EXHIBIT 8.2
[XXXXXX XXXXXXXX & XXXXXXX LETTERHEAD]
April 21, 1998
German American Bancorp
000 Xxxx Xxxxxx
Xxx 000
Xxxxxx, Xxxxxxx 00000
Subject: Agreement and Plan of Reorganization by and among FSB
Financial Corporation, FSB Bank, German American Bancorp,
German American Holdings Corporation, and Community Trust
Bank.
Gentlemen:
You have requested our opinion on certain of the federal income tax
consequences with respect to certain transactions set forth in the Agreement and
Plan of Reorganization by and among FSB Financial Corporation, an Indiana
corporation ("FSB"), FSB Bank, an Indiana banking corporation, ("FSB Bank"),
German American Holdings Corporation, an Indiana corporation ("GAHC"), German
American Bancorp, an Indiana corporation ("German American"), and Community
Trust Bank, an Indiana banking corporation ("Community") and dated January 30,
1998 ("Agreement and Plan of Reorganization"). Subject to the terms and
conditions of the Agreement and Plan of Reorganization, FSB shall merge with and
into GAHC. This transaction is referred to herein as the "Holding Company
Merger." Simultaneously, FSB Bank shall be merged with and into Community,
subject to the terms and conditions of the Agreement and Plan of Reorganization.
This transaction is referred to herein as the "Bank Merger." Collectively, the
Holding Company Merger and the Bank Merger are referred to herein as the
"Mergers." Capitalized terms used herein that are not defined in this opinion
are defined in the Agreement and Plan of Reorganization.
Documents Reviewed. We have, for purposes of the opinion, reviewed the
following documents:
1. The Agreement and Plan of Reorganization.
2. The Registration Statement on Form S-4 filed by German
American with the Securities and Exchange Commission on February 26,
1998, under the Securities Act of 1933, as amended (the "Registration
Statement").
3. Such other documents, records, and matters of law as we
have deemed necessary or appropriate in connection with rendering this
opinion.
We have relied upon the above documents as to matters of fact. We have not
independently checked or verified the accuracy or completeness of the
information set forth in such documents, but we know of no facts that indicate
to us that the information set forth in such documents is inaccurate or
incomplete.
Factual and Legal Assumptions. For purposes of this opinion, we have made
the following assumptions as to factual and legal matters:
1. The representations and warranties of the parties
contained in the Agreement and Plan of Reorganization that may be
deemed material to this opinion will be true in all material respects
as of the effective date of the Mergers, except as may be otherwise set
forth in or contemplated by the Agreement and Plan of Reorganization.
2. The representations of German American, Community, GAHC,
FSB and FSB Bank contained in the Representation Certificates attached
hereto will be true in all material respects as of the effective date
of the Mergers.
3. The Mergers and all transactions related thereto or
contemplated by the Agreement and Plan of Reorganization shall be
consummated in accordance with the terms and conditions of the
Agreement and Plan of Reorganization.
Limitations on Opinion. The following limitations apply with respect to
this opinion:
1. Our opinion is based upon the Internal Revenue Code (the
"Code"), Treasury Regulations, court decisions and Internal Revenue
Service policies and rulings as of this date. These fundamentals of our
opinion are subject to change at any time, and some of these changes
have been applied in the past, retroactively, to affect adversely
transactions that had occurred prior to the change.
2. We have not been asked to render an opinion with respect
to any federal income tax matters, except those set forth below, nor
have we been asked to render an opinion with respect to any state or
local tax consequences of the Mergers. Accordingly, this opinion should
not be construed as applying in any manner to any tax aspect of the
Mergers other than as set forth below.
3. All of the factual and legal assumptions set forth above
are material to the opinion herein rendered and have been relied upon
by us in rendering such opinion. Any material inaccuracy in any one or
more of the factual or legal assumptions may render all or part of our
opinion inapplicable to the Mergers.
Opinion. Based upon and subject to the foregoing, it is our opinion that:
1. The Mergers will constitute a reorganization within the
meaning of Section 368(a) of the Code.
