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Exhibit 8.2
(216) 586-7248
[Closing Date], 2000
M.A. Hanna Company
Suite 36-500
200 Public Square
Cleveland, OH 44114-2304
Gentlemen:
You have requested our opinion regarding certain U.S. federal
income tax consequences to M.A. Hanna Company, a Delaware corporation ("Hanna"),
Hanna's stockholders, and certain other parties resulting from the consolidation
of Hanna, The Geon Company, a Delaware corporation ("Geon"), and [Consolidation
Corporation], an Ohio corporation ("Consolidation Corp.") with and into a
corporation to be formed under the laws of the State of Ohio ("Resulting
Corporation") pursuant to the Agreement and Plan of Consolidation (the
"Consolidation Agreement"), dated as of May 7, 2000, by and between Hanna and
Geon. This opinion is being delivered to you pursuant to Section 6.2(c) of the
Consolidation Agreement and addresses certain U.S. federal income tax
consequences to Hanna, its stockholders, Geon, Consolidation Corp., and
Resulting Corporation resulting from the Consolidation. Capitalized terms used
but not defined herein shall have the same meanings as ascribed to such terms in
the Consolidation Agreement.
For purposes of rendering the opinion that follows, we have
examined such existing documents and records of Hanna and Geon relating to the
matters described below as we have deemed necessary or appropriate, as well as
the Consolidation Agreement, other documents relating to the Consolidation, and
the Joint Proxy Statement sent to Hanna's and Geon's stockholders. We assume
that each of the documents that we examined in connection with this matter,
which is not a final or executed document or agreement, will be finalized or
executed in the form in which we have reviewed it. We confirm, also, that in
rendering our opinion herein, we have examined fully all such matters of law as
in our judgment we deemed necessary or appropriate to enable us to opine on the
questions that you have asked us to consider. In addition, with your permission,
we have assumed for purposes of this opinion that:
(1) The Consolidation will be consummated in accordance
strictly with the terms of the Consolidation
Agreement, in the form approved by the Boards of
Directors of Hanna and Geon on May 7, 2000 and
executed by an appropriate officer of each of Hanna
and Geon on that date.
(2) Immediately prior to the Effective Time,
Consolidation Corp. will be duly incorporated and
organized under Ohio law, and Hanna and Geon will
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M.A. Hanna Company
[Closing Date], 2000
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each own 50 percent of the shares of common stock of
Consolidation Corp., which will constitute the only
class of capital stock of Consolidation Corp. which
is outstanding. Prior to the Effective Time
Consolidation Corp. will not have engaged in any
business activity, will not have any liabilities, and
its only asset will consist of the consideration that
it received for the shares of its common stock which
Consolidation Corp. previously issued to Hanna and
Geon.
(3) The Consolidation was proposed, and will be
undertaken, by Hanna and Geon in order to further
their individual long-term business strategy of
becoming a world leader in the manufacture and sale
of performance polymer products and related services.
The Consolidation will enable Resulting Corporation
to achieve greater market access and to offer a more
complete selection of polymer products and
technologies than is currently attainable or
achievable by either Hanna or Geon functioning on
their own.
(4) Except for shares of Hanna Common Stock which certain
stockholders of Hanna sold to Hanna in open market
transactions during the period April 16 - [Closing
Date], 2000, to the knowledge of Hanna, no
stockholder of Hanna has entered into any plan or
arrangement, or otherwise taken any action, with
respect to any of the shares of Hanna Common Stock
which such stockholder owns, or at anytime owned
after April 15, 2000, or with respect to any of the
Resulting Corporation Shares with such stockholder
will be entitled to receive upon the effectiveness of
the Consolidation which would cause such stockholder,
following the Consolidation, to fail to preserve,
within the meaning of Treasury Regulation Section
1.368-1(e), "a substantial part of the value of the
proprietary interest" in Hanna which such stockholder
owned at anytime after April 15, 2000 and prior to
the Consolidation.
(5) To the knowledge of Geon, no stockholder of Geon has
entered into any plan or arrangement, or otherwise
taken any action, with respect to any of the shares
of Geon Common Stock which such stockholder owns, or
at anytime owned after April 15, 2000, or with
respect to any of the Resulting Corporation Shares
which such stockholder will be entitled to receive
upon the effectiveness of the Consolidation which
would cause such stockholder, following the
Consolidation, to fail to preserve, within the
meaning of Treasury Regulation Section 1.368-1(e), "a
substantial part of the value of the proprietary
interest" in Geon which such stockholder owned at
anytime after April 15, 2000 and prior to the
Consolidation.
