§ 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.