EXHIBIT 8
XXXXXX & BIRD
000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
000-000-0000
Fax: 000-000-0000
Xxxxxx X. Xxxx Direct Dial: 000-000-0000
[FORM OF OPINION]
December __,1995
American National Bankshares Inc.
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Mutual Savings Bank, F.S.B.
000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Re: PROPOSED AGREEMENT AND PLAN OF REORGANIZATION INVOLVING MUTUAL
SAVINGS BANK, F.S.B., AMERICAN NATIONAL BANKSHARES INC., AND
AMERICAN NATIONAL BANK AND TRUST COMPANY
Ladies and Gentlemen:
We have served as counsel to American National Bankshares Inc.
("ANB") in connection with the proposed reorganization of Mutual Savings Bank,
F.S.B. ("Mutual") pursuant to the Agreement and Plan of Reorganization, dated
as of September 26, 1995 (the "Agreement"), which provides for the merger of
Mutual with and into American National Bank and Trust Company ("American
National"), a wholly owned subsidiary of ANB. In our capacity as counsel to
ANB, our opinion has been requested with respect to certain of the federal
income tax consequences of the Merger.
In rendering this opinion, we have examined (i) the Internal Revenue
Code of 1986, as amended (the "Code"), and Treasury Regulations, (ii) the
legislative history of applicable sections of the Code, and (iii) appropriate
Internal Revenue Service and court decisional authority. In addition, we have
relied upon certain assumptions as more fully described below. All terms used
herein without definition shall have the respective meanings specified in the
Agreement, and unless otherwise specified, all section references herein are to
the Code.
One Atlantic Center, 0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
American National Bankshares Inc.
December __, 1995
Page 2
INFORMATION RELIED UPON
In rendering the opinions expressed herein, we have examined such
documents as we have deemed appropriate, including:
(1) The Agreement;
(2) The Registration Statement on Form S-4 filed by American
National Bankshares Inc. with the Securities and Exchange Commission under the
Securities Act of 1933, on December __, 1995, including the Joint Proxy
Statement/Prospectus for meetings of the shareholders of American National and
Mutual; and
(3) Such additional documents as we have considered relevant.
In our examination of the documents, we have assumed with your
consent that all documents submitted to us as photocopies faithfully reproduce
the originals thereof, that such originals are authentic, that all such
documents have been or will be duly executed to the extent required, and that
all statements set forth in such documents are accurate.
We have also obtained such additional information and representations
as we have deemed relevant and necessary through consultation with various
officers and representatives of Mutual and ANB and through certificates
provided by the management of Mutual and the management of ANB.
You have advised us that the proposed transaction will enable the
Resulting Association to realize certain economies of scale, yield a wider
array of banking and banking-related services to consumers and businesses, and
provide for a stronger market position and for greater financial resources to
meet competitive challenges within the Danville, Virginia market area. To
achieve these goals, the following will occur pursuant to the Agreement:
(1) Subject to the terms and conditions of the Agreement, at the
Effective Time, Mutual shall be merged with and into American National in
accordance with and with the effect provided in 12 U.S.C. Sections 215c,
1815(d)(3), and 1828(c). American National shall be the Resulting Association
resulting from the Merger and shall be a wholly-owned, first-tier subsidiary of
ANB and shall continue to be governed by the Laws of the United States. The
Merger shall be consummated pursuant to the terms of the Agreement, which has
been approved and adopted by the respective Boards of Directors of Mutual and
ANB, and the Plan of Merger which has been approved by the respective Boards of
Directors of Mutual and American National.
American National Bankshares Inc.
December __, 1995
Page 3
(2) At the Effective Time, by virtue of the Merger, and without any
action on the part of the holders thereof, the shares of the constituent
corporations shall be converted as follows:
(a) Each share of ANB Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.
(b) Each share of American National Common Stock issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(c) Each share of Mutual Common Stock (excluding shares held by
any Mutual Company or by any ANB Company, which shares shall be canceled as
provided in Section 3.3 of the Agreement, in each case other than in a
fiduciary capacity or in satisfaction of debts previously contracted) issued
and outstanding at the Effective Time shall cease to be outstanding and shall
be converted into and exchanged for .705 of a share of ANB Common Stock (the
"Exchange Ratio"). In the event Mutual or ANB changes the number of shares of
Mutual Common Stock or ANB Common Stock, respectively, issued and outstanding
prior to the Effective Time as a result of a stock split, stock dividend, or
similar recapitalization with respect to such stock and the record date
therefor shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
(3) Each of the shares of Mutual Common Stock held by Mutual or any
of its wholly owned Subsidiaries or by ANB or any of its wholly owned
Subsidiaries, in each case other than in a fiduciary capacity or as a result of
debts previously contracted, shall be canceled and retired at the Effective
Time, and no consideration shall be issued in exchange therefor.
(4) Any holder of shares of Mutual Common Stock who perfects such
holder's dissenters' rights of appraisal in accordance with and as contemplated
by 12 C.F.R. 552.14 shall be entitled to receive the value of such shares in
cash as determined pursuant to such provision of Law and in accordance with the
terms of the Agreement.
