having a conversion price per share, if a security convertible into shares of Preferred Stock or Equivalent Preferred Shares)
less than the then Current Market Price of the Preferred Stock (determined pursuant to Section 11(d) hereof) on such record date,
the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock and Equivalent
Preferred Shares outstanding on such record date plus the number of shares of Preferred Stock and Equivalent Preferred Shares which
the aggregate offering price of the total number of shares of Preferred Stock and/or Equivalent Preferred Shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market
price, and the denominator of which shall be the number of shares of Preferred Stock and Equivalent Preferred Shares outstanding
on such record date plus the number of additional shares of Preferred Stock and/or Equivalent Preferred Shares to be offered for
subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be
paid in consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined
by the Board, whose determination shall be described in a statement filed with the Rights Agent. Shares of Preferred Stock and
Equivalent Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be
in effect if such record date had not been fixed.


 


(c)            In case the Company shall fix a
record date for the making of a dividend or distribution to all holders of the Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences
of indebtedness or assets (other than a regular quarterly or other periodic cash dividend, or a dividend payable in shares of Common
Stock or Preferred Stock, but excluding a dividend payable in capital stock other than shares of Common Stock or Preferred Stock)
or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then Current Market Price of a share of Preferred Stock on such record date (determined pursuant
to Section 11(d) hereof), less the fair market value (as determined by the Board, which determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to Preferred Share, and the denominator of which shall be such Current Market Price of a share of
Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not
so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date
had not been fixed.


 



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(d) (i)            Except as otherwise provided
herein, for the purpose of any computation hereunder, the “Current Market Price" of any security (a “Security”
for the purpose of this Section 11(d)) on any date shall be deemed to be the average of the daily closing prices per share of such
Security for the thirty (30) consecutive Trading Days immediately prior to such date; provided, however, that in
the event that the Current Market Price of the Security is determined during a period following the announcement by the issuer
of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible
into such shares (other than, in the case of the shares of Common Stock, the Rights), or (B) any subdivision, combination, consolidation
or reclassification of such Security, and prior to the expiration of thirty (30) Trading Days period, after the ex-dividend date
for such dividend or distribution, or the record date for such subdivision, combination, consolidation or reclassification, then,
and in each such case, the Current Market Price shall be appropriately adjusted to reflect the current market price per share equivalent
of such security.


 


(ii)            The closing price of a Security
on a given date shall be determined in the following order of preference (unless the Board reasonably determines that a different
order would yield more accurate results): (A) if such Security is listed or admitted to trading on a national securities exchange
or trading market, the last sale price, or, in case no such sale takes place on such date, the average of the closing bid and asked
prices, in either case as reported in the principal consolidated transaction reporting system for such securities exchange or trading
market, (B) if such Security is quoted on a national automated quotation system or in the over-the-counter market, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices, as reported by any system then in use, (C) if one
or more professional market-makers is making a market in such Security on such date, the average of the closing bid and asked prices
as furnished by such professional market-maker selected by the Board, or (D) otherwise, the fair value of the Security at the Close
of Business on such date as determined in good faith by the Board (which determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes).


 


(e)            No adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this Section 11(e) shall be made to the nearest cent
or to the nearest one one-hundredth of a share of Preferred Stock or one one-hundredth of any other share or security, as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three (3) years from the date of the transaction which requires such adjustment, and (ii) the Expiration
Date.


 



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(f)            If as a result of an adjustment
made pursuant to Section 11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive
any Issuable Shares other than shares of Preferred Stock, thereafter the number of such other Issuable Shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Stock contained in Sections 11(a) through 11(e), inclusive, Sections 11(g) through
11(k), inclusive, and Section 11(m), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock shall
apply on like terms to any such other Issuable Shares.


 


(g)            All Rights originally issued by
the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredth (1/100ths) of a share of Preferred Stock purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided herein.


 


(h)            Unless the Company shall have exercised
its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections
11(b) and 11(c), each Right outstanding immediately prior to such adjustment shall thereafter evidence the right to purchase, at
such adjusted Purchase Price, that number of shares of Preferred Stock (calculated to the nearest one one-hundredth of a Share)
equal to the quotient of (i) the product of (x) the number of shares of Preferred Stock covered by a Right immediately prior to
such adjustment, times (y) the Purchase Price in effect immediately prior to such adjustment, divided by (ii) the Purchase Price
in effect immediately after such adjustment.


 


(i)            The Company may elect on or after
the date of any adjustment of the Purchase Price pursuant to Sections 11(b) or 11(c) hereof to adjust the number of Rights, in
substitution for any adjustment in the number of shares of Preferred Stock purchasable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-hundredth (1/100ths)
of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one-hundredth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be
made. Such record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least ten (10) days later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company may, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates
held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates to be so distributed
may, at the Company's option, bear an adjusted Purchase Price, and shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in
the public announcement.


 



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(j)            Irrespective of any adjustment
or change in the Purchase Price or the number of shares of Preferred Stock issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the Purchase Price per share of Preferred Stock which was
expressed in the initial Right Certificates issued hereunder.


 


(k)            Before taking any action that would
cause an adjustment reducing the Purchase Price below the then par value, if any, of the number of a one one-hundredths (1/100ths)
of a share of Preferred Stock or other securities issuable upon exercise of the Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and non-assessable
shares of Preferred Stock or other securities at such adjusted Purchase Price.


 


(l)            In any case in which this Section
11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date
the shares of Preferred Stock or other Issuable Securities, if any, issuable upon such exercise over and above the number shares
of Preferred Stock or other Issuable Securities, if any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional Issuable Securities upon the occurrence of the event requiring
such adjustment.


 


(m)            Anything in this Section 11 to
the contrary notwithstanding, the Company shall be entitled to make such adjustments in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable
in order that any (i) consolidation or subdivision of Preferred Stock or Common Stock, (ii) issuance wholly for cash of shares
of Preferred Stock or Common Stock at less than the Current Market Price, (iii) issuance wholly for cash of any debt or equity
securities which by their terms are convertible into or exchangeable for shares of Preferred Stock or Common Stock, (iv) stock
dividends, or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders
of its Preferred Stock or Common Stock shall not be taxable to such shareholders.


 


(n)            Anything in this Agreement to the
contrary notwithstanding, in the event that at any time after the date of this Agreement and prior to the Distribution Date, the
Company shall (i) declare and pay any dividend on the Common Stock payable in Common Stock, or (ii) effect a subdivision, combination
or consolidation of the Common Stock (by reclassification or otherwise than by payment of a dividend payable in Common Stock) to
a greater or lesser number of shares of Common Stock, then, in each such case, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered thereafter, shall be proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately prior to such event by a fraction the numerator of which
shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence of such event.


