EXHIBIT 8.1
[Letterhead of Xxxxxx, Xxxxxx & Xxxxx, P.C.]
October 30, 1995
The Board of Directors
Xxxxxxxxxxx National Bancshares, Inc.
P.O. Box 1299
Weatherford, Texas 76086
Dear Sirs:
Pursuant to Section 2.2 of the Stock Exchange Agreement and Plan of
Reorganization, dated October 20, 1995 (the "Agreement") among First Financial
Bankshares, Inc. ("First Financial"), Xxxxxxxxxxx National Bancshares, Inc.
("Weatherford Holdings"), Xxxxxx Xxxxxxxxxx, Inc. ("Xxxxxx"), and Xxxxxxxxxxx
National Bank ("Xxxxxxxxxxx National"), our opinion has been requested with
respect to certain Federal income tax consequences of the exchange by the
Weatherford Holdings shareholders of their Xxxxxxxxxxx Holdings stock for First
Financial voting common stock (the "Stock Exchange") and the merger of
Xxxxxxxxxxx Holdings with and into First Financial Bankshares of Delaware, Inc.
("FFB Delaware"), a wholly-owned subsidiary of First Financial (the "Merger").
This opinion letter supersedes our opinion letter dated September 27, 1995.
In rendering our opinion, we have reviewed the Agreement and such other
documents as we have deemed necessary or appropriate. We have relied upon the
accuracy and completeness of the facts, information, covenants, and
representations contained in the Agreement and such other documents.
Furthermore, we have assumed that the Stock Exchange and Merger will be
consummated in accordance with the Agreement and that the Merger will qualify as
a merger under applicable State law.
In rendering our opinion, we have considered the applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations
promulgated thereunder, pertinent judicial authorities, interpretive rulings of
the Internal Revenue Service and such other authorities as we have considered
relevant. It should be noted that statutes, regulations, judicial decisions and
administrative interpretations are subject to change at any time and, in some
circumstances, with retroactive effect.
The Board of Directors
Xxxxxxxxxxx National Bancshares, Inc.
October 30, 1995
Page 2
A material change in the authorities upon which our opinion is based could
affect our conclusions. However, we assume no obligation to revise or supplement
this opinion if any subsequent change were to occur.
Requisite to a tax-free reorganization under the Code is a continuity of
interest in the business enterprises on the part of those persons who were the
owners of the enterprise prior to the reorganization. Accordingly, the
Xxxxxxxxxxx Holdings shareholders, as a group, will be required to satisfy the
continuity of interest doctrine through a post-exchange continuing ownership of
the First Financial voting common stock received in the Stock Exchange. In this
regard, a disposition by the Xxxxxxxxxxx Holdings shareholders of a substantial
portion (in the aggregate) of their post-exchange First Financial shares which
is pursuant to a plan, intention or arrangement existing at the time of the
Stock Exchange will result in a failure to satisfy the continuity of interest
doctrine. The Internal Revenue Service takes the position that 50 percent (in
the aggregate) constitutes a "substantial portion." A failure to satisfy the
continuity of interest doctrine will result in the Stock Exchange being a
taxable transaction to the Xxxxxxxxxxx Holdings shareholders. In rendering our
opinion, we have assumed that the continuity of interest doctrine can and will
be satisfied.
Also requisite to a tax-free reorganization under the Code is a continuity of
the business enterprise under the modified corporate form. The continuity of
business enterprise doctrine requires that the acquiring corporation either
continue the acquired corporation's historic business or use a significant
portion of the acquired corporation's historic business assets in a business.
Accordingly, in order to satisfy the continuity of business enterprise doctrine,
First Financial and/or one or more of its controlled subsidiaries will be
required to either continue the historic business of Xxxxxxxxxxx Holdings,
Xxxxxx and Weatherford National or use a significant portion of the historic
business assets of Weatherford Holdings, Xxxxxx, and Weatherford National in a
business. A failure to satisfy the continuity of business enterprise doctrine
will result in the Stock Exchange being a taxable transaction to the Xxxxxxxxxxx
Holdings shareholders. In rendering our opinion, we have assumed that the
continuity of business enterprise doctrine will be satisfied.
In addition to the requirements noted in the foregoing for a tax-free
reorganization under the Code, there is the requirement that, immediately after
a stock-for-stock exchange, the acquiring corporation must have control of the
acquired corporation. For purposes of the reorganization provisions of the Code,
the term "control" means the ownership of stock possessing at least 80 percent
of the total combined voting power of all classes of stock entitled to vote and
at least 80 percent of the total number of shares
The Board of Directors
Xxxxxxxxxxx National Bancshares, Inc.
October 30, 1995
Page 3
of all other classes of stock of the corporation. Therefore, in order to satisfy
the control requirement, First Financial and/or one or more of its controlled
subsidiaries will have to own at least 80 percent of the outstanding stock of
Xxxxxxxxxxx Holdings immediately after the Stock Exchange. If the Stock Exchange
is consummated with First Financial acquiring less than 80 percent of the
outstanding stock of Xxxxxxxxxxx Holdings, the Stock Exchange will be a taxable
transaction to the Xxxxxxxxxxx Holdings shareholders. In rendering our opinion,
we have assumed that the control requirement will be satisfied.
Based solely upon and subject to foregoing, we are of the opinion that under
current law:
1. The Stock Exchange and Merger will be treated as a reorganization
within the meaning of Section 368(a) of the Code, and First Financial,
Xxxxxxxxxxx Holdings, and FFB Delaware each will be a party to the
reorganization within the meaning of Section 368(b) of the Code.
2. No gain or loss will be recognized by the Xxxxxxxxxxx Holdings
shareholders upon receipt of First Financial voting common stock in
exchange for their Xxxxxxxxxxx Holdings stock, except for any gain or
loss recognized with respect to the shareholders who receive cash in
lieu of fractional share interests in First Financial voting common
stock or pursuant to the exercise of statutory dissenter rights.
3. The aggregate Federal income tax basis of the shares of First
Financial voting common stock received by the Xxxxxxxxxxx Holdings
shareholders in exchange for their shares of Xxxxxxxxxxx Holdings
stock will be the same as the aggregate adjusted tax basis of their
Xxxxxxxxxxx Holdings stock exchanged therefor, less the tax basis, if
any, allocated to fractional share interests.
4. The holding period of the First Financial voting common stock
received by the Xxxxxxxxxxx Holdings shareholders in exchange for
their shares of Xxxxxxxxxxx Holdings stock in the hands of the
Xxxxxxxxxxx Holdings shareholders will include the holding period of
their Xxxxxxxxxxx Holdings stock exchanged therefor.
Except as set forth above, we express no opinion as the tax consequences,
whether Federal, State or local, of the Stock Exchange and Merger, or of any
transactions related thereto. We are furnishing this opinion to you solely in
connection with Section 2.2 of the Agreement. This opinion is solely for your
benefit and is not to be
The Board of Directors
Xxxxxxxxxxx National Bancshares, Inc.
October 30, 1995
Page 4
used, circulated, quoted or otherwise referred to for any purposes without our
prior consent.
We hereby consent to the references made to us in the Summary and under the
heading "The Exchange Offer - Certain Federal Income Tax Consequences" in the
Offering Circular/Prospectus of First Financial relating to the Stock Exchange,
and to the inclusion of this opinion as an Annex to the Offering
Circular/Prospectus and the filing of this opinion as an exhibit to the
Registration Statement on Form S-4 of which such Offering Circular/Prospectus is
a part.
Very truly yours,
/s/ XXXXXX, XXXXXX & XXXXX, P.C.
Weatherford, Texas
