EXHIBIT 8
October 13, 1998
German American Bancorp
000 Xxxx Xxxxxx
Xxx 000
Xxxxxx, Xxxxxxx 00000
1ST BANCORP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Subject: Agreement and Plan of Reorganization by and between 1ST
BANCORP and German American Bancorp
Greetings:
You have requested our opinion on certain of the federal income tax
consequences with respect to certain transactions set forth in the Agreement and
Plan of Reorganization by and among 1ST BANCORP, an Indiana corporation ("1ST
BANCORP") and German American Bancorp, an Indiana corporation ("German
American") and dated August 6, 1998 ("Agreement and Plan of Reorganization").
Subject to the terms and conditions of the Agreement and Plan of Reorganization,
1ST BANCORP shall merge with and into German American. This transaction is
referred to herein as the "Merger." Capitalized terms used herein that are not
defined in this opinion are defined in the Agreement and Plan of Reorganization.
Documents Reviewed. We have, for purposes of the opinion, reviewed the
following documents:
1. The Agreement and Plan of Reorganization.
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2. The Registration Statement on Form S-4 to be filed by German
American with the Securities and Exchange Commission on October 13, 1998,
under the Securities Act of 1933, as amended (the "Registration
Statement").
3. Such other documents, records, and matters of law as we have deemed
necessary or appropriate in connection with rendering this opinion.
We have relied upon the above documents as to matters of fact. We have not
independently checked or verified the accuracy or completeness of the
information set forth in such documents, but we know of no facts that indicate
to us that the information set forth in such documents is inaccurate or
incomplete.
Factual and Legal Assumptions. For purposes of this opinion, we have made
the following assumptions as to factual and legal matters:
1. The representations and warranties of the parties contained in the
Agreement and Plan of Reorganization that may be deemed material to this
opinion will be true in all material respects as of the effective date of
the Merger, except as may be otherwise set forth in or contemplated by the
Agreement and Plan of Reorganization.
2. The representations of German American and 1ST BANCORP contained in
the Representation Certificates attached hereto will be true in all
material respects as of the effective date of the Merger.
3. The Merger and all transactions related thereto or contemplated by
the Agreement and Plan of Reorganization shall be consummated in accordance
with the terms and conditions of the Agreement and Plan of Reorganization.
Limitations on Opinion. The following limitations apply with respect to
this opinion:
1. Our opinion is based upon the Internal Revenue Code (the "Code"),
Treasury Regulations, court decisions and Internal Revenue Service policies
and rulings as of this date. These fundamentals of our opinion are subject
to change at any time, and some of these changes have been applied in the
past, retroactively, to affect adversely transactions that had occurred
prior to the change.
2. We have not been asked to render an opinion with respect to any
federal income tax matters, except those set forth below, nor have we been
asked to render an opinion with respect to any state or local tax
consequences of the Merger. Accordingly, this opinion should not be
construed as applying in any manner to any tax aspect of the Merger other
than as set forth below.
3. All of the factual and legal assumptions set forth above are
material to the opinion herein rendered and have been relied upon by us in
rendering such opinion. Any material inaccuracy in any one or more of the
factual or legal assumptions may render all or part of our opinion
inapplicable to the Merger.
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Opinion. Based upon and subject to the foregoing, it is our opinion that:
1. The Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code.
2. No gain or loss will be recognized by German American or 1ST
BANCORP as a result of the consummation of the Merger.
3. No gain or loss will be recognized by the 1ST BANCORP shareholders
upon exchange of their shares of 1ST BANCORP Common solely for shares of
German American Common.
4. The basis of the shares of German American Common received by 1ST
BANCORP shareholders will be the same, in each instance, as the basis of
the shares of 1ST BANCORP Common surrendered in exchange therefor.
5. The holding period of the shares of German American Common received
by each shareholder of shares of 1ST BANCORP Common will include the period
during which the shares of 1ST BANCORP Common surrendered in exchange
therefor were held, provided that the shares of 1ST BANCORP Common so
exchanged were held as a capital asset by such shareholder.
6. Cash payments in lieu of fractional share interests of German
American Common will be treated as having been received as distributions in
full payment in exchange for the stock converted as provided in Section 302
of the Code.
