Exhibit 8
October 13, 1995
Board of Directors
Webster Financial Corporation
First Federal Plaza
145 Bank Street
Waterbury, Connecticut 06702
Board of Directors
Shelton Bancorp, Inc.
375 Bridgeport Avenue
Shelton, Connecticut 06484
Gentlemen:
You have requested that we render to you our opinion with respect to
certain federal income tax consequences of the proposed transactions described
below in connection with the Agreement and Plan of Merger, dated June 20, 1995,
as amended (the "Agreement"), among Webster Financial Corporation ("Webster"),
Webster Acquisition Corp. ("Merger Sub"), and Shelton Bancorp, Inc. ("Shelton").
The proposed transactions are to occur on a substantially concurrent basis
in the following sequence: (i) Bristol Savings Bank ("Bristol"), a wholly-owned
subsidiary of Webster, will convert from a Connecticut savings bank charter to a
federal savings bank charter (the "Charter Conversion") and concurrently be
renamed "Webster Bank"; (ii) First Federal Bank, a federal savings bank ("First
Federal"), a wholly-owned subsidiary of Webster, will then merge into Webster
Bank, with Webster Bank as the surviving federal savings bank (the "First
Federal Merger"); (iii) Merger Sub, a newly formed wholly-owned subsidiary of
Webster, will then merge into Shelton, as the surviving corporation, and, as a
result of such merger, Shelton will be acquired by Webster (the "Acquisition
Merger"); (iv) Shelton, having become a wholly-owned subsidiary of Webster, will
then merge into Webster, as the surviving corporation (the "Shelton Merger");
and (v) Shelton Savings Bank ("Shelton Bank"), which prior to the Shelton Merger
is a wholly-owned subsidiary of Shelton and as a result of the Shelton Merger
will be a wholly-owned subsidiary of Webster, will then merge into Webster Bank,
with Webster Bank as the surviving federal savings bank (the "Shelton Bank
Merger"). The Charter Conversion and renaming of Bristol, the First Federal
Merger, the Acquisition Merger, the Shelton Merger and the Shelton Bank Merger
are collectively referred to as the "Proposed Transactions."
In connection with the preparation of this opinion, we have examined and
relied upon the Agreement, including the exhibits thereto, the Plan of
Conversion (as defined herein), the First Federal Bank Merger Agreement (as
defined herein), the Shelton Bank Merger Agreement (as defined herein), and the
Registration Statement filed on Form S-4 by Webster with the Securities and
Exchange Commission on July 28, 1995, as amended through the date hereof (the
"Registration Statement").
In rendering the opinion set forth hereinafter, we have assumed the
accuracy of all information contained in the documents described in the
preceding paragraph, and we have also
assumed the accuracy of all copies, and the genuineness of all signatures
thereof. We have not attempted to verify independently the accuracy of any
information in the these documents.
The Proposed Transactions
Based solely upon our review of the above described documents, and upon
such information as Webster has provided us (which we have not attempted to
verify in any respect), and in reliance upon such documents and information, we
understand that the Proposed Transactions and the relevant facts with respect
thereto are as follows:
Webster is a corporation organized, validly existing and in good standing
under the laws of the State of Delaware. Webster is a registered savings and
loan holding company under the Home Owners' Loan Act. The common stock of
Webster is traded on the Nasdaq National Market. Merger Sub is a corporation
organized, validly existing and in good standing under the laws of the State of
Delaware. Merger Sub is a wholly-owned subsidiary of Webster. Webster owns 100
percent of the issued and outstanding capital stock of Bristol and of First
Federal and, upon the Charter Conversion and renaming of Bristol, will own 100
percent of the issued and outstanding capital stock of Webster Bank. Bristol
prior to the Charter Conversion is a state chartered capital stock savings bank
organized, validly existing and in good standing under the laws of the State of
Connecticut. After the Charter Conversion, Bristol, renamed Webster Bank, will
be a federally chartered stock savings bank organized and existing under the
laws of the United States. First Federal is a federally chartered stock savings
bank organized and existing under the laws of the United States.