 



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(o)            The Company agrees that, after
the earlier of a Stock Acquisition Date and the Distribution Date, it will not, except as permitted by Sections 23, 24 or 27 hereof,
take (or permit any of its Subsidiaries to take) any action the purpose of which is, or if at the time such action is taken it
is reasonably foreseeable that the effect of such action would be, materially to diminish or otherwise eliminate the benefits intended
to be afforded by the Rights.


 


12.            Certificate of Adjusted Purchase Price or
Number of Shares.


 


Whenever an adjustment
is made as provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent
for the Common Stock and the Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder of
a Right Certificate (or, prior to the Distribution Date, to each holder of shares of Common Stock or Preferred Stock) in accordance
with Section 25 hereof (if so required under Section 25 hereof). Notwithstanding the foregoing sentence, the failure of the Company
to make such certification or give notice shall not affect the validity of such adjustment, or the force or effect of the requirement
for such adjustment. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any such adjustment unless and until it shall have received such certificate.


 


13.            Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.


 


(a)            In the event, directly or indirectly,
at any time after the Flip-In Event (i) the Company shall consolidate with or shall merge into any other Person, (ii) any Person
shall merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection
with such merger, all or part of the Common Stock shall be changed into or exchanged for stock or other securities of any other
Person (or of the Company) or cash or any other property, or (iii) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or
more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person (other than the
Company or one or more wholly-owned Subsidiaries of the Company), then upon the first occurrence of such event, proper provision
shall be made so that: (A) each holder of a Right (other than Rights which have become null and void pursuant to Section 11(a)(ii)
hereof) shall thereafter have the right to receive, upon the exercise thereof at the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof), in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock
or Common Stock of the Company, such number of validly authorized and issued, fully paid, non-assessable and freely tradeable shares
of Common Stock of the Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall equal the result obtained by dividing the Purchase Price (as theretofore adjusted
in accordance with Section 11(a)(ii) hereof) by 50% of the Current Market Price of the Common Stock of such Principal Party (determined
pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer; provided,
however, that the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof) and the number of
shares of Common Stock of such Principal Party so receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(f) hereof to reflect any events occurring in respect of the Common Stock of such Principal
Party after the occurrence of such consolidation, merger, sale or transfer; (B) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (C) the term “Company” shall thereafter be deemed to refer to such Principal Party; and
(D) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of its shares
of Common Stock in accordance with Section 9 hereof) in connection with such consummation of any such transaction as may be necessary
to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the shares
of its Common Stock thereafter deliverable upon the exercise of the Rights; provided that, upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other extraordinary transaction in respect of such Principal Party, each holder
of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase Price as provided in this
Section 13(a), such cash, shares, rights, warrants and other property which such holder would have been entitled to receive had
such holder, at the time of such transaction, owned the Common Stock of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13(a), and such Principal Party shall take such steps (including, but not limited to, reservation of shares
of stock) as may be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.           


 



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           (b)            “Principal Party”
shall mean:


 


(i)           in the case of any
transaction described in Section 13(a)(i) or (ii) hereof: (A) the Person that is the issuer of the securities into which the shares
of Common Stock are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer the shares
of Common Stock of which have the greatest aggregate market value of shares outstanding, or (B) if no securities are so issued,
(x) the Person that is the other party to the merger, if such Person survives said merger, or, if there is more than one such Person,
the Person the shares of Common Stock of which have the greatest aggregate market value of shares outstanding or (y) if the Person
that is the other party to the merger does not survive the merger, the Person that does survive the merger (including the Company
if it survives) or (z) the Person resulting from the consolidation; and


 



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(ii)           in the case of any
transaction described in Section 13(a)(iii) hereof, the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions, or, if each Person that is a party to such transaction
or transactions receives the same portion of the assets or earning power so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever of such Persons is the issuer of Common Stock having the
greatest aggregate market value of shares outstanding;


 


provided, however, that in any such
case described in the foregoing clause (b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has not been
continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, then (1) if such Person is a direct
or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, the term “Principal Party”
shall refer to such other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common
Stock of all of which is and has been so registered, the term “Principal Party” shall refer to whichever of such Persons
is the issuer of Common Stock having the greatest aggregate market value of shares outstanding, or (3) if such Person is owned,
directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in clauses (1) and (2) above shall apply to each of the owners having an interest in the venture as
if the Person owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the Principal Party in each
such case shall bear the obligations set forth in this Section 13 in the same ratio as its interest in such Person bears to the
total of such interests.


 


(c)            The Company shall not consummate
any consolidation, merger, sale or transfer referred to in Section 13(a) hereof unless prior thereto the Company and the Principal
Party involved therein shall have executed and delivered to the Rights Agent an agreement confirming that the requirements of Sections
13(a) and (b) hereof shall promptly be performed in accordance with their terms and that such consolidation, merger, sale or transfer
of assets shall not result in a default by the Principal Party under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b) hereof and providing that, as soon as practicable after executing such agreement
pursuant to this Section 13, the Principal Party will:


 


(i)           prepare
and file a registration statement under the Securities Act, if necessary, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, use its best efforts to cause such registration statement to become effective
as soon as practicable after such filing and use its best efforts to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date and similarly comply with
applicable state securities laws;


 


(ii)           use its best efforts, if the Common
Stock of the Principal Party shall be listed or admitted to trading on the New York Stock Exchange, NASDAQ or on another national
securities exchange, to list or admit to trading (or continue the listing of) the Rights and the securities purchasable upon exercise
of the Rights on the New York Stock Exchange or such securities exchange, or, if the Common Stock of the Principal Party shall
not be listed or admitted to trading on the New York Stock Exchange, NASDAQ or a national securities exchange, to cause the Rights
and the securities receivable upon exercise of the Rights to be authorized for quotation on any other system then in use;


 



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(iii)           deliver to holders of the Rights
historical financial statements for the Principal Party which comply in all respects with the requirements for registration on
Form 10 (or any successor form) under the Exchange Act; and


 


(iv)           obtain waivers of any rights of
first refusal or preemptive rights in respect of the Common Stock of the Principal Party subject to purchase upon exercise of outstanding
Rights.