(5) Notwithstanding any other provision of the Agreement, each
holder of shares of Mutual Common Stock exchanged pursuant to the Merger, or of
options to purchase shares of Mutual Common Stock, who would otherwise have
been entitled to receive a fraction of a share of ANB Common Stock (after
taking into account all certificates delivered by such holder) shall receive,
in lieu thereof, cash (without interest) in an amount equal to such fractional
part of a share of ANB Common Stock multiplied by $30.50.
American National Bankshares Inc.
December __, 1995
Page 4
(6) At the Effective Time, each option or other right to purchase
shares of Mutual Common Stock pursuant to stock options or stock appreciation
rights ("Mutual Options") granted by Mutual under the Mutual Stock Plans, which
are outstanding at the Effective Time, whether or not exercisable, shall be
converted into and become rights with respect to ANB Common Stock and ANB shall
assume each Mutual Option, in accordance with the terms of the Mutual Stock
Plan and stock option agreement by which it is evidenced on substantially the
same terms and conditions.
(7) All restrictions or limitations on transfer with respect to
Mutual Common Stock awarded under the Mutual Stock Plans or any other plan,
program, or arrangement of any Mutual Company, to the extent that such
restrictions or limitations shall not have already lapsed, and except as
otherwise expressly provided in such plan, program, or arrangement, shall
remain in full force and effect with respect to shares of ANB Common Stock into
which such restricted stock is converted pursuant to Section 3.1 of the
Agreement.
With your consent, we have also assumed that the following statements
are true on the date hereof and will be true on the date on which the Merger is
consummated:
(1) The fair market value of the ANB stock received by each
shareholder of Mutual will, in each instance, be approximately equal to the
fair market value of the Mutual stock surrendered in exchange therefor.
(2) There is no plan or intention by any of the shareholders of
Mutual who own five percent (5%) or more of the outstanding Mutual Common
Stock, and to the best of the knowledge of the management of Mutual, the
remaining Mutual shareholders have no plan or intention, to sell, exchange, or
otherwise dispose of a number of shares of ANB Common Stock that they will
receive in the Merger that will reduce on the part of the Mutual shareholders
such shareholders' ownership of ANB Common Stock to a number of shares having
an aggregate value as of the date of the Merger of less than fifty percent
(50%) of the aggregate value of all of the stock of Mutual outstanding
immediately prior to the Merger. For purposes of this representation, shares
of Mutual stock that are disposed of or exchanged for cash in lieu of
fractional shares of ANB Common Stock will be treated as outstanding Mutual
stock immediately prior to the Merger. Moreover, shares of Mutual Common Stock
and shares of ANB Common Stock held by Mutual shareholders and otherwise sold,
redeemed, or disposed of prior or subsequent to the transactions will be
considered outstanding immediately prior to the Merger in making this
representation.
(3) In the Merger, American National will acquire assets
representing at least ninety percent (90%) of the fair market value of the net
assets and at least seventy percent (70%) of the fair market value of the gross
assets held by Mutual immediately prior to the Merger. For this purpose, all
redemptions and distributions (except for regular, normal
American National Bankshares Inc.
December __, 1995
Page 5
dividends) made by Mutual immediately preceding the Merger and all amounts
paid out of the assets of Mutual as reorganization expenses will be
considered as assets held by Mutual immediately prior to the Merger. In
addition, assets disposed of in contemplation of the Merger will be
considered as assets held by Mutual immediately prior to the Merger.
(4) ANB has no plan or intention to liquidate American National, or
to sell or otherwise dispose of its stock in American National or cause
American National to sell or otherwise dispose of any of the assets acquired by
American National from Mutual, except for dispositions made in the ordinary
course of business or transfers to a corporation controlled by American
National.
(5) From and after the consummation of the Merger, American National
will continue the historic business of Mutual or use a significant portion of
Mutual's business assets in a business.
(6) The liabilities of Mutual to be assumed by American National in
the Merger (and the liabilities to which the assets to be transferred are
subject) were incurred or will be incurred by Mutual in the ordinary course of
its business.
(7) There is not now nor will there be at the time of the Merger any
intercorporate indebtedness existing between Mutual and ANB or between Mutual
and American National that was issued, acquired, or will be settled at a
discount.
(8) Mutual, American National, and ANB will each pay all direct
costs and expenses incurred by it or on its behalf in connection with the
Merger, except that ANB shall bear and pay the filing fees payable in
connection with the Registration Statement and the Joint Proxy Statement and
printing costs incurred in connection with the printing of the Registration
Statement and the Joint Proxy Statement.
(9) None of ANB, American National or Mutual are investment
companies as defined in Code section 368(a)(2)(F).
(10) None of the parties are under the jurisdiction of a court in a
case under Title 11 of the United States Code, a receivership, foreclosure, or
similar proceeding in a federal or state court.
