Exhibit 8
FORM OF TAX OPINION
HOGAN & HARTSON L.L.P.
555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20004
_____________, 2000
Board of Directors
Webster Financial Corporation
Webster Plaza
Waterbury, Connecticut 06702
Board of Directors
MECH Financial, Inc.
100 Pearl Street
Hartford, Connecticut 06103
Gentlemen and Ladies:
This opinion is being delivered to you in accordance with
Section 7.1(f) of the Agreement and Plan of Merger (the "Agreement"), dated as
of December 1, 1999, as amended on December 21, 1999, by and between Webster
Financial Corporation ("Webster"), a Delaware corporation and MECH Financial,
Inc. ("MECH"), a Delaware corporation. Pursuant to the Agreement, MECH will be
merged with and into Webster (the "Merger"). The Agreement also provides for
Mechanics Savings Bank ("MS Bank"), a Connecticut chartered savings bank and
wholly owned subsidiary of MECH, to merge with and into Webster Bank ("Webster
Bank"), a federally chartered savings bank and wholly owned subsidiary of
Webster (the "Bank Merger").
In connection with the preparation of this opinion, we have
examined and with your consent relied upon the following documents (including
all exhibits and schedules thereto): (1) the Agreement; (2) the Registration
Statement on Form S-4 of Webster Bancorp (File No. 333-33228) filed with the
Securities and Exchange Commission ("SEC") on March 24, 2000, as amended and
declared effective by the SEC on May ____, 2000 (the "Registration Statement")
and the Proxy Statement/Prospectus included as a part thereof; (3)
representations and certifications made to us by Webster; (4) representations
and certifications made to us by MECH; and (5) such other instruments and
documents related to the formation, organization and operation of Webster and
MECH or to the consummation of the Merger and the Bank Merger and the
transactions contemplated thereby as we have deemed necessary or appropriate.
All capitalized terms used herein and not otherwise defined
shall have the same meaning as they have in the Agreement. All section
references, unless otherwise indicated, are to the Internal Revenue Code of
1986, as amended (the "Code").
The Proposed Transaction
Based solely upon our review of the documents set forth above,
and upon such information as Webster and MECH have provided to us and in
reliance upon such documents and information, we understand that the proposed
transaction and the relevant facts with respect thereto are as follows:
Webster is the holding company of Webster Bank. Both Webster
and Webster Bank are headquartered in Waterbury, Connecticut. Webster Bank
offers full service business and retail banking services throughout Connecticut.
MECH is the holding company of MS Bank. MS Bank is
headquartered in the Hartford, Connecticut. MS Bank conducts business from
branch locations throughout the greater Hartford area. Historically, MS Bank has
been engaged in the business of attracting deposits from the general public and
earning income on those funds through various lending and investment activities.
It is proposed that pursuant to the Agreement and the General
Corporation Law of the State of Delaware, MECH will merge with and into Webster.
As a result of the Merger, MECH's corporate existence will cease and Webster
will be the Surviving Corporation. As the Surviving Corporation, Webster will
succeed to all of the assets and liabilities of MECH. Immediately after
consummation of the Merger, MS Bank will merge with and into Webster Bank in the
Bank Merger, with Webster Bank as the Surviving Bank.
The purpose of the Merger and the Bank Merger is to enable
Webster to acquire the assets and business of MECH. After the Merger and the
Bank Merger, it is expected that some of MS Banks' branch banking offices will
remain open and will be operated as banking offices of Webster Bank. The Merger
and the Bank Merger will result in an expansion of Webster Bank's primary market
area to include MS Bank's banking offices in Connecticut. The assets and
business of MS Bank's banking offices will broaden Webster's existing operations
in Hartford County, where Webster Bank currently has banking offices. Webster
expects to achieve reductions in the current operating expenses of MECH upon the
consolidation of MS Bank's operations into Webster Bank.
By virtue of the Merger, each share of MECH Common Stock
issued and outstanding prior to the Effective Time (other than certain shares to
be canceled) will be converted into and exchangeable for 1.52 shares of Webster
Common Stock. Certificates for fractions of shares of Webster Common Stock will
not be issued. In lieu of a fraction of a share of Webster Common Stock, each
holder of MECH Common Stock otherwise entitled to a fraction of a share of
Webster Common Stock will be entitled to receive an amount of cash equal to (i)
the fraction of a share of the Webster Common Stock to which such holder would
otherwise be entitled, multiplied by (ii) the actual market value of the Webster
Common Stock, which will be deemed to be the average of the daily closing prices
per share for Webster Common Stock for the twenty consecutive trading days on
which shares of Webster Common Stock are actually traded (as reported on the
Nasdaq Stock Market National Market System) ending on the third trading day
preceding the Closing Date. Under Section 33-856 of the Connecticut Business
Corporation Act, MECH shareholders are entitled to dissent from the Merger.
At the Effective Time, each option granted by MECH to purchase
shares of MECH Common Stock which is outstanding and unexercised immediately
prior thereto will be converted automatically into an option to purchase shares
of Webster Common Stock, with adjustment in the number of shares and exercise
price to reflect the Exchange Ratio.
