EXHIBIT (10)(j)



|                          |  |  |  |                                      
|------------------------- |  |  |  | -------------------------------------
|The Sage Group            |  |  |  |                                      
|CONSULTANTS TO MANAGEMENT |  |  |  | 10409 LESLIE DRIVE                   
|                          |  |  |  | RALEIGH, NORTH CAROLINA 27601        
|                          |  |  |  | (919) 844-9783                       
|                          |  |  |  | E-mail: steve@sagegroupconsulting.com



MEMORANDUM



|      |  |                                                          
|----- |  | ---------------------------------------------------------
|DATE: |  | May 1, 2004                                              
|      | 
|TO:   |  | Lee Johnson, President M&F Bank                          
|      | 
|FROM: |  | Steven A. Savia, CMC                                     
|      | 
|RE:   |  | Final 2004 City Executives Incentive Compensation Program
|      | 
|CC:   |  |                                                          



This years incentive
compensation program will have multiple components.



| | 1. | Executive Plan
| | -- | --------------



| | 2. | City Executive Plan
| | -- | -------------------



| | 3. | Loan Production Plan
| | -- | --------------------



| | 4. | Branch Customer Service Plan
| | -- | ----------------------------



| | 5. | Corporate Support/Teller Plan
| | -- | -----------------------------



This memo addresses the Executive Plan.



Overall for all plans, we will put in place the following:



| | 1. | Threshold level of Net Income - the Threshold level for 2004 will be $1.448 million (2003 = $1.389 million).
| | -- | ------------------------------------------------------------------------------------------------------------



| | 2. | Key factor measures for each of the employee participants. Schedule C presents the 2004 executive management measures.
| | -- | ----------------------------------------------------------------------------------------------------------------------



| | 3. | Once the threshold has been exceeded, the overall Bank pool will be created by 65% percent of the increase in net income marginal difference between budgeted net income
($1.484 million) and actual. The City Executive Plan Pool will be composed of 30% of the overall Bank pool.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The City Executive plan is based on the assumption that the award will be a percent of base salary. The plan has no budget implications since the awards would be made
based on a percentage of the marginal increase beyond the budget. The Banks income would therefore always be more than budget if awards were being made.



Schedule A is a listing of the measures that the program will include and where in the Banks information system or other reporting processes the data for
those measures is found.



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SCHEDULE A  PERFORMANCE FACTORS



|                                                |  |                                      
|----------------------------------------------- |  | -------------------------------------
|Measurement Factor                              |  | Where Available                      
|Growth in Average Assets                        |  | General Ledger/ Finance              
|Return on Average Assets                        |  | General Ledger/ Finance              
|Efficiency Ratio                                |  | General Ledger/ Finance              
|Total Deposits                                  |  | General Ledger/ Finance              
|Total Assets                                    |  | General Ledger/ Finance              
|Growth in Portfolio Loan Levels                 |  | Credit Administration                
|Net Income                                      |  | General Ledger/ Finance              
|Percent Recovery Of Loan Loss                   |  | General Ledger/ Credit Administration
|Service Charge Income                           |  | General Ledger/ Finance              
|Classified Loans as a % of Capital              |  | General Ledger/ Credit Administration
|Non-Performing Assets as % of Loan Loss Reserve |  | General Ledger/ Credit Administration
|Income per Employee                             |  | General Ledger/ Finance              
|Assets per Employee                             |  | General Ledger/ Finance              
|Level of Earning Assets                         |  | General Ledger/ Finance              
|Audit Exceptions                                |  | Internal Audit                       
|Loan Originations ($)                           |  | Loan Production (Retail Bank Admin)  
|Loan Origination (#)                            |  | Loan Production (Retail Bank Admin)  
|Average Closing Days                            |  | Credit Administration                
|Exceptions From Quality Control                 |  | Credit Administration                
|CRA Rating                                      |  | Compliance                           
|Target Customer Calls (#)                       |  | Loan Production (Retail Bank Admin)  
|% Loan Portfolio > 30 Days Delinquent           |  | Credit Administration                
|Document Exceptions Not Cleared 30 Days         |  | Credit Administration                
|Operating Losses                                |  | General Ledger                       
|Transactions per Employee                       |  | Operations                           
|Loans Processed (#)                             |  | Credit Administration                
|Delinquencies as % of Loan Portfolio            |  | Credit Administration                
|Monthly Branch Mystery Shop Score               |  | Operations                           
|New Deposit Accounts Opened                     |  | Operations/Branch Reports            
|Deposit Accounts Closed                         |  | Operations/Branch Reports            
|Loan Referrals                                  |  | Loan Production (Retail Bank Admin)  
|Branch Profitability                            |  | Finance                              