We consent to the use of this opinion as an exhibit to the Registration
Statement, to the disclosure and summarization of the opinion in the
Registration Statement, including in the proxy statement/prospectus included
therein, and to the reference to our firm in the Registration Statement under
the caption "Legal Matters." In giving this consent, we do not thereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ Leagre Xxxxxxxx & Xxxxxxx
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REPRESENTATION CERTIFICATE
German American Bancorp ("German American") makes the following
representations to Leagre Xxxxxxxx & Xxxxxxx to be used by Leagre Xxxxxxxx &
Xxxxxxx in rendering its opinion as to certain federal income tax consequences
with respect to certain transactions set forth in the Agreement and Plan of
Reorganization by and between 1ST BANCORP ("1ST BANCORP") and German American
Bancorp, and dated August 6, 1998 ("Agreement and Plan of Reorganization").
Subject to the terms and conditions of the Agreement and Plan of Reorganization,
1ST BANCORP shall merge with and into German American. This transaction is
referred to herein as the "Merger." Capitalized terms used herein that are not
defined in this Certificate are defined in the Agreement and Plan of
Reorganization.
German American acknowledges and agrees that each of the following
representations constitutes a material representation to be relied upon by
Leagre Xxxxxxxx & Xxxxxxx in rendering its opinion and that any material
inaccuracy in any of the following representations may render the conclusions
drawn in the opinion of Leagre Xxxxxxxx & Xxxxxxx inapplicable to the Merger.
The representations of German American hereto are limited to the extent that
each specific representation is made solely with respect to information
applicable to itself.
The specific representations made are as follows:
1. The fair market value of the German American Common received by
each 1ST BANCORP shareholder will be approximately equal to the fair market
value of the 1ST BANCORP Common surrendered in the exchange.
2. German American has no plan or intention to reacquire any of the
German American Common issued in the Merger.
3. German American has no plan or intention to sell or otherwise
dispose of any of the assets of 1ST BANCORP acquired in the Merger, except
for dispositions made in the ordinary course of business or transfers made
to a corporation controlled by German American pursuant to Section
368(a)(2)(C) of the Code.
4. The liabilities of 1ST BANCORP to be assumed by German American and
the liabilities to which the transferred assets of 1ST BANCORP are subject
were incurred by 1ST BANCORP in the ordinary course of its business.
5. Following the Merger, German American will continue the historic
business of 1ST BANCORP or use a significant portion of 1ST BANCORP'S
historic business assets in a business.
5
6. German American, 1ST BANCORP, and their respective shareholders
will each pay their own expenses, if any, incurred in connection with the
Merger.
7. There is no intercorporate indebtedness existing between German
American and 1ST BANCORP that was issued, acquired, or will be settled at a
discount.
8. No party to the Merger is an investment company regulated under the
Investment Company Act of 1940, a real estate investment trust, or a
corporation 50 percent or more of the value of whose total assets are stock
and securities and 80 percent or more of the value of whose total assets
are held for investment.
9. 1ST BANCORP is not under the jurisdiction of a court in a case
under Title 11 of the United States Code or a receivership, foreclosure, or
similar proceeding.
10. On the date of the Merger, the fair market value of the assets of
1ST BANCORP transferred to German American will equal or exceed the sum of
the liabilities assumed by German American plus the amount of liabilities,
if any, to which the transferred assets are subject.
11. The payment of cash in lieu of fractional shares of German
American Common is solely for the purpose of avoiding the expense and
inconvenience to German American of issuing fractional shares and does not
represent separately bargained-for consideration. The total cash
consideration that will be paid in the Merger to the 1ST BANCORP
shareholders instead of issuing fractional shares of German American Common
will not exceed one percent of the total consideration that will be issued
in the Merger to the 1ST BANCORP shareholders in exchange for their shares
of 1ST BANCORP Common. The fractional share interests of each 1ST BANCORP
shareholder will be aggregated, and no 1ST BANCORP shareholder will receive
cash in an amount equal to or greater than the value of one full share of
German American Common.
12. None of the compensation received by any shareholder-employees of
1ST BANCORP will be separate consideration for, or allocable to, any of
their shares of 1ST BANCORP Common; none of the shares of German American
Common received by any shareholder-employees of 1ST BANCORP will be
separate consideration for, or allocable to, any employment agreement; and
the compensation paid to any shareholder-employees of 1ST BANCORP will be
for services actually rendered and will be commensurate with amounts paid
to third parties bargaining at arm's-length for similar services.