(11) Prior to the Merger, ANB will be in control of American
National. For purposes of this assumption, as well as assumption 12, a
corporation is considered to control a corporation in which it holds at least
eighty percent (80%) of the total combined voting power of all classes of stock
entitled to vote and at least eighty percent (80%) of the total number of
shares of all other classes of stock.
American National Bankshares Inc.
December __, 1995
Page 6
(12) Following the Merger, American National will not issue
additional shares of its stock that would result in ANB losing control of
American National.
(13) The fair market value and adjusted basis of the assets to be
transferred from Mutual to American National as a result of the Merger will
equal or exceed the sum of the liabilities of Mutual to be assumed by American
National (plus the amount of liabilities to which the assets to be transferred
are subject).
(14) The payment of cash to Mutual shareholders in lieu of fractional
shares of ANB stock will not be a separately bargained for consideration, but
will be undertaken solely for the purpose of avoiding the expense and
inconvenience of issuing and transferring fractional shares.
(15) ANB has no plan or intention to redeem or otherwise reacquire
its stock that will be issued in the Merger.
(16) None of the compensation received by any shareholder-employee of
Mutual represents separate consideration for, or is allocable to, any of his
Mutual stock. None of the ANB stock that will be received by Mutual
shareholder-employees in the Merger represents separately bargained for
consideration which is allocable to any employment agreement or arrangement.
Any compensation to be paid to a Mutual shareholder-employee who continues as
an employee of ANB or American National subsequent to the Merger will be for
services rendered and will be commensurate with amounts paid to third parties
bargaining at arms length for similar services.
(17) Mutual has no plan or intention to make, and has not made, any
distributions other than regular, normal dividends to shareholders prior to the
Merger.
(18) No stock of American National will be issued in the Merger.
(19) Mutual has not reacquired or redeemed any of its stock within
the last three (3) years.
(20) The reorganization of ANB, American National and Mutual will
occur pursuant to the Agreement.
(21) The Merger is being undertaken for the purposes of enhancing the
business of Mutual through utilization of the financial resources of ANB and
allowing ANB to expand its banking business into the markets served by Mutual
and for other valid business purposes.
American National Bankshares Inc.
December __, 1995
Page 7
(22) ANB does not own, directly or indirectly, nor has it owned
during the past five (5) years, directly or indirectly, any stock of Mutual.
OPINIONS
Based on the foregoing assumptions, we are of the opinion that:
(1) The merger of Mutual with and into American National will
qualify as a reorganization within the meaning of Sections 368(a)(1)(A) and
368(a)(2)(D). Mutual, American National, and ANB will each be "a party to a
reorganization" within the meaning of Section 368(b).
(2) No gain or loss will be recognized by a Mutual shareholder upon
the exchange of such shareholder's Mutual Common Stock for shares of ANB Common
Stock.
(3) The basis of the ANB Common Stock to be received by a Mutual
shareholder will be the same as the basis of the Mutual Common Stock
surrendered in exchange therefor.
(4) The holding period of the ANB Common Stock to be received by a
Mutual shareholder (including the holding period of any fractional share
interest) will include the holding period of the Mutual Common Stock
surrendered in exchange therefor, provided Mutual Common Stock was held as a
capital asset on the date of the exchange.
(5) The payment of cash in lieu of fractional shares of ANB Common
Stock will be treated as if the fractional shares were issued as part of the
exchange and then redeemed by ANB. These cash payments will be treated as
having been received as distributions in full payment in exchange for the stock
redeemed. Generally, any gain or loss recognized upon such exchange will be
capital gain or loss, provided the fractional share would constitute a capital
asset in the hands of the exchanging shareholder.
The opinions expressed herein are based upon existing statutory,
regulatory, and judicial authority, any of which may be changed at any time
with retroactive effect. In addition, our opinions are based solely on the
documents that we have examined, the additional information that we have
obtained, and the statements set out herein, which we have assumed are true on
the date hereof and will be true on the date on which the Merger is
consummated. Our opinions cannot be relied upon if any of the facts pertinent
to the Federal income tax treatment of the Merger stated in such documents or
in such additional information is, or later becomes, inaccurate, or if any of
the statements set out herein are, or
American National Bankshares Inc.
December __, 1995
Page 8
later become, inaccurate. Finally, our opinions are limited to the tax
matters specifically covered thereby, and we have not been asked to address,
nor have we addressed, any other tax consequences of the Merger, including
for example any issues related to intercompany transactions, accounting
methods, or changes in accounting methods resulting from the Merger.
This opinion is being provided solely for the benefit of ANB, Mutual,
and their shareholders. No other person or party shall be entitled to rely on
this opinion.
We hereby consent to the use of this opinion and to the references
made to the firm under the captions "Summary--The Merger--Certain Federal
Income Tax Consequences" and "The Merger--Certain Federal Income Tax
Consequences" in the Joint Proxy Statement/Prospectus constituting part of the
Registration Statement on Form S-4 of ANB.
Very truly yours,
XXXXXX & BIRD
By: ____________________________
Xxxxxx X. Xxxx
