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EXHIBIT 8.2
[DRAFT-SUBJECT TO DUE DILIGENCE AND
OPINION COMMITTEE APPROVAL]
, 2000
FSB Bancorp, Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Re: Agreement and Plan of Merger by and among
IBT Bancorp, Inc. and FSB Bancorp, Inc.
Ladies and Gentlemen:
You have requested our opinion with respect to certain federal income tax
consequences of the Agreement and Plan of Merger dated as of April ____, 2000
(the "Merger Agreement"), by and among IBT Bancorp, Inc., a Michigan corporation
("IBT"), and FSB Bancorp, Inc., a Michigan corporation ("FSB"). All capitalized
terms used herein, unless otherwise specified, shall have the meanings ascribed
to them in the Merger Agreement.
We understand that, pursuant to the Merger Agreement and subject to the
terms and conditions set forth therein, FSB will be merged with and into IBT,
with IBT being the surviving corporation, and each share of FSB Common Stock
issued and outstanding immediately prior to the Closing Date (and not held by a
dissenting shareholder) will, by virtue of the Merger, be converted at the
Closing Date into and exchanged for the number of shares of IBT Common Stock set
forth in the Merger Agreement.
We have considered such factual matters and have made such inquiries as we
have deemed appropriate to render the opinions set forth below. In addition, we
have reviewed copies of (i) the Form S-4 Registration Statement, dated
, 2000, under the Securities Act of 1933 relating to the Merger,
and amendment number 1 to said Form S-4, dated , 2000 (as
amended, the "Registration Statement"); (ii) the Merger Agreement; and (iii) the
Certificate of Merger, as such documents have been amended. We also have
reviewed originals, or copies certified or otherwise identified to our
satisfaction, of such other documents and certificates (including the
certificates of certain officers of IBT and FBS) as we have deemed appropriate
to render the opinions hereafter expressed (together with the Registration
Statement, the Merger Agreement and the Certificate of Merger, the "Documents").
In our examination, we have assumed the due authorization and proper execution,
delivery and authenticity of original documents, the conformity to original
documents of all documents submitted to us as certified, conformed or
photostatic copies, the genuineness of signatures and the capacity of each party
to execute each executed document, and that the Merger Agreement is valid,
binding, and enforceable in accordance with its terms. We also have examined
such matters of law, including the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), Treasury Regulations promulgated thereunder by
the
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Treasury Department (the "Regulations"), pertinent judicial authorities, rulings
of the United States Internal Revenue Service (the "Service") and such other
authorities as we have considered relevant. It should be noted that the Code,
the Regulations, judicial decisions, administrative interpretations and such
other authorities are subject to change at any time and, in some circumstances,
with retroactive effect. A material change in any of the authorities upon which
our opinions are based could affect our conclusions stated herein. In addition,
there can be no assurance that the Service would not take a position contrary to
that which is stated in this opinion letter. Furthermore, the opinions expressed
below might not be applicable to the FSB shareholders who or that, for United
States federal income tax purposes, are nonresident alien individuals, foreign
corporations, foreign partnerships, foreign trusts or foreign estates, or who
acquired their FSB Common Stock pursuant to the exercise of employee stock
options or otherwise as compensation.
Our opinions assume and are conditioned upon the current and continued
accuracy of the factual matters we have considered, including the recitals,
agreements, representations and warranties contained in or made pursuant to the
Documents. Our opinions also assume that the Merger will be carried out in a
manner consistent with the representations set forth in the documents and
consummated in accordance with the terms of the Merger Agreement. We have not
independently verified the factual matters set forth in the Documents, nor have
we conducted any investigation to verify the accuracy or completeness of any
information reviewed or considered by us for purposes of our opinion.
Our opinions also are subject to and conditioned upon the current and
continued accuracy of the following additional assumptions:
A. The fair market value of the IBT Common Stock (including any
fractional share interest) and any other consideration received by a FSB
shareholder in exchange for FSB Common Stock will be approximately equal to the
fair market value of the FSB Common Stock surrendered in the exchange.
