Exhibit 8
SHATSWELL, MacLEOD & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
174 SOUTH BOULEVARD
WEST SPRINGFIELD, MASSACHUSETTS 01089
July 15, 1997
Mr. James D. Carey
Executive Vice President
Slade's Ferry Bancorp
100 Slade's Ferry Avenue
Somerset, Massachusetts 02726
Dear Mr. Carey:
RE: Federal Income Tax Consequences
to Slade's Ferry Bancorp and the
Participating Shareholders in
the Dividend Reinvestment
and Common Stock Purchase
Plan
This letter is in reply to your request that our firm render an
opinion with regard to the federal income tax consequences to Slade's Ferry
Bancorp and its shareholders upon participation in the Dividend Reinvestment
and Common Stock Purchase Plan of Slade's Ferry Bancorp. The facts
pertaining to the Plan as submitted by the management of Slade's Ferry
Bancorp for our consideration are set forth below.
Description of The Plan
-----------------------
Slade's Ferry Bancorp (herein after referred to as the Company) is a
corporation, duly organized and validly existing under the laws of the
Commonwealth of Massachusetts, with its principal office at 100 Slade's
Ferry Avenue, Somerset, Massachusetts 02726. The authorized capital stock
of Weetamoe Bancorp consists of 5,000,000 shares of common stock of $.01 par
value. 3,208,143.865 shares are outstanding as of the date of this letter.
In order to provide the shareholders of the Company with a convenient
method of acquiring additional shares of common stock of the Company without
incurring brokerage commissions or service charges, the Company has
established The Dividends Reinvestment and Common Stock Purchase Plan of
Slade's Ferry Bancorp. All shareholders, and only the shareholders, of the
Company are eligible to participate in the plan.
The purpose of the Slade's Ferry Bancorp Dividend Reinvestment and
Common Stock Purchase Plan (the "Plan) is to provide the Company's
shareholders the opportunity to reinvest their cash dividends in additional
shares of the Company's common stock; and, in addition, the opportunity to
elect to make optional cash payments to purchase additional shares of the
Company's common stock.
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A participant in the Plan may acquire additional shares of common
stock by authorizing automatic reinvestment of cash dividends and by making
optional cash payments without incurring any brokerage fees, service fees,
or commissions. Participants will receive a quarterly or monthly statement
setting forth the amount of dividends, the optional cash payments received,
the number of shares (full and fractional) purchased, the price per share
and the amount of shares held for the participant by the Company.
The Company will administer the Plan, keep a continuous record of each
participant's activities and issue a periodic statement of account to each
participant.
Any shareholder of the Company is eligible to participate in the Plan.
A shareholder may become a participant by filling out and signing the
authorization card and returning it to the Company directed to Shareholder
Services. A shareholder may become a participant at any time; however, the
authorization card must be received by Shareholder Services at least (2)
weeks prior to the dividend payment date on which the participant wants to
begin reinvesting. Participants will have all dividends on shares of
Company common stock held of record by them reinvested in additional shares
of the Company's common stock.
Reinvested dividends will be used to acquire newly issued shares of
common stock from the Company at a price equal to the average of the closing
bid and ask prices for the Company's common stock for the investment date as
quoted by A. G. Edwards & Sons, Inc.
The investment date for the acquisition of shares by dividend payment
will be the same date established by the Company as the dividend payment
date, normally January 15, April 15, July 15, and October 15. The
investment date for the acquisition of shares by optional cash payments will
be the 15th day of each month or the next business day if the 15th falls on
a Saturday, Sunday or holiday.
Any participant may at any time elect to make optional cash payments
for the purchase of additional shares of the Company's common stock by
completing an Optional Cash Payment remittance form and submitting it to
Shareholder Services at the Company's address together with a check payable
to Slade's Ferry Bancorp. Such optional cash payments must be in an amount
of not less than $100 and may not exceed a total of $5,000 in any calendar
year. Any optional cash payments received in an amount less than $100 or in
excess of $5,000 for the calendar years will be returned to participant.
Shareholders who are not participants in the Dividend reinvestment
Plan may not acquire additional shares through optional cash payments.
Optional cash payments will be utilized to purchase additional shares
of the Company's common stock monthly as of the investment date. In order
to be so invested, optional cash payments must be received by the Company no
later than the tenth day of the month. Optional cash payments received
after the deadline for the month will be held and invested on the next
investment date.
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No interest will be paid by the Company on optional cash payments held
pending investment.
Each participant's account will be credited with the number of shares
purchased by the dividend and/or the optional cash payment including
fractions computed to three decimal places.
