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EXHIBIT 8.1
[HUSCH & EPPENBERGER, LLC LETTERHEAD]
September ____, 1998
Liberty Bancshares, Inc.
0000 Xxxx Xxxxxxxx
Xxxxxxxxxxx, XX 00000
Liberty Bank
0000 Xxxx Xxxxxxxx
Xxxxxxxxxxx, XX 00000
Sac River Valley Bank
P.O. Box B
Stockton, MO 65785
RE: Agreement and Plan of Merger, Dated as of June
18, 1998, among Sac River Valley Bank, Liberty
Bancshares, Inc. and Liberty Bank
Ladies and Gentlemen:
We have acted as counsel for Liberty Bank ("Liberty") and Liberty
Bancshares, Inc. ("Bancshares") in connection with the proposed merger (the
"Merger") of Sac River Valley Bank ("Sac River") with and into Liberty, pursuant
to the terms of the above-referenced agreement (the"Agreement"). Liberty is the
wholly owned subsidiary of Bancshares. Unless otherwise defined herein, all
capitalized terms shall have the respective meetings set forth in the Agreement.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion, including, but not limited to,
the current provisions of the Internal Revenue
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[HUSCH & EPPENBERGER, LLC LETTERHEAD]
Liberty Bancshares, Inc.
Liberty Bank
Sac River Valley Bank
September ___, 1998
Page 2
Code of 1986, as amended (the "Code"), the Treasury Regulations promulgated
thereunder, and applicable judicial and administrative interpretations thereof,
existing as of the date hereof, any of which is subject to change at any time.
We have also made the following factual assumptions:
1. The Merger will be consummated in accordance with the terms
of the Agreement.
2. The representations and warranties of the parties under the
Agreement will be true and correct in all material respects as of the
effective date of the Merger, except to the extent waived by the
parties.
3. As of the effective date of the Merger, there will be no
plan or intention on the part of Bancshares or any entity related to
Bancshares to reacquire any of the shares of Bancshares common stock to
be issued in the Merger.
4. Bancshares will not terminate the Sac River Valley Bank
Employee Stock Ownership Plan at any time sooner than one year
following the effective date of the Merger.
5. Bancshares will not have any call rights with respect to
the Bancshares stock to be received by the Sac River stockholders in
the Merger.
6. Except as may be provided in Article XI of the Sac River
Valley Bank Employee Stock Ownership Plan and Trust Agreement, no Sac
River shareholder will have put rights with respect to any Bancshares
stock to be received in the Merger.
7. Total cash consideration to Sac River shareholders in
exchange for their Sac River common stock, including the reasonable
cash value of shares of Sac River shareholders who exercise dissenters'
rights granted under RSMo. Section 362.730 with respect to their Sac
River common stock (by applying in the appropriate court either before
or after the Merger by petition for the appointment of appraisers to
value said shares), as finally determined by a court of competent
jurisdiction, shall not exceed, in the aggregate, $8,657,000.00.
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[HUSCH & EPPENBERGER, LLC LETTERHEAD]
Liberty Bancshares, Inc.
Liberty Bank
Sac River Valley Bank
September ___, 1998
Page 3
8. Liberty will acquire at least 90% of the fair market value
of the net assets and at least 70% of the fair market value of the
gross assets held by Sac River immediately prior the Merger.
9. Prior to the Merger, Bancshares will own all of the issued
and outstanding shares of stock of Liberty.
10. Following the Merger, Liberty will not issue additional
shares of its stock that would result in Bancshares losing control of
Liberty within the meaning of Code Section 368(c).
11. As of the effective date of the Merger, Bancshares will
have no plan or intention to liquidate Liberty; to merge Liberty with
and into another corporation; to sell or otherwise dispose of the stock
of Liberty; or to cause Liberty to sell or otherwise dispose of any of
the operating assets of Sac River acquired in the Merger, except for
dispositions made in the ordinary course of business or transfers
described in Code Section 368(a)(2)(C).
12. The liabilities of Sac River assumed by Liberty and the
liabilities to which the transferred assets of Sac River are subject
were incurred by Sac River in the ordinary course of its business.
13. Following the Merger, Liberty will continue the historic
business of Sac River or use a significant portion of Sac River's
business assets in a business.
14. Bancshares, Liberty, Sac River, and the shareholders of
Sac River will pay their respective expenses, if any, incurred in
connection with the Merger.
15. There is no inter-corporate indebtedness existing between
Bancshares and Liberty or between Liberty and Sac River that was
issued, acquired or will be settled at a discount.
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[HUSCH & EPPENBERGER, LLC LETTERHEAD]
Liberty Bancshares, Inc.
