EXHIBIT 8.1
HINSHAW & CULBERTSON
Belleville, Illinois Suite 300 Ft. Lauderdale, Florida
Bloomington, Illinois 222 North La Salle Street Jacksonville, Florida
Champaign, Illinois Chicago, Illinois 60601-1081 Miami, Florida
Joliet, Illinois Tampa, Florida
Lisle, Illinois 312.704.3000 Munster, Indiana
Peoria, Illinois _______ Minneapolis, Minnesota
Rockford, Illinois St. Louis, Missouri
Springfield, Illinois Telefax 312.704.3001 Appleton, Wisconsin
Waukegan, Illinois Brookfield, Wisconsin
March 3, 1998 Lake Geneva, Wisconsin
Milwaukee, Wisconsin
Writer's Direct Dial No. File No.
(312) 704-3712 764359
First Midwest Bancorp, Inc. Heritage Financial Services, Inc.
300 Park Boulevard 12015 South Western Avenue
Suite 405 Blue Island, Illinois 60406
Itasca, Illinois 60143-0459
Ladies and Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences of the proposed merger (the "Merger") of Heritage Financial
Services, Inc., an Illinois corporation ("Heritage"), with and into First
Midwest Acquisition Corporation, an Illinois corporation ("Acquisition Corp"), a
wholly owned subsidiary of First Midwest Bancorp, Inc., a Delaware corporation
("First Midwest"), followed by the immediate liquidation by merger of
Acquisition Corp with and into First Midwest, as described in the Registration
Statement on Form S-4 to be filed by First Midwest with the Securities and
Exchange Commission (the "Registration Statement"). This opinion is being
rendered pursuant to the requirements of Item 21(a) of Form S-4 under the
Securities Act of 1933, as amended.
In connection with this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified to our satisfaction,
of the following:
(i) the Agreement and Plan of Merger, dated as of January 14, 1998
(the "Agreement");
(ii) the Registration Statement;
(iii) the Amended and Restated Rights Agreement between First
Midwest and First Midwest Trust Company as rights agent, dated as of November
15, 1995;
(iv) First Amendment to Amended and Restated Rights Agreement between
First Midwest and First Midwest Trust Company as rights agent, dated as of June
18, 1997; and
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Heritage Financial Services, Inc.
March 3, 1998
Page 2
(v) the Heritage 1987 Stock Option Plan and the Heritage 1990
Executive Equity Incentive Plan.
Our opinion is based solely upon applicable law and the factual
information and undertakings contained in the documents mentioned above. In
rendering our opinion, we have assumed the accuracy of all information and the
performance of all undertakings contained in each such document. We have also
assumed the genuineness of all signatures, the legal capacity of all natural
persons, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified,
conformed, or photostatic copies, and the authenticity of the originals of such
copies. We have not attempted to verify independently the accuracy of any
information in any such document and we have assumed that such documents
accurately and completely set forth all material facts relevant to this option.
If any fact or assumption described herein is incorrect, any or all of the
federal income tax consequences described herein may be in applicable.
This opinion is subject to our receipt prior to the Effective Time (as
defined in the Agreement) of certain written representations and undertakings of
First Midwest, Heritage, and certain officers and directors of Heritage.
Based on and subject to the limitations and conditions identified
herein, it is our opinion that the Merger would give rise to the following
federal income tax consequences under the Internal Revenue Code of 1986, as
amended to the date hereof (the "Code"):
1. The Merger of Heritage with and into Acquisition Corp
followed by the complete liquidation of Acquisition Corp by
merger with and into First Midwest will not be accorded
independent significance, but rather will be disregarded.
Instead, the Merger followed by the liquidation of Acquisition
Corp will be treated as an acquisition by First Midwest of
substantially all the assets of Heritage in exchange for First
Midwest Common Stock (as defined in the Agreement) and will
constitute a reorganization within the meaning of section
368(a)(1) of the Code. Heritage and First Midwest will each be a
"party to a reorganization" within the meaning of section 368(b)
of the Code.
2. No gain or loss will be recognized by the shareholders of
Heritage who receive shares of First Midwest Common Stock in
exchange for all of their shares of Heritage Common Stock (as
defined in the Agreement), except to the extent of any cash
received in lieu of a fractional share of First Midwest Common
Stock.
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Heritage Financial Services, Inc.
March 3, 1998
Page 3
3. No gain or loss will be recognized by First Midwest or
Heritage, as parties to a reorganization.
4. The aggregate adjusted basis of First Midwest Common Stock
to be received by shareholders of Heritage will, in each
instance, be the same as the aggregate adjusted basis of the
respective shares of Heritage Common Stock surrendered in
exchange therefor (reduced by any amount allocable to a
fractional share interest for which cash is received).
5. The holding period of the First Midwest Common Stock to be
received by shareholders of Heritage will, in each instance,
include the holding period of the respective shares of Heritage
Common Stock surrendered in exchange therefor, provided the
Heritage Common Stock was, in each instance, held as a capital
asset in the hands of the shareholder of Heritage on the
effective date of the Merger.
6. A Heritage shareholder who receives cash in lieu of a
fractional share of First Midwest Common Stock will generally
recognize gain or loss equal to the difference, if any, between
the amount of cash received and such Heritage shareholder's
adjusted tax basis in the fractional share interest.
We express no opinion as to (1) the federal income tax consequences of
the Merger not addressed expressly by this opinion, including without limitation
(i) the tax consequences, if any, to those shareholders of Heritage who acquired
shares of Heritage Common Stock pursuant to the exercise of employee stock
options or otherwise as compensation, and (ii) the tax consequences to special
classes of shareholders, if any, including without limitation, foreign persons,
insurance companies, tax-exempt entities, retirement plans, and dealers in
securities; and (2) federal, state, local, or foreign taxes (or any other
federal, state, local, or foreign laws) not specifically referred to and
discussed herein. Further, we express no opinion as to the federal income tax
consequences of the Merger upon any deferred intercompany income or loss of any
member of the consolidated group of which Heritage is the common parent.
Our opinion is based the Code, Treasury regulations proposed or
promulgated thereunder, and administrative and judicial precedents relating
thereto, all of which are subject to change at any time, possibly with
retroactive effect, and we undertake no obligation to advise you of any
subsequent change thereto. If there is any change in the applicable law or
regulation, or if there is any new administrative or judicial interpretation of
the applicable law or regulations, any or all of the federal income tax
consequences described herein may be inapplicable.
This opinion reflects our legal judgment solely on the issues
presented and discussed herein. This opinion has no official status or binding
effect of any kind. Accordingly, we cannot
First Midwest Bancorp, Inc.
Heritage Financial Services, Inc.
March 3, 1998
Page 4
assure you that the Internal Revenue Service or any court of competent
jurisdiction will agree with this opinion.
This opinion is being furnished to you solely for use in connection
with the Registration Statement. We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement. We also consent to the references
to Hinshaw & Culbertson under the heading "Certain Federal Income Tax
Consequences of the Merger" in the Registration Statement and the Joint Proxy
Statement/Prospectus.
Very truly yours,
HINSHAW & CULBERTSON