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EXHIBIT 8(a)
September , 1998
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Georgia National Bancorp, Inc.
000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000
Re: Agreement and Plan of Merger by and between SouthTrust of Alabama,
Inc. and Georgia National Bancorp, Inc., joined in by SouthTrust Corporation
Ladies and Gentlemen:
You have requested the opinion of Xxxxxxx Xxxxx Xxxx & White LLP, as
counsel to SouthTrust Corporation, a Delaware corporation and a bank holding
company registered pursuant to the Bank Holding Company Act (12 USC ss. 1841,
et seq.) and Regulation Y promulgated thereunder ("SouthTrust"), regarding the
transactions contemplated by that certain Agreement and Plan of Merger, dated
July 1, 1998 (the "Merger Agreement"), by and between SouthTrust of Alabama,
Inc., an Alabama corporation ("ST-Sub") and Georgia National Bancorp, Inc., a
Georgia corporation ("Georgia National"), and joined in by SouthTrust
Corporation, a Delaware corporation ("SouthTrust"). Specifically, you have
requested us to opine that the merger of Georgia National with and into ST-Sub
(the "Merger") pursuant to the Merger Agreement will constitute a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and that no gain or loss will be recognized by the
stockholders of Georgia National upon the receipt solely of SouthTrust voting
common stock in exchange for their Georgia National common stock upon
consummation of the Merger.
This opinion is being rendered pursuant to Section 9.8 of the Merger
Agreement. Capitalized terms used herein and not otherwise defined herein have
the meanings given to them in the Merger Agreement.
In rendering the opinion set forth below, we have examined and relied
upon originals or copies of the Merger Agreement and such other documents and
materials as we have deemed necessary as a basis for such opinion. In
connection with such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents, agreements and instruments
submitted to us as originals, the conformity to original documents, agreements
and instruments of all documents, agreements and instruments submitted to us as
copies or specimens and the authenticity of the originals of such documents,
agreements and instruments submitted to us as copies or specimens, and, as to
factual matters, the veracity of written statements made by officers and other
representatives of Georgia National and SouthTrust included in the Merger
Agreement.
The opinion stated below is based upon the relevant provisions of the
Code, regulations promulgated pursuant thereto by the Department of the
Treasury and the Internal Revenue Service (the "IRS"), current administrative
rulings and applicable judicial decisions, all of which are subject to change.
Neither SouthTrust, ST-Sub nor Georgia National has requested or will receive
an advance ruling from the IRS as to any of the federal income tax effects to
holders of Georgia National common stock of the Merger, or of any of the
federal income tax effects to SouthTrust, ST-Sub or Georgia National of the
Merger. Our opinion set forth below is not binding upon the IRS, and there can
be no assurance, and none hereby is given, that the IRS will not take a
position contrary to one or more of the positions reflected herein, or that our
opinion will be upheld by the courts if challenged by the IRS.
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FACTS
SouthTrust is a registered bank holding company and is the common parent
of an affiliated group of corporations, including ST-Sub, that file
consolidated federal income tax returns on the calendar year basis. SouthTrust
Common Stock is publicly held and publicly traded through the Automated
Quotation System of the Nasdaq Stock Market.
In accordance with resolutions of SouthTrust's Board of Directors
adopted on February 22, 1989, and that certain Rights Agreement, dated as of
February 22, 1989 (the "Rights Agreement"), between SouthTrust and Mellon Bank,
N.A. (now known as ChaseMellon Shareholder Services LLC), as Rights Agent, each
share of SouthTrust Common Stock issued and outstanding carries with it eight
twenty-sevenths of a right to purchase from SouthTrust one one-hundredth of a
share of SouthTrust Preferred Stock designated as the Series A Junior
Participating Preferred Stock at a purchase price of $75.00 (a "Right"). These
Rights will expire on February 22, 1999 unless redeemed earlier and are not
exercisable or transferable separately from the shares of SouthTrust Common
Stock until the occurrence of certain events associated with an acquisition of
a substantial amount of SouthTrust Common Stock. The provisions of the Rights
are more fully described in the Rights Agreement and the Certificate of
Designation, Preferences and Rights of Series A Junior Participating Preferred
Stock. A copy of the Rights Agreement is incorporated by reference as an
exhibit to the Registration Statement.
Immediately prior to the Merger, SouthTrust will own 100% of the common
stock of ST-Sub, and ST-Sub will own 100% of the common stock of SouthTrust
Bank, National Association, a national banking association ("ST-Bank"). Both of
ST-Sub and ST-Bank are included in the consolidated federal income tax return
of SouthTrust.
Georgia National is a corporation organized pursuant to the laws of the
State of Georgia and is a registered bank holding company. As of July 1, 1998,
the authorized common stock of Georgia National consisted of 5,000,000 shares
of common stock, par value $0.005 per share, of which 1,308,530 shares were
issued and out standing (the "Georgia National Common Stock"); Georgia National
owns 100% of the issued and outstanding common stock of Georgia National Bank,
a national bank and the sole banking subsidiary of Georgia National (the
"Bank"). Georgia National is an accrual method taxpayer using a calendar year
accounting period.
