EXHIBIT 8
March 16, 1998
Board of Directors
Juniata Valley Financial Corp.
Bridge and Main Streets
Mifflintown, PA 17059
Board of Directors
Lewistown Trust Company
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Re: Agreement and Plan of Reorganization of
Lewistown Trust Company with and into
Juniata Valley Bank,
A Wholly Owned Subsidiary of
Juniata Valley Financial Corp.
Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences of a proposed reorganization involving Juniata Valley Financial
Corp. ("Juniata"), a Pennsylvania corporation; Juniata Valley Bank ("JVB"), a
Pennsylvania state chartered banking institution and wholly-owned subsidiary of
Juniata; and Lewistown Trust Company ("Lewistown"). The reorganization is
described in the Joint Proxy Statement/Prospectus and in the Agreement and Plan
of Reorganization dated December 30, 1997 (the "Reorganization Agreement").
Juniata has one class of stock outstanding, which is voting common stock.
Lewistown has only voting common stock outstanding.
Pursuant to and in accordance with the Pennsylvania Banking Code, Lewistown
will be merged into JVB (the "Merger") and the resulting entity will continue
under the name "Juniata Valley Bank". As a result of the Merger, JVB will
succeed to all of the assets of Lewistown, subject to all of the liabilities of
Lewistown.
Each share of common stock of Lewistown will be exchanged for shares of
common stock of Juniata determined in accordance with the exchange ratio
provided in the Merger Agreement, except for shares of Lewistown held by
shareholders who exercise their dissenters rights. Dissenting shareholders may
surrender their Lewistown stock to Juniata and receive cash payments
representing the fair market value of such stock, subject to the provisions of
The Pennsylvania Banking Code.
Shareholders of Lewistown who would have otherwise been entitled to a
fraction of a share of Juniata common stock will be paid an amount in cash equal
to such fraction multiplied by the "market value per share" as defined in the
Merger Agreement for one (1) whole share of Juniata common stock. The cash
received by dissenting shareholders and by shareholders who receive cash in lieu
of fractional shares will be provided by Xxxxxxx.
In connection with the proposed Merger and related transactions you have
made the following representations to us:
1. Original documents (including signatures) are authentic; documents
submitted to us as copies conform to the original documents, and there has been
(or will be by the date of the Merger)
due execution and delivery of all documents where due execution and delivery are
prerequisites to the effectiveness thereof.
2. The Merger will be effective under The Pennsylvania Banking Code.
3. The total fair market value of the Juniata common stock and cash
received by Lewistown shareholders will be approximately equal to the fair
market value of the Lewistown common stock surrendered in the Merger.
4. To the best knowledge of Lewistown management, there is no plan or
intention on the part of Lewistown shareholders to sell, exchange, or otherwise
dispose of a number of shares of Juniata common stock received in the Merger
that would reduce Lewistown's shareholders' ownership of Juniata common stock to
a number of shares having a value, as of the date of the Merger of less than
eighty (80%) percent of the value of all of the formerly outstanding Lewistown
stock as of the same date. For this purpose, shares of Lewistown common stock
exchanged for cash in exercise of dissenters' rights or in lieu of fractional
shares of Juniata common stock are treated as outstanding Lewistown stock on the
date of the Merger. Moreover, Lewistown stock and Juniata stock held by
Lewistown shareholders and otherwise sold, redeemed, or disposed of prior or
subsequent to the transaction have been taken into account in making this
representation.
5. Juniata has no plan or intention to reacquire any of its stock issued
in the Merger or make any extraordinary distribution in respect of its stock.
6. JVB has no plan or intention to sell or otherwise dispose of any of its
assets or the assets of Lewistown acquired in the Merger, except for
dispositions made in the ordinary course of business.
7. The liabilities of Lewistown were incurred by Lewistown in the ordinary
course of its business.
8. Following the Merger, JVB will continue its historic business or use a
significant portion of its historic business assets in a business.
9. Xxxxxxx, Lewistown, and the Lewistown shareholders will pay their
respective expenses, if any, incurred in connection with the transaction (other
than expenses of Lewistown assumed by JVB pursuant to the Merger).