Shelton is a corporation organized, validly existing and in good standing
under the laws of the State of Delaware. Shelton is a registered savings and
loan holding company under the Home Owners' Loan Act. The common stock of
Shelton is traded on the Nasdaq National Market. Shelton owns 100 percent of the
issued and outstanding capital stock of Shelton Bank. Shelton Bank is a state
chartered capital stock savings bank organized, validly existing and in good
standing under the laws of the State of Connecticut.
Webster desires to enter into the Proposed Transactions in order to (i)
combine its existing savings bank subsidiaries into one savings bank under a new
single name and with a federal charter and (ii) acquire the assets and business
of Shelton Bank, which Webster intends to operate as branches of Webster Bank,
and thereby expand its market.
As a result of the Charter Conversion, Bristol will become a federally
chartered stock savings bank and be renamed as "Webster Bank." Upon consummation
of the Charter Conversion, each share of Bristol common stock will become a
share of Webster Bank common stock, and such Webster Bank common stock will
constitute the only outstanding shares of Webster Bank. The Charter Conversion
will be consummated pursuant to a plan of conversion, as adopted and approved by
the Board of Directors of Bristol on July 24, 1995 (the "Plan of Conversion").
As part of the First Federal Merger, First Federal will merge into Webster
Bank, which will be the surviving federal savings bank. Upon consummation of the
First Federal Merger, each issued and outstanding share of First Federal common
stock will be canceled. Each share of Webster Bank common stock issued and
outstanding immediately prior to the First Federal Merger will remain issued and
outstanding. Such Webster Bank common stock will constitute the only shares of
Webster Bank, as the surviving federal savings bank in the First Federal Merger.
The First Federal Merger will be consummated pursuant to a bank merger agreement
between Webster Bank and First Federal, which will be in substantially the form
approved by the Boards of Directors of Webster, Bristol and First Federal on
July 24, 1995 (the "First Federal Merger Agreement").
As part of the Acquisition Merger, Merger Sub will merge into Shelton, with
Shelton being the surviving corporation, and Shelton will thereupon be acquired
by Webster and become a
wholly-owned subsidiary of Webster. Upon consummation of the Acquisition Merger,
each issued and outstanding share of Merger Sub common stock will be
automatically converted into a share of common stock of Shelton, as the
surviving corporation. In exchange for their shares of Shelton common stock, the
existing shareholders of Shelton will receive shares of Webster voting common
stock and, as applicable, cash in lieu of any fractional share, in each case as
specified at Section 1.4 of the Agreement. Holders of Shelton common stock have
no dissenters' rights.
As part of the Shelton Merger, Shelton, which will have become a
wholly-owned subsidiary of Webster, will then merge into Webster, with Webster
as the surviving corporation. Upon consummation of the Shelton Merger, each
share of Shelton common stock will be canceled. Each share of Webster common
stock and class B convertible preferred stock issued and outstanding immediately
prior to the Shelton Merger will remain issued and outstanding. Such Webster
common stock and class B convertible preferred stock will constitute the only
shares of capital stock of Webster, as the surviving corporation in the Shelton
Merger. The Shelton Merger will be consummated pursuant to the Agreement.
As part of the Shelton Bank Merger, Shelton Bank, which will have become a
wholly-owned subsidiary of Webster as a result of the Shelton Merger, will then
merge into Webster Bank, which will be the surviving federal savings bank. Upon
consummation of the Shelton Bank Merger, each share of Shelton Bank common stock
will be canceled. Each share of Webster Bank common stock issued and outstanding
immediately prior to the Shelton Bank Merger will remain issued and outstanding.
Such Webster Bank common stock will constitute the only shares of capital stock
of Webster Bank, as the surviving federal savings bank in the Shelton Bank
Merger. The Shelton Bank Merger will be consummated pursuant to a bank merger
agreement, between Webster Bank and Shelton Bank, which will be in substantially
the form of Exhibit A to the Agreement (the "Shelton Bank Merger Agreement").
