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EXHIBIT 8.01
January 10, 1999
Board of Directors
Old National Bancorp
420 Main Street
Evansville, Indiana 47708
RE: Merger of ANB Corporation into Old National Bancorp and the
Exchange of Common Stock of ANB Corporation for Common Stock of
Old National Bancorp
Ladies and Gentlemen:
The Board of Directors of Old National Bancorp ("ONB") has requested
our opinion as to certain federal income tax consequences of a reorganization
involving ONB and ANB.
In summary, the proposed transaction involves the merger of ANB
Corporation ("ANB") with and into ONB ("Merger"), with ONB as the surviving
entity. The surviving entity shall be known as Old National Bancorp. Upon
consummation of the Merger, each of American National Bank & Trust Company of
Muncie, Peoples Loan & Trust Bank, Farmers State Bank of Union City, Ohio and
American National Trust and Investment Management Company will become a
wholly-owned subsidiary of ONB, and ANB Financial Planning Services, Inc. will
continue to be a wholly-owned subsidiary of American National Bank & Trust
Company of Muncie. In consideration of the Merger, ANB shareholders will receive
ONB common stock in exchange for their shares of ANB common stock.
FACTS
In connection with the Merger, the following facts have been provided
to us, and we have relied upon them for purposes of this opinion:
A. OLD NATIONAL BANCORP
ONB has its principal office at 420 Main Street, Evansville,
Vanderburgh County, Indiana 47708. ONB is a corporation duly incorporated and
existing under the laws of the State of Indiana and is a registered bank holding
company under the Bank Holding Company Act of 1956, as amended. As of June 30,
1999, ONB had 75,000,000 shares of voting, no par value common stock authorized,
of which
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approximately 46,200,000 shares were issued and outstanding. ONB common stock is
traded, and prices of ONB common stock are reported, on the Nasdaq National
Market System.
ONB also has 2,000,000 shares of Series A, no par value, preferred
stock authorized. The preferred stock has no stated dividend rate. No shares of
ONB preferred stock have been issued, and ONB presently has no intent and no
commitments to issue any of such shares. However, during the first fiscal
quarter of 1990, ONB declared and paid a dividend in the form of rights
("Rights") to purchase shares of its Series A preferred stock pursuant to a
Rights Agreement. One Right was issued for each outstanding share of ONB common
stock. Subsequent issuances of ONB common stock also included such Rights. Each
Right entitles the holder thereof, upon the occurrence of certain events
involving a change in control of ONB, to purchase from ONB 1/100 of a share of
the Series A preferred stock at an initial purchase price equal to $60.00,
subject to adjustment. Unless earlier exercised or redeemed, the Rights will
expire at the close of business on March 1, 2000. A Right is transferred
automatically with a transfer of each underlying share of ONB common stock, and
future issuances of ONB common stock will also include such Rights.
ONB maintains its accounting on a calendar year basis, and computes its
income under the accrual method of accounting. ONB is the parent corporation of
an affiliated group of subsidiaries consisting of three (3) operating banks, one
consumer finance company, one insurance company, one realty company, four (4)
Delaware business trusts and three (3) national trust companies ("ONB Group").
The ONB Group files a consolidated federal income tax return and will continue
to file consolidated federal income tax returns after the effective time of the
Merger.
B. ANB CORPORATION
ANB has its principal office at 120 West Charles Street, Delaware
County, Muncie, Indiana 47305. ANB is a corporation duly incorporated and
existing under the laws of the State of Indiana and is a registered bank holding
company under the Bank Holding Company Act of 1956, as amended. As of June 30,
1999, ANB had 20,000,000 shares of voting, $1.00 stated value common stock
authorized, of which approximately 5,445,995 shares were issued and outstanding.
ANB common stock is traded, and prices of ANB common stock are reported, on the
Nasdaq National Market System.
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ANB also has 250,000 shares of preferred stock authorized. The
preferred stock has no stated dividend rate. No shares of ANB preferred stock
have been issued, and ANB presently has no intent and no commitments to issue
any of such shares.
ANB maintains its accounting on a calendar year basis, and computes its
income under the accrual method of accounting. ANB is the parent corporation of
an affiliated group of subsidiaries consisting of three (3) operating banks and
one national trust company ("ANB Group"). The ANB Group files a consolidated
federal income tax return and will be included in the ONB Group consolidated
federal income tax return after the effective time of the Merger.
BUSINESS PURPOSES
The shareholders of ONB and the shareholders of ANB desire to
reorganize their stock interests to accomplish the following business
objectives, among others:
1. To obtain greater financial and managerial strength for future
growth and to achieve economies of scale and other operational
benefits.
