EXHIBIT 8.1
[FORM OF TAX OPINION]
February __, 1998
German American Bancorp
711 Main Street
Box 810
Jasper, Indiana 47546
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."
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 February ___, 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,
8438
FORM OF REPRESENTATION CERTIFICATE
German American Bancorp ("German American"), German American
Holdings Corporation ("GAHC"), and Community Trust Bank
("Community") make the following representations to Leagre Chandler
& Millard to be used by Leagre Chandler & Millard 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 Leagre Chandler & Millard in
rendering its opinion and that any material inaccuracy in any of
the following representations may render the conclusions drawn in
the opinion of Leagre Chandler & Millard 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 own five percent or more of CSB Common Stock and 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 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. 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.
23. CSB 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, Community and GAHC, each
acting by an authorized officer with full corporate authority, have
executed and delivered this Representation Certificate to
Leagre Chandler & Millard as of the date written below.
GERMAN AMERICAN BANCORP
Date: ______________________ By____________________________
George W. Astrike,
Chairman of the Board and
Chief Executive Officer
GERMAN AMERICAN HOLDINGS
CORPORATION
Date: ______________________ By____________________________
George W. Astrike,
Chief Executive Officer
THE COMMUNITY TRUST BANK
Date: ______________________ By____________________________
Its___________________________
FORM OF REPRESENTATION CERTIFICATE
CSB Bancorp ("CSB") and The Citizens State Bank of Petersburg
("Citizens") make the following representations to Leagre Chandler
& Millard to be used by Leagre Chandler & Millard 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 Leagre Chandler & Millard in rendering its
opinion and that any material inaccuracy in any of the following
representations may render the conclusions drawn in the opinion of
Leagre Chandler & Millard 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 own one percent or more of CSB Common Stock 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
that would result in German American losing control,
respectively, of CSB or Citizens.
5. 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, 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. 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. 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 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. 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.
15. 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.
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 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.
17. 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.
18. CSB 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, CSB and Citizens, each acting by an
authorized officer with full corporate authority, have executed and
delivered this Representation Certificate to Leagre Chandler &
Millard as of the date written below.
CSB BANCORP
Date: ______________________ By____________________________
Its___________________________
THE CITIZENS STATE BANK OF
PETERSBURG
Date: ______________________ By____________________________
Its___________________________