THE PROPOSED TRANSACTIONS
Pursuant to the Merger Agreement the following transactions will take
place:
1. Georgia National will merge with and into ST-Sub in accordance with
the applicable corporation laws of the States of Georgia and Alabama (the
"Corporate Laws"), after which ST-Sub will be the surviving corporation. ST-Sub
will acquire all of the assets and assume all of the liabilities of Georgia
National. ST-Sub will be the surviving corporation and the separate corporate
existence of Georgia National will terminate.
2. Each share of Georgia National Common Stock will become and be
converted into the right to receive 0.60 shares of SouthTrust Common Stock, and
eight twenty-sevenths of a Right will be associated with each share of
SouthTrust Common Stock exchanged in the Merger for Georgia National Common
Stock.
3. No fractional shares of SouthTrust Common Stock will be issued in the
Merger; each holder of Georgia National Common Stock who would otherwise be
entitled to receive a fractional share interest, if any, will receive cash in
lieu of a fractional share.
4. Any holder of Georgia National Common Stock who dissents from the
Merger will be entitled to receive from the surviving corporation the fair
value of his or her shares in cash.
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REPRESENTATIONS
Officers of Georgia National and SouthTrust each have made certain
written representations to us on behalf of their respective institutions by
letters dated each of even date herewith (the "Representation Letters"), and
with your consent, we have relied upon the accuracy and validity of these
representations provided in the Representation Letters in offering the opinions
expressed below.
OPINION
Upon the basis of the foregoing facts and representations, and solely
for purposes of the Code, we are of the opinion that:
(i) The Merger will qualify as a reorganization within the meaning of
Section 368(a) of the Code. Georgia National, SouthTrust and ST-Sub each will
be a party to the reorganization within the meaning of Section 368(b) of the
Code.
(ii) Georgia National shareholders will recognize no gain or loss
upon their exchange of Georgia National Common Stock solely for SouthTrust
Common Stock.
(iii) The basis of the shares of SouthTrust Common Stock received by
the Georgia National shareholders (including any fractional share interests to
which they may be entitled) will be the same as the basis of the shares of
Georgia National Common Stock surrendered in exchange therefor.
(iv) The holding period of the shares of SouthTrust Common Stock
received by the shareholders of Georgia National (including any fractional
share interest to which they may be entitled) will include the period during
which the shares of Georgia National Common Stock surrendered in exchange
therefor were held by the Georgia National shareholders, provided that the
shares of Georgia National Common Stock surrendered were held as a capital
asset within the meaning of Section 1221 of the Code by the Georgia National
shareholders as of the Effective Time of the Merger.
(v) The receipt by a holder of Georgia National Common Stock
of cash in lieu of a fractional share of SouthTrust Common Stock will be
treated as though such fractional share actually was issued in the Merger and
thereafter redeemed by SouthTrust for cash. The receipt of such cash in lieu of
a fractional share by a holder of Georgia National Common Stock will be treated
as a distribution by SouthTrust in full payment in exchange for the fractional
share as provided in Section 302(a) of the Code.
(vi) Georgia National shareholders who exercise dissenters' rights,
and as a result receive only cash, will be treated as having received such cash
as a distribution in redemption of their shares of Georgia National Common
Stock, subject to the provisions and limitations of Section 302 of the Code.
Those holders of Georgia National Common Stock who receive only cash, and who
hold no SouthTrust Common Stock, directly or indirectly through the application
of Section 318(a) of the Code, following the Merger will be treated as having a
complete termination of interest within the meaning of Section 302(b)(3) of the
Code, and the cash received will be treated as a distribution in full payment
in exchange for such holder's Georgia National Common Stock as provided in
Section 302(a) of the Code. As provided in Section 1001 of the Code, gain will
be realized and recognized by such Georgia National shareholders measured by
the difference between the redemption price and the adjusted tax basis of the
shares of Georgia National Common Stock surrendered. Provided that Section 341
of the Code (relating to collapsible corporations) is inapplicable and the
Georgia National Common Stock is a capital asset in the hands of such holders,
the gain, if any, will constitute capital gain. Such gain will constitute
long-term capital gain if the surrendered shares of Georgia National Common
Stock were held by the shareholder for a period greater than one year prior to
the Merger; if the surrendered shares of Georgia National Common Stock were
held by such shareholder for a period of one year or less, the gain will
constitute short-term capital gain.
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No opinion is expressed as to the federal tax treatment of the
transaction under any other provisions of the Code and regulations, or as to
the tax treatment of any conditions existing at the time of, or effects
resulting from, the transaction that are not specifically covered by the
opinion.
This opinion is rendered solely with respect to certain federal income
tax consequences of the Merger under the Code, and does not extend to the
income or other tax consequences of the Merger under the laws of any state or
any political subdivision of any state; nor does it extend to any tax effects
or consequences of the Merger to SouthTrust or ST-Sub other than those
expressly stated in the above opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the references to this firm under
the heading "Certain Federal Income Tax Consequences" in the prospectus which
is included as part of the Registration Statement. In giving such consent, we
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended.
Yours very truly,