2. To provide the shareholders of ANB an interest in a more
widely-held enterprise with potentially more marketable stock.
3. To allow ONB and the ANB Group to compete more effectively with
other banking organizations and to enable the ANB Group to provide
new and broader services to its customers.
PROPOSED TRANSACTION
As used herein, "Code" refers to the Internal Revenue Code of 1986, as
amended, and "Regulations" refers to regulations promulgated thereunder by the
Secretary of the Treasury, all as in effect as of the date of this opinion.
To accomplish the objectives specified above, ONB and ANB entered into
an Agreement of Affiliation and Merger, dated July 29, 1999 ("Agreement"). Under
the terms of the Agreement, ANB will merge with and into ONB. Upon consummation
of the Merger, each of American National Bank &
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Trust Company of Muncie, Peoples Loan & Trust Bank, Farmers State Bank of Union
City, Ohio and American National Trust and Investment Management Company will
become a wholly-owned subsidiary of ONB. At the effective time of the Merger,
each issued and outstanding share of ANB common stock will be converted into the
right to receive 1.3125 shares of ONB common stock, as adjusted for the 5% stock
dividend declared by Old National on December 9, 1999, and subject to further
adjustment, if any, as provided for in the Agreement.
No fractional shares of ONB common stock will be issued with respect to
fractional share interests arising from the exchange ratio specified above.
Rather, any shareholder of ANB entitled to a fractional share interest of ONB
common stock will receive cash in lieu thereof in an amount equal to the
fraction of a share of ONB common stock multiplied by the average of the per
share closing price of ONB common stock reported on the Nasdaq National Market
System for the final five (5) business days on which shares of ONB common stock
were traded immediately preceding the effective time of the Merger. The payment
of cash in lieu of fractional share interests of ONB common stock is solely for
the purpose of avoiding the expense and inconvenience to ONB of issuing
fractional shares of its common stock and does not represent separately
bargained-for consideration. No cash or other property, except for ONB common
stock and cash paid in lieu of fractional shares, will be allocated to the
shareholders of ANB.
The Agreement will be submitted to the shareholders of ANB for their
approval at a special meeting called and held in accordance with applicable law
and with ANB's Articles of Incorporation and By-Laws. The holders of a majority
of the outstanding shares of ANB common stock and a majority of the Board of
Directors of ANB must approve the Merger. Approval of the Merger by the
shareholders of ONB is not required or contemplated.
The Merger requires the prior approval of the Board of Governors of the
Federal Reserve System, The Indiana Department of Financial Institutions and The
Ohio Division of Financial Institutions. As of the date hereof, these approvals
have not been received.
The shares of ONB common stock will, when issued to shareholders of ANB
in accordance with the Agreement, be validly issued, fully paid and
nonassessable and registered under the Securities Act of 1933, as amended.
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ASSUMPTIONS
In connection with the Merger, we have relied upon the following
assumptions for the purpose of issuing this opinion:
1. The fair market value of the ONB common stock and other
consideration received by each ANB shareholder will be approximately equal to
the fair market value of the ANB common stock surrendered in the exchange.
2. There is no plan or intention by the shareholders of ANB who own
five percent (5%) or more of the outstanding shares of ANB common stock and, to
the best knowledge of ANB management, there is no plan or intention on the part
of the remaining shareholders of ANB, to sell, exchange or otherwise dispose of
a number of shares of ONB common stock received in the transaction that would
reduce the ANB shareholders' ownership of ONB common stock to be received in the
Merger to a number of shares having a value, as of the effective time of the
Merger, of less than fifty percent (50%) of the value of all of the formerly
outstanding common stock of ANB. For purposes of this assumption, shares of ANB
common stock exchanged for cash in lieu of fractional shares of ONB common stock
will be treated as outstanding ANB common stock at the effective time of the
Merger. Moreover, shares of ANB common stock and shares of ONB common stock held
by ANB shareholders and otherwise sold, redeemed, or disposed of prior or
subsequent to the Merger have been considered in making this assumption.
3. ONB has no plan or intention to reacquire any of its common stock
issued in the Merger. ONB may, however, acquire ONB common stock on a periodic
basis through purchases on an anonymous basis on the open market at open market
prices.
4. ONB has no plan or intention to sell or otherwise dispose of any
of the assets of ANB acquired in the Merger, except for dispositions made in the
ordinary course of business or transfers described in Section 368(a)(2)(C) of
the Code.