 


(d)            In case the Principal Party has
a provision in any of its authorized securities or in its articles of incorporation or bylaws or other instrument governing its
affairs, which provision would have the effect of (i) causing such Principal Party to issue (other than to holders of Rights pursuant
to this Section 13), in connection with, or as a consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock or common stock equivalents of such Principal Party at less than the then Current Market Price or securities
exercisable for, or convertible into, shares of Common Stock or common stock equivalents of such Principal Party at less than such
then Current Market Price, or (ii) providing for any special payment, tax or similar provision in connection with the issuance
of the Common Stock of such Principal Party pursuant to the provisions of Section 13, then, in such event, the Company hereby agrees
with each holder of Rights that it shall not consummate any such transaction unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental agreement providing that the provision in question of
such Principal Party shall have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that
the applicable provision will have no effect in connection with, or as a consequence of, the consummation of the proposed transaction.


 


(e)            The Company covenants and agrees
that it shall not, at any time after the Flip-In Event, enter into any transaction of the type described in clauses (i) through
(iii) of Section 13(a) hereof if (i) at the time of or immediately after such consolidation, merger, sale or transfer of assets
or other extraordinary transaction there are any rights, warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights, (ii) prior
to, simultaneously with or immediately after such consolidation, merger, sale or transfer of assets or other extraordinary transaction,
the shareholders of the Person who constitutes, or would constitute, the Principal Party for purposes of Section 13(b) hereof shall
have received a distribution of Rights previously owned by such Person or any of its Affiliates or Associates, or (iii) the form
or nature of organization of the Principal Party would preclude or limit the exercisability of the Rights.


 


14.            Fractional Rights and Fractional Shares.


 


(a)           The Company shall
not be required to issue fractions of Rights or, except prior to the Distribution Date in accordance with Section 11(i) hereof,
to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount
in cash equal to the same fraction of the current market value of a whole Right.  For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of a Right (as determined pursuant to Section 11(d)(ii) hereof)
for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable.  






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(b)            The Company shall not be required
to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples of one one-hundredth (1/100th)
of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth (1/100th) of a share of Preferred Stock). Interests
in fractions of shares of Preferred Stock in integral multiples of one one-hundredth (1/100th) of a share of Preferred Stock may,
at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and
a depositary selected by it; provided, that such agreement shall provide that the holders of such depositary receipts shall have
all the preferences, limitations and relative rights to which they are entitled as beneficial owners of shares of Preferred Stock
represented by such depositary receipts. In lieu of fractional shares of Preferred Stock that are not integral multiples of one
one-hundredth (1/100th) of a share of Preferred Stock, the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value
of a share of Preferred Stock. For purposes of this Section 14(b), the current market value of a share of Preferred Stock shall
be (x) one hundred multiplied by (y) the closing price of a share of Common Stock (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date of such exercise.


 


(c)            The Company shall not be required
to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares of Common Stock upon
the exercise or exchange of Rights. In lieu of such fractional shares of Common Stock, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional shares of Common Stock would otherwise be issuable an amount
in cash equal to the same fraction of the current market value of a whole share of Common Stock. For purposes of this Section 14(c),
the current market value of one (1) share of Common Stock for which a Right is exercisable shall be deemed to be the closing price
of one (1) share of Common Stock (as determined in accordance with Section 11(d)(ii) hereof) for the Trading Day immediately prior
to the date of such exercise.


 


(d)            The holder of a Right by the acceptance
of the Right expressly waives his right to receive any fractional Rights or any fractional shares (other than fractions that are
integral multiples of one one-hundredth (1/100th) of a share of Preferred Stock) upon exchange or exercise of a Right (except as
provided above).


 


15.            Rights of Action.


 


All rights of action in
respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common
Stock); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the shares of Common Stock),
without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of
the Common Stock), on his own behalf and for his own benefit, may enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Right Certificate
(or, prior to the Distribution Date, such shares of Common Stock) in the manner provided therein and in this Agreement.  Without
limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to,
this Agreement.



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16.            Agreement of Right Holders.


 


Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:


 


(a)            Prior to the Distribution Date,
the Rights will be transferable only in connection with the transfer of the Common Stock and the Right associated with each such
share of Common Stock shall be automatically transferred upon the transfer of each such share of Common Stock;


 


(b)            After the Distribution Date, the
Right Certificates are transferable, subject to Section 11(a)(ii), only on the registry books of the Rights Agent if surrendered
at the office or agency of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates properly completed and duly executed;


 


(c)            The Company and the Rights Agent
may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the Common Stock certificate)
is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent.


 


17.            Right Certificate Holder Not Deemed a Shareholder.


 


No holder, as such, of
any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Stock
or any other Issuable Securities of the Company which may at any time be issuable on the exercise or exchange of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder or Beneficial Owner
of any Right Certificate, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except as provided in this Agreement), or to receive dividends
or other distributions or to exercise any preemptive or subscription rights, or otherwise, until the Rights evidenced by such Right
Certificate shall have been exercised or exchanged in accordance with the provisions hereof.



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           18.            Concerning the Rights Agent.


 


           (a)            The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Agreement
and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability or expense, incurred without gross negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending against any claim of liability arising therefrom, directly or
indirectly.


 


(b)           The Rights Agent
shall be protected and shall incur no liability for, or in respect of, any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right Certificate or certificate representing the Preferred Stock,
the Common Stock or any other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other paper or document believed by it to be genuine and
to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice
of counsel as set forth in Section 20 hereof.


 


(c)           The provisions of
Section 18 and 20 shall survive the exercise or expiration of the Rights, the resignation or removal of the Rights Agent and the
termination of this Agreement.


 


19.            Merger or Consolidation or Change of Name of Rights
Agent.


 


(a)            Any Person into which the Rights
Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger
or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to all or substantially
all of the stock transfer, corporate trust or transfer agent business of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such Person would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates
in the name of either the predecessor or the successor Rights Agent; and in all such cases such Right Certificates shall have the
full force and effect provided in the Right Certificates and in this Agreement.


 



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(b)           In case at any time the name of
the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates
either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force provided
in the Right Certificates and in this Agreement.


 


20.            Duties of Rights Agent.


 


The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound:


 


(a)            The Rights Agent may consult with
legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization
and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion.


 


(b)            Whenever
in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter
(including the identity of any Acquiring Person and the determination of the Closing Price or Current Market Price of any Security)
be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman of the Board, the President and Chief Executive Officer, any Vice President
or the Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken, suffered or omitted to be taken in good faith by it under the provisions of this Agreement in reliance
upon such certificate.


 


(c)            The Rights Agent shall be liable
hereunder only for its own gross negligence, bad faith or willful misconduct. Notwithstanding anything in this Agreement to the
contrary, in no event will the Rights Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damage
and regardless of the form of action. Any liability of the Rights Agent under this Agreement will be limited to the amount of annual
fees paid by the Company to the Rights Agent.


 


(d)            The
Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or
in the Right Certificates or be required to verify the same (in each case, except its countersignature on such Right Certificates),
but all such statements and recitals are and shall be deemed to have been made by the Company only.






