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EXHIBIT 8
_______________, 1997
Gulf West Banks, Inc.
000 00xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Citizens National Bank & Trust Company
0000-0 X.X. Xxxxxxx 00
Xxxx Xxxxxx, Xxxxxxx 00000
Re: Amended and Restated Agreement and Plan of Merger by and among
Gulf West Banks, Inc., Mercantile Bank and Citizens National
Bank & Trust Company
Ladies and Gentlemen:
You have requested the opinion of Fowler, White, Gillen, Boggs,
Xxxxxxxxx and Banker, P.A., as counsel to Gulf West Banks, Inc., a Florida
corporation and a bank holding company registered pursuant to the Bank Holding
Company Act (12 USC Section 1841, et seq.) and Regulation Y promulgated
thereunder ("Gulf West"), regarding the transactions contemplated by that
certain Amended and Restated Agreement and Plan of Merger dated October 16,
1997 (the "Merger Agreement"), by and among Gulf West, Mercantile Bank, a
Florida banking corporation and a wholly-owned subsidiary of Gulf West
("Mercantile"), and Citizens National Bank & Trust Company, a national banking
association ("Bank"). Specifically, you have requested us to opine that the
merger of Bank with and into Mercantile (the "Merger") pursuant to the Merger
Agreement will constitute a tax-free reorganization under Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and that no gain or
loss will be recognized by the stockholders of Bank upon the receipt solely of
Gulf West common stock (and cash in lieu of fractional shares) in exchange for
their Bank common stock upon consummation of the Merger.
This opinion is being rendered pursuant to Section 7.1(e) of the
Merger Agreement. Capitalized terms used herein and not otherwise defined
herein have the meanings given to them in the Merger Agreement.
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In rendering the opinion set forth below, we have examined and relied
upon originals or copies of the Merger Agreement, and such other documents and
materials as we have deemed necessary as a basis for such opinion. In
connection with such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents, agreements and instruments
submitted to us as originals, the conformity to original documents, agreements
and instruments of all documents, agreements and instruments submitted to us as
copies or specimens and the authenticity of the originals of such documents,
agreements and instruments submitted to us as copies or specimens, and, as to
factual matters, the veracity of written statements made by officers and other
representatives of Bank and Gulf West included in the Merger Agreement. In
addition, in rendering this opinion we have made certain assumptions as set
forth below.
The opinion stated below is based upon the relevant provisions of the
Code, regulations promulgated pursuant thereto by the Department of the
Treasury and the Internal Revenue Service (the "IRS"), current administrative
rulings and applicable judicial decisions, all of which are subject to change.
Neither Gulf West, Mercantile nor Bank has requested or will receive an advance
ruling from the IRS as to any of the federal income tax effects to holders of
Bank Common Stock of the Merger, or of any of the federal income tax effects to
Gulf West, Mercantile, or Bank of the Merger. Our opinion set forth below is
not binding upon the IRS, and there can be no assurance, and none hereby is
given, that the IRS will not take a position contrary to one or more of the
positions reflected herein, or that our opinion will be upheld by the courts if
challenged by the IRS.
FACTS
Gulf West is a registered bank holding company and is the common
parent of an affiliated group of corporations, including Mercantile, that file
consolidated federal income tax returns on the calendar year basis. The
authorized capital stock of Gulf West consists of 10,000,000 shares of common
stock, par value $1.00 per share (the "Gulf West Common Stock"), of which a
total of 3,337,081 shares were issued and outstanding as of December 31, 1996,
and 1,000,000 shares of preferred stock, par value $5.00 per share, none of
which is issued and outstanding as of the date hereof. Gulf West Common Stock
is publicly held and publicly traded through the Automated Quotation System of
the Nasdaq Stock Market ("NASDAQ").
Mercantile is a corporation organized pursuant to the laws of the
state of Florida. Immediately prior to the Merger, Gulf West will own 100% of
the capital stock of Mercantile. Mercantile is included in the consolidated
federal income tax return of Gulf West.
Bank is a national banking association organized under the laws of the
United States. As of July 31, 1997, the authorized capital stock of Bank
consisted of 750,000 shares of common stock, par value $5.00, of which 603,030
shares were issued and outstanding (the "Bank Common Stock"), and there has
been no change in the number of shares of Bank Common Stock outstanding as of
the date hereof. Bank does not directly or indirectly own any subsidiary
corporations. Bank is an accrual method taxpayer using a calendar year
accounting period.
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As of July 31, 1997, Bank had no outstanding subscriptions, options,
convertible securities, rights, warrants, calls, or other agreements or
commitments of any kind issued or granted by, or binding upon, the Bank to
purchase or otherwise acquire any security or equity interest in the Bank.