B. There is no present plan or intention by FSB shareholders to sell,
exchange, or otherwise dispose of a number of shares of IBT Common Stock
received in the Merger that would reduce the FSB shareholders' ownership of IBT
Common Stock to a number of shares having a value, as of the date of the Merger,
of less than 50% of the value of all of the formerly outstanding FSB Common
Stock as of the same date. For this purpose, shares of FSB Common Stock
surrendered by dissenters or exchanged for cash in lieu of fractional shares of
FSB Common Stock are treated as outstanding FSB Common Stock on the date of the
Merger. Moreover, shares of FSB Common Stock and shares of IBT Common Stock held
by FSB shareholders and otherwise sold, redeemed, or disposed of prior or
subsequent to (and in connection with) the Merger are considered in making the
above determination.
C. IBT has no plan or intention to reacquire any of its stock issued in
the Merger.
D. IBT has no plan or intention to (i) liquidate the Farmers State Bank
of Breckenridge ("Farmers State Bank"), (ii) cause Farmers State Bank to merge
into another corporation, (iii) sell or otherwise dispose of any stock of
Farmers State Bank, except for transfers permitted under Code ss.368(a)(2)(C) or
Regulation ss.1.368-2(k)(2), or (iv) sell or otherwise dispose of, or cause
Farmers State Bank to sell or otherwise to dispose of, any of the
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assets of Farmers State Bank, except for (a) dispositions made in the ordinary
course of business, (b) transfers permitted under Code ss.368(a)(2)(C) or
Regulation ss.1.368-2(k)(2), or (c) transfers or dispositions that do not
violate the "substantially all" requirement described in Code
ss.368(a)(2)(E)(i).
E. The liabilities of FSB that will be assumed by IBT and the liabilities
to which the transferred assets of FSB are subject (i) were, or will have been,
incurred by FSB in the ordinary course of business, and (ii) will be assumed and
acquired for a bona fide business purpose and not for the principal purpose of
avoiding federal income tax in connection with the Merger.
F. Following the Merger, IBT will continue the historic business of FSB
and Farmers State Bank or use a significant portion of the historic business
assets of FSB and Farmers State Bank in a business. The Merger is being
undertaken for reasons germane to the continuance of the business of FSB and
IBT, and the Merger serves a genuine and legitimate corporate business purpose.
G. IBT, FSB and FSB shareholders will pay their respective expenses, if
any, incurred in connection with the Merger. IBT will make payments for
fractional shares.
H. There is no intercorporate indebtedness existing between IBT and FSB
that was issued, acquired or will be settled at a discount.
I. No parties to the Merger are investment companies as defined in Code
ss.368(a)(2)(F)(iii) and (iv).
J. FSB is not under the jurisdiction of a court in a Title 11 or similar
case within the meaning of Code ss.368(a)(3)(A).
K. None of the compensation received by any shareholder-employee of FSB
will be separate consideration for, or allocable to, any shares of FSB Common
Stock; none of the shares of IBT Common Stock received by any
shareholder-employee will be separate consideration for, or allocable to, any
employment agreement; and the compensation paid to any shareholder-employee will
be for services actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's-length for similar services.
L. The payment of cash in lieu of fractional shares of IBT Common Stock
is solely for the purpose of avoiding the expense and inconvenience to IBT of
issuing fractional shares and does not represent separately bargained-for
consideration. With the possible exception of FSB shareholders who hold their
shares under different names or in separate accounts or otherwise submit
multiple letters of transmittal, the total cash received by a FSB shareholder in
lieu of fractional share interests of IBT will not exceed the value of one full
share of IBT Common Stock.
M. Farmers State Bank has no plan or intention to sell or otherwise
dispose of any of its assets, except for dispositions made in the ordinary
course of business.
