Exhibit 8.2
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
404-881-7000
Fax: 404-881-4777
www.alston.com
May 17, 2001
CharterBank
600 Third Avenue
West Point, Georgia 31833
Re: Amended Plan of Reorganization From Mutual Savings Association to
Mutual Holding Company and Stock Issuance - Georgia Tax Matters
Ladies and Gentlemen:
We have acted as special Georgia tax counsel to CharterBank (the
"Bank"), a mutual savings association located in West Point, Georgia, in
connection with the transactions contemplated by the Amended Plan of
Reorganization From Mutual Savings Association to Mutual Holding Company and
Stock Issuance, adopted by the Board of Directors of the Bank on March 8, 2001
(the "Plan"). Pursuant to the Plan, the Bank will reorganize from a mutual
savings association to a mutual holding company structure (the
"Reorganization"), to be effected as follows: (i) the Bank will establish a
federal corporation ("Holding Company") as its wholly-owned subsidiary; (ii)
Holding Company will establish a federally chartered stock savings bank ("New
Stock Bank") as its wholly-owned subsidiary; (iii) the Bank will exchange its
charter for a federal mutual holding company charter to become First Charter,
MHC ("MHC"); (iv) immediately following step (iii), MHC will transfer all of its
assets and liabilities (excluding some cash and stock), to Holding Company in
exchange solely for common stock of Holding Company and the assumption by the
Holding Company of the liabilities of MHC ("Contribution One"); (v) immediately
following step (iv), Holding Company will transfer all of its assets and
liabilities, including all of the assets and liabilities transferred to Holding
Company pursuant to step (iv) but excluding some stock, to New Stock Bank in
exchange solely for common stock of New Stock Bank and the assumption by New
Stock Bank of the liabilities of the Holding Company ("Contribution Two"); and
(vi) immediately following step (v), or as soon as practicable thereafter,
Holding Company will sell up to 20% of its authorized common stock in one or
more Minority Share Offerings. Pursuant to Section 5(F) of the Plan, you have
requested our opinion as to the Georgia tax consequences of the Plan to the
parties to the Reorganization.
Bank of America Plaza 90 Park Avenue 3605 Glenwood Avenue 601 Pennsylvania Avenue, N.W.
101 South Tryon Street, Suite 4000 New York, NY 10016 Suite 310 North Building, 11th Floor
Charlotte, NC 28280-4000 212-210-9400 Raleigh, NC 27612-4957 Washington, DC 20004-2601
704-444-1000 Fax: 212-210-9444 919-420-2200 202-756-3300
Fax: 704-444-1111 Fax: 919-420-2260 Fax: 202-756-3333
CharterBank
May 2, 2001
Page 2
For purposes of rendering this opinion, we have examined the Plan and
have also relied, with your consent and without independent verification, upon
the statements and opinions provided in the opinion letter of Thacher Proffitt &
Wood rendered on DATE (the "Federal Opinion"). In addition, we have assumed,
with your consent and without independent verification, that (i) the Bank, MHC,
the Holding Company, and New Stock Bank each do (or will do) business both
within and without the state of Georgia; (ii) New Stock Bank will be authorized
to accept deposits in Georgia; and, (iii) neither MHC nor the Holding Company
will be authorized to accept deposits in Georgia.
As the basis for rendering this opinion, we have examined the
applicable statutory provisions of the Georgia Corporate Income, Sales and Use,
Real Estate Transfer, Ad Valorem, Corporate Net Worth, and Financial Institution
Gross Receipts Taxes, regulations promulgated thereunder by the Georgia
Department of Revenue (the "Department"), rulings issued by the Department,
pertinent judicial authorities, and other relevant authorities, which are
subject to change, and which changes could apply retroactively. In addition, our
opinion is not binding upon the courts or the Department, and there can be no
assurance that positions contrary to those stated in our opinion would not be
taken by the Department or that any such contrary position would not be
sustained by the courts.
Based on the foregoing, we are of the opinion that:
(1) The Georgia income tax treatment will conform to and be
consistent with the federal income tax treatment as described in
the Federal Opinion. In particular, (i) no gain or loss will be
recognized by any of the Bank, Holding Company, New Stock Bank,
and MHC as a result of the Reorganization, and (ii) no gain or
loss will be recognized by any Member (as defined in the Plan) as
a result of the Reorganization.
(2) Any transfers of tangible personal property pursuant to
Contribution One or Contribution Two (collectively, the
"Contributions") will not be subject to Georgia sales or use tax.
These Contributions constitute "business reorganizations" for
purposes of Georgia sales and use tax, and Georgia exempts
transfers of tangible personal property as a result of a business
reorganization when the stockholders/owners "of the business
being reorganized maintain the same proportionate interest or
share in the newly formed business reorganization." O.C.G.A. (S)
48-8-3(21).
(3) To the extent any real estate (or any interest therein) is
transferred by MHC to the Holding Company, or by the Holding
Company to New Stock Bank, such transfers shall be subject to the
real estate transfer tax, imposed at a rate of $1.00 on the first
$1,000 of value and $0.10 for each additional $100 or fraction
thereof. See O.C.G.A. (S) 48-6-1 et seq.
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CharterBank
May 17, 2001
Page 3
(4) The Reorganization will have no legal consequences on the
imposition of ad valorem taxes, which are assessed based on fair
market value.
(5) Going forward, the Holding Company, New Stock Bank and MHC will
each be subject to the corporate net worth tax. The maximum tax
is $5,000 for apportioned net worth in excess of $22,000,000. See
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O.C.G.A. (S) 48-13-70 et seq.
(6) Going forward, New Stock Bank will be subject to the tax on
financial institutions because New Stock Bank shall be authorized
to accept deposits in Georgia and shall therefore qualify as a
"depository financial institution." The tax is levied at both the
state and local level, each at a rate of 0.25 percent of Georgia
gross receipts. MHC and the Holding Company are not "depository
financial institutions" because they are not authorized to
receive deposits in Georgia. Thus, MHC and the Holding Company
will not be subject to the tax on financial institutions. See
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O.C.G.A. (S) 48-6-90 et seq.
This opinion is limited to the matters expressly opined on herein, and no
opinion may be implied or inferred beyond those expressly stated.
This opinion is rendered as of the date hereof based on the law and facts
in existence on the date hereof, and we do not undertake, and hereby disclaim,
any obligation to advise you of any changes in law or facts, whether or not
material, which may be brought to our attention at a later date.
This opinion is being furnished to you solely for your benefit in
connection with the consummation of the transactions contemplated by the Plan
and is not to be used, circulated, quoted or otherwise referred to or relied
upon for any purpose without our prior express written consent.
Except as provided in this paragraph, this opinion is being furnished to
you solely for your benefit in connection with the consummation of the
transactions contemplated by the Plan and is not to be used, circulated, quoted
or otherwise referred to or relied upon for any purpose without our prior
express written consent. We consent to the filing of this opinion as an exhibit
to the Form MHC-1 filed with the Office of Thrift Supervision in connection with
the Reorganization, and to the Prospectus included in the Bank's Registration
Statement on Form S-1 filed with the Securities and Exchange Commission in
connection with the Reorganization (the "Prospectus") and to the references
thereto under the headings "The Reorganization and The Offering - Tax Aspects"
and "Legal and Tax Opinions."
Very truly yours,
ALSTON & BIRD LLP
By: /s/ Michael T. Petrik
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Michael T. Petrik
A Partner of the Firm
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