§ 6.2-862 — Directors to own stock in bank

Virginia § 6.2-862

• Jurisdiction: Virginia
• Title 6.2: Financial Institutions and Services
• Subtitle II: Depository Institutions and Trust Organizations
• Ch. 8: Banks
• Art. 8: DIRECTORS AND OFFICERS; DIVIDENDS

Text

A. As used in this section, "bank holding company" means (i) a bank holding company as defined in § 6.2-800 or (ii) any corporation organized under the laws of the Commonwealth and doing business in the Commonwealth that owns all of the capital stock of one bank, except those shares issued as directors' qualifying shares, and at least 66 and two-thirds percent of the assets of the holding company, computed on a consolidated basis, consists of assets held by such bank and controlled subsidiaries of such bank.

B. Every director of a bank incorporated under the laws of the Commonwealth shall be the sole owner of, and have in his personal possession or control, shares of stock in such bank having a book value of not less than $5,000, calculated as of the last business day of the calendar year immediately preceding the election of the director. So long as a director shall successively be reelected, there shall be no requirement to increase the shares of stock owned according to this section. Such stock shall be unpledged and unencumbered at the time such director becomes a director and during the whole of his term as such. A director shall be deemed to be the sole owner of, and have in his personal possession or control:

1. Shares held through a brokerage account or similar arrangement, provided that the director retains sole beneficial ownership and sole legal control over the shares;

2. Shares held jointly or as a tenant in common, but only to the extent of the book value of the shares divided by the number of joint or tenant in common holders;

3. Shares deposited by the director in a living trust, or inter vivos trust, as to which the director is a trustee and retains an absolute power of revocation; or

4. Shares held through a profit-sharing plan, individual retirement account, retirement plan, or similar arrangement, provided that the director retains sole beneficial ownership and sole legal control over the shares.

C. When a bank is controlled by a bank holding company, a director may comply with the requirements of subsection B for each bank of which he is a director by ownership, in similar manner, of shares of capital stock of the bank holding company having an aggregate book value equal to the book value of shares of bank stock that he would be obligated to own under subsection B.

D. A director of a bankers' bank shall not be required to own or control any shares of stock of such bankers' bank or any shares of stock of a bank holding company that controls such bankers' bank.

E. Any director violating the provisions of this section shall, immediately, vacate his office.

F. The requirements of this section shall not apply to any person duly elected a director of a bank prior to July 1, 1995, or so long as such person shall successively be reelected a director, and as to such person the requirements of the law prior to such date shall apply.

Legislative History

Code 1950, § 6-37; 1966, c. 584, § 6.1-47; 1970, c. 95; 1995, c. 63; 1996, cc. 25, 218; 2010, c. 794; 2014, cc. 156, 219; 2018, cc. 76, 262.