2. No gain or loss will be recognized by German American,
Community, GAHC, FSB, or FSB Bank as a result of the consummation of
the Mergers.
3. No gain or loss will be recognized by the FSB shareholders
upon exchange of their shares of FSB Common solely for shares of German
American Common.
4. The basis of the shares of German American Common received
by FSB shareholders will be the same, in each instance, as the basis of
the shares of FSB Common surrendered in exchange therefor.
5. The holding period of the shares of German American Common
received by each shareholder of shares of FSB Common will include the
period during which the shares of FSB Common surrendered in exchange
therefor were held, provided that the shares of FSB Common so exchanged
were held as a capital asset by such shareholder.
6. Cash payments in lieu of fractional share interests of
German American Common will be treated as having been received as
distributions in full payment in exchange for the stock converted as
provided in Section 302 of the Code.
We consent to the reference to this opinion and to our firm in the
Registration Statement.
Very truly yours,
/s/Leagre Xxxxxxxx & Xxxxxxx
REPRESENTATION CERTIFICATE
German American Bancorp ("German American"), German American Holdings
Corporation ("GAHC"), and Community Trust Bank ("Community") make the following
representations to Leagre Xxxxxxxx & Xxxxxxx to be used by Xxxxxx Xxxxxxxx &
Xxxxxxx in rendering its opinion as to certain federal income tax consequences
with respect to certain transactions set forth in the Agreement and Plan of
Reorganization by and among FSB Financial Corporation ("FSB"), FSB Bank ("FSB
Bank"), GAHC, German American, and Community and dated January 30, 1998
("Agreement and Plan of Reorganization"). Subject to the terms and conditions of
the Agreement and Plan of Reorganization, FSB shall merge with and into GAHC.
This transaction is referred to herein as the "Holding Company Merger."
Simultaneously, FSB Bank shall be merged with and into Community, subject to the
terms and conditions of the Agreement and Plan of Reorganization. This
transaction is referred to herein as the "Bank Merger." Collectively, the Bank
Merger and the Holding Company Merger are referred to herein as the "Mergers."
German American, Community and GAHC acknowledge and agree that each of
the following representations constitutes a material representation to be relied
upon by Xxxxxx Xxxxxxxx & Xxxxxxx in rendering its opinion and that any material
inaccuracy in any of the following representations may render the conclusions
drawn in the opinion of Xxxxxx Xxxxxxxx & Xxxxxxx inapplicable to the Mergers.
The representations of each party hereto are limited to the extent that each
specific representation is made solely with respect to information applicable to
itself.
"Control" for purposes of these representations means the ownership of
stock possessing at least 80 percent of the total combined voting power of all
classes of stock entitled to vote and at least 80 percent of the total number of
shares of all other classes of stock.
The specific representations made are as follows:
1. The fair market value of the German American
Common Stock received by each FSB shareholder will be approximately
equal to the fair market value of the FSB Common Stock surrendered in
the exchange.
2. Following the Mergers, Community will hold at
least 90 percent of the fair market value of its net assets and at
least 70 percent of the fair market value of its gross assets and at
least 90 percent of the fair market value of FSB Bank net assets and at
least 70 percent of the fair market value of FSB Bank gross assets,
held immediately prior to the Mergers. For purposes of this
representation, amounts used by FSB Bank or Community to pay
reorganization expenses and all redemptions and distributions (except
for regular, normal dividends) made by Community will be included as
assets of FSB Bank or Community, respectively, immediately prior to the
Mergers.
3. Prior to the Mergers, German American will be in
control of Community and GAHC.
4. Neither GAHC nor Community has any plan or
intention to issue additional shares of its stock after the Mergers
that would result in German American losing control, respectively, of
GAHC or Community.
5. German American has no plan or intention to
reacquire any of its Common Stock issued in the Mergers.
