EXHIBIT 8.1
[XXXXXX XXXXXXXX & XXXXXXX LETTERHEAD]
April 21, 1998
German American Bancorp
000 Xxxx Xxxxxx
Xxx 000
Xxxxxx, Xxxxxxx 00000
Subject: Agreement and Plan of Reorganization by and among CSB Bancorp,
The Citizens State Bank of Petersburg, German American Bancorp,
German American Holdings Corporation, and Community Trust Bank.
Gentlemen:
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 CSB Bancorp, an Indiana corporation ("CSB"),
The Citizens State Bank of Petersburg, an Indiana banking corporation,
("Citizens"), German American Holdings Corporation, an Indiana corporation
("GAHC"), German American Bancorp, an Indiana corporation ("German American"),
and Community Trust Bank, an Indiana banking corporation ("Community"), and
dated December 8, 1997 ("Agreement and Plan of Reorganization"). Subject to the
terms and conditions of the Agreement and Plan of Reorganization, CSB shall
merge with and into GAHC. This transaction is referred to herein as the "Holding
Company Merger." Simultaneously, Community shall be merged with and into
Citizens, subject to the terms and conditions of the Agreement and Plan of
Reorganization. This transaction is referred to herein as the "Bank Merger."
Collectively, the Holding Company Merger and the Bank Merger are referred to
herein as the "Mergers." 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.
2. The Registration Statement on Form S-4 filed by German
American with the Securities and Exchange Commission on February 26,
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 Mergers, except as may be otherwise set
forth in or contemplated by the Agreement and Plan of Reorganization.
2. The representations of German American, Community, GAHC,
CSB and Citizens contained in the Representation Certificates attached
hereto will be true in all material respects as of the effective date
of the Mergers.
3. The Mergers 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 Mergers. Accordingly, this opinion should
not be construed as applying in any manner to any tax aspect of the
Mergers 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 Mergers.
Opinion. Based upon and subject to the foregoing, it is our opinion that:
1. The Mergers 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,
Community, GAHC, CSB, or Citizens as a result of the consummation of
the Mergers.
3. No gain or loss will be recognized by the CSB shareholders
upon exchange of their shares of CSB Common solely for shares of German
American Common.
4. The basis of the shares of German American Common received
by CSB shareholders will be the same, in each instance, as the basis of
the shares of CSB Common surrendered in exchange therefor.
5. The holding period of the shares of German American Common
received by each shareholder of shares of CSB Common will include the
period during which the shares of CSB Common surrendered in exchange
therefor were held, provided that the shares of CSB 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 reference to this opinion and to our firm in the
Registration Statement.
Very truly yours,
/s/ Leagre Xxxxxxxx & Xxxxxxx
REPRESENTATION CERTIFICATE
German American Bancorp ("German American"), German American Holdings
Corporation ("GAHC"), and Community Trust Bank ("Community") make the following
representations to Leagre Xxxxxxxx & Xxxxxxx to be used by Xxxxxx 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 among CSB Bancorp ("CSB"), The Citizens State Bank of
Petersburg ("Citizens"), GAHC, German American, and Community and dated December
8, 1997 ("Agreement and Plan of Reorganization"). Subject to the terms and
conditions of the Agreement and Plan of Reorganization, CSB shall merge with and
into GAHC. This transaction is referred to herein as the "Holding Company
Merger." Simultaneously, Community shall be merged with and into Citizens,
subject to the terms and conditions of the Agreement and Plan of Reorganization.
This transaction is referred to herein as the "Bank Merger." Collectively, the
Bank Merger and the Holding Company Merger are referred to herein as the
"Mergers."
German American, Community and GAHC acknowledge and agree that each of
the following representations constitutes a material representation to be relied
upon by Xxxxxx 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 Xxxxxx Xxxxxxxx & Xxxxxxx inapplicable to the Mergers.
The representations of each party hereto are limited to the extent that each
specific representation is made solely with respect to information applicable to
itself.
"Control" for purposes of these representations means the ownership of
stock possessing at least 80 percent of the total combined voting power of all
classes of stock entitled to vote and at least 80 percent of the total number of
shares of all other classes of stock.
The specific representations made are as follows:
1. The fair market value of the German American
Common Stock received by each CSB shareholder will be approximately
equal to the fair market value of the CSB Common Stock surrendered in
the exchange.