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(e)            The Rights Agent shall not be under
any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming null
and void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights provided for in Sections 3, 11, 13,
23 and 24, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after receipt of a certificate furnished pursuant to Section 12, describing
such change or adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization
or reservation of any shares of Preferred Stock or other securities to be issued pursuant to this Agreement or any Right Certificate
or as to whether any shares of Preferred Stock or other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.


 


(f)            The Company agrees that it will
perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.


 


(g)            The Rights Agent is hereby authorized
and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the
Board, the President and Chief Executive Officer, any Vice President or the Secretary of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and shall not be liable for any action taken or suffered by it in good
faith or lack of action in accordance with instructions of any such officer or for any delay in acting while waiting for such instructions.
Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the Rights Agent under this Agreement and the date on or after which such
action shall be taken or such omission shall be effective. The Rights Agent shall not be liable for any action taken by, or omission
of, the Rights Agent in accordance with a proposal included in any such application on or after the date specified in such application
(which date shall not be less than five (5) Business Days after the date any officer of the Company actually receives such application,
unless any such officer shall have consented in writing to an earlier date) unless, prior to taking any such action (or the effective
date in the case of an omission), the Rights Agent shall have received written instruction in response to such application specifying
the act to be taken or omitted.


 


(h)            The Rights Agent and any shareholder,
Affiliate, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of
the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not the Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person.


 


(i)            The Rights Agent may execute and
exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.


 



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(j)           If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the Certificate contained in the “Form of Assignment” or
“Form of Election to Purchase,” as the case may be, has either not been completed to certify the holder is not an Acquiring
Person (or an Affiliate or Associate thereof) or a transferee thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the Company.


 


21.            Change of Rights Agent.


 


The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing
mailed to the Company and, in the event that the Rights Agent or one of its Affiliates is not also the transfer agent for the Company,
to each transfer agent of the Common Stock or Preferred Stock by registered or certified mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Stock or Preferred Stock by registered or certified mail, and, following
the Distribution Date, to the holders of the Right Certificates by first-class mail. In the event the transfer agency relationship
in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and
be discharged from its duties under this Agreement as of the effective date of such termination, and the Company shall be responsible
for sending any required notice. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of
30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate
for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall
be a Person organized and doing business under the laws of the United States or any state of the United States so long as such
entity is authorized to do business as a banking institution in such state, in good standing, which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority
and which has at the time of its appointment as Rights Agent a combined capital and surplus, along with its Affiliates, of at least
$50 million. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment the Company shall
mail notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock or Preferred Stock,
and, following the Distribution Date, mail a notice thereof in writing to the registered holders of the Right Certificates. Failure
to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.



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22.            Issuance of New Right Certificates.


 


(a)            Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights
in such forms as may be approved by the Board to reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions
of this Agreement.


 


(b)            In addition, in connection with
the issuance or sale of shares of Common Stock following the Distribution Date and prior to the Expiration Date, the Company may
(a) with respect to shares of Common Stock so issued or sold pursuant to the exercise of stock options or under any employee plan
or arrangement, or upon the exercise, conversion or exchange of securities (other than the Rights), notes or debentures issued
by the Company, in each case existing prior to the Distribution Date, and (b), in any other case, if deemed necessary or appropriate
by the Board; issue Right Certificates evidencing the appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) the Company shall not be obligated to issue any such Right Certificates if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Right Certificate would be issued, (ii) no such Right Certificate shall be issued if, and
to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof, (iii) no such Right
Certificate shall be issued to an Acquiring Person or an Affiliate or Associate of an Acquiring Person, and (iv) no such Right
Certificate shall be issued in connection with any shares of Common Stock issued upon the exercise of any Rights.


 


23.            Redemption and Termination.


 


(a)            The Board may, at any time prior
to the Flip-In Event, redeem all but not less than all the then outstanding Rights at a redemption price of $0.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring in respect of the Common Stock after the date
hereof (the redemption price being hereinafter referred to as the “Redemption Price”). The redemption of the
Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish.
The Redemption Price shall be payable, at the option of the Company, in cash, shares of Common Stock or such other form of consideration
as the Board shall determine.


 


(b)            In any redemption pursuant to this
Section 23, the Company may, at its option, pay the Redemption Price in shares of Common Stock (based on the Current Market Price
of a share of Common Stock at the time of redemption and subject to Section 14), cash or other consideration deemed appropriate
by the Board; provided that if the Company elects to pay the Redemption Price in shares of Common Stock, the Company shall not
be required to issue any fractional shares of Common Stock and the number of shares of Common Stock issuable to each holder of
Rights shall be rounded down to the next whole share.


 



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(c)            Immediately upon the date for redemption
and satisfaction of other conditions, if any, set forth (or determined in the manner specified) in the action of the Board ordering
the redemption of the Rights pursuant to Section 23(a) (or at such later time as the Board may establish for the effectiveness
of such redemption), and without any further action and without any notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall
not affect the validity of such redemption. Within ten (10) days after such effective date for redemption (or such later time as
the Board may establish for the effectiveness of such redemption), the Company shall mail a notice of redemption to all the holders
of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the transfer agent for the shares of Common Stock. Any notice which is so mailed
to a holder shall be deemed given, whether or not the holder receives such notice. Each such notice of redemption shall state the
method by which the payment of the Redemption Price will be made.


 


(d)            The Company may, at its option,
discharge all of its obligations with respect to the Rights by (i) making a public announcement or other disclosure of the manner
of redemption of the rights in accordance with this Agreement, and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent of the shares of Common Stock, and upon such action, all outstanding Rights and
Right Certificates shall terminate and be null and void without any further action by the Company or the Rights Agent.


 


24.            Exchange.


 


(a)            The Board may, at its option, at
any time after the Flip-In Event, exchange all or part of the then outstanding Rights (which shall not include Rights that have
become null and void pursuant to the provisions of Section 11(a)(ii) hereof) for shares of Common Stock at an exchange ratio of
one (1) share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring in respect of the Common Stock, after the date hereof (such amount per Right being hereinafter referred to as the “Exchange
Ratio”). Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any time after an
Acquiring Person shall have become the Beneficial Owner of 50% or more of the shares of the Common Stock then outstanding. From
and after the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore have not been exchanged pursuant
to this Section 24(a) shall thereafter be exercisable only in accordance with Section 13 and may not be exchanged pursuant to this
Section 24(a). The exchange of the Rights by the Board may be made effective at such time, on such basis and with such conditions
as the Board in its sole discretion may establish. Prior to effecting an exchange pursuant to this Section 24, the Board may direct
the Company to enter into such arrangements or implement such procedures as it deems necessary or appropriate for ensuring that
Common Stock (or such other consideration contemplated by Section 24(c) below) issuable upon an exchange pursuant to this Section
24 is not received by any holders of Rights that have become null and void pursuant to Section 11(a)(ii) hereof, including entering
into a Trust Agreement in such form and with such terms as its Board shall then approve (the “Trust Agreement”).
If the Board so directs, the Company shall enter into the Trust Agreement and shall issue to the trust created by such agreement
(the “Trust”) all of the shares of Common Stock (or such other consideration) issuable pursuant to the exchange,
and all Persons entitled to receive shares (or such other consideration) pursuant to the exchange shall be entitled to receive
such shares (or such other consideration) (and any dividends or distributions made thereon after the date on which such shares
are deposited in the Trust) only from the Trust and solely upon compliance with the relevant terms and provisions of the Trust
Agreement.


