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EXHIBIT 8.1
[Letterhead of Arnold & Porter]
[Form of Tax Opinion]
July 28, 2000
M&T Bank Corporation
One M&T Plaza
Buffalo, New York 14203
Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax
consequences of the proposed merger (the "Merger") of Keystone Financial, Inc.
("Keystone") with and into Olympia Financial Corp. ("Olympia"), a wholly owned
subsidiary of M&T Bank Corporation ("M&T").
In preparing our opinion, and with your permission, we have assumed (1)
that the Merger will be consummated in accordance with the terms, conditions and
other provisions of the Agreement and Plan of Reorganization by and among
Keystone, M&T and Olympia, dated as of May 16, 2000 (the "Reorganization
Agreement"), the Agreement and Plan of Merger by and between Keystone and
Olympia and joined in by M&T as of May 16, 2000 (the "Plan of Merger"), and the
Option Agreement,(1) and (2) that all of the factual information, descriptions,
representations and assumptions set forth or referred to (a) in this letter (an
advance copy of which has been provided to you), (b) in the Reorganization
Agreement, the Plan of Merger and the Option Agreement (the "Agreements"), (c)
in letters to us from M&T and Olympia dated July 28, 2000, and from Keystone
dated July 28, 2000 (the "Letters"), and (d) in the Prospectus/Proxy Statement
prepared in connection with the Merger, are accurate and complete and will be
accurate and complete as of the effective time of the Merger ("Effective Time").
We have not independently verified any factual matters relating to the
Merger in connection with or apart from our preparation of this opinion.
Accordingly, our opinion does not take into account any matters not set forth
herein which might have been disclosed by independent verification.
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(1) Terms not otherwise defined in this letter shall have the meanings assigned
to them in the Reorganization Agreement.
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OPINION
Based on the foregoing, 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 be treated as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code");
2. Keystone, M&T and Olympia will each be a party to the
reorganization within the meaning of Section 368(b) of the Code;
3. No gain or loss will be recognized by M&T, Olympia or Keystone as
a result of the merger (except for amounts resulting from any
required change in accounting methods or any income or deferred
gain recognized under the relevant consolidated return
regulations);
4. Keystone shareholders who receive only M&T common stock for all of
their shares of Keystone stock will not recognize any gain or loss
with respect to shares of M&T stock received (except with respect
to cash received instead of a fractional share interest in M&T
common stock);
5. Each Keystone shareholder who receives M&T common stock and cash
(other than cash instead of a fractional share interest in M&T
common stock) in exchange for the shareholder's shares of Keystone
common stock will recognize the gain, if any, realized by the
shareholder, in an amount not in excess of the amount of cash
received, but will not recognize any loss on the exchange;
6. Each Keystone shareholder's aggregate tax basis in any shares of
M&T common stock received in the transaction (including fractional
shares deemed received and redeemed) will be the same as the
aggregate tax basis of the shares of Keystone common stock the
Keystone shareholder surrendered in exchange therefor, decreased
by the amount of any cash received by the shareholder and
increased by the amount of income or gain recognized by the
shareholder in the exchange; and
7. Each Keystone shareholder's holding period in any shares of M&T
common stock received in the transaction (including any fractional
shares deemed
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July 28, 2000
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received and redeemed) will, in each instance, include the period
during which the shares of Keystone common stock surrendered in
exchange therefor were held.
This opinion may not apply to a Keystone shareholder that is subject to
special treatment under the Code, such as a shareholder that is a financial
institution, an insurance company, a dealer in securities or foreign currencies,
a trader in securities, a tax-exempt organization, a person who holds shares of
Keystone common stock in an individual retirement account (IRA), 401(k) plan or
similar tax-favored account, a person who acquired shares of Keystone common
stock pursuant to the exercise of an employee stock option or otherwise as
compensation or a person who holds shares of Keystone common stock as part of a
hedge, straddle, conversion or constructive sale transaction.
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 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 change, our opinion would not be
different. Moreover, our opinion is not binding on the Internal Revenue Service
or the courts.
We undertake no responsibility to update or supplement this opinion. Our
opinion is issued to M&T. Only M&T may rely on our opinion, and only with
respect to the Merger described herein.
We hereby consent to the filing with the Securities and Exchange
Commission of this opinion as an exhibit to the Registration Statement on Form
S-4 and to the reference to our firm under the heading "THE MERGER -- Certain
Federal Income Tax Consequences" in the Prospectus/Proxy Statement contained
therein. In giving such
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consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act of 1933.
Very truly yours,
/s/ Arnold & Porter
ARNOLD & PORTER