Shelton and Webster entered into an option agreement dated, June 20, 1995
(the "Option Agreement), pursuant to which Shelton granted Webster an
unconditional, irrevocable option to purchase up to 267,324 shares of Shelton
common stock at a price of $17.00 per share, subject to adjustments as provided
in the Option Agreement (the "Option"). Shelton issued the Option to Webster as
a condition and an inducement to Webster entering into the Agreement. Webster
may exercise the Option only after the occurrence of a "Purchase Event" and
before the occurrence of an Exercise Termination Event, as those terms are
defined in the Option Agreement.
Representations in Connection with the Charter Conversion
Webster has made the following additional representations and
certifications in connection with the Charter Conversion, the accuracy and
completeness of which we also have relied upon in rendering the opinion
hereinafter set forth:
(a) The fair market value of the Webster Bank stock and other consideration
received by Webster will be approximately equal to the fair market value of the
Bristol stock surrendered in the exchange.
(b) There is no plan or intention by Webster to sell, exchange or otherwise
dispose of any of the shares of Webster Bank stock received in the Charter
Conversion.
(c) Immediately following consummation of the Charter Conversion, Webster
will own all of the outstanding Webster Bank stock and will own such stock
solely by reason of its ownership of Bristol stock immediately prior to the
Charter Conversion.
(d) Webster Bank has no plan or intention to issue additional shares of its
stock following the Charter Conversion.
(e) Immediately following consummation of the Charter Conversion, Webster
Bank will possess the same assets and liabilities, except for assets used to pay
expenses incurred in connection with the Charter Conversion, as those possessed
by Bristol immediately prior to the Charter Conversion. Assets used to pay
expenses and all redemptions and distributions (except for regular normal
dividends) made by Bristol immediately preceding the Charter Conversion will, in
the aggregate, constitute less than on percent of the net assets of Bristol.
(f) At the time of the Charter Conversion, Bristol will not have
outstanding any warrants, options, convertible securities, or any other type of
right pursuant to which any person could acquire stock in Bristol.
(g) Webster Bank has no plan or intention to reacquire any of its stock
issued in the Charter Conversion.
(h) Webster Bank has no plan or intention to sell or otherwise dispose of
any of the assets of Bristol acquired in the Charter Conversion, except for
dispositions made in the ordinary course of business.
(i) The liabilities of Bristol assumed by Webster Bank plus the
liabilities, if any, to which the assets of Bristol are subject were incurred by
Bristol in the ordinary course of its business and are associated with the
assets transferred.
(j) Following the Charter Conversion, Webster Bank will continue the
historic business of Bristol or use a significant portion of Bristol's historic
business assets in a business.
(k) Webster will pay its respective expenses, if any, incurred in
connection with the Charter Conversion.
(l) Bristol is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Internal Revenue
Code of 1986, as amended (the "Code").
Representations in Connection with the First Federal Merger
Webster has made the following additional representations and
certifications in connection with the First Federal Merger, the accuracy and
completeness of which we also have relied upon in rendering the opinion
hereinafter set forth:
(a) The fair market value of the Webster Bank stock and other consideration
deemed received by Webster in the First Federal Merger will be approximately
equal to the fair market value of the First Federal stock surrendered in the
exchange.
(b) Webster has no plan or intention to sell, exchange, or otherwise
dispose of any shares of Webster Bank stock deemed received in the First Federal
Merger; or to liquidate Webster Bank.
(c) Webster Bank 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 First Federal immediately prior to the First Federal Merger. For
purposes of this representation, amounts used by First Federal to pay its
reorganization expenses, and all redemptions and distributions (except for
regular, normal dividends) made by First Federal immediately preceding the
transfer will be included as assets of First Federal prior to the First Federal
Merger.
(d) After the First Federal Merger, Webster will be in control of Webster
Bank within the meaning of section 368(a)(2)(H) of the Code.
