EXHIBIT 8.1
FORM OF OPINION OF TUCKER ARENSBERG, P.C.
[DRAFT]
_______________, l998
First Commonwealth Financial Corporation
Old Courthouse Square
22 North Sixth Street
Indiana, Pennsylvania 15701
Southwest National Corporation
111 S. Main Street
Greensburg, Pennsylvania 15601
Ladies and Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences of the proposed merger of Southwest National Corporation
("Southwest") with and into First Commonwealth Financial Corporation ("First
Commonwealth").
FACTS
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First Commonwealth is a bank holding company incorporated under the laws of
the Commonwealth of Pennsylvania. First Commonwealth's principal bank
subsidiaries are First Commonwealth Bank, a Pennsylvania banking corporation
headquartered in Indiana, Pennsylvania and First Commonwealth Trust Company, a
Pennsylvania trust company headquartered in Indiana, Pennsylvania (collectively,
the "First Commonwealth Banking Subsidiaries"). Through the First Commonwealth
Banking Subsidiaries, First Commonwealth is engaged in the business of providing
commercial banking services and consumer financial services, including retail
banking, trust and investment management services. First Commonwealth also has
two additional subsidiaries, Commonwealth Systems Corporation and BSI Financial
Services, Inc., which provide related financial services.
Southwest is a bank holding company incorporated under the laws of the
Commonwealth of Pennsylvania. Southwest's principal subsidiary is Southwest
National Bank of Pennsylvania ("Southwest Bank"), a national banking
association. Southwest Bank provides a wide variety of services, including
secured and unsecured financing, real estate financing, retail banking services,
as well as the offering of asset management and fiduciary services.
The terms of the proposed merger (the "Merger") are contained in the
Agreement and Plan of Merger dated as of July 15, 1998 by and between Southwest
National Corporation and First Commonwealth Financial Corporation (the "Merger
Agreement"). Concurrently with and as a condition to entering into the Merger
Agreement, First Commonwealth and Southwest entered into a Stock Option
Agreement dated as of July 15, 1998 (the "Stock Option Agreement"), pursuant to
which Southwest has granted to First Commonwealth the option to purchase shares
of Southwest Common Stock. Exercise of the options is contingent upon the
occurrence of specified events described therein.
First Commonwealth
Financial Corporation
Southwest National Corporation
, 1998
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Page 2
The Merger Agreement and the Stock Option Agreement are collectively
referred to as the "Agreements." Terms not otherwise defined in this letter
shall have the meanings assigned to them in the Merger Agreement.
You have directed us to assume in preparing this opinion that (1) the
Merger will be consummated in accordance with the terms, conditions and other
provisions of the Agreements, and (2) all of the factual information,
descriptions, representations and assumptions set forth or referred to in this
letter, in the letters to us from First Commonwealth dated __________, 1998, and
from Southwest dated __________, 1998 (the "Letters") and in the Joint Proxy
Statement/Prospectus dated __________, 1998 (the "Joint Proxy
Statement/Prospectus") and mailed to Southwest and First Commonwealth
shareholders in connection with the special meetings of shareholders to approve
the Merger, are accurate and complete and will be accurate and complete at the
Effective Time.
We have examined the documents referred to above and the originals, or
copies certified or otherwise identified to our satisfaction of such records,
documents, certificates or other instruments and made such other inquiries as in
our judgment are necessary or appropriate to enable us to render the opinions
set forth below. We have not independently verified any factual matters
relating to the Merger with or apart from our preparation of this opinion and,
accordingly, our opinion does not take into account any matters not set forth
herein which might have been disclosed by independent verification.
The Merger will be approved as required by law by the Southwest
shareholders at a special meeting to be held on __________, 1998, and by the
First Commonwealth shareholders at a special meeting to be held on __________,
1998. Holders of Southwest and First Commonwealth stock are not entitled to
exercise dissenters' rights with respect to the Merger.
Subject to the terms and conditions of the Merger Agreement and in
accordance with the Pennsylvania Business Corporation Law, at the Effective
Time, Southwest will merge with and into First Commonwealth. First Commonwealth
will be the surviving entity in the Merger, and will continue its corporate
existence under Pennsylvania law under the name "First Commonwealth Financial
Corporation." At the Effective Time, the separate corporate existence of
Southwest will terminate. The First Commonwealth Articles of Incorporation, as
in effect immediately prior to the Effective Time, will be the Articles of
Incorporation of the Continuing Corporation, and the By-Laws of First
Commonwealth, as in effect immediately prior to the Effective Time, will be the
By-Laws of the Continuing Corporation.
