EXHIBIT 8
[LEAGRE & XXXXXX LETTERHEAD]
November 18, 1996
German American Bancorp
000 Xxxx Xxxxxx
Xxx 000
Xxxxxx, Xxxxxxx 00000
Subject: Agreement and Plan of Reorganization by
and among Peoples Bancorp of Washington,
The Peoples National Bank and Trust
Company, German American Bancorp, German
American Holdings Corporation, and
The Union 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 Peoples Bancorp of
Washington, an Indiana corporation ("Peoples"), The
Peoples National Bank and Trust Company, a national
banking association ("Peoples Bank"), German American
Holdings Corporation, an Indiana corporation ("GAHC"),
German American Bancorp, an Indiana corporation
("German American"), and The Union Bank, an Indiana
banking corporation ("Union") and dated September 27,
1996 ("Agreement and Plan of Reorganization"). Subject
to the terms and conditions of the Agreement and Plan
of Reorganization, Peoples shall merge with and into
GAHC. This transaction is referred to herein as the
"Holding Company Merger." Simultaneously, Union shall
be merged with and into Peoples Bank, 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."
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
to be filed by German American with the Securities
and Exchange Commission on November 18, 1996,
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 are 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,
Union, GAHC, Peoples and Peoples Bank contained in
the Representation Certificates attached hereto
are 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, Union, GAHC, Peoples, or Peoples Bank as a
result of the consummation of the Mergers.
3. No gain or loss will be recognized by the
Peoples shareholders upon exchange of their shares of
Peoples Common solely for shares of German American
Common.
4. The basis of the shares of German American
Common received by Peoples shareholders will be the
same, in each instance, as the basis of the shares of
Peoples Common surrendered in exchange therefor.
5. The holding period of the shares of German
American Common received by each shareholder of shares
of Peoples Common will include the period during which
the shares of Peoples Common surrendered in exchange
therefor were held, provided that the shares of Peoples
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/XXXXXX & XXXXXX
REPRESENTATION CERTIFICATE
Peoples Bancorp of Washington ("Peoples") and The
Peoples National Bank and Trust Company ("Peoples
Bank") make the following representations to Leagre &
Xxxxxx to be used by Xxxxxx & Xxxxxx 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
Peoples, Peoples Bank, German American Holdings
Corporation ("GAHC"), German American Bancorp ("German
American"), and The Union Bank ("Union") and dated
September 27, 1996 ("Agreement and Plan of
Reorganization"). Subject to the terms and conditions
of the Agreement and Plan of Reorganization, Peoples
shall merge with and into GAHC. This transaction is
referred to herein as the "Holding Company Merger."
Simultaneously, Union shall be merged with and into
Peoples Bank, 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."
Peoples and Peoples Bank acknowledge and agree
that each of the following representations constitutes
a material representation to be relied upon by Xxxxxx &
Xxxxxx 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 &
Xxxxxx 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 Peoples
shareholder will be approximately equal to the
fair market value of the Peoples Common Stock
surrendered in the exchange.
2. There is no plan or intention by the
shareholders of Peoples who own one percent or
more of Peoples Common Stock and to the best of
the knowledge of the managements of Peoples and
Peoples Bank there is no plan or intention on the
part of the remaining shareholders of Peoples, to
sell, exchange, or otherwise dispose of a number
of shares of German American Common Stock received
in the Mergers that would reduce the Peoples
shareholders' ownership of German
5
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 Peoples as of the same
date. For purposes of this representation, shares
of Peoples Common Stock surrendered by dissenters,
or exchanged for cash in lieu of fractional shares
of German American Common Stock, will be treated
as outstanding Peoples Common Stock as of the
Effective Time. Moreover, shares of Peoples
Common Stock and shares of German American Common
Stock held by Peoples 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, Peoples Bank 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 Union net
assets and at least 70 percent of the fair market
value of Union gross assets, held immediately
prior to the Mergers. For purposes of this
representation, amounts used by Peoples Bank or
Union to pay reorganization expenses and all
redemptions and distributions (except for regular,
normal dividends) made by Peoples Bank will be
included as assets of Peoples Bank or Union,
respectively, immediately prior to the Mergers.
4. Neither Peoples nor Peoples Bank has any
plan or intention to issue additional shares of
its stock that would result in German American
losing control, respectively, of Peoples or
Peoples Bank.
5. The liabilities of Peoples to be assumed
by GAHC, the liabilities of Union to be assumed by
Peoples Bank, and the liabilities to which the
assets of Peoples and Union are subject, were
incurred in the ordinary course of business of
Peoples and Union, respectively.
