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Exhibit 8
May 4, 1998
FirstFederal Financial Services Corp
135 East Liberty Street
Wooster, OH 44691
Ladies and Gentlemen:
We have acted as counsel to FirstFederal Financial Services Corp, an
Ohio corporation ("FirstFederal"), in connection with the proposed merger of
First Shenango Bancorp, Inc., a Pennsylvania corporation ("First Shenango"),
with and into FirstFederal, with FirstFederal as the surviving entity (the
"Merger"). The Merger will be effected pursuant to the Agreement of Affiliation
and Plan of Merger and by and between FirstFederal and First Shenango dated as
of February 6, 1998 (the "Agreement").
In our capacity as counsel to FirstFederal, our opinion has been
requested with respect to certain of the federal income tax consequences of the
proposed Merger. In rendering this opinion, we have examined: i) the Internal
Revenue Code of 1986 as amended (the "Code") and Treasury Regulations
promulgated thereunder and ii) appropriate Internal Revenue Service and court
decisional authority (collectively "Tax Authority"). In addition, we have relied
upon certain information made known to us as more fully described below.
Capitalized terms used but not otherwise defined herein have the
respective meanings given to them in the Agreement.
In arriving at the opinions expressed below, we have examined and
relied on the originals or copies certified or otherwise identified to our
satisfaction of i) the Agreement, and the exhibits and schedules thereto; ii)
the Registration Statement on Form S-4 filed with the Securities and Exchange
Commission by FirstFederal in connection with the Merger; iii) the Prospectus
and Proxy Statement ("Prospectus"); iv) such corporate records of FirstFederal
and First Shenango as we have deemed appropriate.
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May 4, 1998
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Based upon and subject to the limitations and qualifications expressly
set forth herein, it is our opinion that under current applicable law, the
Merger will constitute a reorganization within the meaning of Section 368 of the
Code and that accordingly, the following will be the material federal income tax
consequences of the Merger:
1. No gain or loss will be recognized by FirstFederal or First
Shenango by reason of the Merger.
2. No gain or loss will be recognized by any First Shenango
shareholder upon the exchange of First Shenango Common Stock
solely for FirstFederal Common Stock in the Merger (except in
connection with the receipt of cash in lieu of a fractional
share of FirstFederal Common Stock or in connection with the
exercise of dissenter's rights, as discussed below).
3. The aggregate tax basis of the FirstFederal Common Stock
received by each shareholder of First Shenango who exchanged
First Shenango Common Stock for FirstFederal Common Stock in
the Merger will be the same as the aggregate tax basis of the
First Shenango Common Stock surrendered in exchange therefor
(subject to any adjustments required as a result of the
receipt of cash in lieu of a fractional share of FirstFederal
Common Stock).
4. The holding period of the shares of FirstFederal Common Stock
received by a First Shenango shareholder in the Merger will
include the holding period of the First Shenango Common Stock
surrendered in exchange therefor (provided that such shares of
First Shenango Common Stock were held as a capital asset by
such shareholder at the Effective Time).
5. Cash received in the Merger by a First Shenango shareholder in
lieu of a fractional share interest of FirstFederal Common
Stock will be treated as having been received as a
distribution in full payment in exchange for the fractional
share interest of FirstFederal Common Stock which such
shareholder would otherwise be entitled to receive and will
qualify as a capital gain or loss (assuming the First Shenango
Common Stock surrendered in exchange thereof will be held as a
capital asset by such shareholder at the Effective Time).
6. A First Shenango shareholder who receives only cash as a
result of the exercise of dissenter's rights will realize gain
or loss for federal income tax purposes (determined separately
as to each block of First Shenango Common Stock
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FirstFederal Financial Services Corp
May 4, 1998
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exchanged) in an amount equal to the difference between (x)
the amount of cash received by such shareholder, and (y) such
shareholder's tax basis for the shares of First Shenango
Common Stock surrendered in exchange therefor provided that
the cash payment did not have the effect of the distribution
of a dividend. Any such gain or loss will be recognized for
federal income tax purposes and will be treated as capital
gain or loss. However, if the cash payment did have the effect
of the distribution of a dividend, the amount of taxable
income recognized generally will equal the amount of cash
received; such income generally would be taxable as a
dividend; and no loss (or other recovery of such shareholder's
tax basis for the shares of First Shenango Common Stock
surrendered in the exchange) generally would be recognized by
such shareholder. The determination of whether a cash payment
has the effect of the distribution of the dividend will be
made pursuant to the provisions and limitations of Section 302
of the Code, taking into account the constructive stock
ownership rules of Section 318 of the Code.
This opinion may not be applicable to First Shenango's shareholders who
are banks, insurance companies, tax exempt organizations, non-United States
shareholders or dealers in securities, or who received their First Shenango
stock pursuant to the exercise of employee stock options or otherwise as
compensation.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
reference of this opinion under the "Summary: Certain Federal Income Tax
Consequences of the Merger," the "The Merger: Certain Federal Income Tax
Consequences of the Merger" and elsewhere in the Prospectus.
This opinion is subject to the following assumptions, exceptions and
qualifications:
A. The opinions set forth above in paragraphs 1 through 6 are limited
to the matters expressly set forth in this opinion letter and no opinion is to
be implied or may be inferred beyond the matters expressly so opined.
B. We have relied without independent verification of the statements
contained therein on officers' certificates of First Shenango and FirstFederal,
each dated the date hereof containing representations as to certain tax and
factual matters. We have also assumed that the parties to the Merger will act
and the Merger will be effected in accordance with the Merger Agreement and as
described in the Prospectus and that the Merger will qualify as a statutory
merger under the applicable laws of the State of Ohio, the Commonwealth of
Pennsylvania and the United States. We
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May 4, 1998
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express no opinions as to the laws of any jurisdiction other than the income tax
laws of the United States.
C. We have assumed without independent verification, that:
(i) All documents submitted to us as originals or duplicate
originals are authentic;
(ii) All documents submitted to us as copies, whether
certified or not, conform to authentic original documents;
(iii) All signatures of persons signing all documents examined
in connection with this opinion are genuine;
(iv) All parties to the documents reviewed by us (other than
FirstFederal) have full power and authority to execute, deliver and
perform their obligations under such documents, and under the documents
required or permitted to be delivered and performed under the documents
reviewed by us, and all such documents have been duly authorized by all
necessary corporate or other action on the part of such parties.
D. We disclaim any undertaking to update this letter or otherwise
advise you of any changes of law or fact which may hereafter be brought to our
attention. The Tax Authority is subject to change, possibly with retroactive
effect, and any change would affect the continuing validity of the discussion
contained in this letter of the federal income tax consequences of the proposed
Merger.
CRITCHFIELD, CRITCHFIELD & JOHNSTON, LTD.
By: /s/ Daniel H. Plumly
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Daniel H. Plumly, Member