6
IN WITNESS WHEREOF, German American, acting by an authorized officer with
full corporate authority, has executed and delivered this Representation
Certificate to Leagre Xxxxxxxx & Xxxxxxx as of the date written below.
GERMAN AMERICAN BANCORP
Date:________________ By /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx,
Chairman of the Board and
Chief Executive Officer
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REPRESENTATION CERTIFICATE
1ST BANCORP ("1ST BANCORP") makes the following representations to Leagre
Xxxxxxxx & Xxxxxxx to be used by Leagre Xxxxxxxx & Xxxxxxx in rendering its
opinion as to certain federal income tax consequences with respect to certain
transactions set forth in the Agreement and Plan of Reorganization by and
between 1ST BANCORP and German American Bancorp ("German American"), and dated
August 6, 1998 ("Agreement and Plan of Reorganization"). Subject to the terms
and conditions of the Agreement and Plan of Reorganization, 1ST BANCORP shall
merge with and into German American. This transaction is referred to herein as
the "Merger." Capitalized terms used herein that are not defined in this
Certificate are defined in the Agreement and Plan of Reorganization.
1ST BANCORP acknowledges and agrees that each of the following
representations constitutes a material representation to be relied upon by
Leagre Xxxxxxxx & Xxxxxxx in rendering its opinion and that any material
inaccuracy in any of the following representations may render the conclusions
drawn in the opinion of Leagre Xxxxxxxx & Xxxxxxx inapplicable to the Merger.
The representations of 1ST BANCORP hereto are limited to the extent that each
specific representation is made solely with respect to information applicable to
itself.
The specific representations made are as follows:
1. The fair market value of the German American Common received by
each 1ST BANCORP shareholder will be approximately equal to the fair market
value of the 1ST BANCORP Common surrendered in the exchange.
2. The liabilities of 1ST BANCORP to be assumed by German American and
the liabilities to which the transferred assets of 1ST BANCORP are subject
were incurred by 1ST BANCORP in the ordinary course of its business.
3. German American, 1ST BANCORP, and their respective shareholders
will each pay their own expenses, if any, incurred in connection with the
Merger.
4. There is no intercorporate indebtedness existing between German
American and 1ST BANCORP that was issued, acquired, or will be settled at a
discount.
5. No party to the Merger is an investment company regulated under the
Investment Company Act of 1940, a real estate investment trust, or a
corporation 50 percent or more of the value of whose total assets are stock
and securities and 80 percent or more of the value of whose total assets
are held for investment.
6. 1ST BANCORP is not under the jurisdiction of a court in a case
under Title 11 of the United States or a receivership, foreclosure, or
similar proceeding.
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7. On the date of the Merger, the fair market value of the assets of
1ST BANCORP transferred to German American will equal or exceed the sum of
the liabilities assumed by German American plus the amount of liabilities,
if any, to which the transferred assets are subject.
8. The payment of cash in lieu of fractional shares of German American
Common is solely for the purpose of avoiding the expense and inconvenience
to German American of issuing fractional shares and does not represent
separately bargained-for consideration. The total cash consideration that
will be paid in the Merger to the 1ST BANCORP shareholders instead of
issuing fractional shares of German American Common will not exceed one
percent of the total consideration that will be issued in the Merger to the
1ST BANCORP shareholders in exchange for their shares of 1ST BANCORP
Common. The fractional share interests of each 1ST BANCORP shareholder will
be aggregated, and no 1ST BANCORP shareholder will receive cash in an
amount equal to or greater than the value of one full share of German
American Common.
9. None of the compensation received by any shareholder-employees of
1ST BANCORP will be separate consideration for, or allocable to, any of
their shares of 1ST BANCORP Common; none of the shares of German American
Common received by any shareholder-employees of 1ST BANCORP will be
separate consideration for, or allocable to, any employment agreement; and
the compensation paid to any shareholder-employees of 1ST BANCORP will be
for services actually rendered and will be commensurate with amounts paid
to third parties bargaining at arm's-length for similar services.
IN WITNESS WHEREOF, 1ST BANCORP, acting by an authorized officer with full
corporate authority, has executed and delivered this Representation Certificate
to Leagre Xxxxxxxx & Xxxxxxx as of the date written below.
1ST BANCORP
Date: ______________ By /s/ C. Xxxxx XxXxxxxxx
C. Xxxxx XxXxxxxxx
Chairman of the Board and
Chief Executive Officer