6. German American and GAHC have no plan or intention
to sell or otherwise dispose of any of the assets of FSB acquired in
the Mergers, to liquidate Community, to sell or otherwise dispose of
the Community stock, or to cause Community to sell or otherwise dispose
of any of its assets or of any of the assets acquired from FSB Bank,
except for dispositions made in the ordinary course of business.
7. The liabilities of FSB to be assumed by GAHC, the
liabilities of FSB Bank to be assumed by Community, and the liabilities
to which the assets of FSB and FSB Bank are subject, were incurred in
the ordinary course of business of FSB and FSB Bank.
8. Following the Mergers, GAHC will continue the
historic business of FSB or use a significant portion of FSB's historic
business assets in a business, and Community will continue the historic
business of FSB Bank or use a significant portion of FSB Bank historic
business assets in a business.
9. German American, Community, GAHC, FSB, FSB Bank
and their respective shareholders will each pay their own expenses, if
any, incurred in connection with the Mergers.
10. There is no intercorporate indebtedness existing
between (i) German American or GAHC and FSB Bank, (ii) Community and
FSB Bank, or (iii) German American or GAHC and FSB that was issued,
acquired, or will be settled at a discount.
11. In the Mergers, shares of FSB's Common Stock
representing control of FSB will be exchanged solely for voting stock
of German American. For purposes of this representation, shares of
FSB's Common Stock exchanged for cash or other property originating
with German American will be treated as outstanding FSB Common Stock as
of the Effective Time.
12. At the Effective Time, FSB and FSB Bank will not
have outstanding any warrants, options, convertible securities, or any
other type of right pursuant to which any person could acquire stock in
FSB and FSB Bank that, if exercised or converted, would affect German
American's acquisition or retention of control of FSB and FSB Bank,
respectively.
13. German American does not own, directly or
indirectly, nor has it owned during the past five years, directly or
indirectly, any Common Stock of FSB or FSB Bank.
14. No party to the Mergers is an investment company
regulated under the Investment Company Act of 1940, a real estate
investment trust, or a corporation 50 percent or more of the value of
whose total assets are stock and securities and 80 percent or more of
the value of whose total assets are held for investment.
15. On the date of the Mergers, the fair market value
of the assets of FSB Bank will exceed the sum of its liabilities, plus
the amount of liabilities, if any, to which the assets are subject.
16. Neither FSB nor FSB Bank is under the
jurisdiction of a court in a case under Title 11 of the United States
Code or a receivership, foreclosure, or similar proceeding.
17. The payment of cash in lieu of fractional shares
of German American's Common Stock is solely for the purpose of avoiding
the expense and inconvenience to German American of issuing fractional
shares and does not represent separately bargained-for consideration.
The total cash consideration that will be paid in the Mergers to the
FSB shareholders instead of issuing fractional shares of German
American Common Stock will not exceed one percent of the total
consideration that will be issued in the Mergers to the FSB
shareholders in exchange for their shares of FSB Common Stock. The
fractional share interests of each FSB shareholder will be aggregated,
and no FSB shareholder will receive cash in an amount equal to or
greater than the value of one full share of German American Common
Stock.
18. None of the compensation received by any
shareholder-employees of FSB or FSB Bank will be separate consideration
for, or allocable to, any of their shares of FSB Common Stock; none of
the shares of German American Common Stock received by any
shareholder-employees of FSB or FSB Bank will be separate consideration
for, or allocable to, any employment agreement; and the compensation
paid to any shareholder-employees of FSB or FSB Bank will be for
services actually rendered and will be commensurate with amounts paid
to third parties bargaining at arm's-length for similar services.
19. The Bank Merger and Holding Company Merger will
occur on the same date.
20. GAHC will acquire at least 90 percent of the fair
market value of the net assets and at least 70 percent of the fair
market value of the gross assets, held by FSB immediately prior to the
Mergers. For purposes of this representation, amounts used by FSB to
pay its reorganization expenses, amounts paid by FSB to shareholders
who receive cash or other property, and all redemptions and
distribution (except for regular, normal dividends) made by FSB
immediately preceding the transfer will be included as assets of FSB
held immediately prior to the Mergers.