 



    	33



    	 



    




(b)           Immediately upon the effectiveness
of the action of the Board ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any further
action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio (or such other consideration contemplated by Section 24(c) below). The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall promptly mail a notice of any such exchange to all of the holders of the
Rights so exchanged at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the shares of Common Stock (or such other consideration) for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become null and void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.


 


(c)           The Company may at its option substitute,
and, in the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued
to permit an exchange of Rights for Common Stock as contemplated in accordance with this Section 24, the Company shall substitute
to the extent of such insufficiency, for each share of Common Stock that would otherwise be issuable upon exchange of a Right,
a number of shares of Preferred Stock or fraction thereof (or Equivalent Preferred Shares, as such term is defined in Section 11(b))
such that the Current Market Price (determined pursuant to Section 11(d) hereof) of one (1) share of Preferred Stock (or Equivalent
Preferred Share) multiplied by such number or fraction is equal to the Current Market Price of one (1) share of Common Stock (determined
pursuant to Section 11(d) hereof) as of the date of such exchange.           


 


25.            Notice of Certain Events.




 


(a)            In case the Company shall at any
time after the earlier of the Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend payable in stock
of any class to the holders of its Preferred Stock or to make any other distribution to the holders of its Preferred Stock (other
than a regular quarterly or other periodic cash dividend), (ii) to offer to the holders of its Preferred Stock rights or warrants
to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the
subdivision or combination of outstanding Preferred Stock), (iv) to effect the liquidation, dissolution or winding up of the Company,
or (v) to pay any dividend on the Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation
of the Common Stock (by reclassification or otherwise than by payment of dividends in Common Stock), then, in each such case, the
Company shall give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such dividend or distribution or offering of rights or warrants, or the
date on which such liquidation, dissolution, winding up, reclassification, subdivision, combination or consolidation is to take
place and the date of participation therein by the holders of the Common Stock and/or Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to
the record date for determining holders of the Preferred Stock for purposes of such action, and in the case of any such other action,
at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of
the Common Stock and/or Preferred Stock, whichever shall be the earlier. The failure to give notice required by this Section 25
or any defect therein shall not affect the legality or validity of the action taken by the Company or the vote upon any such action.

 



    	34



    	 



    
 


(b)            In case any event described in
Section 11(a)(ii) or Section 13 shall occur, then (i) the Company shall as soon as practicable thereafter give to each holder of
a Right Certificate (or if occurring prior to the Distribution Date, the holders of the Common Stock) in accordance with Section
26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such event
to holders of Rights under Section 11(a)(ii) and Section 13 hereof, and (ii) all references in the preceding paragraph to Preferred
Stock shall be deemed thereafter to refer to Common Stock and/or, if appropriate, other securities.


 


26.            Notices.


 


(a)            Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by overnight delivery service or first-class mail, postage prepaid, addressed as set forth below:


 


M&F Bancorp, Inc.


Attn: Chief Executive Officer


2634 Durham-Chapel Hill Blvd.


Durham, NC 27707


 


(b)            Subject to the provisions of Section
21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate
to or on the Rights Agent shall be sufficiently given or made if sent by overnight delivery service or first-class mail, postage
prepaid, addressed as set forth below:


 



    	35



    	 



    




American Stock Transfer & Trust
Company, LLC

Attn: Relationship Management

6201 15th Avenue

Brooklyn, NY 11219


 


(c)            Notices or demands authorized or
required by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate or, if
prior to the Distribution Date, to the holder of any certificates evidencing shares of Common Stock, shall be sufficiently given
or made if sent by overnight delivery service or first-class mail, postage prepaid, addressed to such holder at the address such
holder as shown upon the registry books of the Rights Agent, or the Company, as applicable.


 


27.            Supplements and Amendments.


 


(a)            Prior to the Distribution Date,
the Company may, subject to Section 27(b), supplement or amend any provision of this Agreement without the approval of any holders
of certificates evidencing shares of Common Stock. From and after the Distribution Date, the Company may, subject to Section 27(b),
supplement or amend this Agreement in any respect without the approval of any holders of the Rights (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein,
(iii) subject to the proviso to this sentence, to shorten or lengthen any time period hereunder, or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than the interests of any Acquiring Persons and their respective Affiliates
and Associates); provided, however, that this Agreement may not be so supplemented or amended to lengthen any time
period pursuant to subparagraph (iii) hereof unless such lengthening is for the purpose of protecting, enhancing or clarifying
the rights of, and the benefits to, the holders of Rights. For purposes of this Section 27(a), prior to the Distribution Date,
the interests of the holders of Rights shall be deemed coincident with the interests of the holders of shares of Common Stock.


 


(b)            If the Company delivers a certificate
from an appropriate officer of the Company stating that a proposed supplement or amendment is in compliance with Section 27(a),
and such supplement or amendment does not adversely affect the rights or obligations of the Rights Agent under Sections 18 or 20,
the Rights Agent shall execute such supplement or amendment.


 


28.            Determination and Actions by the Board of
Directors, Etc.


 


The Board shall have the
exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board
or the Company, or as may be necessary or advisable in the administration of this Agreement, including the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all determinations deemed necessary or advisable for the administration
of this Agreement (including, without limitation, a determination as to the identity of the Affiliates and Associates of any Person,
a determination as to the extent of the Beneficial Ownership of any Person, whether or not to redeem the Rights or to amend or
supplement this Agreement, and whether any proposed amendment or supplement adversely affects the interests of the holders of Right
Certificates). All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) next succeeding,
all omissions with respect to the foregoing) which are done or made by the Board in good faith, shall (x) be final, conclusive
and binding on the Company, the Rights Agent, the holders and Beneficial Owners of the Rights and all other Persons, and (y) not
subject them to any liability to the holders of the Right Certificates.



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29.            Successors.


