LAW OFFICES
SILVER, XXXXXXXX & XXXX, L.L.P.
A LIMITED LIABILITY PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
0000 XXX XXXX XXXXXX, X.X.
WASHINGTON, D.C. 20005-3934
(000) 000-0000
XXXXXX X. XXXXXX, P.C. TELECOPIER NUMBER
XXXXXX X. XXXXXXXX, P.C. (000) 000-0000
XXXXX X. XXXX, P.C.
XXXXXX X. XXXX, P.C. OF COUNSEL
XXXXX X. XXXXXXXXX, P.C. XXXXX X. XXXXX, P.C.
XXXXXXX X. XXXXXXX, P.C. XXXX X. XXXXXX*
XXX X. XXXXXXXX, P.C. XXXXX X. XXXXX*
XXXXXX X. XXXXXXXXX, P.C. XXXXX X. XXXXXX
XXXXXXX X. XXXXXXXXXX, P.C. XXXXXX XXXXXX
XXXXXXX X. XXXX, P.C. XXXXXX X. X'XXXXXXX*
XXXXXXXXXXX X. XXXXX, P.C.
XXXX X. XXXXXXXXXX, P.C. WRITER'S DIRECT DIAL NUMBER
XXXXXX X. XXXXXXXX, P.C. (000) 000-0000
XXXXX X. XXXXXX, P.C.
XXXX X. XXX, P.C.
XXXX X. XXXXXXXX*
XXXXXXX X. XXXXX
XXXXX X. XXXX
XXXXX X. XXXXXX
January 23, 1998
*NOT ADMITTED IN D.C.
Board of Directors
Xxxxxx Xxxxx Bankshares, Inc.
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Federal Income Tax Consequences Arising From the Merger
Contemplated By That Certain Amended and Restated Agreement
And Plan of Merger dated December 10, 1997 By And Between
Xxxxxx Xxxxx Bankshares, Inc. And United Bankshares, Inc.
(the "Agreement")
Ladies and Gentlemen:
In connection with the Form S-4 Registration Statement/Proxy Statement
(the "Registration Statement") filed by United Bankshares, Inc. with the SEC
pursuant to the Agreement, set forth hereinbelow is this firm's opinion relating
to certain federal income tax consequences applicable to the Merger contemplated
by the Agreement. Capitalized terms used herein which are not expressly defined
herein shall have the meaning assigned to them in the Agreement.
FACTS
United is a stock corporation organized and existing under the laws of
the State of West Virginia. Merger Sub is a stock corporation organized and
existing under the laws of the State of Virginia, is a first-tier wholly owned
subsidiary of United and was formed for the sole purpose of facilitating the
Merger. United's principal business consists of lending and deposit taking
activities through one or more banking subsidiaries.
Xxxxx is a stock corporation organized and existing under the laws of
the State of Virginia. Mason's principal business consists of lending and
deposit taking activities through its banking subsidiary.
Board of Directors
January 23, 1998
Page 2
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Pursuant to the Agreement, it is proposed that the Merger will be
implemented through the merger of Merger Sub with and into Xxxxx. In the Merger
all of the outstanding Xxxxx Common Stock will be exchanged solely for United
Common Stock or cash in lieu of fractional share interests.
ASSUMPTIONS
A. The Merger will be implemented strictly in accordance with the
terms of the Agreement and will constitute a statutory merger.
B. All conditions precedent contained in the Agreement shall be
performed or waived prior to the Effective Time.
C. The representations of Xxxxx and United made in their respective
tax representation letters dated January 23, 1998 to Xxxxxxxx & Xxxxxxxx and us
are true and correct on the date hereof and will be true and correct as of the
Effective Time.
D. All of the stockholders of Xxxxx are citizens or residents of the
United States of America ("U.S. Holders"). For purposes hereof, U.S. Holders do
not include certain classes of taxpayers including but not limited to foreign
persons, insurance companies, tax-exempt organizations, financial institutions,
dealers in securities, persons who acquired or acquire Xxxxx Common Stock
pursuant to the exercise of employee stock options or otherwise as compensation
and persons who hold shares of Xxxxx Common Stock in a hedging transaction or as
part of a straddle or conversion transaction.
OPINIONS
Subject to the foregoing and to the conditions and limitations
expressed elsewhere herein, we are of the opinion on the date hereof that for
federal income tax purposes:
1. the Merger will constitute a tax-free reorganization within the
meaning of Section 368(a) of the Code and United, Merger Sub and Xxxxx will each
be a party to the reorganization;
2. except as provided in paragraph 4 below, no gain or loss will be
recognized by any U.S. Holder upon the exchange of Xxxxx Common Stock solely for
United Common Stock in the Merger; the aggregate adjusted tax basis of shares of
United Common Stock (including a fractional share interest in United Common
Stock deemed received and redeemed as described below) received
Board of Directors
January 23, 1998
Page 3
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by a U.S. Holder will be the same as the aggregate adjusted tax basis of the
shares of the Xxxxx Common Stock exchanged therefor;
3. the holding period of the United Common Stock received by a U.S.
Holder in the Merger will include the holding period of the Xxxxx Common Stock
surrendered and exchanged therefor, provided that such shares of Xxxxx Common
Stock were held as a capital asset by such U.S. Holder at the Effective Time;
and
4. a U.S. Xxxxxx who receives cash in lieu of a fractional share
interest in United Common Stock in the Merger will be treated as having received
such fractional share interest and then as having received the cash in
redemption of such fractional share interest. Under Section 302 of the Code, if
such deemed distribution were "substantially disproportionate" with respect to
the U.S. Holder or were "not essentially equivalent to a dividend" after giving
effect to the constructive ownership rules of the Code, the U.S. Holder would
generally recognize capital gain or loss equal to the difference between the
amount of cash received and the U.S. Holder's adjusted tax basis in the
fractional share interest (determined as described in paragraph 2 above). Such
capital gain or loss would be long-term capital gain or loss if the U.S.
Xxxxxx's holding period in a fractional share interest (determined as described
in paragraph 3 above) is more than one year. Long-term capital gain of a
non-corporate U.S. Holder is generally subject to a maximum tax rate of 28% if
the holding period exceeds one year but does not exceed 18 months and to a
maximum tax rate of 20% if the holding period exceeds 18 months.
The foregoing opinion reflects our legal judgment as of the date
hereof based upon the facts and assumptions presented herein. This opinion has
no official status or binding effect of any kind. Accordingly, we cannot assure
you that the Internal Revenue Service or any court of competent jurisdiction
will agree with this opinion.
We hereby consent to the filing of this letter as an Exhibit to the
Registration Statement and to all references made to this letter in the
Registration Statement.
Very truly yours,
/s/ Xxxxx X. Xxxx, P.C.
SILVER, XXXXXXXX & XXXX, L.L.P.
