EXHIBIT 8.1
[LETTERHEAD OF WARNER NORCROSS & JUDD LLP]
May 19, 1999
Old Kent Financial Corporation Pinnacle Banc Group, Inc.
111 Lyon Street N.W. 2215 York Road, Suite 306
Grand Rapids, Michigan 49503 Oak Brook, Illinois 60523
You have each requested our opinion regarding the federal income
tax consequences of the proposed affiliation of Pinnacle Banc Group, Inc.
("Pinnacle") with Old Kent Financial Corporation ("Old Kent") through the
proposed merger (the "Merger") of OKFC Merger Corporation ("MergerSub")
into Pinnacle under the terms of an Agreement and Plan of Merger dated as
of March 18, 1999 (the "Merger Agreement"), among Old Kent, MergerSub and
Pinnacle, followed by the liquidation of Pinnacle. Capitalized terms not
defined herein shall have the meanings ascribed to them in the Merger
Agreement.
MergerSub will be merged into Pinnacle under the laws of the
states of Michigan and Illinois and in accordance with the Merger
Agreement. In the Merger, all of the issued and outstanding shares of
Pinnacle Common Stock will be converted into shares of Old Kent Common
Stock. Immediately after the Merger, Pinnacle will be liquidated and
dissolved, and all of its assets and liabilities will be transferred to and
assumed by Old Kent. In addition, immediately following the Merger and the
liquidation and dissolution of Pinnacle, Old Kent intends to merge the bank
subsidiaries of Pinnacle, Pinnacle Bank and Pinnacle Bank of the Quad-
Cities, into Old Kent's bank subsidiary, Old Kent Bank.
This opinion is based upon facts regarding the Merger as
described in the Prospectus and Proxy Statement contained in the
Registration Statement, and on the following assumptions:
1. The fair market value of the Old Kent Common Stock to be
received by each Pinnacle stockholder will be approximately equal to
the fair market value of the Pinnacle Common Stock surrendered in the
exchange.
2. Old Kent has no plan or intention to reacquire any of the
Old Kent Common Stock issued in the transaction, other than purchases
of stock in the open market in the normal course of business executed
through an independent broker in which Old Kent is not aware of the
identity of any seller. Old Kent did not create and has not modified
its stock repurchase program in connection with the acquisition of
Pinnacle.
3. Old Kent will acquire at least 90% of the fair market value
of the net assets and at least 70% of the fair market value of the
gross assets held by Pinnacle immediately prior to the transaction.
For purposes of this assumption, amounts paid by Pinnacle to
dissenters, amounts used by Pinnacle to pay its reorganization
expenses, amounts paid by Pinnacle to shareholders who receive cash or
other property and all redemptions and distributions (except for
regular, normal dividends) made by Pinnacle immediately preceding the
transaction will be included as assets of Pinnacle held immediately
prior to the transaction.
4. Old Kent will acquire solely for voting stock property of
Pinnacle having a fair market value which is at least 80% of the fair
market value of all of the property of Pinnacle.
5. Old Kent has formed MergerSub solely for the purpose of the
acquisition transaction. MergerSub will not engage in any business
other than as necessary incident to its merger into Pinnacle.
6. Immediately after the Merger, Old Kent will liquidate and
dissolve Pinnacle as part of an overall plan for Old Kent to acquire
the assets of Pinnacle.
7. Old Kent has no plan or intention to sell or otherwise
dispose of any of the assets of Pinnacle acquired in the transaction,
except for dispositions made in the ordinary course of business or
transfers described in Section 368(a)(2)(C) of the Internal Revenue
Code of 1986, as amended (the "Code").
8. The liabilities of Pinnacle to be assumed by Old Kent and
the liabilities to which the assets of Pinnacle to be transferred are
subject were incurred by Pinnacle in the ordinary course of its
business.
9. Following the transaction, Old Kent will continue the
historic business of Pinnacle or use a significant portion of
Pinnacle's historic business assets in a business.