Each of the above factors relates to
one or more positions in the Bank as a measure of their contribution to the Bank. In some cases the measure is an overall measure of the success of the Bank as a whole (such as Return on Average Assets). In other cases, the measure is more specific
to the nature of the position, e.g., Growth in Portfolio Loan Levels for the Retail Banking Group Executive and City Executives; Number of New Deposit Accounts for Customer Service Representatives and Branch Operations Managers.



Schedule C is a listing of the City Executive employees that would be included in the City
Executive plan.



SCHEDULE C  CITY EXECUTIVE PLAN
PARTICIPANTS



|                   |  |                                   
|------------------ |  | ----------------------------------
|EMPLOYEE           |  | POSITION                          
|Acree, Evelyn      |  | SVP/City Executive  Winston-Salem
|                   | 
|Green, Stanley Jr. |  | SVP/ City Executive - Raleigh     
|                   | 
|Johnson, Jacque    |  | SVP/ City Executive - Charlotte   
|                   | 
|Smith, Queron      |  | SVP/ City Executive - Durham      



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The next step is putting the factors with the personnel and their positions. Schedule H below has the measures and the
weighted percentage for each employee participating in the Plan this year. The absolute measures may be different for each individual recognizing the difference in cities.



SCHEDULE H  CITY EXECUTIVE PLAN PARTICIPANTS  2004 MEASURES



|                   |  |                                                                                                                                                                                                                                                                                                                                                                   
|------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EMPLOYEE           |  | MEASUREMENT FACTORS                                                                                                                                                                                                                                                                                                                                               
|Acree, Evelyn      |  | Growth in City Loan Portfolio (30%), Total
Deposit Growth for the City (30%), City Operations Management (15%)       Non-Interest & Fee Income       Non-Interest Expense       Net City Earnings Recovery of Charged-off Loans (5%), Business Development Quarterly Goals (10%), Average Delinquencies as % of Loan Portfolio (5%) Performance
Evaluation (5%)
|                   | 
|Green, Stanley Jr. |  | Growth in City Loan Portfolio (30%), Total
Deposit Growth for the City (30%), City Operations Management (15%)       Non-Interest & Fee Income       Non-Interest Expense       Net City Earnings Recovery of Charged-off Loans (5%), Business Development Quarterly Goals (10%), Average Delinquencies as % of Loan Portfolio (5%) Performance
Evaluation (5%)
|                   | 
|Johnson, Jacque    |  | Growth in City Loan Portfolio (30%), Total
Deposit Growth for the City (30%), City Operations Management (15%)       Non-Interest & Fee Income       Non-Interest Expense       Net City Earnings Recovery of Charged-off Loans (5%), Business Development Quarterly Goals (10%), Average Delinquencies as % of Loan Portfolio (5%) Performance
Evaluation (5%)
|                   | 
|Smith, Queron      |  | Growth in City Loan Portfolio (30%), Total
Deposit Growth for the City (30%), City Operations Management (15%)       Non-Interest & Fee Income       Non-Interest Expense       Net City Earnings Recovery of Charged-off Loans (5%), Business Development Quarterly Goals (10%), Average Delinquencies as % of Loan Portfolio (5%) Performance
Evaluation (5%)



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AWARD PAYOUTS



Below is a description of the basis for payouts for the various plans described above.



City Executive Plan 



The pool from which this plans awards are distributed is based on the 30% of the overall Bank pool or 15% of the total difference between budgeted and actual net
income. The Bank-wide pool from which this plans awards are distributed is based on 65% of the difference between budgeted and actual, assuming actual exceeds budget. 30% of that pool is available to the City Executives of the Bank (see
Schedule C, page 4). Thus, if the Bank exceeds its net income threshold of $1.448 million by $200,000, then the Bank-wide pool available for incentive awards is $130,000 of which $30,000 would be available for Executive participants.



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