Upon consummation of the Merger, except as described below, each
outstanding share of Southwest Common Stock, other than shares held in
Southwest's treasury or held by First Commonwealth or any wholly-owned
subsidiary of First Commonwealth or Southwest (except in both cases for shares
held in trust, managed, custodial or nominee accounts and the like, or held by
mutual funds for which a subsidiary of First Commonwealth or Southwest acts as
investment advisor that, in any such case, are beneficially owned by third
parties ("Trust Account Shares") and shares acquired in respect of debts
previously contracted ("DPC Shares")), will be automatically converted into 2.9
fully paid and non-assessable shares of First
First Commonwealth
Financial Corporation
Southwest National Corporation
, 1998
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Page 3
Commonwealth Common Stock (except that cash will be paid in lieu of fractional
shares as described below), subject to possible increase in the rate of exchange
in certain limited circumstances. Any shares of Southwest Common Stock owned
immediately prior to the Effective Time by First Commonwealth, Southwest or
their wholly-owned subsidiaries (other than Trust Account Shares and DPC Shares)
will be cancelled. All shares of First Commonwealth Common Stock owned
immediately prior to the Effective Time by Southwest (other than Trust Account
Shares and DPC Shares) will become treasury stock of First Commonwealth.
Southwest owns no First Commonwealth Common Stock, and First Commonwealth owns
no Southwest Common Stock. The Exchange Ratio was determined through arm's-
length negotiations between First Commonwealth and Southwest.
No fractional Shares of First Commonwealth Common Stock will be issued in
the Merger. Each holder of Southwest Common Stock who otherwise would be
entitled to receive a fraction of a share of First Commonwealth Common Stock
will receive, instead, cash equal to such fraction multiplied by the market
value of one share of First Commonwealth Common Stock at the Effective Time. The
market value of one share of First Commonwealth Common Stock at the Effective
Time will be the average of the closing prices of such stock on the New York
Stock Exchange ("NYSE") Composite Transactions Tape for the ten NYSE trading
days immediately preceding the Effective Time. Except for cash exchanged in
lieu of issuing fractional shares of First Commonwealth Common Stock, no cash
will be exchanged for shares of Southwest Common Stock or shares of First
Commonwealth Common Stock pursuant to the Merger. Except for the Stock Option
Agreement, no options to purchase Southwest Common Stock and no securities or
other instruments convertible into Southwest Common Stock will be outstanding at
the Effective Time.
We have also relied with your permission on the following additional
representations and/or assumptions and render such opinion subject to the
following limitations:
[INTENTIONALLY LEFT BLANK - TO BE COMPLETED AT A LATER DATE]
OPINION
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Assuming that the Merger is consummated in accordance with the terms and
conditions set forth in the Agreements and based on the facts set forth or
referred to in the Joint Proxy Statement/Prospectus, the Letters and this letter
(an advance copy of which has been provided to you), including all assumptions
and representations in any such documents, and subject to the qualifications and
other matters set forth herein, it is our opinion that for federal income tax
purposes:
1. The Merger will constitute a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
and Southwest and First Commonwealth will each be a party to that reorganization
within the meaning of Section 368(b) of the Code;
First Commonwealth
Financial Corporation
Southwest National Corporation
, 1998
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Page 4
2. To the extent Southwest Common Stock is exchanged pursuant to the
Merger for First Commonwealth Common Stock, no gain or loss will be recognized
by the shareholders of Southwest; and
3. Gain or loss, if any, will be recognized by Southwest shareholders upon
the receipt of cash in lieu of fractional shares of First Commonwealth Common
Stock.
Our opinion is limited to the foregoing federal income tax consequences of
the Merger, which are the only matters as to which you have requested our
opinion, and you must judge whether the matters addressed herein are sufficient
for your purposes. We do not address any other federal income tax consequences
of the Merger or other matters of federal law and have not considered matters
(including state or local tax consequences) arising under the laws of any
jurisdiction other than matters of federal law arising under the laws of the
United States.
Our opinion is based on the understanding that the relevant facts are, and
will be as of the Effective Time, as set forth or referred to in this letter. If
this understanding is incorrect or incomplete in any respect, our opinion could
be affected.
Our opinion is also based on the Code, Treasury Regulations, case law, and
Internal Revenue Service rulings and interpretations as they now exist. These
authorities are all subject to change and such change may be made with
retroactive effect. We can give no assurance that after any such changes our
opinion would not be different. Moreover, our opinion will not be binding on the
IRS or the courts,
We undertake no responsibility to update or supplement our opinion. Only First
Commonwealth and Southwest may rely on this opinion, and only with respect to
the proposed Merger described herein. We hereby consent to the filing of this
opinion as an exhibit to the Joint Proxy Statement/Prospectus and to the use of
our name under the captions "The Merger - Certain Federal Income Tax
Consequences" and "Legal Matters" in the Proxy Statement/Prospectus.
Very truly yours,
TUCKER ARENSBERG, P.C.