2. To the best of the knowledge of the managements of
German American, Community and GAHC there is no plan or intention on
the part of the shareholders of CSB, to sell, exchange, or otherwise
dispose of a number of shares of German American Common Stock received
in the Mergers that would reduce the CSB shareholders' ownership of
German American Common Stock to a number of shares having a value, at
the close of business on the effective date of the Mergers ("Effective
Time"), of less than 50 percent of the value of all the formerly
outstanding Common Stock of CSB as of the same date. For purposes of
this representation, shares of CSB Common Stock surrendered by
dissenters, or exchanged for cash in lieu of fractional shares of
German American Common Stock, will be treated as outstanding CSB Common
Stock as of the Effective Time. Moreover, shares of CSB Common Stock
and shares of German American Common Stock held by CSB shareholders and
otherwise sold, redeemed, or disposed of prior or subsequent to the
Merger will be considered in making this representation.
3. Following the Mergers, Citizens will hold at least
90 percent of the fair market value of its net assets and at least 70
percent of the fair market value of its gross assets and at least 90
percent of the fair market value of Community net assets and at least
70 percent of the fair market value of Community gross assets, held
immediately prior to the Mergers. For purposes of this representation,
amounts used by Citizens or Community to pay reorganization expenses
and all redemptions and distributions (except for regular, normal
dividends) made by Citizens will be included as assets of Citizens or
Community, respectively, immediately prior to the Mergers.
4. Prior to the Mergers, German American will be in
control of Community and GAHC.
5. Neither GAHC nor Citizens has any plan or
intention to issue additional shares of its stock after the Mergers
that would result in German American losing control, respectively, of
GAHC or Citizens.
6. German American has no plan or intention to
reacquire any of its Common Stock issued in the Mergers.
7. German American and GAHC have no plan or intention
to sell or otherwise dispose of any of the assets of CSB acquired in
the Mergers, to liquidate Citizens, to sell or otherwise dispose of the
Citizens stock, or to cause Citizens to sell or otherwise dispose of
any of its assets or of any of the assets acquired from Community,
except for dispositions made in the ordinary course of business.
8. The liabilities of CSB to be assumed by GAHC, the
liabilities of Community to be assumed by Citizens, and the liabilities
to which the assets of CSB and Community are subject, were incurred in
the ordinary course of business of CSB and Community.
9. Following the Mergers, GAHC will continue the
historic business of CSB or use a significant portion of CSB's historic
business assets in a business, and Citizens will continue the historic
business of Community or use a significant portion of Community
historic business assets in a business.
10. German American, Community, GAHC, CSB, Citizens
and their respective shareholders will each pay their own expenses, if
any, incurred in connection with the Mergers.
11. There is no intercorporate indebtedness existing
between (i) German American or GAHC and Citizens, (ii) Community and
Citizens, or (iii) German American or GAHC and CSB that was issued,
acquired, or will be settled at a discount.
12. In the Mergers, shares of CSB's Common Stock
representing control of CSB will be exchanged solely for voting stock
of German American. For purposes of this representation, shares of
CSB's Common Stock exchanged for cash or other property originating
with German American will be treated as outstanding CSB Common Stock as
of the Effective Time.
13. At the Effective Time, CSB and Citizens will not
have outstanding any warrants, options, convertible securities, or any
other type of right pursuant to which any person could acquire stock in
CSB and Citizens that, if exercised or converted, would affect German
American's acquisition or retention of control of CSB and Citizens,
respectively.
14. German American does not own, directly or
indirectly, nor has it owned during the past five years, directly or
indirectly, any Common Stock of CSB or Citizens.
15. No party to the Mergers 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.
16. On the date of the Mergers, the fair market value
of the assets of Citizens will exceed the sum of its liabilities, plus
the amount of liabilities, if any, to which the assets are subject.
17. Neither CSB nor Citizens is under the
jurisdiction of a court in a case under Title 11 of the United States
Code or a receivership, foreclosure, or similar proceeding.
18. The payment of cash in lieu of fractional shares
of German American's Common Stock 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 Mergers to the
CSB shareholders instead of issuing fractional shares of German
American Common Stock will not exceed one percent of the total
consideration that will be issued in the Mergers to the CSB
shareholders in exchange for their shares of CSB Common Stock. The
fractional share interests of each CSB shareholder will be aggregated,
and no CSB shareholder will receive cash in an amount equal to or
greater than the value of one full share of German American Common
Stock.
