                                 CODE OF VIRGINIA

REORGANIZATION OF MUTUAL ASSOCIATION INTO MUTUAL HOLDING COMPANY; APPROVAL BY
COMMISSIONER; POWERS; ISSUANCE OF STOCK (§ 6.2-1140)

A. Notwithstanding any other provision of law, with the approval of the
Commission, and in accordance with the provisions of this section and any
regulations adopted pursuant to this section, any mutual association may
reorganize to become a mutual holding company by:

   1. Causing a stock association to be formed by incorporating a stock
   corporation and obtaining a certificate of authority to begin business as a
   savings institution pursuant to the provisions of Chapter 9 (&#xA7; 13.1-601
   et seq.) of Title 13.1 and Article 2 (&#xA7; 6.2-1114 et seq.) of this
   chapter;

   2. Transferring the substantial part of its assets and liabilities, including
   all of its deposit liabilities, to the stock association created, in exchange
   for receipt of no less than 51 percent of the capital stock of the stock
   association; and

   3. Adopting an amended charter changing its name and conforming its
   organization, governance, and powers to those prescribed hereunder for a
   mutual holding company.

B. In connection with the transfer of assets and liabilities, the resulting
mutual holding company may retain assets to the extent such assets are not
required to be transferred to the stock association created in order to satisfy
any capital or reserve requirements imposed by applicable state or federal law.

C. Upon such transfer, all persons who prior thereto held depository rights with
respect to or other rights as creditors of the reorganized mutual association
shall have such rights solely with respect to the stock association created, and
the corresponding liability or obligation of the reorganized mutual association
to such persons shall be assumed by the stock association. Persons who prior
thereto had any ownership, liquidation, or voting rights with respect to the
reorganized mutual association, in their capacities as savings depositors, and
pursuant to provision of law, or pursuant to the articles of incorporation and
bylaws of that association, shall continue to have such rights but solely with
respect to the mutual association in its reorganized form as a mutual holding
company. The ownership or liquidation interest of any savings depositor of the
subsidiary stock association in the net earnings and net worth of the resulting
mutual holding company, and the voting rights of any such depositor in the
mutual holding company, shall terminate, or otherwise be limited, in the same
manner and on the happening of the same events as was the case prior thereto
with the interest held by that depositor in the mutual association.

D. The reorganization of a mutual association into a mutual holding company
shall be conducted in a manner that is equitable to all parties. The board of
directors of the mutual association shall first adopt by a two-thirds vote a
plan of reorganization, the provisions of which shall comply with requirements
set forth in regulations adopted by the Commission. Such plan shall provide that
holders of savings deposits in the reorganized mutual association shall be
afforded an opportunity to preserve their interests by subscribing to the
minority stock of the subsidiary stock association. The Commission shall approve
any such plan of reorganization if the Commission ascertains that the
reorganization shall not have an adverse effect on the stability of the
association and that the reorganized mutual association has complied with all
laws and regulations of the Commission relating to the reorganization of a
mutual association into a mutual holding company. The Commission shall adopt
regulations governing the procedures to be followed in completing the
reorganization after the Commission has approved a plan of reorganization. Such
regulations shall ensure that the subsidiary association resulting from such
reorganization shall continue to have its accounts insured by the Federal
Deposit Insurance Corporation or other federal insurance agency.

E. Upon reorganization, the resulting mutual holding company (i) shall continue
to possess and may exercise all the rights, powers, and privileges, except
deposit-taking powers, of a mutual association under the laws of the
Commonwealth and (ii) shall be subject to the limitations and restrictions
imposed on savings institution holding companies by &#xA7;&#xA7; 6.2-1147 and
6.2-1192, as well as all limitations and restrictions applicable to mutual
savings institutions.

F. Upon reorganization, the association chartered as a stock corporation shall
have the power to issue to persons other than the mutual holding company of
which it is a subsidiary, an amount of common stock which in the aggregate does
not exceed 49 percent of the issued and outstanding common stock of the
association. For purposes of this percentage limitation, any issued and
outstanding securities that are convertible into common stock shall be
considered as issued and outstanding common stock. If at any time, the mutual
holding company resulting from reorganization sells or otherwise disposes of
outstanding shares in its stock association subsidiary, and as a result such
mutual holding company no longer owns more than 51 percent of the outstanding
shares of such association, or if the subsidiary stock association sells
substantially all of its assets in a transaction in which substantially all
deposit liabilities of such association are assumed and become liabilities of
the purchaser of those assets, the Commission, on application of the
Commissioner, may, after reasonable notice to the mutual holding company and its
subsidiary stock association, appoint a receiver to wind up the affairs of the
mutual holding company.

G. Any mutual holding company having its principal place of business in the
Commonwealth may convert into a stock savings institution holding company, with
the approval of the Commissioner, and in accordance with any regulations adopted
by the Commission.

HISTORY: 1989, c. 205, § 6.1-194.32:1; 1990, c. 3; 2010, c. 794.