Liberty Bank
Sac River Valley Bank
September ___, 1998
Page 4
16. No two parties to the Merger are investment companies as
defined in Code Section 368(a)(2)(F)(iii) and (iv).
17. Sac River is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of Code Section 368(a)(3)(A).
18. The fair market value of the assets of Sac River transferred
to Liberty will equal or exceed the sum of the liabilities assumed by
Liberty, plus the amount of liabilities, if any, to which the
transferred assets are subject.
19. No stock of Liberty will be used in the Merger.
Based upon the foregoing assumptions, and in reliance upon the matters
set forth above, and subject to the exceptions and qualifications contained
herein, we are of the opinion that, for federal income tax purposes:
1. No gain or loss will be recognized by Bancshares, Liberty, or
Sac River as a result of the Merger.
2. Sac River stockholders will not recognize any gain or loss
upon the receipt of Bancshares common stock (as opposed to cash) in
exchange for their Sac River common stock.
3. The tax basis of the Bancshares common stock received by a
Sac River stockholder will be the same as the basis of the Sac River
common stock surrendered in exchange therefor reduced by the portion of
the basis allocable to the fractional shares of Bancshares stock
received in the Merger.
4. The holding period for Bancshares stock received by Sac River
stockholder in the Merger will include the period during which the Sac
River common stock surrendered in exchange therefor was held.
5. Each Sac River stockholder will recognize gain equal to the
lesser of (i) the amount of cash received in the Merger or (ii) the
amount, if any, by which the sum of the cash plus
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[HUSCH & EPPENBERGER, LLC LETTERHEAD]
Liberty Bancshares, Inc.
Liberty Bank
Sac River Valley Bank
September ___, 1998
Page 5
the fair market value of the Bancshares stock received in the Merger
exceeds the stockholder's basis in the Sac River shares surrendered.
For purposes of determining the character of such gain, the cash
received in the Merger will be treated as if shares of Bancshares
common stock equal in value to the cash had been distributed to the Sac
River shareholders as part of the Merger and then immediately after the
Merger such shares were redeemed by Bancshares. Depending upon the
particular circumstances of each shareholder, such cash payments will
be characterized as either having been received as a distribution in
full payment in exchange for the Bancshares stock deemed to have been
redeemed or as having been received as a dividend, as provided in Code
Section 302. If the cash payment is treated as having been received by
a Sac River stockholder as a distribution in full payment in exchange
for redeemed shares, such stockholder's gain recognized in the Merger
will be short-term, mid-term or long-term capital gain, depending upon
the Sac River stockholder's holding period for the Sac River stock. If
the cash payment is treated as having been received by a Sac River
stockholder as a dividend, the stockholder's gain on the Merger will
be recognized as ordinary income.
This opinion is subject to the following additional assumptions and
qualifications:
(a) This opinion is specifically limited to applicable federal
income tax laws in effect as of the date hereof.
(b) We undertake no responsibility to advise you of any changes
in the federal income tax law or as to any events that may occur or as
to any amendment of any of the documents referred to herein, after the
Closing of the Merger, that may alter the scope or substance of this
opinion.
(c) This opinion is based upon the assumption by management of
Liberty and Xxxxxxxxxx (without independent verification by us) that,
to the best of management's knowledge and belief:
(i) As of the effective date of the Merger, the fair market
value of the Bancshares stock and other
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[HUSCH & EPPENBERGER, LLC LETTERHEAD]
Liberty Bancshares, Inc.
Liberty Bank
Sac River Valley Bank
September ___, 1998
Page 6
consideration to be received by each Sac River shareholder
will be approximately equal to the fair market value of the
Sac River stock surrendered in the Merger; and
(ii) As of the effective date of the Merger, the fair
market value of Bancshares common stock shall not be less
than $29.50 per share.
This opinion may be specifically relied upon by the shareholders of Sac
River.
This opinion is being furnished to you solely in connection with the
Merger and is solely for your benefit and the benefit of shareholders of Sac
River. Accordingly, without our prior written consent, this letter may not be
quoted in whole or in part or otherwise referred to in any reported document or
otherwise referred to or circulated in connection with any transaction other
than the Merger. Notwithstanding the foregoing, we hereby consent to the
inclusion of this opinion in the Registration Statement on Form S-4 to be filed
by Bancshares with the Securities and Exchange Commission to register _______
shares of Bancshares common stock which may be issued in the Merger and to the
reference to this firm under the caption "Legal Opinions" in the prospectus
comprising part of such Registration Statement.
Sincerely yours,
HUSCH & EPPENBERGER, LLC
By_________________________
Xxxx X. Xxxxxx
GAP/wm
