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EXHIBIT 8
February , 1996
FFE Financial Corp.
0000 Xxxxx XxXxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
Re: Agreement and Plan of Merger by and among SouthTrust
Corporation, SouthTrust of Florida, Inc., and FFE Financial
Corp.
Ladies and Gentlemen:
You have requested the opinion of Bradley, Arant, Rose &
White, as counsel to SouthTrust Corporation, a Delaware corporation and a bank
holding company registered pursuant to the Bank Holding Company Act (12 USC
Section 1841, et seq.) and Regulation Y promulgated thereunder ("SouthTrust"),
regarding the transactions contemplated by that certain Agreement and Plan of
Merger dated November 3, 1995 (the "Merger Agreement"), by and between
SouthTrust of Florida, Inc., a Florida corporation and a wholly-owned
subsidiary of SouthTrust ("ST-Sub"), and FFE Financial Corp., a Delaware
corporation ("FFE"), and joined in by SouthTrust. Specifically, you have
requested us to opine that the merger of FFE 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 FFE upon the receipt solely of SouthTrust common stock in
exchange for their FFE common stock upon consummation of the Merger.
This opinion is being rendered pursuant to the requirements of
Item 21(a) of the registration statement on Form S-4 (the "Registration
Statement") which is being filed today on SouthTrust's behalf with the
Securities Exchange Commission under the Securities Act of 1933, as amended,
and pursuant to Section 5.11 of the Merger Agreement. Capitalized terms used
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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 FFE and SouthTrust included in the
Merger Agreement. In addition, in rendering this opinion we have made certain
assumptions as set forth below.
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 FFE has requested or will receive an advance
ruling from the IRS as to any of the federal income tax effects to holders of
FFE Common Stock of the Merger, or of any of the federal income tax effects to
SouthTrust, ST-Sub or FFE 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. The
authorized capital stock of SouthTrust consists of 200,000,000 shares of common
stock, par value $2.50 per share (the "SouthTrust Common Stock"), of which a
total of 87,903,683 shares were issued and outstanding as of December 31, 1995,
and 5,000,000 shares of preferred stock, par value $1.00 per share, none of
which is issued and outstanding as of the date hereof. SouthTrust Common Stock
is publicly held and publicly traded through the Automated Quotation System of
the Nasdaq Stock Market ("NASDAQ").
ST-Sub is a corporation organized pursuant to the laws of the
state of Florida. Immediately prior to the Merger, SouthTrust will own 100% of
the capital stock of ST-Sub, and ST-Sub will own 100% of the capital stock of
SouthTrust Bank of Florida, N.A., a national
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banking corporation ("ST-Bank"). Both of ST-Sub and ST-Bank are included in
the consolidated federal income tax return of SouthTrust.
FFE is a corporation organized pursuant to the laws of the
State of Delaware. As of November 3, 1995, the authorized capital stock of FFE
consisted of (i) 2,000,000 shares of common stock, par value $0.01, of which
473,986 shares were issued and outstanding (the "FFE Common Stock"), and (ii)
500,000 shares of preferred stock, $0.01 par value per share, of which none
were issued and outstanding (together with the FFE Common Stock, the "FFE
Capital Stock"), and there has been no change in the number of shares of FFE
Capital Stock outstanding as of the date hereof. FFE directly or indirectly
owns 100% of the issued and outstanding capital stock of several subsidiary
corporations (the "FFE Subsidiaries"), including First of Englewood, FSB, a
federal savings bank (the "Bank"). FFE is an accrual method taxpayer using a
calendar year accounting period.
As of September 30, 1995, FFE had 46,288 shares of FFE Common
Stock reserved for issuance under the FFE 1992 Stock Option and Incentive
Option Plan for the benefit of employees and directors of FFE and the Bank,
pursuant to which options to purchase 40,731 shares of FFE Common Stock were
outstanding as of such date (the "FFE Stock Options"). The average exercise
price of the FFE Stock Options was $10.08 per share. Also as of September 30,
1995, 11,111 shares of FFE Common Stock were issued and outstanding under the
FFE Management Retention Plan (the "MRP"), a restricted stock arrangement.
THE PROPOSED TRANSACTIONS
Pursuant to the Merger Agreement as amended, the following
transactions will take place:
(1) FFE will merge with and into ST-Sub in accordance
with the applicable corporation laws of the States of Florida and Delaware (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 FFE.
ST-Sub will be the surviving corporation and the separate corporate existence
of FFE will terminate.
(2) As a result of the Merger, each share of FFE Common
Stock issued and outstanding, except for those shares of FFE Common Stock with
respect to which the holder exercises rights of dissent, will be exchanged for:
(i) cash in the amount of $10.80, subject to adjustment as provided in Section
1.2(b) of the Merger Agreement (the "Cash Consideration"), and (ii) 0.645
shares of SouthTrust Common Stock, with such number subject to adjustment, all
as set forth in the Merger Agreement.
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(3) No fractional shares of SouthTrust Common Stock will
be issued in the Merger; each holder of FFE 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 shares of FFE Common Stock who dissents
from the Merger will be entitled to receive from the surviving corporation the
appraisal value of his or her shares in cash.
