N.Y. Banking Law § 447-b: Formation of a mutual holding company

§ 447-b. Formation of a mutual holding company. 1. The plan of

reorganization may authorize the formation of a mutual holding company

by:

(a) (i) the organization by the mutual holding company of a stock

savings and loan association subsidiary and the transferal to such stock

savings and loan association of the substantial part of its assets and

liabilities, including all of its deposit liabilities, in accordance

with general regulations promulgated by the superintendent of financial

services;

(ii) the organization by the mutual savings and loan association of a

mutual holding company and the organization by such mutual holding

company of a stock savings and loan association subsidiary which merges

with the mutual savings and loan association; or

(iii) the reorganization of the mutual savings and loan association

under any other method approved pursuant to general or specific

regulations promulgated by the superintendent of financial services.

(b) For the purposes of paragraph (a) of this subdivision, such

regulations shall permit the stock savings and loan association to issue

to persons other than the mutual holding company of which it is a

subsidiary an amount of common stock and securities convertible into

common stock which in the aggregate does not exceed forty-nine per

centum of the issued and outstanding common stock of such stock savings

and loan association, provided that if a mutual holding company which

owns all of the common stock and securities convertible into common

stock of its savings and loan association subsidiary subsequently

determines to make such an issuance it shall pay a fee as prescribed

pursuant to section eighteen-a of this chapter. Issued and outstanding

securities that are convertible into common stock shall be considered

issued and outstanding common stock for the purposes of computing the

forty-nine per centum limitation. This paragraph shall not limit the

authority of such stock savings and loan association to issue equity or

debt securities other than common stock and securities convertible into

common stock.

2. In connection with the reorganization of a mutual savings and loan

association as provided in section four hundred forty-seven of this

article, the mutual holding company may retain or acquire assets of the

mutual savings and loan association to the extent that such assets are

not then required to be transferred to or retained by the stock savings

and loan association in order to satisfy capital or reserve requirements

of any applicable state or federal law or regulation.

3. A stock savings and loan association, at least fifty-one per centum

but less than one hundred per centum of the outstanding common stock of

which is owned by a mutual holding company shall have at least one

director, but no more than two-fifths of its directors, who are

"unaffiliated directors" who shall represent the interests of the

minority shareholders. An "unaffiliated director" is a director who is

not (a) an officer or employee of the stock savings and loan association

(or any affiliate thereof) or (b) an officer, trustee, director or

employee of the mutual holding company. If the organization certificate

or bylaws of the stock savings and loan association provide that the

board of directors shall be divided into two or more classes, then to

the extent possible, each class shall contain the same number of

unaffiliated directors as each other class.