JENKENS & GILCHRIST PARKER CHAPIN LLP
AUSTIN, TEXAS
(512) 499-3800
THE CHRYSLER BUILDING CHICAGO, ILLINOIS
405 LEXINGTON AVENUE (312) 425-3900
NEW YORK, NEW YORK 10174 DALLAS, TEXAS
(214) 855-4500
(212) 704-6000 HOUSTON, TEXAS
FACSIMILE (212) 704-6288 (713) 951-3300
LOS ANGELES, CALIFORNIA
www.jenkens.com (310) 820-8800
PASADENA, CALIFORNIA
(626) 578-7400
SAN ANTONIO, TEXAS
(210) 246-5000
WASHINGTON, D.C.
(202) 326-1500
May 16, 2003
Classic Bancshares, Inc.
344 Seventeenth Street
Ashland, Kentucky 41105
Re: Merger of First Federal Financial Bancorp, Inc.
with and into Classic Bancshares, Inc.
Ladies and Gentlemen:
We have acted as counsel to Classic Bancshares, Inc. ("Classic"), a
Delaware corporation, solely in connection with the Agreement and Plan of Merger
dated as of December 30, 2002 (the "Agreement") by and between Classic and First
Federal Financial Bancorp, Inc. ("FFFB"), a Delaware corporation. Pursuant to
the Agreement, FFFB will merge with and into Classic (the "Merger"). Except as
otherwise provided herein, capitalized terms referred to herein have the
meanings set forth in the Agreement. All section references, unless otherwise
indicated, are to the Internal Revenue Code of 1986, as amended (the "Code").
You have requested our opinion regarding certain United States federal
income tax consequences of the Merger. In delivering this opinion, we have
reviewed and are relying (or will rely) upon (without any independent
investigation) the truth and accuracy, at all relevant times, of the statements,
descriptions, representations and warranties contained in the Agreement
(including all schedules and exhibits thereto), the registration statement on
Form S-4 filed with the Securities and Exchange Commission (which includes a
proxy statement-prospectus relating to the Merger) (the "Registration
Statement"), and certain representations and warranties set forth in
certificates provided to us by Classic and by FFFB (the "Officers'
Certificates"), copies of which are attached hereto as Exhibits A and B,
respectively.
In addition, we have assumed or obtained representations and are relying
thereon (without any independent investigation or review thereof) that:
1. All original documents (including signatures) are authentic, all
documents submitted to us as copies conform to the original documents, and there
has been (or will be by the Effective Time) due execution and delivery of all
documents where due execution and delivery are prerequisites to effectiveness
thereof.
2. The Merger will be consummated in accordance with the Agreement (without
any waiver, breach or amendment of any of the provisions thereof) and will be
effective under the laws of the State of Delaware. Each of the representations
and warranties set forth in the Agreement and the Officers' Certificates is and
will be true, correct and complete as if made at the Effective Time.
3. All statements, descriptions and representations contained in any of the
documents referred to herein or otherwise made to us were true, correct and
complete when made and are and will continue to be true, correct and complete
through the Effective Time, including, but not limited to, the facts relating to
the merger of FFFB with and into Classic as described in the Registration
Statement, the representations set forth and documents described in the
Registration Statement, and the business reasons for the Merger as set forth in
the Registration Statement. No actions have been (or will be) taken which are
inconsistent with the foregoing sentence.
4. Classic, FFFB and the shareholders of FFFB will report the Merger on
their respective federal income tax returns in a manner consistent with the
opinions set forth below.
5. Any statement or representation made "to the knowledge of" or otherwise
similarly qualified is correct without such qualification. As to all matters in
which a person or entity making a representation has represented that such
person or entity either is not a party to, does not have, or is not aware of any
plan, intention, understanding or agreement to take an action, there is in fact
no plan, intent, understanding or agreement and such action will not be taken.
6. The terms of the Agreement and all other agreements entered into in
connection therewith are the product of negotiations between unrelated parties
negotiating at arm's-length without duress or hardship.
Based on our examination of the foregoing items and subject to the
assumptions, exceptions, limitations and qualifications set forth herein and in
the Registration Statement, we are of the opinion that:
A. The Merger will constitute a reorganization within
the meaning of Section 368(a) of the Code.
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B. Each of Classic and FFFB will be a party to that
reorganization within the meaning of Section 368(b) of the Code.
C. No gain or loss will be recognized by holders of
FFFB common stock who exchange all of their FFFB common stock solely for the
common stock of Classic pursuant to the Merger (except with respect to and to
the extent of any cash received by any such shareholders, whether in lieu of a
fractional share interest in the common stock of Classic or otherwise).
We express no opinion as to any transaction other than the Merger as
described in the Agreement or to any transaction whatsoever (including the
Merger) if all of the transactions described in the Agreement are not
consummated in accordance with the terms of the Agreement and without amendment,
waiver or breach of any material provision thereof, or if any of the
descriptions, representations, warranties, statements and assumptions upon which
we relied is not true and accurate at all relevant times. In the event any one
of the descriptions, 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 letter addresses only the U.S. federal income tax consequences
of the Merger as described herein and does not address any other federal, state,
local or foreign tax consequences that may result from the Merger or any other
transaction (including any other transaction undertaken in connection with the
Merger or in contemplation of the Merger). In particular, we express no opinion
regarding (1) whether and the extent to which any FFFB shareholder that has
provided or will provide services to FFFB or Classic will have compensation
income under any provision of the Code; (2) the effects of any such compensation
income, including but not limited to the effect upon the basis and holding
period of the Classic stock received by any such shareholder in the Merger; (3)
other than the fact that the Merger will be a reorganization within the meaning
of Section 368(a) of the Code, the corporate-level tax consequences of the
Merger to FFFB or Classic, including without limitation the survival and/or
availability, after the Merger, of any of the federal income tax attributes or
elections of FFFB or Classic or the application of the "golden parachute" rules
under Section 280G of the Code, or the application of any other provision of the
Code as well as the regulations promulgated thereunder and judicial
interpretations thereof; (4) the tax consequences of the Merger to holders of
options, warrants or other rights to acquire FFFB stock; and (5) the tax
consequences of the Merger as applied to specific shareholders of FFFB or that
may be relevant to particular classes of FFFB shareholders such as dealers in
securities, corporate shareholders subject to the alternative minimum tax,
foreign persons, tax-exempt organizations, banks, insurance companies or holders
of shares acquired upon exercise of stock options or in other compensatory
transactions.
This opinion letter represents and is based upon our best judgment
regarding the application of federal income tax statutes, existing judicial
decisions, administrative regulations and published rulings and procedures in
effect on the date hereof. Our opinion is not binding
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upon the Internal Revenue Service or the courts, and there is no assurance that
the Internal Revenue Service will not successfully assert a contrary position.
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 conclusions stated herein. Nevertheless, we
undertake no responsibility to advise you of any new developments in the
application or interpretation of the federal income tax laws.
This opinion letter is issued to you solely for your use and benefit in
connection with the Merger and is not to be relied upon by any other person or
entity without our express written consent. We consent to the use of this
opinion as an exhibit to the Registration Statement, to references to this
opinion in the Registration Statement and to the use of our name in the
Registration Statement under the heading "Material Federal Income Tax
Consequences." In giving this consent we do not admit that we are within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules or regulations promulgated thereunder.
Very truly yours,
/S/ JENKENS & GILCHRIST PARKER CHAPIN LLP
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JENKENS & GILCHRIST PARKER CHAPIN LLP