 


All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective
permitted successors and assigns hereunder.


 


30.            Benefits of this Agreement.


 


Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights Agent and the holders of the Right Certificates (and,
prior to the Distribution Date, the holders of the shares of Common Stock) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the shares of Common Stock).


 


31.            Severability.


 


If any term, provision,
covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.


 


32.            Governing Law.


 


This Agreement, each Right
and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of North Carolina
and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts negotiated,
made and to be performed entirely within such State.


 


33.            Counterparts.


 


This Agreement may be executed
in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.


 


34.            Force Majeure.


 

Notwithstanding anything
to the contrary contained herein, the Rights Agent shall not be liable for any delays or failures in performance resulting from
acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or
malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties
with information storage or retrieval systems, labor difficulties, war or civil unrest.


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[remainder of this page intentionally
left blank]




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IN WITNESS WHEREOF,
the parties hereto have caused this Shareholder Rights Agreement to be duly executed, all as of the date and year first above written.


 


 


	 	 	 	
        M&F BANCORP, INC.

         

	 	 	 	By:	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	ATTEST:	 	 	 
	By:	 	 	 	 
	Title:	 	 	 	 


 


Countersigned:


     




 


AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Rights Agent


 




 


	By:	 	 
	Title:	 	 


 




    	39



    	 



    


Exhibit A


 


FORM


of


CERTIFICATE OF DESIGNATION OF PREFERENCES,


LIMITATIONS AND RELATIVE RIGHTS

of

SERIES C JUNIOR PARTICIPATING PREFERRED STOCK

of

M&F BANCORP, INC.


 


 


1.           Designation
and Amount. There shall be a series of Preferred Stock that shall be designated as “Series C Junior Participating Preferred
Stock,” and the number of shares constituting such series shall be 100,000. Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, however, that no decrease shall reduce the number of shares of
Series C Junior Participating Preferred Stock to less than the number of shares then issued and outstanding plus the number of
shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by
the Corporation.


2.           Dividends and Distributions.


(A)           Subject to
the prior and superior rights of the holders of any shares of any class or series of stock of the Corporation ranking prior and
superior to the shares of Series C Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series
C Junior Participating Preferred Stock, in preference to the holders of shares of any class or series of stock of the Corporation
ranking junior to the Series C Junior Participating Preferred Stock in respect thereof, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on
the last day of March, June, September and December in each year (each such date being referred to herein as a “Quarterly
Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share
or fraction of a share of Series C Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal
to the greater of (a) $10.00 and (b) the sum of (1) the Adjustment Number (as defined below) times the aggregate per share amount
of all cash dividends plus (2) the Adjustment Number times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of Common Stock, no par value per share, of the Corporation
(the “Common Stock”), or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise),
in each case declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series C Junior Participating
Preferred Stock. The “Adjustment Number” shall initially be 100. In the event the Corporation shall at any time
after September 23, 2014 (i) declare and pay any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately prior to such event.



    	A-1



    	 



    




(B)           The Board of
Directors shall declare a dividend or distribution on the Series C Junior Participating Preferred Stock as provided in paragraph
(A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares
of Common Stock).


(C)           Dividends shall
begin to accrue and be cumulative on outstanding shares of Series C Junior Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series C Junior Participating Preferred Stock, unless the date
of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares; or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of shares of Series C Junior Participating Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series C Junior Participating Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of
Series C Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which
record date shall be no more than 60 days prior to the date fixed for the payment thereof.


3.            Voting
Rights. The holders of shares of Series C Junior Participating Preferred Stock shall have the following voting rights:


(A)           Each share
of Series C Junior Participating Preferred Stock shall entitle the holder thereof to a number of votes equal to the Adjustment
Number on all matters submitted to a vote of the shareholders of the Corporation.


(B)           Except as otherwise
provided herein, in the Articles of Incorporation of the Corporation or by law, holders of Series C Junior Participating Preferred
Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall
vote together as one class on all matters submitted to a vote of stockholders of the Corporation.


(C)           Except as otherwise
provided herein, in the Articles of Incorporation of the Corporation or by law, holders of Series C Junior Participating Preferred
Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate action.



    	A-2



    	 



    




4.            Certain Restrictions.


(A)           Whenever quarterly
dividends or other dividends or distributions payable on the Series C Junior Participating Preferred Stock as provided in Section
2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of
Series C Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:


(i)           declare or
pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series C Junior Participating Preferred
Stock other than (A) such redemptions or purchases that may be deemed to occur upon the exercise of stock options, warrants or
similar rights or grant, vesting or lapse of restrictions on the grant of any other performance shares, restricted stock, restricted
stock units or other equity awards to the extent that such shares represent all or a portion of (x) the exercise or purchase price
of such options, warrants or similar rights or other equity awards and (y) the amount of withholding taxes owed by the recipient
of such award in respect of such grant, exercise, vesting or lapse of restrictions; (B) the repurchase, redemption, or other acquisition
or retirement for value of any such shares from employees, former employees, directors, former directors, consultants or former
consultants of the Corporation or their respective estate, spouse, former spouse or family member, pursuant to the terms of the
agreements pursuant to which such shares were acquired;


(ii)           declare
or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series C Junior Participating Preferred Stock, except dividends paid ratably on
the Series C Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are then entitled; or


(iii)           purchase
or otherwise acquire for consideration any shares of Series C Junior Participating Preferred Stock, or any shares of stock ranking
on a parity with the Series C Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing
or by publication (as determined by the Board of Directors) to all holders of Series C Junior Participating Preferred Stock, or
to such holders and holders of any such shares ranking on a parity therewith, upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes,
shall determine will result in fair and equitable treatment among the respective series or classes.


(B)           The Corporation
shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.


5.            Reacquired
Shares. Any shares of Series C Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired promptly after the acquisition thereof. All such shares shall upon their retirement become authorized
but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to any conditions and restrictions on issuance set forth herein.



    	A-3



    	 



    




6.            Liquidation,
Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Corporation, voluntary or otherwise, no distribution
shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series C Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series C Junior Participating
Preferred Stock shall have received an amount per share (the “Series C Liquidation Preference”) equal to the
greater of (i) $10.00 plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, and (ii) the Adjustment Number times the per share amount of all cash and other property to be distributed
in respect of the Common Stock upon such liquidation, dissolution or winding up of the Corporation.


(A)           In the event,
however, that there are not sufficient assets available to permit payment in full of the Series C Liquidation Preference and the
liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series
C Junior Participating Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed
ratably to the holders of the Series C Junior Participating Preferred Stock and the holders of such parity shares in proportion
to their respective liquidation preferences.