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(6) Neither Hanna nor any person related to Hanna within
the meaning of Treasury Regulation Section 1.368-1(e)
has purchased or otherwise acquired any shares of
Hanna Common Stock or any shares of Geon Common
Stock in anticipation of, or in connection with, the
Consolidation, except for the shares of Hanna Common
Stock which Hanna purchased in open market
transactions during the period April 16 - [Closing
Date], 2000, which, in the aggregate, represent less
than five percent of the number of shares of Hanna
Common Stock that Hanna had outstanding on April 15,
2000.
(7) Neither Geon nor any person related to Geon within
the meaning of Treasury Regulation Section 1.368-1(e)
has purchased or otherwise acquired any shares of
Geon Common Stock or any shares of Hanna Common Stock
in anticipation of, or in connection with, the
Consolidation.
(8) There are no fractional shares of Hanna Common Stock
outstanding.
(9) There are no fractional shares of Geon Common Stock
outstanding.
(10) The fair market value of the Resulting Corporation
Shares which each of the Hanna stockholders will
receive upon consummation of the Consolidation will
be approximately equal to the fair market value of
the shares of Hanna Common Stock which such
stockholder owns immediately prior to the Effective
Time.
(11) The fair market value as of the Effective Time of the
Resulting Corporation Shares which each of the Geon
stockholders will receive upon consummation of the
Consolidation will be approximately equal to the fair
market value of the shares of Geon Common Stock which
such stockholder owns immediately prior to the
Effective Time.
(12) Neither Hanna, Geon, Consolidation Corp. nor
Resulting Corporation is an investment company within
the meaning of Section 368(a)(2)(F) of the Code, and
neither Hanna, Geon, Consolidation Corp. nor
Resulting Corporation is 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.
(13) At the Effective Time the fair market value of the
assets of Hanna transferred to Resulting Corporation
will exceed the sum of the amount of the liabilities
of Hanna which Resulting Corporation will assume upon
the
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effectiveness of the Consolidation plus the amount of
the liabilities of Hanna, if any, to which those
assets may be subject.
(14) At the Effective Time the fair market value of the
assets of Geon transferred to Resulting Corporation
will exceed the sum of the amount of the liabilities
of Geon which Resulting Corporation will assume upon
the effectiveness of the Consolidation plus the
amount of the liabilities of Geon, if any, to which
those assets may be subject.
(15) The liabilities of Hanna which Resulting Corporation
will assume, or take subject to, at the Effective
Time were incurred by Hanna in the ordinary course of
business and will be associated with the assets of
Hanna which Resulting Corporation will succeed to
upon the effectiveness of the Consolidation.
(16) The liabilities of Geon which Resulting Corporation
will assume, or take subject to, at the Effective
Time were incurred by Geon in the ordinary course of
business and will be associated with the assets of
Geon which Resulting Corporation will succeed to upon
the effectiveness of the Consolidation.
(17) The aggregate adjusted basis of the assets of Hanna
which Resulting Corporation will succeed to and
acquire upon the effectiveness of the Consolidation
will equal or exceed the sum of the liabilities of
Hanna which Resulting Corporation will assume upon
consummation of the Consolidation plus the amount of
the liabilities of Hanna, if any, to which those
assets may be subject.
(18) The aggregate adjusted basis of the assets of Geon
which Resulting Corporation will succeed to and
acquire upon the effectiveness of the Consolidation
will equal or exceed the sum of the liabilities of
Geon which Resulting Corporation will assume upon
consummation of the Consolidation plus the amount of
the liabilities of Geon, if any, to which those
assets may be subject.
(19) There is, and at the Effective Time there will be, no
intercorporate indebtedness existing between Hanna
and any of Geon, Consolidation Corp. or Resulting
Corporation, between Geon and any of Hanna,
Consolidation Corp. or Resulting Corporation, or
between Consolidation Corp. and any of Hanna, Geon or
Resulting Corporation that was issued, acquired or
which will be settled at a discount.
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[Closing Date], 2000
Page 5
(20) Except for costs relating to the printing, filing and
mailing of the Joint Proxy Statement which Hanna and
Geon will share equally, the expenses incurred by
Hanna in connection with the Consolidation will be
paid by Hanna or Resulting Corporation; the expenses
incurred by Geon in connection with the Consolidation
will be paid by Geon or Resulting Corporation; the
expenses, if any, incurred by Consolidation Corp. in
connection with the Consolidation will be paid by
Hanna, Geon or Resulting Corporation; and, the
stockholders of Hanna and Geon will each pay their
own expenses, if any, incurred in connection with the
Consolidation.
