EXHIBIT 8
XXXXXXX XXXXX XXXX & WHITE LLP
____________, 2001
Community Bankshares Incorporated
00000 Xxxx Xxxxx Xxxxxx
P.O. Box 29569
Richmond, Virginia 23242
RE: AGREEMENT AND PLAN OF MERGER BY AND BETWEEN
SOUTHTRUST OF ALABAMA, INC. AND COMMUNITY BANKSHARES
INCORPORATED 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
registered financial holding company ("SouthTrust"), regarding the transactions
contemplated by that certain Agreement and Plan of Merger, dated September 21,
2001, (the "Merger Agreement"), by and between SouthTrust of Alabama, Inc., an
Alabama corporation ("ST-Sub") and Community Bankshares Incorporated, a Virginia
corporation ("Community"), and joined in by SouthTrust Corporation, a Delaware
corporation ("SouthTrust"), as described in more detail in the Merger Agreement
and in the Registration Statement on Form S-4 which was filed by SouthTrust with
the Securities Exchange Commission on October 19, 2001 (the "Registration
Statement"). Specifically, you have requested us to opine that the merger of
Community 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 Community upon the receipt solely of
SouthTrust voting common stock in exchange for their Community common stock upon
consummation of the Merger.
This opinion is being rendered pursuant to Section 7.5 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 Community 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 Community has requested or will receive an
advance ruling from the IRS as to any of the federal income tax effects to
holders of Community common stock of the Merger, or of any of the federal income
tax effects to SouthTrust, ST-Sub or Community 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.
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 December 16, 1998, and that certain Xxxxxxx and Restated
Rights Agreement, dated as of July 1, 2000 (the "Rights Agreement"), between
SouthTrust and American Stock Transfer & Trust Company, as Rights Agent, each
share of SouthTrust Common Stock issued and outstanding carries a right to
purchase from SouthTrust one one-hundredth of a share of SouthTrust Preferred
Stock designated as the Series 1999 Junior Participating Preferred Stock at a
purchase price of $150.00 (a "Right"). These Rights will expire on February 22,
2009 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 1999 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. ST-Sub is included in the consolidated federal
income tax return of SouthTrust.
Community is a corporation organized pursuant to the laws of
the State of Virginia and is a registered bank holding company. As
of_______________, the authorized common stock of Community consisted of
4,000,000 shares of common stock, par value $3.00 per share, of which Community
Bankshares Incorporated 2,782,676 shares were issued and outstanding (the
"Community Common Stock"). Community 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. Community will merge with and into ST-Sub in
accordance with the applicable corporation laws of the States of Virginia and
Alabama (the "Corporate Laws"), after which ST-Sub will be the surviving
corporation. ST-Sub will acquire all of the assets and be subject to all of the
liabilities of Community. ST-Sub will be the surviving corporation and the
separate corporate existence of Community will terminate.
2. Each share of Community Common Stock will become and
be converted into the right to receive 1.5608 shares of SouthTrust Common Stock,
and one Right will be associated with each share of SouthTrust Common Stock
received in the Merger in exchange for Community Common Stock.
3. The holders of Community Common Stock may elect to
receive from SouthTrust cash in the amount of $34.03 per share in exchange for
part or all of their Community Common Stock, provided that the number of shares
of Community Common Stock that may be exchanged for cash may not exceed Forty
Percent (40%) of the total number of shares of Community Common Stock
outstanding immediately prior to the Effective Time of the Merger.
4. No fractional shares of SouthTrust Common Stock will
be issued in the Merger; each holder of Community Common Stock who would
otherwise be entitled to receive a fractional share interest, if any, will
receive cash in lieu of a fractional share.
5. Pursuant to Section 2A.2 of the Merger Agreement, if
the average closing price of SouthTrust Common Stock on the date which is five
(5) business days prior to the scheduled date for mailing the proxy statement
for the special meeting of the shareholders of Community at which the Merger
Agreement is to be voted upon is less than $15.00 per share, the transaction
shall be converted into a statutory share exchange in which the consideration to
be paid for the Community Common Stock shall be solely cash.
ASSUMPTIONS
For purposes of the opinion set forth below, we have assumed
that the form of transaction contemplated by the Merger Agreement will not be
converted into a statutory share exchange under the provisions of Section 2A.2
of the Merger Agreement.
REPRESENTATIONS
Officers of Community and SouthTrust each have made certain
written representations to us on behalf of the management 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, assumptions 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. Community, SouthTrust and ST-Sub each
will be a party to the reorganization within the meaning of Section 368(b) of
the Code.
(ii) Community stockholders will recognize no gain or loss
upon their exchange of Community Common Stock solely for SouthTrust Common
Stock.
(iii) The basis of the shares of SouthTrust Common Stock
received by the Community stockholders (including any fractional share interests
to which they may be entitled) will be the same as the basis of the shares of
Community Common Stock surrendered in exchange therefor.
(iv) The holding period of the shares of SouthTrust Common
Stock received by the stockholders of Community (including any fractional share
interests to which they may be entitled) will include the period during which
the shares of Community Common Stock surrendered in exchange therefor were held
by the Community stockholders, provided that the shares of Community Common
Stock surrendered were held as a capital asset within the meaning of Section
1221 of the Code by the Community stockholders as of the Effective Time of the
Merger.
(v) The receipt by a holder of Community 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 Community 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.
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, including without limitation the
tax effects or consequences of the receipt by a holder of Community Common Stock
of cash pursuant to a cash election under the Merger Agreement.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. We also consent to the reference to this firm
under the "Federal Income Tax Consequences" in the proxy statement/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,