(e) Webster Bank has no plan or intention to reacquire any of its stock
deemed issued in the First Federal Merger.
(f) Webster Bank has no plan or intention to sell or otherwise dispose of
any of the assets of First Federal acquired in the First Federal Merger, except
for dispositions made in the ordinary course of business.
(g) The liabilities of First Federal assumed by Webster Bank plus the
liabilities, if any, to which the transferred assets are subject were incurred
by First Federal in the ordinary course of its business and are associated with
the assets transferred.
(h) Following the First Federal Merger, Webster Bank will continue the
historic business of First Federal or use a significant portion of First
Federal's historic business assets in a business.
(i) At the time of the First Federal Merger, Webster 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 Webster Bank that, if
exercised or converted, would affect the Webster's acquisition or retention of
control of Webster Bank, as defined in section 368(a)(2)(H) of the Code.
(j) Webster Bank, First Federal, and Webster will pay their respective
expenses, if any, incurred in connection with the First Federal Merger.
(k) There is no intercorporate indebtedness existing between Webster Bank
and First Federal that was issued, acquired, or will be settled at a discount.
(l) No two parties to the First Federal Merger are investment companies as
defined in section 368(a)(2)(F)(iii) and (iv) of the Code.
(m) The fair market value of the assets of First Federal transferred to
Webster Bank in the First Federal Merger will equal or exceed the sum of the
liabilities assumed by Webster Bank, plus the amount of liabilities, if any, to
which such assets of First Federal are subject.
(n) The total adjusted basis of the assets of First Federal transferred to
Webster Bank in the First Federal Merger will equal or exceed the sum of the
liabilities to be assumed by Webster Bank, plus the amount of liabilities, if
any, to which such assets of First Federal are subject.
(o) First Federal is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of the Code.
(p) No stock of Webster Bank actually will be issued in the First Federal
Merger.
Representations in Connection with the Acquisition Merger and the Shelton
Merger
Webster, and/or Shelton where appropriate, have made the following
additional representations and certifications in connection with the Acquisition
Merger and the Shelton Merger, the accuracy and completeness of which we also
have relied upon in rendering the opinion hereinafter set forth:
(a) The fair market value of the Webster common stock to be received by
each Shelton shareholder pursuant to the Acquisition Merger will be
approximately equal to the fair market value of the Shelton common stock
surrendered in exchange therefor.
(b) To the best of the knowledge of the management of Shelton and Webster
and the Boards of Directors of Shelton and Webster, there is no plan or
intention on the part of any shareholder of Shelton to sell, exchange, or
otherwise dispose of a number of shares of Webster common stock received in the
Acquisition Merger that would reduce the Shelton shareholders' ownership of
Webster common stock to a number of shares having a value, as of the date of the
Acquisition Merger, of less than 50 percent of the value of all of the formerly
outstanding stock of Shelton as of the same date. For purposes of this
representation, shares of Shelton stock exchanged for cash in lieu of fractional
shares of Webster common stock will be treated as outstanding Shelton stock on
the date of the Acquisition Merger. Moreover, shares of Shelton stock and shares
of Webster common stock held by Shelton shareholders and otherwise sold,
redeemed, or disposed of prior or subsequent to the Acquisition Merger will be
considered in making this representation.
(c) Webster 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 Shelton immediately prior to the Acquisition Merger. For purposes
of this representation, amounts used by Shelton to pay its expenses relating to
the Proposed Transactions and all redemptions and distributions (except for
regular, normal dividends) made by Shelton immediately preceding the Acquisition
Merger will be included as assets of Shelton held immediately prior to the
Acquisition Merger.
(d) Webster has no plan or intention to reacquire any of its common stock
to be issued in the Acquisition Merger, except for shares of Webster common
stock that may be purchased in the open market in the ordinary course under
Webster's existing stock repurchase plan for up to ten percent of Webster's
common stock. Such plan was not established for the purpose of affording holders
of Webster common stock to be issued in the Acquisition Merger the opportunity
to sell such shares back to Webster following the Acquisition Merger, and such
Webster shareholders will not be offered any preferred right to sell, vis-a-vis
other Webster shareholders, following the Acquisition Merger.