(B)           Neither the
merger or consolidation of the Corporation into or with another entity nor the merger or consolidation of any other entity into
or with the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of
this Section 6.


7.           Consolidation,
Merger, Etc. In case the Corporation shall enter into any consolidation, merger, share exchange, combination or other transaction
in which the outstanding shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series C Junior Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share equal to the Adjustment Number times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed
or exchanged.


8.           No Redemption.
Shares of Series C Junior Participating Preferred Stock shall not be subject to redemption by the Corporation.


9.           Ranking.
The Series C Junior Participating Preferred Stock shall rank junior to all other series of Preferred Stock as to the payment of
dividends and as to the distribution of assets upon liquidation, dissolution or winding up, unless the terms of any such series
shall provide otherwise, and shall rank senior to the Common Stock as to such matters.



    	A-4



    	 



    




10.           Amendment.
At any time that any shares of Series C Junior Participating Preferred Stock are outstanding, the Articles of Incorporation of
the Corporation shall not be amended, by merger, consolidation or otherwise, which would materially alter or change the preferences,
limitations and relative rights of the Series C Junior Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds of the outstanding shares of Series C Junior Participating Preferred Stock, voting
separately as a class.


11.           Fractional
Shares. Series C Junior Participating Preferred Stock may be issued in fractions of a share that shall entitle the holder,
in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions
and to have the benefit of all other rights of holders of Series C Junior Participating Preferred Stock.


 




    	A-5



    	 



    


 


Exhibit B


Form of Right Certificate


Certificate No. R-______


NOT EXERCISABLE AFTER SEPTEMBER
22, 2024 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT AND TO EXCHANGE ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY
OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (EACH AS DEFINED IN THE
RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.


RIGHT CERTIFICATE


M&F BANCORP, INC.


 


This certifies that the
holder or the registered holder or registered assigns, is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of September
23, 2014, as the same may be amended from time to time (the “Rights Agreement”), between M&F Bancorp, Inc.,
a North Carolina corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, a New York
limited liability company, as Rights Agent (the “Rights Agent”), to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., North Carolina time, on September
22, 2024 at the office of the Rights Agent designated for such purpose, or of its successor as Rights Agent, one one-hundredth
of a fully paid non-assessable share of Series C Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred
Stock”), of the Company at a purchase price of $10.00 per one one-hundredth of a share of Preferred Stock (the “Purchase
Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a share of Preferred Stock which
may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price
as of September 23, 2014 based on the Preferred Stock as constituted at such date. As provided in the Rights Agreement, the Purchase
Price, the number of one one-hundredth of a share of Preferred Stock (or other securities or property) which may be purchased upon
the exercise of the Rights and the number of Rights evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.


 


If the Rights evidenced by this Right Certificate
are at any time beneficially owned by or transferred to any person who is or becomes an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (each as defined in the Rights Agreement) or certain transferees thereof, such Rights will become null and
void and will no longer be transferable.


 



    	B-1



    	 



    




This Right Certificate is subject to all of
the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right
Certificates. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the above-mentioned
office of the Rights Agent. The Company will mail to the holder of this Right Certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor.


 


This Right Certificate, with or without other
Right Certificates, upon surrender at the office of the Rights Agent designated for such purpose, may be exchanged for another
Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate
number of shares of Preferred Stock as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised.


 


Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption price of $0.01 per Right or (ii) may
be exchanged in whole or in part for shares of the Company’s Common Stock, no par value per share, shares of Preferred Stock,
or Equivalent Preferred Shares (as defined in the Rights Agreement).


 


No fractional shares of Preferred Stock or
Common Stock will be issued upon the exercise or exchange of any Right or Rights evidenced hereby (other than fractions of Preferred
Stock which are integral multiples of one one-hundredth of a share of Preferred Stock, which may, at the election of the Company,
be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.


 


No holder of this Right Certificate, as such,
shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Stock or of any other securities
of the Company which may at any time be issuable on the exercise or exchange hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement) or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced
by this Right Certificate shall have been exercised or exchanged as provided in the Rights Agreement.


 


This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned by the Rights Agent.


 



    	B-2



    	 



    




IN WITNESS WHEREOF, the undersigned
has executed this Certificate this _____ day of September, 2014.


 


	 	 	 	
        M&F BANCORP, INC.

         

	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	ATTEST:	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	
        Title:

         
	 	 	 	 


 


	
         

         

        Countersigned:

         

        American Stock Transfer & Trust Company, LLC

        as Rights Agent

         

         
	 
	 	 	 
	By:	 	 
	Title:	 	 


 




    	B-3



    	 



    


Form of Reverse Side of Right Certificate

FORM OF ASSIGNMENT


(To be executed by the registered
holder if such

holder desires to transfer the Right Certificate)


FOR VALUE RECEIVED __________________ hereby sells, assigns
and transfers unto


 


 


 


 


 


(Please print name and address of transferee)


 


_______ Rights represented by this Right Certificate,
together with all right, title and interest therein, and does hereby irrevocably constitute and appoint Attorney, to transfer said
Rights on the books of M&F Bancorp, Inc., with full power of substitution.


 


 


	Dated: 	 	 	 
	 	 	 	Signature


 


 


	Signature Guaranteed: 	 	 


 


 


Signatures must be guaranteed by a bank, trust
company, broker, dealer or other eligible institution participating in a recognized signature guarantee medallion program.


 


 


Certificate:


 


(To be completed)


 


The undersigned hereby certifies that (1) the
Rights evidenced by this Right Certificate are not being sold, assigned or transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), (2) this Right Certificate
is not being sold, assigned or transferred to or on behalf of any Acquiring Person or Affiliate or Associate thereof and (3) the
undersigned did not acquire the Rights evidenced by this Right Certificate from any Person who is or was an Acquiring Person or
an Affiliate or Associate thereof.


	 	By:	 
	 	Name:	 
	 	Title:	 


 




    	B-4



    	 



    


Form of Reverse Side of Right Certificate –
continued




FORM OF ELECTION TO PURCHASE


(To be executed if holder desires
to exercise

Rights represented by the Right Certificate)


To M&F Bancorp, Inc.:


The undersigned hereby irrevocably
elects to exercise Rights represented by this Right Certificate to purchase the shares of Preferred Stock (or other securities
or property) issuable upon the exercise of such Rights and requests that certificates for such shares of Preferred Stock (or such
other securities) be issued in the name of:


 


 


 


 


 


 


(Please print name and address)


If such number of Rights shall not
be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be
registered in the name of and delivered to:


Please insert social security or other identifying
number:


 


 


 


 


 


(Please print name and address)


	Dated:	 	 	By:	 
	 	 	 	Name:	 
	 	 	 	Title:	 


(Signature must conform to holder specified
on Right Certificate)


Signature Guaranteed: _____________________


Signature must be guaranteed by a
bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee medallion program.