5. The liabilities of ANB assumed by ONB and the liabilities to which
the transferred assets of ANB are subject were incurred by ANB in the ordinary
course of its business.
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6. Following the Merger, ONB will continue the historic business of
ANB or use a significant portion of ANB's historic business assets in a
business.
7. ONB, ANB, and the shareholders of ANB will pay their respective
expenses, if any, incurred in connection with the Merger.
8. There is no intercorporate indebtedness existing between ONB and
ANB that was issued, acquired or will be settled at a discount.
9. No parties to the Merger are investment companies as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code.
10. ANB is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
11. The fair market value of the assets of ANB transferred to ONB will
equal or exceed the sum of the liabilities assumed by ONB plus the amount of
liabilities, if any, to which the transferred assets are subject.
12. The payment of cash in lieu of fractional shares of ONB common
stock resulting from the exchange ratio is solely for the purpose of avoiding
the expense and inconvenience to ONB of issuing fractional shares of ONB common
stock and does not represent separately bargained-for consideration. The total
cash consideration that will be paid in the Merger to the ANB shareholders
instead of issuing fractional shares of ONB common stock will not exceed one
percent (1%) of the total consideration that will be issued in the Merger to the
ANB shareholders in exchange for their shares of ANB common stock. The
fractional share interests of each ANB shareholder will be aggregated, and no
ANB shareholder will receive cash in an amount equal to or greater than the
value of one full share of ONB common stock.
13. None of the compensation received by any shareholder-employee of
ANB will be separate consideration for, or allocable to, any of their shares of
ANB common stock; none of the shares of ONB common stock received by any
shareholder-employee of ANB will be separate consideration for, or allocable to,
any employment agreement; and the compensation paid to any shareholder-employee
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of ANB will be for services actually rendered and will be commensurate with
amounts paid to third parties bargaining at arm's-length for similar services.
14. The shareholders of ANB (immediately before the Merger) receiving
shares of ONB common stock in the Merger will not own (immediately after the
Merger) more than fifty percent (50%) of the fair market value of ONB common
stock.
OPINION
Based solely upon the facts, assumptions and other information set
forth above, and so long as such facts, assumptions and other information are
true and correct on the date of the consummation of the Merger, it is our
opinion with respect to the Merger that:
1. Provided that the merger of ANB with and into ONB qualifies as a
statutory merger under applicable law, the proposed merger will
constitute a reorganization within the meaning of Section
368(a)(1)(A) of the Code.
2. ANB will recognize no gain or loss upon the transfer of all of its
assets to ONB in exchange for ONB common stock issued to ANB
shareholders, cash paid to ANB shareholders in lieu of fractional
shares of ONB common stock, and the assumption by ONB of all of
ANB's liabilities.
3. No gain or loss will be recognized by ONB on the receipt of the
assets of ANB in exchange for common stock of ONB.
4. The shareholders of ANB will recognize no gain or loss upon the
exchange of their shares of ANB common stock solely for shares of
ONB common stock.
5. The statements made under the caption "Federal Income Tax
Consequences" contained in the Proxy Statement Prospectus filed as
part of ONB's Registration Statement on Form S-4 relating to the
Merger, to the extent that they constitute matters of law or legal
conclusions, are correct in all material respects.
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The opinion expressed herein represents our conclusions as to the
application of existing federal income tax law to the facts as presented to us
relating to the Merger, and we give no assurance that changes in such law or any
interpretation thereof will not affect the opinion expressed by us. Moreover,
there can be no assurance that this opinion will not be challenged by the
Internal Revenue Service or that a court considering the issues will not hold
contrary to such opinion. We express no opinion on the treatment of the Merger
under the income tax laws of any state or other taxing jurisdiction. We assume
no obligation to advise you of any changes concerning the above, whether or not
deemed material, which may hereafter come or be brought to our attention. The
opinions expressed herein are a matter of professional judgment and are not a
guarantee of result.
This opinion is addressed to you and is solely for your use in
connection with the Merger and your role as members of your Board of Directors.
We assume no professional responsibility to any other person or entity
whatsoever, including, without limitation, any shareholder of ONB or shareholder
of ANB. Accordingly, the opinion expressed herein is not to be utilized or
quoted by, or delivered or disclosed to, in whole or in part, any other person,
corporation, entity or governmental authority without, in each instance, our
prior written consent.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference made to us in the Registration
Statement and the Prospectus forming a part thereof under the caption "Legal
Opinions". In giving this consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the Rules and Regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ KRIEG DeVAULT ALEXANDER & CAPEHART, LLP
KRIEG DeVAULT ALEXANDER & CAPEHART, LLP