Assumptions and Representations
In connection with rendering this opinion, we have assumed or
obtained representations (and, with your consent, are relying thereon, without
any independent investigation or review thereof, although we are not aware of
any material facts or circumstances contrary to or inconsistent therewith) that:
1. All information contained in each of the documents we have
examined and relied upon in connection with the preparation of this opinion is
accurate and completely describes all material facts relevant to our opinion,
all copies are accurate and all signatures are genuine. We have also assumed
that there has been (or will be by the Effective Time of the
Merger) due execution and delivery of all documents where due execution and
delivery are prerequisites to the effectiveness thereof.
2. The Merger will be consummated in accordance with
applicable state law and will qualify as a statutory merger under applicable
state law.
3. All representations made to us are true, correct, and
complete. Any representation or statement made "to the best of knowledge" or
similarly qualified is correct without such qualification.
4. The Merger will be consummated in accordance with the
Agreement and as described in the Proxy Statement/Prospectus (including
satisfaction of all covenants and conditions to the obligations of the parties
without amendment or waiver thereof); both Webster and MECH will comply with all
reporting obligations with respect to the Merger required under the Code and the
Treasury Regulations thereunder; and the Agreement and all other documents and
instruments referred to therein or in the Proxy Statement/Prospectus are valid
and binding in accordance with their terms.
Opinion - Federal Income Tax Consequences
Based upon and subject to the assumptions and qualifications
set forth herein, it is our opinion that for Federal income tax purposes the
Merger will qualify as a reorganization within the meaning of Section 368(a) of
the Code.
In addition to the assumptions set forth above, this opinion
is subject to the exceptions, limitations and qualifications set forth below:
1. This opinion represents and is based upon our best judgment
regarding the application of relevant current provisions of the Code and
interpretations of the foregoing as expressed in existing court decisions,
administrative determinations (including the practices and procedures of the
Internal Revenue Service (the "IRS") in issuing private letter rulings, which
are not binding on the IRS except with respect to the taxpayer that receives
such a ruling) and published rulings and procedures all as of the date hereof.
An opinion of counsel merely represents counsel's best judgment with respect to
the probable outcome on the merits and is not binding on the IRS or the courts.
There can be no assurance that positions contrary to our opinions will not be
taken by the IRS, or that a court considering the issues would not hold contrary
to such opinions. Neither Webster nor MECH has requested a ruling from the IRS
(and no ruling will be sought) as to any of the federal income tax consequences
addressed in this opinion. Furthermore, no assurance can be given that future
legislative, judicial or administrative changes, on either a prospective or
retroactive basis, would not adversely affect the accuracy of the opinion
expressed herein. Nevertheless, we undertake no responsibility to advise you of
any new developments in the law or in the application or interpretation of the
federal income tax laws.
2. This letter addresses only the specific tax opinion set
forth above. This letter does not address the Bank Merger or any other federal,
state, local or foreign tax consequences that may result from the Merger or any
other transaction (including any transaction undertaken in connection with the
Merger).
3. We express no opinion regarding, among other things, the
tax consequences of the Merger (including the opinion set forth above) as
applied to specific shareholders of MECH or that may be relevant to particular
classes of MECH shareholders, such as dealers in securities, corporate
shareholders subject to the alternative minimum tax, foreign persons, and
holders of shares acquired upon exercise of stock options or in other
compensatory transactions. In addition, we express no opinion regarding the tax
consequences to a holder of an option to purchase shares of MECH Common Stock
who receives an option to purchase shares of Webster Common Stock in exchange
therefor pursuant to the Merger.
4. Our opinion set forth herein is based upon the description
of the contemplated transactions as set forth above in the section of this
letter captioned "The Proposed Transaction," and in the Agreement and the Proxy
Statement/Prospectus (the "Transactions"). If the actual facts relating to any
aspect of the Transactions differ from this description in any material respect,
our opinion may become inapplicable. No opinion is expressed as to any
transaction other than the Transactions or to any transaction whatsoever,
including the Merger, if the Transactions are not consummated in accordance with
the terms of the Agreement and without waiver or breach of any material
provision thereof or if all of the representations, warranties, statements and
assumptions upon which we relied are not true and accurate at all relevant
times. In the event any one of the statements, representations, warranties or
assumptions upon which we have relied to issue this opinion is incorrect, our
opinion might be adversely affected and may not be relied upon.
This opinion is provided to Webster and MECH only, and without
our prior consent, may not be relied upon, used, circulated, quoted or otherwise
referred to in any manner by any person, firm, governmental authority or entity
whatsoever other than reliance thereon by Webster, MECH and the MECH
shareholders. Notwithstanding the prior sentence, we hereby consent to the use
of the opinion letter as an exhibit to the Registration Statement and to the use
of our name in the Registration Statement. In giving the consent, we do not
thereby admit that we are an "expert" within the meaning of the Securities Act
of 1933, as amended.
Sincerely yours,
HOGAN & HARTSON L.L.P.