(e) Webster has no plan or intention to sell or otherwise dispose of any of
the assets of Shelton to be acquired in the Acquisition Merger or Shelton
Merger, except for dispositions made in the ordinary course of business or
transfers described in section 368(a)(2)(C) of the Code.
(f) The Webster common stock, and cash in lieu of fractional shares, to be
received by the shareholders of Shelton in the Acquisition Merger will be
distributed in accordance with the Agreement.
(g) The liabilities of Shelton to be assumed by Webster and the liabilities
to which the transferred assets of Shelton will be subject were incurred by
Shelton in the ordinary course of its business.
(h) Following the Acquisition Merger and Shelton Merger, Webster will
continue the historic business of Shelton or use a significant portion of
Shelton's historic business assets in a business.
(i) Webster, Merger Sub, Shelton, and the shareholders of Shelton will pay
their respective expenses, if any, incurred in connection with the Acquisition
Merger and Shelton Merger.
(j) There is no intercorporate indebtedness existing among Webster, Merger
Sub and Shelton that was issued, acquired, or will be settled at a discount.
(k) None of the parties to the Acquisition Merger or Shelton Merger is an
investment company as defined in section 368(a)(2)(F)(iii) of the Code.
(l) Webster does not own, directly or indirectly, nor has it owned during
the past five years, directly or indirectly, any stock of Shelton, except for
120 shares of Shelton common stock and the Option (as described in Exhibit B to
the Agreement).
(m) The fair market value of the assets of Shelton to be received by
Webster in the Acquisition Merger and Shelton Merger will equal or exceed the
sum of the liabilities assumed by Webster, plus the amount of liabilities, if
any, to which the transferred assets will be subject.
(n) Shelton is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of the Code.
(o) The payment of cash in lieu of fractional shares of Webster common
stock is solely for the purpose of avoiding the expense and inconvenience to
Webster of issuing fractional shares and does not represent separately
bargained-for consideration. The total cash consideration that will be paid in
the Acquisition Merger to the Shelton shareholders instead of issuing fractional
shares of Webster common stock will not exceed one percent of the total
consideration that will be issued in the Acquisition Merger to the Shelton
shareholders in exchange for their shares of Shelton stock. The fractional share
interests of each Shelton shareholder will be aggregated, and no Shelton
shareholder will receive cash in an amount equal to or greater than the value of
one full share of Webster common stock.
(p) None of the compensation received by any shareholder-employees of
Shelton will be separate consideration for, or allocable to, any of their shares
of Shelton stock; none of the shares of Webster common stock received by any
shareholder-employees of Shelton will be separate consideration for, or
allocable to, any employment agreement; and the compensation paid to any
shareholder-employees will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's length for
similar services.
Representations in Connection with the Shelton Bank Merger
Webster, and/or the Shelton where appropriate, have made the following
additional representations and certifications in connection with the Shelton
Bank Merger, the accuracy and completeness of which we also have relied upon in
rendering the opinion hereinafter set forth:
(a) The fair market value of the Webster Bank stock and other consideration
deemed received by Webster will be approximately equal to the fair market value
of the Shelton Bank stock surrendered in the exchange.
(b) Webster has no plan or intention to sell, exchange, or otherwise
dispose of any shares of Webster Bank stock deemed received in the Shelton Bank
Merger; or to liquidate Webster Bank.
(c) Webster Bank 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 Shelton Bank
immediately prior to the Shelton Bank Merger. For purposes of this
representation, amounts used by Shelton Bank to pay its reorganization expenses,
and all redemptions and distributions (except for regular, normal dividends)
made by Shelton Bank immediately preceding the transfer will be included as
assets of Shelton Bank prior to the Shelton Bank Merger.
