EXHIBIT 8.1
FORM OF OPINION
___________, 2000
Board of Directors
American Community Bank
0000 Xxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000-0000
RE: AGREEMENT AND PLAN OF REORGANIZATION AND SHARE EXCHANGE DATED AS OF
FEBRUARY 16, 2000 BY AND BETWEEN AMERICAN COMMUNITY BANK AND
AMERICAN COMMUNITY BANCSHARES, INC. ("ACB").
Gentlemen:
You have asked for our opinion in connection with the proposed exchange (the
"Exchange") of shares of the $1.00 par value common stock of ACB, a North
Carolina corporation, for the shares of $5 par value common stock of American
Community Bank , a North Carolina-chartered bank, pursuant to the terms of the
Agreement and Plan of Reorganization and Share Exchange dated as of February 16,
2000 by and between American Community Bank and ACB (the "Exchange Agreement").
All capitalized terms, unless otherwise specified, have the meaning assigned to
them in the Exchange Agreement.
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
the Exchange Agreement, the Registration Statement filed with the Securities and
Exchange Commission on February 25, 2000 and such other documents as we have
deemed necessary or appropriate in order to enable us to render the opinion
expressed below. In our examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such copies.
In rendering the opinions set forth below, we have relied, with your permission,
upon certain written factual representations of American Community Bank and ACB
dated as of the date of this letter. We have assumed that any representation or
statement made in connection with such representations that is made "to the best
of knowledge" or similarly qualified is correct without such qualification. We
have also assumed that when a person or entity making a representation has
represented that such person or entity either is not a party to or does not
have, or is not aware
of, any plan or intention, understanding or agreement as to a particular matter,
there is in fact no such plan, intention, understanding or agreement. We also
have assumed that all such written representations will be true as of the
Effective Time of the Exchange.
In rendering our opinion, we have considered the applicable provisions of the
Code, the Treasury Regulations, pertinent judicial authorities, interpretive
rulings of the Internal Revenue Service and such other authorities as we have
considered relevant, all as of the date hereof. All of such authorities are
subject to change, possibly with retroactive effect. Any such change could
affect the opinions rendered below. Our opinion does not address the federal
income tax consequences of the Exchange to American Community Bank shareholders
in special circumstances, including insurance companies, tax-exempt
organizations, financial institutions and broker-dealers, persons who do not
hold American Community Bank Common Stock as capital assets, individuals who
received American Community Bank Common Stock as compensation, and non-U.S.
persons.
Based upon and subject to the foregoing, and subject to the discussions of the
continuity of interest requirement and the applicability of Section 351 which
follow, we are of the opinion that:
(i) The Exchange will constitute a tax-free reorganization under Section
368(a)(1)(B) of the Code, and American Community Bank and ACB will each
be a party to the reorganization within the meaning of Section 368(b)
of the Code.
(ii) The American Community Bank shareholders will not recognize any gain or
loss on the receipt of the ACB Common Stock in exchange for their
Common Stock in American Community Bank.
(iii) The basis of each shareholder of American Community Bank in ACB's
Common Stock received by such shareholder will be the same as the basis
of such shareholder in the Common Stock of American Community Bank
surrendered in exchange therefor.
(iv) The holding period of ACB's Common Stock received by each shareholder
of American Community Bank in the Exchange will include the holding
period of the Common Stock of American Community Bank surrendered in
exchange therefor, provided that the Common Stock at American Community
Bank is held as a capital asset at the Effective Time of the Exchange.
(v) If an American Community Bank shareholder dissents from the Exchange
and receives cash for his American Community Bank Common Stock, the
receipt of such cash will be a taxable transaction and will be treated
as a distribution and redemption of his shares, subject to the
provisions and limitations of Sections 301 and 302 of the Code.
Continuity of Interest Requirement
In order for the Exchange to qualify as a reorganization, among other
requirements, the shareholders of American Community Bank must exchange a
substantial portion of the proprietary interests in American Community Bank for
a proprietary interest in ACB. The IRS takes the
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position for advance ruling purposes that this "continuity of interest"
requirement is satisfied in a potential reorganization if the value of the
acquiring corporation's stock received in the reorganization by the acquired
corporation's shareholders equals or exceeds 50% of the total consideration paid
for the stock of the acquired corporation in the potential reorganization.
Based on the foregoing, the continuity of interest requirement will be satisfied
in the Exchange if, at the Effective Time of the Exchange, the value of the ACB
Common Stock issued in the Exchange equals or exceeds the amount of any cash and
the fair market value of any other property received by dissenting shareholders
of American Community Bank in exchange for their Common Stock in American
Community Bank. For purposes of this opinion, we have therefore assumed that the
cash and the fair market value of any property paid to dissenting shareholders
in American Community Bank will not exceed the fair market value at the
Effective Time of the Exchange of the ACB Common Stock issued in the Exchange.
Our opinion expressed in this letter is based on current law and upon facts and
assumptions as of the date of this letter. Our opinion is subject to change in
the event of a change in the applicable law, a change in the interpretation of
the applicable law by the courts or by the Internal Revenue Service or a change
in any of the facts or assumptions upon which the opinion is based. There is no
assurance that legislative, regulatory, administrative or judicial developments
may not be forthcoming which would significantly modify the statements or
opinion expressed in this letter. Any such developments may or may not be
retroactive. This opinion represents our best legal judgment but has no binding
effect or official status of any kind. As a result, no assurance can be given
that the opinion expressed in this letter will be sustained by a court if
contested. No ruling will be obtained from the Internal Revenue Service with
respect to the Exchange.
Except as set forth above, we express no opinion as to the tax consequences to
any party, whether Federal, state, local or foreign, of the Exchange or of any
transactions related to the Exchange or contemplated by the Exchange Agreement.
This opinion is being furnished only to you in connection with the Exchange and
solely for your benefit in connection therewith and may not be used or relied
upon for any other purpose and may not be circulated, quoted or otherwise
referred to for any other purpose without our express written consent. We hereby
consent to the filing of
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this opinion as an exhibit to the Registration Statement with the Securities and
Exchange Commission.
Very truly yours,
XXXXXXX XXXXX, XX., P.A.
Xxxxxxx Xxxxx, Xx.
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