21. The adjusted basis and fair market value of the
assets of FSB transferred to GAHC will each equal or exceed the sum of
FSB's liabilities assumed by GAHC, plus any other liabilities to which
the transferred assets are subject.
22. FSB will distribute the stock, securities, and
other property it receives in the Mergers, and its other properties, in
pursuance of the Merger Agreements.
IN WITNESS WHEREOF, German American, Community and GAHC, each acting by
an authorized officer with full corporate authority, have executed and delivered
this Representation Certificate to Xxxxxx Xxxxxxxx & Xxxxxxx as of the date
written below.
GERMAN AMERICAN BANCORP
Date: April 20, 1998 By /s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx,
Chairman of the Board and Chief Executive
Officer
GERMAN AMERICAN HOLDINGS CORPORATION
Date: April 20, 1998 By /s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx,
Chief Executive Officer
THE COMMUNITY TRUST BANK
/s/Xxxx X. Xxxxxx
Date: April 20, 1998 By Xxxx X. Xxxxxx, President
REPRESENTATION CERTIFICATE
FSB Financial Corporation ("FSB") and FSB Bank ("FSB Bank") make the
following representations to Leagre Xxxxxxxx & Xxxxxxx to be used by Leagre
Xxxxxxxx & Xxxxxxx in rendering its opinion as to certain federal income tax
consequences with respect to certain transactions set forth in the Agreement and
Plan of Reorganization by and among FSB, FSB Bank, German American Holdings
Corporation ("GAHC"), German American Bancorp ("German American"), and Community
Trust Bank ("Community") and dated January 30, 1998 ("Agreement and Plan of
Reorganization"). Subject to the terms and conditions of the Agreement and Plan
of Reorganization, FSB shall merge with and into GAHC. This transaction is
referred to herein as the "Holding Company Merger." Simultaneously, FSB Bank
shall be merged with and into Community, subject to the terms and conditions of
the Agreement and Plan of Reorganization. This transaction is referred to herein
as the "Bank Merger." Collectively, the Bank Merger and the Holding Company
Merger are referred to herein as the "Mergers."
FSB and FSB Bank acknowledge and agree that each of the following
representations constitutes a material representation to be relied upon by
Xxxxxx Xxxxxxxx & Xxxxxxx in rendering its opinion and that any material
inaccuracy in any of the following representations may render the conclusions
drawn in the opinion of Xxxxxx Xxxxxxxx & Xxxxxxx inapplicable to the Mergers.
The representations of each party hereto are limited to the extent that each
specific representation is made solely with respect to information applicable to
itself.
"Control" for purposes of these representations means the ownership of
stock possessing at least 80 percent of the total combined voting power of all
classes of stock entitled to vote and at least 80 percent of the total number of
shares of all other classes of stock.
The specific representations made are as follows:
1. The fair market value of the German American Common Stock
received by each FSB shareholder will be approximately equal to the
fair market value of the FSB Common Stock surrendered in the exchange.
2. Following the Mergers, Community will hold at least 90
percent of the fair market value of its net assets and at least 70
percent of the fair market value of its gross assets and at least 90
percent of the fair market value of FSB Bank net assets and at least 70
percent of the fair market value of FSB Bank gross assets, held
immediately prior to the Mergers. For purposes of this representation,
amounts used by FSB Bank or Community to pay reorganization expenses
and all redemptions and distributions (except for regular, normal
dividends) made by Community will be included as assets of FSB Bank or
Community, respectively, immediately prior to the Mergers.
3. Neither FSB nor FSB Bank has any plan or intention to issue
additional shares of its stock prior to the Mergers.
4. The liabilities of FSB to be assumed by GAHC, the
liabilities of FSB Bank to be assumed by Community, and the liabilities
to which the assets of FSB and FSB Bank are subject, were incurred in
the ordinary course of business of FSB and FSB Bank, respectively.
