Exhibit 8.1
REED SMITH SHAW & McCLAY
435 Sixth Avenue
Pittsburgh, PA 15219-1886
June 17, 1994
United National Bancorporation
15 South Main Street
Chambersburg, Pennsylvania 17201
First Commonwealth Financial Corporation
Old Courthouse Square
P.O. Box 400
Indiana, Pennsylvania 15701-0400
Gentlemen:
United National Bancorporation, a Pennsylvania business corporation
("United"), and First Commonwealth Financial Corporation, a Pennsylvania
business corporation ("FCFC"), have requested our opinion as to certain tax
aspects of the proposed merger (the "Merger") of United into FCFC.
In the Merger, FCFC will be the surviving corporation and on the
effective date of the Merger each share of Common Stock, par value $2.50 per
share, of United (the "United Common Stock") will be converted into 2 shares of
Common Stock, par value $1 per share, of FCFC (the "FCFC Common Stock").
With your consent, we have acted as special counsel for United and
FCFC in connection with the preparation and execution of the Agreement and Plan
of Reorganization dated as of March 25, 1994 (the "Plan") between FCFC and
United, the related Plan of Merger dated March 25, 1994 between United and FCFC
and the Registration Statement of FCFC on Form S-4 to be filed with the
Securities and Exchange Commission.
You have represented to us that neither FCFC nor any of its
subsidiaries own any United Common Stock and neither United nor any of its
subsidiaries owns any FCFC Common Stock; and that to the best knowledge of the
managements of United and FCFC, there is no plan or intention on the part of the
United shareholders to sell or otherwise dispose of any significant amount of
FCFC Common Stock to be received in the Merger.
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Based upon the foregoing facts and representations and upon existing
law and regulations, as presently interpreted by judicial decisions and
administrative rulings, it is our opinion that:
Federal Income Tax
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(1) The Merger will constitute a reorganization under the provisions
of Section 368(a)(1)(A)of the Internal Revenue Code of 1986 (the "Code").
United and FCFC will each be a party to the reorganization within the
meaning of Section 368(b) of the Code.
(2) No gain or loss will be recognized to United upon the transfer of
substantially all of its assets to FCFC in exchange for FCFC Common Stock
and the assumption of all of United's liabilities by FCFC.
(3) No gain or loss will be recognized to FCFC upon the acquisition
by FCFC of substantially all of the assets of United in exchange for FCFC
Common Stock.
(4) The basis of the assets of United acquired by FCFC will be the
same in the hands of FCFC as the basis of such assets in the hands of
United immediately prior to the exchange.
(5) The holding period of the assets of United received by FCFC will,
in each instance, include the period during which such assets were held by
United.
(6) No gain or loss will be recognized to the United shareholders
upon the exchange of United Common Stock for FCFC Common Stock.
(7) The basis of the FCFC Common Stock to be received by the United
shareholders will be the same as the basis of the United Common Stock
surrendered in exchange therefor.
(8) The holding period of the FCFC Common Stock to be received by the
United shareholders will include the holding period of the United Common
Stock surrendered in exchange therefor, provided that the United Common
Stock was held as a capital asset in the hands of the United shareholders
on the date of the exchange.
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(9) Where a United shareholder dissents to the proposed transaction
and receives cash in exchange for his United Common Stock, the cash will be
treated as received by the shareholder as a distribution in redemption of
his United Common Stock subject to the provisions and limitations of
Section 302 of the Code.
(10) Cash received by a dissenting United shareholder as described in
paragraph (9) will be treated as if the shares had been sold to United for
the cash received and will generally be entitled to capital gain or loss
treatment under Section 302 of the Code, provided the shares are a capital
asset in the hands of the shareholder. However, because the ownership of
shares by certain individuals related to the shareholder and by certain
partnerships, estates, trusts and corporations in which the shareholder has
an interest may have an adverse impact upon the tax treatment of the cash
received by the shareholder and result in its being taxed as a dividend,
the shareholder should consult with his personal tax advisor as to the
federal, state and local tax consequences of receiving cash as a dissenting
shareholder.
Pennsylvania Personal Income Tax
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(11) No gain or loss will be recognized to the United shareholders
who are subject to the Pennsylvania Personal Income Tax upon the receipt by
them of FCFC Common Stock in exchange for their United Common Stock, and
the state tax basis for the FCFC Common Stock to be received by the United
shareholders will be the same as the state tax basis of the United Common
Stock surrendered in exchange therefor. Cash received by a dissenting
United shareholder who is subject to the Pennsylvania Personal Income Tax
will be treated as if he had sold his shares to United for the cash
received and taxed accordingly.
Pennsylvania Personal Property Tax
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(12) Shares of FCFC Common Stock to be received by the United
shareholders are exempt from county personal property taxes imposed in
Pennsylvania.
The foregoing opinions cover all material federal, Pennsylvania and
local Pennsylvania tax aspects and are based upon existing law and regulations,
as presently interpreted by judicial decisions and administrative rulings, all
of which are subject to change without notice and any such change might be
applied
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retroactively to the transactions contemplated by the Merger; and the foregoing
opinions do not address the federal or state income tax considerations that may
affect the treatment of a shareholder who acquired his United Common Stock
pursuant to an employee or nonemployee stock option. Accordingly, each United
shareholder should consult his personal tax advisor with specific reference to
his own tax situation and potential changes in the applicable law as to all
federal, state and local tax matters in connection with the Merger.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to us under the caption "Certain Tax
Aspects of the Merger" in the Proxy Statement/Prospectus forming a part of the
Registration Statement.
Very truly yours,
Reed Smith Shaw & McClay