6. German American, Union, GAHC, Peoples,
Peoples Bank 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 and Peoples
Bank, (ii) Union and Peoples Bank, or (iii) German
American or GAHC and Peoples that was issued,
acquired, or will be settled at a discount.
8. In the Mergers, shares of Peoples'
Common Stock representing control of Peoples will
be exchanged solely for voting stock of German
American. For purposes of this representation,
shares of Peoples' Common Stock exchanged for cash
or other property originating with German American
will be treated as outstanding Peoples Common
Stock as of the Effective Time.
9. At the Effective Time, Peoples and
Peoples Bank will not have outstanding any
warrants, options, convertible securities, or any
other type of right pursuant to which any person
could acquire stock in Peoples and Peoples Bank
that, if exercised or converted, would affect
German American's acquisition or retention of
control of Peoples and Peoples Bank, respectively.
10. German American does not own, directly
or indirectly, nor has it owned during the past
five years, directly or indirectly, any Common
Stock of Peoples or Peoples Bank.
11. 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.
12. On the date of the Mergers, the fair
market value of the assets of Peoples Bank will
exceed the sum of its liabilities, plus the amount
of liabilities, if any, to which the assets are
subject.
13. Neither Peoples nor Peoples Bank 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. 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 Peoples 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 Peoples shareholders in exchange
for their shares of Peoples Common Stock. The
fractional share interests of each Peoples
shareholder will be aggregated, and no Peoples
shareholder will receive cash in an amount equal
to or greater than the value of one full share of
German American Common Stock.
15. None of the compensation received by any
shareholder-employees of Peoples or Peoples Bank
will be separate consideration for, or allocable
to, any of their shares of Peoples Common Stock;
none of the shares of German American Common Stock
received by any shareholder-employees of Peoples
or Peoples Bank will be separate consideration
for, or allocable to, any employment agreement;
and the compensation paid to any shareholder-
employees of Peoples or Peoples Bank will be for
services actually rendered and will be
commensurate with amounts paid to third parties
bargaining at arm's-length for similar services.
16. 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 Peoples immediately prior to
the Mergers. For purposes of this representation,
amounts used by Peoples to pay its reorganization
expenses, amounts paid by Peoples to shareholders
who receive cash or other property, and all
redemptions and distribution (except for regular,
normal dividends) made by Peoples immediately
preceding the transfer will be included as assets
of Peoples held immediately prior to the Mergers.
17. The fair market value of the assets of
Peoples transferred to GAHC will equal or exceed
the sum of Peoples's liabilities assumed by GAHC,
plus any other liabilities to which the
transferred assets are subject.
18. Peoples will distribute the stock,
securities, and other property it receives in the
Mergers, and its other properties, in pursuance of
the Merger Agreements.
IN WITNESS WHEREOF, Peoples and Peoples Bank, each
acting by an authorized officer with full corporate
authority, have executed and delivered this
Representation Certificate to Leagre & Xxxxxx as of the
date written below.
PEOPLES BANCORP OF
WASHINGTON
Date: November 18, 1996 By /s/Xxxxxx X.
Xxxxxxx
Xxxxxx X.
Xxxxxxx,
President
THE PEOPLES NATIONAL
BANK AND TRUST
COMPANY
Date: November 18, 1996 By /s/Xxxxxx X.
Xxxxxxx
Xxxxxx X.
Xxxxxxx,
President
REPRESENTATION CERTIFICATE
German American Bancorp ("German American"),
German American Holdings Corporation ("GAHC"), and The
Union Bank ("Union") make the following representations
to Leagre & Xxxxxx to be used by Xxxxxx & Xxxxxx 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 Peoples Bancorp of Washington ("Peoples"),
The Peoples National Bank and Trust Company ("Peoples
Bank"), GAHC, German American, and Union and dated
September 27, 1996 ("Agreement and Plan of
Reorganization"). Subject to the terms and conditions
of the Agreement and Plan of Reorganization, Peoples
shall merge with and into GAHC. This transaction is
referred to herein as the "Holding Company Merger."
Simultaneously, Union shall be merged with and into
Peoples Bank, 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, Union and GAHC acknowledge and
agree that each of the following representations
constitutes a material representation to be relied upon
by Xxxxxx & Xxxxxx 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 & Xxxxxx 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 Peoples
shareholder will be approximately equal to the
fair market value of the Peoples Common Stock
surrendered in the exchange.