5. German American, Community, GAHC, FSB, FSB Bank and their
respective shareholders will each pay their own expenses, if any,
incurred in connection with the Mergers.
6. There is no intercorporate indebtedness existing between
(i) German American or GAHC and FSB Bank, (ii) Community and FSB Bank,
or (iii) German American or GAHC and FSB that was issued, acquired, or
will be settled at a discount.
7. In the Mergers, shares of FSB Common Stock representing
control of FSB will be exchanged solely for voting stock of German
American. For purposes of this representation, shares of FSB Common
Stock exchanged for cash or other property originating with German
American will be treated as outstanding FSB Common Stock as of the
Effective Time.
8. At the Effective Time, FSB and FSB Bank will not have
outstanding any warrants, options, convertible securities, or any other
type of right pursuant to which any person could acquire stock in FSB
and FSB Bank that, if exercised or converted, would affect German
American's acquisition or retention of control of FSB and FSB Bank,
respectively.
9. German American does not own, directly or indirectly, nor
has it owned during the past five years, directly or indirectly, any
Common Stock of FSB or FSB Bank.
10. No party to the Mergers is an investment company regulated
under the Investment Company Act of 1940, a real estate investment
trust, or a corporation 50 percent or more of the value of whose total
assets are stock and securities and 80 percent or more of the value of
whose total assets are held for investment.
11. On the date of the Mergers, the fair market value of the
assets of FSB Bank will exceed the sum of its liabilities, plus the
amount of liabilities, if any, to which the assets are subject.
12. Neither FSB nor FSB Bank is under the jurisdiction of a
court in a case under Title 11 of the United States Code or a
receivership, foreclosure, or similar proceeding.
13. The payment of cash in lieu of fractional shares of German
American's Common Stock is solely for the purpose of avoiding the
expense and inconvenience to German American of issuing fractional
shares and does not represent separately bargained-for consideration.
The total cash consideration that will be paid in the Mergers to the
FSB shareholders instead of issuing fractional shares of German
American Common Stock will not exceed one percent of the total
consideration that will be issued in the Mergers to the FSB
shareholders in exchange for their shares of FSB Common Stock. The
fractional share interests of each FSB shareholder will be aggregated,
and no FSB shareholder will receive cash in an amount equal to or
greater than the value of one full share of German American Common
Stock.
14. None of the compensation received by any
shareholder-employees of FSB or FSB Bank will be separate consideration
for, or allocable to, any of their shares of FSB Common Stock; none of
the shares of German American Common Stock received by any
shareholder-employees of FSB or FSB Bank will be separate consideration
for, or allocable to, any employment agreement; and the compensation
paid to any shareholder-employees of FSB or FSB Bank will be for
services actually rendered and will be commensurate with amounts paid
to third parties bargaining at arm's-length for similar services.
15. GAHC will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair market
value of the gross assets, held by FSB immediately prior to the
Mergers. For purposes of this representation, amounts used by FSB to
pay its reorganization expenses, amounts paid by FSB to shareholders
who receive cash or other property, and all redemptions and
distribution (except for regular, normal dividends) made by FSB
immediately preceding the transfer will be included as assets of FSB
held immediately prior to the Mergers.
16. The fair market value of the assets of FSB transferred to
GAHC will equal or exceed the sum of FSB's liabilities assumed by GAHC,
plus any other liabilities to which the transferred assets are subject.
17. FSB will distribute the stock, securities, and other
property it receives in the Mergers, and its other properties, in
pursuance of the Merger Agreements.
IN WITNESS WHEREOF, FSB and FSB Bank, each acting by an authorized
officer with full corporate authority, have executed and delivered this
Representation Certificate to Xxxxxx Xxxxxxxx & Xxxxxxx as of the date written
below.
FSB FINANCIAL CORPORATION
/s/ Xxxxx X. Xxxxx
Date: April 16, 1998 By Xxxxx X. Xxxxx, President
FSB BANK
/s/ Xxxxx X. Xxxxx
Date: April 16, 1998 By Xxxxx X. Xxxxx, President
