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Exhibit 8
[LETTERHEAD APPEARS HERE]
June 14, 2000
Stilwell Financial Inc.
920 Main Street, 21st Floor
Kansas City, Missouri 64105
Ladies and Gentlemen:
In connection with the registration of certain shares of Common Stock of
Stilwell Financial Inc. ("Stilwell") to be issued pursuant to the Stilwell
Financial Inc. 1998 Long-Term Incentive Stock Plan (the "Plan"), as described in
a Registration Statement on Form S-3 dated on or about the date of this opinion
(the "Registration Statement"), we have been asked to render our opinion to you
with respect to certain tax consequences under the Internal Revenue Code of
1986, as amended (the "Code") of various transactions contemplated by the Plan.
We have examined the provisions of the Plan and made such other
investigations as we deem necessary in order to enable us to render this
opinion. Assuming that the transactions contemplated by the Plan are carried
out in conformity with the terms of the Plan, it is our opinion that the tax
consequences of each transaction will be as described below.
The Registration Statement addresses only Nonstatutory Stock Options and
LSARs, and not Incentive Stock Options, Bonus Shares, Performance Shares or
Restricted Shares which may be issued under the Plan. This opinion is likewise
limited to Nonstatutory Stock Options and LSARs.
The grant of a Nonstatutory Stock Option will not result in taxable income
to an employee at the time of grant, because of the Nonstatutory Stock Option
granted under the Plan is of a type not actively traded on an established
securities market, is not transferable by the employee, and has no readily
ascertainable fair market value. Code (S) 83(e) and Treas. Reg. (S) 1.83-7.
Upon exercise of a Nonstatutory Stock Option, the employee will be subject to
tax. Treas. Reg. (S) 1.83-7. At the time of exercise, the employee will
recognize ordinary income equal to the excess, if any, of the fair market value
of the stock on the date of exercise over the option price for the stock. Code
(S) 83(a).
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Stilwell Financial Inc.
June 14, 2000
Page 2
If an employee exercises a Nonstatutory Stock Option using cash, the basis
of the shares received will equal the option price plus the amount included in
the employee's income upon exercise. Treas. Reg. (S)(S) 1.62-2(d)(2)(i) and
1.61-2(d)(6)(i). If the employee uses shares of Stilwell Common Stock to
exercise a Nonstatutory Stock Option, the basis of the shares he surrenders
carries over to the same number of shares received in the exercise of the
option. Code (S)(S) 1031(d) and 1036, and Rev. Rul. 80-244, 1980-2 C.B. 234.
The employee's holding period in the same number of shares will include the
employee's holding period in the shares surrendered. The basis of any
additional shares received is the same as the amount included in gross income
plus any cash the employee pays in connection with the exercise of the option.
The holding period of any additional shares will not include any holding period
in the shares surrendered.
To the extent that the shares constitute a capital asset in the hands of
the employee, on subsequent disposition of the stock acquired under the
Nonstatutory Stock Option, the difference between the amount received for the
stock and the basis of the stock will be treated as long-term or short-term
capital gain or loss, depending on the holding period. Code (S)(S) 1001, 1221
and 1222.
The grant of an LSAR will not result in taxable income to the employee at
the time of grant. When the LSAR is paid, the employee will recognize ordinary
income equal to the amount of cash received. Code (S) 61 and Rev. Rul. 80-300,
1980-2 C.B. 165.
This opinion is limited to the matters expressly set forth herein; no
opinion may be inferred or implied beyond the matters expressly stated herein.
The undersigned consents to the filing of this opinion as an exhibit to the
Registration Statement.
SONNENSCHEIN NATH & ROSENTHAL
/s/ Sonnenschein Nath & Rosenthal