(d) After the Shelton Bank Merger, Webster will be in control of Webster
Bank within the meaning of section 368(a)(2)(H) of the Code.
(e) Webster Bank has no plan or intention to reacquire any of its stock
deemed issued in the Shelton Bank Merger.
(f) Webster Bank has no plan or intention to sell or otherwise dispose of
any of the assets of Shelton Bank acquired in the Shelton Bank Merger, except
for dispositions made in the ordinary course of business.
(g) The liabilities of Shelton Bank assumed by Webster Bank plus the
liabilities, if any, to which the transferred assets are subject were incurred
by Shelton Bank in the ordinary course of its business and are associated with
the assets transferred.
(h) Following the Shelton Bank Merger, Webster Bank will continue the
historic business of Shelton Bank or use a significant portion of Shelton Bank's
historic business assets in a business.
(i) At the time of the Shelton Bank Merger, Webster 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 Webster Bank that, if
exercised or converted, would affect the Webster's acquisition or retention of
control of Webster Bank, as defined in section 368(a)(2)(H) of the Code.
(j) Webster Bank, Shelton Bank, and Webster will pay their respective
expenses, if any, incurred in connection with the Shelton Bank Merger.
(k) There is no intercorporate indebtedness existing between Webster Bank
and Shelton Bank that was issued, acquired, or will be settled at a discount.
(l) No two parties to the Shelton Bank Merger are investment companies as
defined in section 368(a)(2)(F)(iii) and (iv) of the Code.
(m) The fair market value of the assets of Shelton Bank transferred to
Webster Bank in the Shelton Bank Merger will equal or exceed the sum of the
liabilities assumed by Webster Bank, plus the amount of liabilities, if any, to
which such assets of Shelton Bank are subject.
(n) The total adjusted basis of the assets of Shelton Bank transferred to
Webster Bank in the Shelton Bank Merger will equal or exceed the sum of the
liabilities to be assumed by Webster Bank, plus the amount of liabilities, if
any, to which such assets of Shelton Bank are subject.
(o) Shelton Bank is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of the Code.
(p) No stock of Webster Bank actually will be issued in the Shelton Bank
Merger.
Opinion - Federal Income Tax Consequences
Based upon and subject to the foregoing, it is our opinion that for federal
income tax purposes the following will result:
Opinions in Connection with the Charter Conversion
(1) For federal income tax purposes, the Charter Conversion will constitute
a mere change in the identity, form, or place of organization of Bristol and
therefore will qualify as a reorganization within the meaning of section
368(a)(1)(F) of the Code. Bristol and Webster Bank will each be "a party to a
reorganization" within the meaning of section 368(b).
(2) Bristol will recognize no gain or loss upon the deemed transfer of its
assets to Webster Bank in exchange solely for Webster Bank common stock and the
assumption by Webster Bank of the liabilities of Bristol (sections 361 and
357(a)).
(3) No gain or loss will be recognized by Webster Bank on receipt of
Bristol's assets in exchange for Webster Bank's common stock (section 1032(a)).
(4) The basis of Bristol's assets in the hands of Webster Bank will be the
same as the basis of those assets in the hands of Bristol immediately prior to
the transaction (section 362(b)).
(5) The holding period of the assets of Bristol in the hands of Webster
Bank will include the period during which such assets were held by Bristol
(section 1223(2)).
(6) No gain or loss will be recognized to Webster upon the receipt of
Webster Bank's common stock in exchange for its Bristol common stock (section
354(a)(1)).
(7) The basis of the Webster Bank common stock to be received by Webster
will be the same as the basis of the Bristol common stock surrendered in
exchange therefor (section 358(a)(1)).
(8) The holding period of the Webster Bank common stock received by Webster
will include the period during which the Bristol shares surrendered therefor
were held, provided that the Bristol shares are held as a capital asset on the
date of the exchange (section 1223(1)).