19. None of the compensation received by any
shareholder-employees of CSB or Citizens will be separate consideration
for, or allocable to, any of their shares of CSB Common Stock; none of
the shares of German American Common Stock received by any
shareholder-employees of CSB or Citizens will be separate consideration
for, or allocable to, any employment agreement; and the compensation
paid to any shareholder-employees of CSB or Citizens will be for
services actually rendered and will be commensurate with amounts paid
to third parties bargaining at arm's-length for similar services.
20. The Bank Merger and Holding Company Merger will
occur on the same date.
21. GAHC will acquire at least 90 percent of the fair
market value of the net assets and at least 70 percent of the fair
market value of the gross assets, held by CSB immediately prior to the
Mergers. For purposes of this representation, amounts used by CSB to
pay its reorganization expenses, amounts paid by CSB to shareholders
who receive cash or other property, and all redemptions and
distribution (except for regular, normal dividends) made by CSB
immediately preceding the transfer will be included as assets of CSB
held immediately prior to the Mergers.
22. The adjusted basis and fair market value of the
assets of CSB transferred to GAHC will each equal or exceed the sum of
CSB's liabilities assumed by GAHC, plus any other liabilities to which
the transferred assets are subject.
IN WITNESS WHEREOF, German American, Community and GAHC, each acting by
an authorized officer with full corporate authority, have executed and delivered
this Representation Certificate to Xxxxxx Xxxxxxxx & Xxxxxxx as of the date
written below.
GERMAN AMERICAN BANCORP
Date: April 20, 1998 By/s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx,
Chairman of the Board and Chief
Executive Officer
GERMAN AMERICAN HOLDINGS CORPORATION
Date: April 20, 1998 By/s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx,
Chief Executive Officer
THE COMMUNITY TRUST BANK
/s/Xxxx X. Xxxxxx
Date: April 20, 1998 By Xxxx X. Xxxxxx, President
REPRESENTATION CERTIFICATE
CSB Bancorp ("CSB") and The Citizens State Bank of Petersburg
("Citizens") make 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 among CSB, Citizens, German
American Holdings Corporation ("GAHC"), German American Bancorp ("German
American"), and Community Trust Bank ("Community") and dated December 8, 1997
("Agreement and Plan of Reorganization"). Subject to the terms and conditions of
the Agreement and Plan of Reorganization, CSB shall merge with and into GAHC.
This transaction is referred to herein as the "Holding Company Merger."
Simultaneously, Community shall be merged with and into Citizens, subject to the
terms and conditions of the Agreement and Plan of Reorganization. This
transaction is referred to herein as the "Bank Merger." Collectively, the Bank
Merger and the Holding Company Merger are referred to herein as the "Mergers."
CSB and Citizens acknowledge and agree that each of the following
representations constitutes a material representation to be relied upon by
Xxxxxx 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 Xxxxxx Xxxxxxxx & Xxxxxxx inapplicable to the Mergers.
The representations of each party hereto are limited to the extent that each
specific representation is made solely with respect to information applicable to
itself.
"Control" for purposes of these representations means the ownership of
stock possessing at least 80 percent of the total combined voting power of all
classes of stock entitled to vote and at least 80 percent of the total number of
shares of all other classes of stock.
The specific representations made are as follows:
1. The fair market value of the German American Common Stock
received by each CSB shareholder will be approximately equal to the
fair market value of the CSB Common Stock surrendered in the exchange.
2. There is no plan or intention by the shareholders of CSB
who currently are directors and executive officers of CSB and Citizens
and to the best of the knowledge of the managements of CSB and Citizens
there is no plan or intention on the part of the remaining shareholders
of CSB, to sell, exchange, or otherwise dispose of a number of shares
of German American Common Stock received in the Mergers that would
reduce the CSB shareholders' ownership of German American Common Stock
to a number of shares having a value, at the close of business on the
effective date of the Mergers ("Effective Time"), of less than 50
percent of the value of all the formerly outstanding Common Stock of
CSB as of the same date. For purposes of this representation, shares of
CSB Common Stock surrendered by dissenters, or exchanged for cash in
lieu of fractional shares of German American Common Stock, will be
treated as outstanding CSB Common Stock as of the Effective Time.