(21) Neither Resulting Corporation nor any person related
to Resulting Corporation within the meaning of
Treasury Regulation Section 1.368-1(e) has any plan
or intention to purchase or otherwise acquire any of
the Resulting Corporation Shares which Resulting
Corporation will issue to the stockholders of Hanna
and Geon upon consummation of the Consolidation, and
neither Resulting Corporation nor any such person
related to it within the meaning of Treasury
Regulation Section 1.368-1(e) will purchase or
otherwise acquire any Resulting Corporation Shares
following consummation of the Consolidation other
than pursuant to an open market stock purchase
program which Resulting Corporation may, but has no
plan or intention to, institute in the future.
(22) Following consummation of the Consolidation,
Resulting Corporation will, with respect to each of
Geon and Hanna, either directly own and continue to
operate a significant line of business that Geon or
Hanna, as the case may be, was engaged in immediately
prior to the Consolidation or directly own and
continue to use in its business a significant portion
of the historic business assets that Geon or Hanna,
as the case may be, used in its historic business
immediately prior to the Consolidation.
(23) Resulting Corporation has no plan or intention to
sell or otherwise dispose of any of the assets of
Geon and Hanna which Resulting Corporation will
succeed to and acquire upon consummation of the
Consolidation, except for sales or dispositions made
in the ordinary course of business.
Based upon the foregoing, we are of the opinion that:
(a) The Consolidation will constitute a "reorganization"
within the meaning of Section 368(a)(1)(A) of the
Code.
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[Closing Date], 2000
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(b) Hanna, Geon, Consolidation Corp. and Resulting
Corporation will each be "a party to a
reorganization", within the meaning of Section 368(b)
of the Code.
(c) Neither Hanna, Geon, Consolidation Corp. nor
Resulting Corporation will recognize any gain or loss
for U.S. federal income tax purposes as a result of
the Consolidation; and
(d) No stockholder of Hanna will recognize any gain or
loss for U.S. federal income tax purposes as a result
of the conversion of his shares of Hanna Common Stock
into Resulting Corporation Shares upon the
Consolidation.
No opinion is expressed herein on any issue except those
specifically addressed in paragraphs (a) through (d) above, including any issues
concerning the U.S. federal income tax consequences to stockholders of Hanna of
Hanna's open market purchases of its shares as described in paragraphs (4) and
(6) above.
In rendering the opinion set forth in paragraph (d) above, we
would point out to you that there are circumstances in which, pursuant to the
Code, a stockholder of a corporation, due to his unique or special situation,
may be required to recognize income (but not gain or loss) as a result of
exchanging shares of stock in one corporation for stock of another corporation
in connection with a "reorganization" (such as employees holding nonvested
compensatory stock). The opinion set forth in paragraph (d) above does not
address the U.S. federal income tax consequences that may result from the
Consolidation to such a stockholder due to his unique or special situation.
In rendering this opinion to you, we have assumed that the
description of facts set forth in the assumptions recited in the preceding
numbered paragraphs of this letter are, and at the Effective Time will be,
accurate in all material respects, but we confirm to you that we have made no
independent investigation or inquiry whatsoever with respect to the accuracy of
the facts set forth in those assumptions. It should be noted in this regard that
any change in the assumptions recited above could materially affect our opinion
as expressed herein and possibly render it wholly or partially inapplicable for
purposes of determining whether Hanna, Geon, Consolidation Corp., Resulting
Corporation and/or the stockholders of Hanna will be entitled to the tax
treatment described herein.
Our opinion is based on the relevant provisions of the Code,
administrative interpretations, judicial decisions, and regulations in effect on
the date of this letter. These authorities are subject to change, which could be
either prospective or retroactive in nature, and we can provide no assurance as
to the effect that any such change may have on the opinion that we have
expressed above.
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M.A. Hanna Company
[Closing Date], 2000
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This opinion is being furnished to you solely for the benefit
of Hanna. We hereby consent to the filing of this opinion as an exhibit to the
Joint Proxy Statement filed with the Securities and Exchange Commission on May
18, 2000 and to the reference to us under the headings "The Consolidation --
Material Federal Income Tax Consequences" and "Legal Matters" in such Joint
Proxy Statement.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
Jones, Day, Reavis & Pogue