(9) Webster Bank will be treated, for purposes of section 381, just as
Bristol would have been treated if there had been no reorganization. Thus, a net
operating loss of Bristol for any tax year ending after the date of transfer
shall be carried back in accordance with section 172(b) in computing the taxable
income of Bristol for a tax year ending before the date of transfer and the tax
attributes enumerated in section 381(c) shall be taken into account by Webster
Bank as if there had been no reorganization (section 1.381(b)-1(a)(2) of the
Income Tax Regulations).
Opinions in Connection with the First Federal Merger
(1) For federal income tax purposes, the First Federal Merger will
constitute a reorganization within the meaning of section 368(a)(1)(D) of the
Code. First Federal and Webster Bank will each be "a party to a reorganization"
within the meaning of section 368(b) of the Code.
(2) First Federal will recognize no gain or loss upon the transfer of its
assets to Webster Bank solely in constructive exchange for Webster Bank stock
and Webster Bank's assumption of First Federal's liabilities (sections 357(a)
and 361(a)). 1/
(3) Webster Bank will recognize no gain or loss on its receipt of the
assets of First Federal in constructive exchange for Webster Bank stock (section
1032(a)).
(4) Webster Bank's basis in the First Federal assets received in the First
Federal Merger will equal the basis of such assets in the hands of First Federal
immediately prior to the First Federal Merger (section 362(b)).
(5) Webster Bank's holding period of the First Federal assets received in
the First Federal Merger will include the period during which such assets were
held by First Federal immediately prior to the First Federal Merger (section
1223(2)).
(6) Webster will recognize no gain or loss on its constructive exchange of
shares of First Federal stock for Webster Bank stock (section 354(a)).
(7) Webster's basis in the Webster Bank stock held immediately after the
First Federal Merger will equal the sum of the basis of such stock immediately
prior to the First Federal Merger plus the basis in the hands of Webster of the
First Federal stock canceled in the First Federal Merger (section 358(a)(1)).
Opinions in Connection with the Acquisition Merger and the Shelton Merger
(1) For federal income tax purposes, the Acquisition Merger and the Shelton
Merger will be considered either a merger of Shelton into Webster or an
acquisition by Webster, in exchange for its voting common stock, of
"substantially all of the assets" of Shelton. (Rev. Rul. 67-274, 1967-2 C.B. 141
and Rev. Rul. 72-405, 1972-2 C.B. 217). For purposes of this opinion,
"substantially all" means 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
of Shelton. Webster and Shelton will each be a "party to a reorganization"
within the meaning of section 368(b) of the Code.
(2) The Acquisition Merger and the Shelton Merger will constitute a
reorganization within the meaning of section 368(a)(1)(A) or 368(a)(1)(C) of the
Code.
(3) No gain or loss will be recognized by Shelton on the transfer of
substantially all of its assets to Webster and the assumption of Shelton's
liabilities by Webster (sections 357(a) and 361(b)).
(4) No gain or loss will be recognized by Webster on the receipt of the
assets of Shelton in exchange for Webster voting common stock (section 1032(a)).
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1/ This assumes, as represented above, that the fair market value of the assets
of First Federal transferred to Webster Bank in the First Federal Merger will
equal or exceed the sum of the liabilities assumed by Webster Bank, plus the
amount of liabilities, if any, to which the transferred assets are subject.. If
this is not the case, and such liabilities exceed such assets, then First
Federal would recognize gain in an amount equal to such excess (section 357(c)).
(5) The basis of the assets of Shelton in the hands of Webster will be the
same as the basis of such assets in the hands of Shelton immediately prior to
the exchange (section 362(b)).
(6) The holding period of the assets of Shelton in the hands of Webster
will include the holding period during which such assets were held by Shelton
(section 1223(2)).
(7) No gain or loss will be recognized by Shelton upon the distribution to
its shareholders of the Webster common stock pursuant to the Agreement (section
361(c)).