(5) Immediately following the consummation of the Merger,
and the receipt of required regulatory approvals, the Bank will be merged with
and into ST-Bank in accordance with the provisions of the Corporate Laws, and
ST-Bank shall be the surviving bank.
(6) Each holder of an FFE Stock Option which was
outstanding as of November 3, 1995, and which remains outstanding immediately
prior to the Effective Time, will receive from SouthTrust at the Effective
Time, in settlement and cancellation of such FFE Stock Options, an amount of
cash equal to the product of (i) the number of shares of FFE Common Stock
subject to such option, and (ii) the excess, if any, of the total value of the
consideration to be exchanged by SouthTrust for each share of FFE Common Stock
to be surrendered pursuant to the Merger Agreement, net of any amount which is
required to be withheld under applicable state and federal income and
employment tax laws; or, at the election of each optionholder, an FFE Stock
Option will be assumed by SouthTrust and will become an option to purchase
shares of SouthTrust Common Stock, all as described in Section 5.12(a) of the
Merger Agreement.
(7) Each outstanding share of FFE Common Stock awarded
pursuant to the MRP that is unvested immediately prior to the Effective Time
shall be cancelled in exchange for a per share cash payment from SouthTrust at
the Effective Time equal to the total value of the per share consideration to
be exchanged by SouthTrust for each share of FFE Common Stock pursuant to the
Merger Agreement, net of any amount which is required to be withheld under
applicable state and federal income and employment tax laws.
REPRESENTATIONS
Officers of FFE and SouthTrust each have made certain written
representations to us on behalf of their respective institutions by letters
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.
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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 under
Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code. FFE, SouthTrust, and
ST-Sub each will be "a party to a reorganization" within the meaning of Section
368(b) of the Code.
(ii) FFE stockholders will recognize no gain or loss upon
their exchange of FFE Common Stock solely for SouthTrust Common Stock.
(iii) The basis of the shares of SouthTrust Common Stock
received by the stockholders of FFE (including any fractional share interests
to which they may be entitled) will be the same as the basis of the shares of
FFE Common Stock surrendered in exchange therefor.
(iv) The holding period of the shares of SouthTrust Common
Stock received by FFE stockholders (including any fractional share interests to
which they may be entitled) will include the period during which the shares of
FFE Common Stock surrendered in exchange therefor was held by the FFE
stockholders, provided that the shares of FFE Common Stock surrendered were
held as a capital asset within the meaning of Section 1221 of the Code by the
FFE stockholders as of the Effective Time.
(v) FFE stockholders who exercise dissenters' rights, and
as a result of which receive only cash, will be treated as having received such
cash as a distribution in redemption of their shares of FFE Common Stock,
subject to the provisions and limitations of Section 302 of the Code. Those
FFE stockholders 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
their interests in FFE 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 each such stockholder's FFE Common Stock as provided in Section 302(a) of
the Code. As further provided in Section 1001 of the Code, gain will be
realized and recognized by such stockholders measured by the difference between
the redemption price and the adjusted basis of the shares of FFE Common Stock
surrendered as determined under Section 1011 of the Code. Provided that
Section 341 of the Code (relating to collapsible corporations) is inapplicable
and the FFE Common Stock is held as a capital asset by such stockholders, the
gain, if any, will constitute capital gain. Such gain will constitute
long-term capital gain if the surrendered shares of FFE Common Stock were held
by the stockholder for a period greater than one year prior to the Merger; if
the surrendered shares of FFE Common Stock were held by such stockholder for a
period of one year or less, the gain will constitute short-term capital gain.
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(vi) FFE stockholders who receive the Cash Consideration
will be treated for federal income tax purposes as if SouthTrust Common Stock
having a value equal to such Cash Consideration actually was issued as part of
the Merger and then was redeemed by SouthTrust in exchange for the Cash
Consideration, and the Cash Consideration will be treated as a distribution in
full payment in exchange for such FFE Common Stock, subject to the provisions
and limitations of Section 302 of the Code.
(vii) The receipt by a holder of FFE Common Stock of cash
in lieu of a fractional share of SouthTrust Common Stock will be treated as
though such fractional share were issued to such holder of FFE Common Stock 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 FFE 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.
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.
Our opinion, as stated above, is based upon our analysis of
the current Internal Revenue Code of 1986, as amended, the regulations issued
thereunder, current case law and published rulings of the Internal Revenue
Service; the foregoing are subject to change, and such changes may be given
retroactive effect. In the event of such changes, our opinion set forth above
may be affected and may not be relied upon.
Furthermore, no opinion is expressed as to the federal or
state tax treatment of the transaction under any other provisions of the Code
and regulations, or about the tax treatment of any conditions existing at the
time of, or effects resulting from, the transaction that are not specifically
covered by the above opinions. We specifically express no opinion with respect
to the income or other tax consequences of transactions affecting the FFE Stock
Options and the unvested shares held under the MRP.
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
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Income Tax Consequences" in the Registration Statement and in the proxy
statement/prospectus which is included as part of the Registration Statement.
Yours very truly,