Moreover, shares of CSB Common Stock and shares of German American
Common Stock held by CSB shareholders and otherwise sold, redeemed, or
disposed of prior or subsequent to the Merger will be considered in
making this representation.
3. Following the Mergers, Citizens will hold at least 90
percent of the fair market value of its net assets and at least 70
percent of the fair market value of its gross assets and at least 90
percent of the fair market value of Community net assets and at least
70 percent of the fair market value of Community gross assets, held
immediately prior to the Mergers. For purposes of this representation,
amounts used by Citizens or Community to pay reorganization expenses
and all redemptions and distributions (except for regular, normal
dividends) made by Citizens will be included as assets of Citizens or
Community, respectively, immediately prior to the Mergers.
4. Neither CSB nor Citizens has any plan or intention to issue
additional shares of its stock prior to the Mergers.
5. The liabilities of CSB to be assumed by GAHC and the
liabilities to which the assets of CSB and Community are subject, were
incurred in the ordinary course of business of CSB and Community,
respectively.
6. German American, Community, GAHC, CSB, Citizens and their
respective shareholders will each pay their own expenses, if any,
incurred in connection with the Mergers.
7. There is no intercorporate indebtedness existing between
(i) German American or GAHC and Citizens, (ii) Community and Citizens,
or (iii) German American or GAHC and CSB that was issued, acquired, or
will be settled at a discount.
8. In the Mergers, shares of CSB Common Stock representing
control of CSB will be exchanged solely for voting stock of German
American. For purposes of this representation, shares of CSB Common
Stock exchanged for cash or other property originating with German
American will be treated as outstanding CSB Common Stock as of the
Effective Time.
9. At the Effective Time, CSB and Citizens will not have
outstanding any warrants, options, convertible securities, or any other
type of right pursuant to which any person could acquire stock in CSB
and Citizens that, if exercised or converted, would affect German
American's acquisition or retention of control of CSB and Citizens,
respectively.
10. To the best of the knowledge of the managements of CSB and
Citizens, German American does not own, directly or indirectly, nor has
it owned during the past five years, directly or indirectly, any Common
Stock of CSB or Citizens.
11. Neither CSB nor Citizens 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.
12. On the date of the Mergers, the fair market value of the
assets of Citizens will exceed the sum of its liabilities, plus the
amount of liabilities, if any, to which the assets are subject.
13. Neither CSB nor Citizens is under the jurisdiction of a
court in a case under Title 11 of the United States Code or a
receivership, foreclosure, or similar proceeding.
14. None of the compensation received by any
shareholder-employees of CSB or Citizens will be separate consideration
for, or allocable to, any of their shares of CSB Common Stock; none of
the shares of German American Common Stock received by any
shareholder-employees of CSB or Citizens will be separate consideration
for, or allocable to, any employment agreement; and the compensation
paid to any shareholder-employees of CSB or Citizens will be for
services actually rendered and will be commensurate with amounts paid
to third parties bargaining at arm's-length for similar services.
15. GAHC will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair market
value of the gross assets, held by CSB immediately prior to the
Mergers. For purposes of this representation, amounts used by CSB to
pay its reorganization expenses, amounts paid by CSB to shareholders
who receive cash or other property, and all redemptions and
distribution (except for regular, normal dividends) made by CSB
immediately preceding the transfer will be included as assets of CSB
held immediately prior to the Mergers.
16. The fair market value of the assets of CSB transferred to
GAHC will equal or exceed the sum of CSB's liabilities assumed by GAHC,
plus any other liabilities to which the transferred assets are subject.
IN WITNESS WHEREOF, CSB and Citizens, each acting by an authorized
officer with full corporate authority, have executed and delivered this
Representation Certificate to Xxxxxx Xxxxxxxx & Xxxxxxx as of the date written
below.
CSB BANCORP
/s/ Xxxxx X. Xxxxxx
Date: April 20, 1998 By Xxxxx X. Xxxxxx, Executive
Vice President
THE CITIZENS STATE BANK OF
PETERSBURG
/s/ Xxxxx X. Xxxxxx
Date: April 20, 1998 By Xxxxx X. Xxxxxx, President