(8) Except as provided in (11) below, no gain or loss will be recognized by
the shareholders of Shelton upon the receipt of Webster voting common stock
solely in exchange for their shares of Shelton stock (section 354(a)(1)).
(9) The basis of Webster voting common stock (including any fractional
share interest to which they will be entitled) received by the shareholders of
Shelton will be the same as the basis of the Shelton stock surrendered in
exchange therefor (section 358(a)(1)).
(10) The holding period of the Webster voting common stock (including any
fractional share interest to which they will be entitled) received by the
shareholders of Shelton in the exchange will include the holding period of the
Shelton stock surrendered in exchange therefor, provided the Shelton stock was
held as a capital asset by the shareholders of Shelton on the date of the
exchange (section 1223(1)).
(11) The payment of cash in lieu of fractional share interests of Webster
voting common stock will be treated as if the fractional shares were distributed
as part of the exchange and then were redeemed by Webster. These cash payments
will be treated as having been received as distributions in full payment in
exchange for the stock redeemed as provided in section 302(a) of the Code (Rev.
Rul. 66-365, 1966-2 C.B. 116 and Rev. Proc. 77-41, 1977-2 C.B. 574).
Opinions in Connection with the Shelton Bank Merger
(1) For federal income tax purposes, the Shelton Bank Merger will
constitute a reorganization within the meaning of section 368(a)(1)(D) of the
Code. Shelton Bank and Webster Bank will each be "a party to a reorganization"
within the meaning of section 368(b) of the Code.
(2) Shelton Bank will recognize no gain or loss upon the transfer of its
assets to Webster Bank solely in constructive exchange for Webster Bank stock
and Webster Bank's assumption of Shelton Bank's liabilities (sections 357(a) and
361(a)). 2/
(3) Webster Bank will recognize no gain or loss on its receipt of the
assets of Shelton Bank in constructive exchange for Webster Bank stock (section
1032(a)).
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2/ This assumes, as represented above, that the fair market value of the assets
of Shelton Bank transferred to Webster Bank in the Shelton Bank Merger will
equal or exceed the sum of the liabilities assumed by Webster Bank, plus the
amount of liabilities, if any, to which the transferred assets are subject.. If
this is not the case, and such liabilities exceed such assets, then Shelton Bank
would recognize gain in an amount equal to such excess (section 357(c)).
(4) Webster Bank's basis in the Shelton Bank assets received in the Shelton
Bank Merger will equal the basis of such assets in the hands of Shelton Bank
immediately prior to the Shelton Bank Merger (section 362(b)).
(5) Webster Bank's holding period of the Shelton Bank assets received in
the Shelton Bank Merger will include the period during which such assets were
held by Shelton Bank immediately prior to the Shelton Bank Merger (section
1223(2)).
(6) Webster will recognize no gain or loss on its constructive exchange of
shares of Shelton Bank stock for Webster Bank stock (section 354(a)).
(7) Webster's basis in the Webster Bank stock held immediately after the
Shelton Bank Merger will equal the sum of the basis of such stock immediately
prior to the Shelton Bank Merger plus the basis in the hands of Webster of the
Shelton Bank stock canceled in the Shelton Bank Merger (section 358(a)(1)).
Our opinions set forth above are based upon the description of the proposed
transaction found in the section captioned "The Proposed Transactions." If the
actual facts relating to any aspect of the transactions differ from this
description in any material respect, our opinion may become inapplicable.
Further, our opinion is based upon the Code, the Income Tax Regulations,
interpretations made by the Internal Revenue Service, and judicial precedents as
of the date hereof. If there is any change in the applicable law as reflected in
these sources, our opinion may become inapplicable.
We hereby consent to the filing of this opinion letter as Exhibit 8 to the
Registration Statement and to the reference to this firm in the Prospectus
constituting a part of the Registration Statement. In giving this consent, we do
not admit that we are an "expert" within the meaning of the Securities Act of
1933, as amended.
Sincerely yours,
/s/ Hogan & Hartson L.L.P.
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Hogan & Hartson
L.L.P.