10. Each of Old Kent, Pinnacle, and the stockholders of Pinnacle
will pay their respective expenses, if any, incurred in connection
with the transaction.
11. There is no intercorporate indebtedness existing between Old
Kent and Pinnacle that was issued, acquired, or will be settled at a
discount.
12. No party to the transaction is an investment company as
defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.
13. Old Kent does not own, nor has it owned during the past five
years, any shares of the stock of Pinnacle.
14. On the date of the transaction, the fair market value of the
assets of Pinnacle will exceed the sum of its liabilities, if any, to
which the assets are subject.
15. Pinnacle 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.
16. None of the compensation or other payments received by any
stockholder-employees of Pinnacle will be separate consideration for
or allocable to, any of their shares of Pinnacle Common Stock; none of
the shares of Old Kent Common Stock received by any stockholder-
employees of Pinnacle will be separate consideration for, or allocable
to, any employment agreement; and the compensation paid to any
stockholder-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.
17. The payment of cash to Pinnacle stockholders in lieu of
fractional shares of Old Kent Common Stock will not be separately
bargained for consideration, but will be undertaken solely for the
purpose of avoiding the expense and inconvenience of issuing and
transferring fractional shares.
Based on the facts and assumptions set forth above, and subject
to the limitations and conditions identified in this opinion, it is our
opinion that the Merger of MergerSub into Pinnacle will be disregarded and
the acquisition of the stock of Pinnacle and its liquidation by Old Kent
will be treated for federal income tax purposes as the acquisition by Old
Kent of the substantially all of the assets of Pinnacle in exchange for Old
Kent Common Stock and the assumption by Old Kent of the liabilities of
Pinnacle followed by a distribution from Pinnacle to its stockholders of
the Old Kent Common Stock in exchange for their Pinnacle stock in a
transaction qualifying as a reorganization under Section 368(a)(1)(C) of
the Code. Pinnacle and Old Kent will each be "a party to a reorganization"
within the meaning of Section 368(b). In addition:
1. No gain or loss will be recognized by Old Kent upon the
receipt by Old Kent of the assets of Pinnacle in exchange for the Old
Kent Common Stock and the assumption by Old Kent of the liabilities of
Pinnacle.
2. The basis of the assets of Pinnacle to be received by Old
Kent will be the same as the basis of those assets in the hands of
Pinnacle immediately prior to the Merger.
3. Pinnacle will not recognize any gain or loss on the transfer
of its assets to Old Kent in exchange for Old Kent Common Stock.
4. The holding period of the assets of Pinnacle to be received
by Old Kent will include the holding period of those assets in the
hands of Pinnacle.
5. No gain or loss will be recognized by the stockholders of
Pinnacle who receive shares of Old Kent Common Stock in exchange for
all of their shares of Pinnacle Common Stock, except to the extent of
any cash received in lieu of a fractional share of Old Kent Common
Stock.
6. The basis of the Old Kent Common Stock (including fractional
share interests) to be received by stockholders of Pinnacle will, in
each instance, be the same as the basis of the respective shares of
Pinnacle Common Stock surrendered in exchange therefor.
7. The holding period of the Old Kent Common Stock to be
received by stockholders of Pinnacle will, in each instance, include
the period during which the Pinnacle Common Stock surrendered in
exchange therefor was held, provided that the Pinnacle Common Stock
was, in each instance, held as a capital asset in the hands of the
stockholders of Pinnacle at the date of the exchange.
We express no opinion about the tax treatment of the transaction
under other provisions of the Code and regulations or about the tax
treatment of any conditions existing at the time of, or the effects
resulting from, the Merger that are not specifically covered above.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to our firm in the
Registration Statement.
This opinion is rendered for the purposes of Item 21 of Form S-4
and Item 601 of Regulation S-K, may be relied upon only by you and the
Commission and may not be used, quoted or referred to or filed for any
other purpose without our prior written permission.
WARNER NORCROSS & JUDD LLP
By /S/ STEPHEN R. KRETSCHMAN
Stephen R. Kretschman, a Partner