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EXHIBIT 8 - TAX OPINION
[WERNER & BLANK CO. L.P.A. LETTERHEAD]
September 30, 1998
Board of Directors
Killbuck Bancshares, Inc.
165 N. Main Street
Killbuck, OH 44637
and
Board of Directors
Commercial and Savings Bank Co.
701 S. Market St.
Danville, OH
Ladies and Gentlemen: You have requested our opinion as to the federal income
tax consequences of the transactions contemplated by a certain Merger Agreement
dated as of April 13, 1998, by and between Killbuck Bancshares, Inc.
("Killbuck") and Commercial and Savings Bank Co. ("Commercial"), hereinafter
referred to as the "Agreement." Our opinion is made in reliance upon and is
limited to the following facts and circumstances:
FACTS
Commercial is an Ohio corporation, is a registered bank holding company and is
located in Danville, Ohio. Killbuck is an Ohio corporation, is a registered bank
holding company and is located in Killbuck, Ohio.
Killbuck and Commercial have only common shares outstanding. Commercial is to be
merged into Killbuck, under the Articles of Incorporation of Killbuck and in
compliance with applicable Ohio law.
Each share of Commercial common stock outstanding on the effective date of the
transaction will be converted into shares of common stock of Killbuck as
provided by the Agreement. The effect of the consummation of the transaction and
the exchange of shares will be that shareholders of Commercial will become
shareholders of Killbuck, and Killbuck will own all of the outstanding common
stock of Commercial.
The business of Commercial and Killbuck (and affiliates) will continue
substantially unchanged after the effective date of the transaction.
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No fractional shares will be issued in the transaction. In lieu thereof, holders
otherwise entitled to receive such fractional shares will be issued cash.
We are not aware, and have been advised by the management of Commercial that
they have no knowledge, of any plan or intention on the part of shareholders of
Commercial to sell or otherwise dispose of an amount of the Killbuck shares to
be received in the transaction, which could reduce Commercial's shareholders
ownership of Killbuck shares after the merger of Commercial and Killbuck to
shares having an aggregate value as of the effective date of the transaction, of
less than fifty percent (50%) of the value of all the formerly outstanding
shares of Commercial as of the same date.
The transaction will be carried out pursuant to and in accordance with all
applicable corporate and banking laws relating to the transaction. On the
effective date, Killbuck will succeed to all assets of Commercial and will be
liable for the liabilities of Commercial then existing or arising as a result of
the transactions.
Following the consummation of the transaction resulting in the merger of
Commercial with and into Killbuck, Killbuck will continue to operate the
business of Commercial and its existing affiliates in substantially the same
manner.
Arms-length negotiations were carried on between the management of Killbuck and
management of Commercial which led to the Agreement and fixed the terms of the
transaction. Consideration was given to both financial and nonfinancial factors
involved in the transaction and the business benefits from the transaction were
discussed and considered by the parties.
In the opinion of the management of Killbuck and Commercial, its employees and
customers will benefit from the affiliation. It is also expected that the
transaction will better enable the resulting corporation to compete with other
financial institutions.
OPINION
Based upon the above, it is our opinion that the Agreement will have the
following federal income tax consequences:
1. The merger of Commercial with and into Killbuck will constitute a
"Statutory Merger" within the meaning of Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended, and Commercial and Killbuck will
each be a "party to a reorganization" within the meaning of Section 368(b).
2. No gain or loss will be recognized by Commercial as a result of the
transfer of its assets to and the assumption of its liabilities by
Killbuck. Section 361(a) and 357(a).
3. No gain or loss will be recognized by Commercial's shareholders who
exchange their respective shares solely for Killbuck shares. Section
354(a).
4. The basis of the Killbuck shares received by Commercial's shareholders in
exchange for their shares will be the same as the basis in the shares
exchanged therefor, respectively. Section 358(a).
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5. The holding period of the Killbuck shares received by Commercial's
shareholders will include the period during which shares exchanged therefor
were held, provided such shares were held as a capital asset.
Section 1223(1).
6. The payment of cash in lieu of fractional shares for the purpose of
mechanically rounding off the fractions resulting from the exchange, will,
in each instance, constitute a distribution not essentially equivalent to a
dividend within the meaning of Section 302(b)(1) of the Internal Revenue
Code of 1986, as amended. The amount received will be treated as a
distribution in full payment in exchange for the shareholders' fractional
share of interest under Section 302(a) of the Code.
7. Gain or loss will be recognized by each Commercial shareholder who dissents
and receives only cash in exchange for all of the shares owned by them.
This letter is solely for your information and use, and except: (i) for its
reliance upon by Killbuck, Commercial and their respective shareholders; and
(ii) to the extent that such may be referred to in the Proxy
Statement-Prospectus to be distrubuted to the shareholders of Killbuck and
Commercial and in the related Registration Statement to be filed with the
Securities and Exchange Commission as an exhibit to same, it is not to be used,
circulated, quoted or otherwise referred to for any other purpose, or relied
upon by any other person, for whatever reason without our prior written consent.
Very truly yours,
/s/ Werner & Blank Co., LPA
Werner & Blank Co., L.P.A.