THE PROPOSED TRANSACTIONS
Pursuant to the Merger Agreement, the following transactions will take
place:
(1) Bank will merge with and into Mercantile in accordance with the
applicable corporation laws of the State of Florida (the "Corporate Laws"),
after which Mercantile will be the surviving corporation. Mercantile will
acquire all of the assets and assume all of the liabilities of Bank.
Mercantile will be the surviving corporation and the separate corporate
existence of Bank will terminate.
(2) As a result of the Merger, each share of Bank Common Stock issued
and outstanding, except for those shares of Bank Common Stock with respect to
which the holder exercises rights of dissent, will be exchanged for: (i) 3.2337
shares of Gulf West Common Stock, with such number subject to adjustment, all
as set forth in the Merger Agreement, and (ii) cash in lieu of fractional
shares equal to such fractional part of a share of Gulf West Common Stock
multiplied by $5.87.
(3) Any holder of shares of Bank Common Stock who dissents from the
Merger will be entitled to receive from the surviving corporation the appraisal
value of his or her shares in cash.
REPRESENTATIONS
Officers of Bank and Gulf West each have made certain written
representations to us on behalf of their respective institutions either in the
Merger Agreement or by letters each of even date herewith (the "Representation
Letters"), and with your consent, we have relied upon the accuracy and validity
of these representations provided in the Representation Letters in offering the
opinions expressed below.
OPINION
Upon the basis of the foregoing facts, assumptions and
representations, and solely for purposes of the Code, we are of the opinion
that:
(i) The Merger will qualify as a reorganization under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Code. Bank, Gulf West, and Mercantile
each will be "a party to a reorganization" within the meaning of Section 368(b)
of the Code.
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(ii) Bank stockholders will recognize no gain or loss upon their
exchange of Bank Common Stock solely for Gulf West Common Stock (except with
respect to cash received in lieu of a fractional share interest in the Gulf
West Common Stock).
(iii) The basis of the shares of Gulf West Common Stock received by
the stockholders of Bank (including any fractional share interests to which
they may be entitled) will be the same as the basis of the shares of Bank
Common Stock surrendered in exchange therefor.
(iv) Bank stockholders who exercise dissenters' rights, and as a
result of which receive only cash, will be treated as having received such cash
as a distribution in redemption of their shares of Bank Common Stock, subject
to the provisions and limitations of Section 302 of the Code. Those Bank
stockholders who receive only cash, and who hold no Gulf West Common Stock,
directly or indirectly through the application of Section 318(a) of the Code,
following the Merger will be treated as having a complete termination of their
interests in Bank within the meaning of Section 302(b)(3) of the Code, and the
cash received will be treated as a distribution in full payment in exchange for
each such stockholder's Bank Common Stock as provided in Section 302(a) of the
Code. As further provided in Section 1001 of the Code, gain will be realized
and recognized by such stockholders measured by the difference between the
redemption price and the adjusted basis of the shares of Bank Common Stock
surrendered as determined under Section 1011 of the Code. Provided that
Section 341 of the Code (relating to collapsible corporations) is inapplicable
and the Bank Common Stock is held as a capital asset by such stockholders, the
gain, if any, will constitute capital gain. Such gain will constitute
long-term capital gain if the surrendered shares of Bank Common Stock were held
by the stockholder for a period greater than one year prior to the Merger; if
the surrendered shares of Bank Common Stock were held by such stockholder for a
period of one year or less, the gain will constitute short-term capital gain.
This opinion is rendered solely with respect to certain federal income
tax consequences of the Merger under the Code, and does not extend to the
income or other tax consequences of the Merger under the laws of any state or
any political subdivision of any state; nor does it extend to any tax effects
or consequences of the Merger to Gulf West or Mercantile other than those
expressly stated in the above opinion.
Our opinion, as stated above, is based upon our analysis of the
current Internal Revenue Code of 1986, as amended, the regulations issued
thereunder, current case law and published rulings of the Internal Revenue
Service; the foregoing are subject to change, and such changes may be given
retroactive effect. In the event of such changes, our opinion set forth above
may be affected and may not be relied upon.
Furthermore, no opinion is expressed as to the federal or state tax
treatment of the transaction under any other provisions of the Code and
regulations, or about the tax treatment of any conditions existing at the time
of, or effects resulting from, the transaction that are not specifically
covered by the above opinions.
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We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the references to this firm under
the heading "Certain Federal Income Tax Consequences" in the Registration
Statement and in the proxy statement/prospectus which is included as part of
the Registration Statement.
Yours very truly,
FOWLER, WHITE, GILLEN, BOGGS,
XXXXXXXXX & BANKER, P.A.
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