Participants will receive a detailed statement of their Plan Account
from the Company as soon as possible following each dividend payment and
each optional cash investment transaction. This detailed statement will
show total cash dividends received, optional cash payments received, total
shares purchased, price paid per share and total shares held by the Company.
These statements should be retained by participants to determine the tax
cost basis for shares purchased.
A participant may withdraw from the Plan at anytime providing written
notice that he/she intends to withdraw to Slade's Ferry Bancorp, Attention:
Shareholder Services, P.O. Box 390, Somerset, MA 02726. If a participant
withdraws or if the Company terminates the Plan, certificates for whole
shares of common stock credited to the account of the participant under the
Plan will be issued and cash will be remitted to the participant for any
fractional share on the basis of the then current market price of the
Company's shares.
Certificates for shares of common stock acquired under the Plan will
not be issued to participants but will be registered in the name of the
Company as agent for the participants. This service protects against loss,
theft or destruction of stock certificates. The number of shares of common
stock credited to an account under the plan will be indicated on the
participant's statement of account.
Upon written request by a participant, certificates for any number of
whole shares credited to an account under the Plan will be issued to the
participant. Requests for the issuance of certificates should be mailed to
the Company to the attention of Shareholder Services. Certificates will be
issued in the participant's name as set in the Company's shareholder record.
Certificates for fractional shares of common stock will not be issued
under any circumstances.
Each participant will be entitled to vote all shares held under the
Plan for his or her account in addition to certificate shares held by the
participant directly.
In administering the Plan, the Company will not be liable for any act
done in good faith or any good faith omission to act, including without
limitation, any claim of liability arising out of fairlure to terminate a
participant's account upon such participant's death before receipt of notice
in writing of such death or with respect to any fluctuation in the market
value after any acquisition or sale of stock.
Participant's should be aware that the Company cannot assure a profit
or protect against a loss on the common stock purchased under the Plan.
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The Company cannot guarantee that dividends on shares of its common
stock may not be reduced or eliminated in the future.
The Company reserves the right to suspend, amend or terminate the Plan
at any time. All participants will receive prompt written notice of any
such action. Any material amendment to the Plan will require that a written
amendment to the Company's Registration Statement be filed with the
Securities and Exchange Commission.
If the Company terminates the Plan, certificates for whole shares of
common stock purchased for participants under the Plan will be issued to the
participants and the participants will receive back any unexpended cash
together with the then cash value of any fractional shares credited to their
account based on the current market value of those shares.
Opinion
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Based on the foregoing plan description, our opinion as to the federal
income tax consequences to the Company and the plan participants is as
follows:
1. No gain or loss will be recognized to the Company upon
reinvestment of cash dividends in common stock of the Company
nor from the issuance of new shares under the optional cash
payments provision of the Plan (Section 1032, I.R.C.).
2. At the time of reinvestment of a cash dividend under the Plan, a
participant will realize taxable income equal to the fair market
value of the shares acquired (Section 301(c), I.R.C.; Section
305(b), I.R.C.; Section 316(a), I.R.C.
3. The basis of the common stock acquired through reinvestment of
cash dividends or under the optional cash payments provision of
the Plan will be the fair market value at the date of acquisition
(Section 1012, I.R.C.)
4. The holding period of the common stock acquired under the Plan
will commence on the date the stock is acquired (Section 1223(6),
I.R.C.).
5. A participant will recognize gain or loss when shares and/or
fractional shares are sold or exchanged on behalf of a participant
upon the participant's withdrawal from the Plan or when a
participant sells or exchanges the shares after withdrawal from the
Plan (Section 1001, I.R.C.; Section 302, I.R.C.).
No opinion is expressed about the tax treatment of the Company or Plan
Participants under other provisions of the Internal Revenue Code and
regulations or about the tax treatment of any conditions existing at the
time of or effects resulting from the adoption of the Plan that are not
specifically covered by the above information.
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This opinion is based on existing statutes, regulations, proposed
regulations, Internal Revenue Service rulings and procedures, judicial and
administrative decisions and other matters of record. Unlike a tax ruling
from the National Office of the Internal Revenue Service, our opinion has no
official status of any kind. No guarantee can be given that the Internal
Revenue Service will not challenge or prevail in the event of audit. In
addition, the law upon which this opinion is based is subject to change and
no assurance can be given that any such change will not be applied
retroactively. Further, any change in the Plan as submitted to us may
result in an adverse change to or withdrawal of this opinion. No
application has been made to the Internal Revenue Service for a tax ruling.
This opinion is for the sole use of management and the board of
directors of Slade's Ferry Bancorp and the participating shareholders under
the Dividend Reinvestment and Common Stock Purchase Plan of Slade's Ferry
Bancorp.
Very truly yours,
/s/ Shatswell, MacLeod & Company, P.C.
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