10. There is no intercorporate indebtedness existing between Lewistown and
Juniata or its subsidiaries that was issued, acquired, or will be settled at a
discount.
11. Neither Juniata nor JVB is an investment company as defined in Section
368(a)(2)(F)(iii) and (iv) of the Internal Revenue Code of 1986 as amended (the
"Code").
12. Neither Juniata nor Lewistown is under the jurisdiction of a court in
a Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the
Code.
13. Lewistown shareholders will receive and retain a meaningful continuing
equity ownership in Juniata that is sufficient to satisfy the continuity of
interest requirement as specified in Treas. Reg. (S)1.368-1(b) and as
interpreted in certain Internal Revenue Service rulings and federal judicial
decisions.
14. After the Merger, JVB will continue to hold "substantially all" of
Lewistown properties acquired in the Merger within the meaning of Section
368(a)(2)(E) of the Code and the regulations promulgated thereunder.
15. None of the compensation to be received by any Lewistown shareholder-
employee pursuant to any employment agreement or any covenants not to compete
will be separate consideration for, or allocable to, any of their shares of
Juniata stock; the compensation to be paid to any Lewistown shareholder-
employees will be for services actually rendered and will be commensurate with
amounts paid to third parties bargaining at arm's length for similar services.
16. No distributions will have been made by Lewistown with respect to its
stock preceding the proposed transaction other than distributions consistent in
amount and in effect with prior dividend policy.
17. The issuance of cash in lieu of fractional shares merely represents
the mechanical rounding off of the fractional share interests. It is undertaken
solely for the purpose of saving Juniata the expense and inconvenience of
issuing and transferring fractional shares, and is not separately bargained for
consideration. The aggregate amount of cash to be issued in lieu of fractional
shares is anticipated to be less than one (1%) percent of the total value of
Juniata common stock received by Lewistown shareholders.
18. Lewistown has not redeemed any of its capital stock within the last
three (3) years.
19. The common stock of Juniata to be received by the shareholders of
Lewistown is not subject to put or call options.
Based on our understanding of the pertinent facts as set forth above and
applicable law, as enacted and construed on the date hereof, it is our opinion
that:
(i) the Merger of Lewistown with and into JVB in accordance with the
Reorganization Agreement will constitute a reorganization within the
meaning of Section 368(a) of the Code, and each of Lewistown, JVB,
and Xxxxxxx will be a "party to a reorganization" within the meaning
of Section 368(b) of the Code;
(ii) no gain or loss will be recognized by Lewistown, JVB, or Juniata as
a result of the Merger;
(iii) except for cash received in lieu of fractional shares, no gain or
loss will be recognized by the shareholders of Lewistown who receive
solely Juniata common stock upon the exchange of their shares of
Lewistown common stock for shares of Juniata common stock;
(iv) the basis of the Juniata common stock to be received by the
Lewistown shareholders will be, in each instance, the same as the
basis of the Lewistown common stock surrendered in exchange
therefor;
(v) to the extent that Lewistown stock is held as capital asset, the
holding period of the Juniata common stock received by the
shareholders of Lewistown receiving Juniata common stock will
include the period during which the Lewistown common stock
surrendered in exchange therefor was held;
(vi) to the extent that they hold their Lewistown common stock as capital
assets, cash received by Lewistown shareholders in lieu of a
fractional share interest in Juniata common stock will be treated as
having been received as a distribution in full payment for such
fractional share interest in Juniata common stock, subject to the
provisions of Section 302(a) of the Code.
We are pleased to offer this opinion based on the federal income tax laws
as of this date. No assurances can be provided as to future changes in
administrative or judicial interpretations of
these laws. No opinion is expressed with respect to state and local taxes,
federal, or state securities law and other federal or state law not expressly
referred herein.
We hereby consent to the filing of this opinion as an Exhibit to the
aforementioned Registration Statement. In giving this opinion, we do not
thereby admit that we are acting within the category of persons whose consent is
required under Section 7 of the Act or the rules or regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Xxxxx X. Xxxx