2. There is no plan or intention by the
shareholders of Peoples who own five percent or
more of Peoples Common Stock and to the best of
the knowledge of the managements of German
American, Union and GAHC there is no plan or
intention on the part of the remaining
shareholders of Peoples, to sell, exchange, or
otherwise dispose of a number of shares of German
American Common Stock received in the Mergers that
would reduce the Peoples 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 Peoples as of the same date. For purposes of
this representation, shares of Peoples Common
Stock surrendered by dissenters, or exchanged for
cash in lieu of fractional shares of German
American Common Stock, will be treated as
outstanding Peoples Common Stock as of the
Effective Time. Moreover, shares of Peoples
Common Stock and shares of German American Common
Stock held by Peoples 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, Peoples Bank 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 Union net
assets and at least 70 percent of the fair market
value of Union gross assets, held immediately
prior to the Mergers. For purposes of this
representation, amounts used by Peoples Bank or
Union to pay reorganization expenses and all
redemptions and distributions (except for regular,
normal dividends) made by Peoples Bank will be
included as assets of Peoples Bank or Union,
respectively, immediately prior to the Mergers.
4. Prior to the Mergers, German American
will be in control of Union and GAHC
5. Neither GAHC nor Peoples Bank 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 Peoples Bank.
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 Peoples acquired in the Mergers, to
liquidate Peoples Bank, to merge Peoples Bank with
or into another corporation, to sell or otherwise
dispose of the Peoples Bank stock, or to cause
Peoples Bank to sell or otherwise dispose of any
of its assets or of any of the assets acquired
from Union, except for dispositions made in the
ordinary course of business.
8. The liabilities of Peoples to be assumed
by GAHC, the liabilities of Union to be assumed by
Peoples Bank, and the liabilities to which the
assets of Peoples and Union are subject, were
incurred in the ordinary course of business of
Peoples and Union.
9. Following the Mergers, GAHC will
continue the historic business of Peoples or use a
significant portion of Peoples's historic business
assets in a business, and Peoples Bank will
continue the historic business of Union or use a
significant portion of Union historic business
assets in a business.
10. German American, Union, GAHC, Peoples,
Peoples Bank 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 and Peoples
Bank, (ii) Union and Peoples Bank, or (iii) German
American or GAHC and Peoples that was issued,
acquired, or will be settled at a discount.
12. In the Mergers, shares of Peoples'
Common Stock representing control of Peoples will
be exchanged solely for voting stock of German
American. For purposes of this representation,
shares of Peoples' Common Stock exchanged for cash
or other property originating with German American
will be treated as outstanding Peoples Common
Stock as of the Effective Time.
13. At the Effective Time, Peoples and
Peoples Bank will not have outstanding any
warrants, options, convertible securities, or any
other type of right pursuant to which any person
could acquire stock in Peoples and Peoples Bank
that, if exercised or converted, would affect
German American's acquisition or retention of
control of Peoples and Peoples Bank, 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 Peoples or Peoples Bank.
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 Peoples Bank will
exceed the sum of its liabilities, plus the amount
of liabilities, if any, to which the assets are
subject.
17. Neither Peoples nor Peoples Bank 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 Peoples 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 Peoples shareholders in exchange
for their shares of Peoples Common Stock. The
fractional share interests of each Peoples
shareholder will be aggregated, and no Peoples
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 Peoples or Peoples Bank
will be separate consideration for, or allocable
to, any of their shares of Peoples Common Stock;
none of the shares of German American Common Stock
received by any shareholder-employees of Peoples
or Peoples Bank will be separate consideration
for, or allocable to, any employment agreement;
and the compensation paid to any shareholder-
employees of Peoples or Peoples Bank 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 Peoples immediately prior to
the Mergers. For purposes of this representation,
amounts used by Peoples to pay its reorganization
expenses, amounts paid by Peoples to shareholders
who receive cash or other property, and all
redemptions and distribution (except for regular,
normal dividends) made by Peoples immediately
preceding the transfer will be included as assets
of Peoples held immediately prior to the Mergers.
22. The adjusted basis and fair market value
of the assets of Peoples transferred to GAHC will
each equal or exceed the sum of Peoples's
liabilities assumed by GAHC, plus any other
liabilities to which the transferred assets are
subject.
23. Peoples will distribute the stock,
securities, and other property it receives in the
Mergers, and its other properties, in pursuance of
the Merger Agreements.
IN WITNESS WHEREOF, German American, Union and
GAHC, each acting by an authorized officer with full
corporate authority, have executed and delivered this
Representation Certificate to Leagre & Xxxxxx as of the
date written below.
GERMAN AMERICAN
BANCORP
Date: November 14, 1996 By /s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx,
Chairman of the
Board and Chief
Executive Officer
GERMAN AMERICAN
HOLDINGS CORPORATION
Date: November 14, 1996 By /s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx,
Chief Executive
Officer
THE UNION BANK
Date: November 13, 1996 By /s/Xxxxx X. Xxxxx
Xxxxx X. Xxxxx,
President