    	B-5



    	 



    


Form of Reverse Side of Right
Certificate - continued





(To be completed)


Certificate:


The undersigned hereby certifies
that (1) the Rights evidenced by this Right Certificate are not being sold, assigned or transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), (2)
this Right Certificate is not being sold, assigned or transferred to or on behalf of any Acquiring Person or any Affiliate or Associate
thereof and (3) the undersigned did not acquire the Rights evidenced by this Right Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate thereof.


	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 


NOTICE


 


The signature in the Form of Assignment or
Form of Election to Purchase, as the case may be, must conform to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.


In the event the certification set
forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, such Assignment
or Election to Purchase will not be honored.




    	B-6



    	 



    


Exhibit C


UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN
THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.


 


SUMMARY OF RIGHTS TO PURCHASE SHARES
OF PREFERRED STOCK


OF M&F BANCORP, INC.


 


 


On September 23, 2014, the Board of Directors
of M&F Bancorp, Inc., (the “Company”) declared a dividend of one preferred share purchase right (a “Right”)
for each outstanding share of common stock, no par value per share, of the Company (the “Common Stock”). The
dividend is payable on October 6, 2014 (the “Record Date”) to the shareholders of record on that date. Each
Right entitles the registered holder to purchase from the Company one one-hundredth of a share of Series C Junior Participating
Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”) at a price of $10.00 per
one one-hundredth of a share of Preferred Stock (the “Purchase Price”), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement dated as of September 23, 2014, as the same may be amended from time
to time (the “Rights Agreement”), between the Company and American Stock Transfer & Trust Company, LLC,
as Rights Agent (the “Rights Agent”).


 


Until the earlier to occur of (i) 10 business
days following a public announcement that a person or group of affiliated or associated persons (with certain exceptions, an “Acquiring
Person”) has acquired beneficial ownership of 10.0% or more of the outstanding shares of Common Stock or (ii) such date
(prior to such time as any person or group of affiliated persons becomes an Acquiring Person), if any, as may be determined by
action of the Board of Directors of the Company following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 10.0% or more
of the outstanding shares of Common Stock (the earlier of such dates being called the “Distribution Date”),
the Rights will be evidenced, with respect to any of the Common Stock certificates outstanding as of the Record Date, by such Common
Stock certificate together with this Summary of Rights.


 


The Rights Agreement provides that, until the
Distribution Date (or earlier expiration of the Rights), the Rights will be transferred with and only with the Common Stock. Until
the Distribution Date (or earlier expiration of the Rights), new Common Stock certificates issued after the Record Date upon transfer
or new issuances of Common Stock will contain a legend incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier expiration of the Rights), the surrender for transfer of any certificates for shares of Common Stock outstanding
as of the Record Date, even without such legend or a copy of this Summary of Rights, will also constitute the transfer of the Rights
associated with the shares of Common Stock represented by such certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the
Rights.


 



    	C-1



    	 



    




The Rights are not exercisable until the
Distribution Date. The Rights will expire on September 22, 2024 (the “Final Expiration Date”), unless the
Rights are earlier redeemed or exchanged by the Company, in each case as described below, or upon the occurrence of certain transactions.


 


The Purchase Price payable, and the number
of shares of Preferred Stock or other securities or property issuable, upon exercise of the Rights is subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of,
the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants to subscribe for or purchase
Preferred Stock at a price, or securities convertible into Preferred Stock with a conversion price, less than the then-current
market price of the Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness
or assets (excluding regular periodic cash dividends or dividends payable in Preferred Stock) or of subscription rights or warrants
(other than those referred to above).


 


The number of outstanding Rights is subject
to adjustment in the event of a stock dividend on the Common Stock payable in shares of Common Stock or subdivisions, consolidations
or combinations of the Common Stock occurring, in any such case, prior to the Distribution Date.


 


In the event that any person or group of affiliated
or associated persons becomes an Acquiring Person, each holder of a Right, other than Rights beneficially owned by the Acquiring
Person, affiliates and associates of the Acquiring Person and certain transferees thereof (which will thereupon become null and
void), will thereafter have the right to receive upon exercise of a Right that number of shares of Common Stock having a market
value of two times the exercise price of the Right.


 


In the event that, after a person or group
has become an Acquiring Person, the Company is acquired in a merger or other business combination transaction or 50% or more of
its consolidated assets or earning power are sold, proper provisions will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person, affiliates and associates of the Acquiring Person and certain transferees thereof which
will have become null and void) will thereafter have the right to receive upon the exercise of a Right that number of shares of
common stock of the person with whom the Company has engaged in the foregoing transaction (or its parent) that at the time of such
transaction have a market value of two times the exercise price of the Right.


 


At any time after any person or group becomes
an Acquiring Person and prior to the earlier of one of the events described in the previous paragraph or the acquisition by such
Acquiring Person of 50% or more of the outstanding shares of Common Stock, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such Acquiring Person and certain transferees thereof which will have become null and void),
in whole or in part, for shares of Common Stock or Preferred Stock (or a series of the Company’s preferred stock having equivalent
preferences, limitations and relative rights), at an exchange ratio of one (1) share of Common Stock, or a fractional share of
Preferred Stock (or other preferred stock) equivalent in value thereto, per Right.


 



    	C-2



    	 



    




With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional
shares of Preferred Stock or Common Stock will be issued (other than fractions of shares of Preferred Stock which are integral
multiples of one one-hundredth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary
receipts), and in lieu thereof an adjustment in cash will be made based on the current market price of the Preferred Stock or the
Common Stock.


 


At any time prior to
the time an Acquiring Person becomes such, the Board of Directors of the Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (the “Redemption Price”) payable, at the option of the Company, in cash, shares
of Common Stock or such other form of consideration as the Board of Directors of the Company shall determine. The redemption
of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors of the Company
in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption Price.


 


For so long as the Rights
are then redeemable, the Company may, except with respect to the Redemption Price, amend the Rights Agreement in any manner. After
the Rights are no longer redeemable, the Company may, except with respect to the Redemption Price, amend the Rights Agreement in
any manner that does not adversely affect the interests of holders of the Rights (other than holders of Rights owned by or transferred
to any person who is or becomes an Acquiring Person or affiliates and associates of an Acquiring Person and certain transferees
thereof).


 


Until a Right is exercised
or exchanged, the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends.


 


A copy of the Rights Agreement
has been filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K dated September 23,
2014. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, as the same may be amended from
time to time, which is hereby incorporated herein by reference.


 








    	C-3