N. No FSB shareholder is a non-resident alien or foreign entity.
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O. FSB has not filed, and holds no assets subject to, a consent under
Code ss.341(f) and the Regulations promulgated thereunder.
Based solely on the foregoing, the information contained in the Merger
Agreement and Certificate of Merger, our analysis and examination of applicable
federal income tax laws, rulings, regulations and judicial precedents, and
subject to the current and continued accuracy of the assumptions contained
herein, it is our opinion that:
1. The Merger will constitute a "reorganization" within the meaning of
Code ss.368(a).
2. FSB and IBT each will be a party to such reorganization within the
meaning of Code ss.368(b).
3. FSB will recognize no gain or loss upon the transfer of its assets to
IBT in exchange for IBT Common Stock and the assumption by IBT of liabilities of
FSB pursuant to the Merger.
4. No gain or loss will be recognized to those FSB shareholders who
receive solely IBT Common Stock in exchange for their shares of FSB Common
Stock.
5. The aggregate tax basis of the IBT Common Stock received by an FSB
shareholder in the Merger (including any fractional share interests to which
they may be entitled) will be the same as the aggregate tax basis of FSB Common
Stock exchanged therefor.
6. The holding period of the shares of IBT Common Stock received by an
FSB shareholder (including any fractional share interests to which they may be
entitled) will include the period during which FSB Common Stock exchanged
therefor was held, provided that FSB Common Stock exchanged is held as a capital
asset on the date of the Merger.
7. Where a cash payment is received by a dissenting FSB shareholder, cash
will be treated as received by the shareholder as a distribution in redemption
of FSB Common Stock, subject to the provisions and limitations of Code ss.302.
8. The payment of cash in lieu of fractional share interests of IBT
Common Stock will be treated as if the fractional shares were distributed as
part of the Merger and then redeemed by IBT. These cash payments will be treated
as having been received as distributions in full payment in exchange for IBT
Common Stock as provided in Code ss.302(a).
EXCEPT AS EXPRESSLY SET FORTH ABOVE, YOU HAVE NOT REQUESTED, AND WE DO NOT
HEREIN EXPRESS, ANY OPINION CONCERNING THE TAX CONSEQUENCES OF, OR ANY OTHER
MATTERS RELATED TO, THE MERGER. WE ASSUME NO OBLIGATION TO UPDATE OR SUPPLEMENT
THIS LETTER TO REFLECT ANY FACTS OR CIRCUMSTANCES WHICH MAY HEREAFTER COME TO
OUR ATTENTION WITH RESPECT TO THE OPINIONS EXPRESSED ABOVE, INCLUDING ANY
CHANGES IN APPLICABLE LAW WHICH MAY HEREAFTER OCCUR.
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THIS OPINION LETTER IS PROVIDED TO YOU ONLY AND, WITHOUT OUR PRIOR WRITTEN
CONSENT, MAY NOT BE RELIED UPON, USED, CIRCULATED, QUOTED OR OTHERWISE REFERRED
TO IN ANY MANNER BY ANY PERSON, FIRM, GOVERNMENTAL AUTHORITY OR ENTITY
WHATSOEVER. We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
" " in the Registration Statement.
Sincerely,
XXXXXX, XXXXXXX & XXXXXXX LLP
By:
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Partner
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XXXXXX, XXXXXXX & XXXXXXX, LLP
000 XXXXX XXXXXX
X.X. XXX 000
XXXXXXXXX, XXXXXXXX 00000
CONSENT OF XXXXXX, XXXXXXX & XXXXXXX, LLP
June 16, 2000
Ladies and Gentlemen:
We consent to the inclusion of the attached draft form of tax opinion as an
exhibit to the Registration Statement and to the reference to this firm under
the heading "Tax Matters." The draft opinion is subject to due diligence and
opinion committee approval.
Very truly yours,
/s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx
