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EXHIBIT 8.1
S-1
Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
August 28, 2000
Bank Mutual Corporation Mutual Savings Bank
4949 West Brown Deer Road 510 East Wisconsin Avenue
Brown Deer, WI 53223 Milwaukee, WI 53202
Ladies and Gentlemen:
We have acted as counsel to Mutual Savings Bank, a Wisconsin mutual
savings bank ("Mutual Savings"), and Bank Mutual Corporation, a
federally-chartered corporation ("Bank Mutual"), in connection with (i) the
restructuring, including the conversion of Mutual Savings from a state-chartered
savings bank to a federal savings bank and then to a federal stock savings bank,
as described in the Plan of Restructuring from Mutual Savings Bank to Mutual
Holding Company of Mutual Savings as adopted on February 17, 2000, as amended
and restated July 31, 2000 (the "Plan of Restructuring"), and (ii) the
preparation and filing of the Prospectus of Bank Mutual relating to the
restructuring (the "Restructuring Prospectus"). In a substantially simultaneous
transaction Bank Mutual will acquire First Northern Capital Corp., a Wisconsin
corporation ("First Northern"), through a merger of First Northern into Bank
Mutual (the "First Northern Merger") as described in the Agreement and Plan of
Merger dated as of February 21, 2000 by and among Mutual Savings, OV Corp., a
Wisconsin corporation and a newly formed, wholly-owned subsidiary of Mutual
Savings, and First Northern (the "Merger Agreement"). With First Northern's
consent, OV Corp. will have assigned all of its rights under the Merger
Agreement to Bank Mutual, and Bank Mutual will have assumed all of the
obligations of OV Corp. under the Merger Agreement. In the following discussion,
"Mutual Bank" refers to Mutual Savings before the conversion and "Stock Bank"
refers to Mutual Savings after the conversion.
The restructuring will be accomplished as follows:
(a) Mutual Savings will convert from a state-chartered savings
bank to a federal savings bank.
(b) Mutual Savings will form Mutual Savings Bancorp, MHC (the
"MHC"), a federally-chartered mutual holding company which
will be subject to regulation by the Office of Thrift
Supervision. The MHC will form a transitory federal stock
savings bank ("Transitory"). Mutual Savings will own all of
the shares of Bank Mutual and will contribute those shares to
the MHC. The MHC will thereupon own all of the stock of both
Bank Mutual and Transitory.
(c) Mutual Savings will convert to a federal stock savings bank
("Stock Bank"). The depositors of Mutual Savings will receive
deposit accounts in Stock Bank with the same terms and
conditions as their deposit accounts in Mutual Savings.
(d) Transitory will merge into Stock Bank in a transaction in
which the MHC will receive all of the stock of Stock Bank.
Stock Bank will be the surviving corporation in the merger.
(e) The MHC will transfer the stock of Stock Bank to Bank Mutual
so that Bank Mutual will hold all of the stock of Stock Bank,
and the MHC will initially own 100% of the shares of common
stock of
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August 28, 2000
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Bank Mutual. The former depositors of Mutual Savings
will hold all of the liquidation interests and voting
rights in the MHC, for so long as, and to the extent, they
continue to maintain their qualifying deposits with Stock
Bank.
(f) Simultaneously with the First Northern Merger, Bank Mutual
will issue shares of its stock to the public and the Bank
Mutual employee benefit plans for cash in the subscription
offering at the price to purchasers of $10 per share.
(g) The initially issued stock of Stock Bank, which will be
constructively received by the former Mutual Savings'
depositors when Mutual Savings becomes a stock savings bank
under step (c) above, will be issued to the MHC in exchange
for liquidation interests in the MHC which will be held by
Mutual Savings' depositors.
In connection with this opinion, we have examined the Plan of
Restructuring, the Restructuring Prospectus, the Merger Agreement, the draft of
the Proxy Statement of First Northern and Prospectus of Bank Mutual relating to
the First Northern Merger (the "Proxy Statement/Prospectus"), and
representations contained in letters to us, dated on or about the date hereof,
by Mutual Savings (on behalf of itself, Bank Mutual and the MHC), Bank Mutual
and First Northern. For purposes of this opinion, we have assumed (i) the
accuracy of the representations made by Mutual Savings, Bank Mutual and First
Northern contained in their respective letters to us, (ii) the restructuring,
including the conversion, will be consummated in the manner described in the
Plan of Restructuring and the Restructuring Prospectus, and (iii) that the First
Northern Merger will be consummated in the manner described in the Merger
Agreement and the Proxy Statement/Prospectus.
Subject to the assumptions set forth above with regard to the
restructuring, we are of the opinion that:
(1) the conversion(s) of Mutual Savings from a state-chartered
savings bank to a federal savings bank and then to a federal
stock savings bank will constitute a reorganization, or
reorganizations, under Section 368(a)(1)(F) of the Internal
Revenue Code of 1986, as amended (the "Code"), and Mutual
Savings (in either its status as Mutual Bank or Stock Bank)
will not recognize gain or loss as a result of the
conversion(s);
(2) the basis of each asset of Mutual Bank received by Stock Bank
in the reorganization will be the same as Mutual Bank's basis
for such asset immediately prior to the reorganization;
(3) the holding period of each asset of Mutual Bank received by
Stock Bank in the reorganization will include the period
during which such asset was held by Mutual Bank prior to the
reorganization;
(4) Mutual Bank's depositors will recognize no gain or loss upon
their constructive receipt of shares of Stock Bank common
stock solely in exchange for their interests (i.e.,
liquidation interests and voting rights) in Mutual Bank;
(5) no gain or loss will be recognized by the depositors of Mutual
Savings (formerly Mutual Bank) upon the transfer to the MHC of
shares of Stock Bank common stock they constructively receive
in the restructuring in exchange for interests (i.e.,
liquidation interests and voting rights) in the MHC;
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(6) no gain or loss will be recognized by depositors of Mutual
Bank upon the issuance to them of deposits in Stock Bank in
the same dollar amount as their deposits in the Mutual Bank;
(7) no gain or loss will be recognized by those that purchase
shares of Bank Mutual in the subscription offering upon the
transfer of cash to Bank Mutual in exchange for shares of
common stock of Bank Mutual;
(8) no gain or loss will be recognized by Bank Mutual upon the
issuance of shares of Bank Mutual in exchange for cash in the
subscription offering; and
(9) the statements made under the captions "TAXATION" and "THE
RESTRUCTURING AND THE OFFERING -- Federal Tax Consequences of
the Restructuring" in the Restructuring Prospectus, to the
extent they constitute matters of law or legal conclusions,
are correct in all material respects.
This opinion does not address any federal, state, local or foreign tax
consequences that may result from the restructuring or any other related
transactions, other than as set forth above. Further, our opinion is not binding
upon the Internal Revenue Service or the courts, and there is no assurance that
the Internal Revenue Service could not successfully assert a contrary opinion.
In rendering our opinion, we have considered the applicable provisions
of the Code, Treasury Department regulations promulgated thereunder, pertinent
judicial authorities, interpretive rulings of the Internal Revenue Service and
such other authorities as we have considered relevant. It should be noted that
statutes, regulations, judicial decisions and administrative interpretations are
subject to change at any time (possibly with retroactive effect). A change in
the authorities or the accuracy or completeness of any of the information,
documents, corporate records, covenants, statements, representations or
assumptions on which our opinion is based could affect our conclusions. This
opinion is expressed as of the date hereof, and we are under no obligation to
supplement or revise our opinion to reflect any changes (including changes that
have retroactive effect) (i) in applicable law or (ii) in any information,
document, corporate record, covenant, statement, representation or assumption
stated herein which becomes untrue or incorrect.
This opinion is intended solely for the benefit of Bank Mutual, its
shareholders, Mutual Savings, and Mutual Savings' depositors in connection with
the restructuring. It may not be relied upon for any other purpose or by any
other person or entity, and it may not be made available to any other person or
entity without our prior written consent. We consent to the filing of this
opinion as an exhibit to the Restructuring Prospectus and the reference to our
firm under the caption "THE RESTRUCTURING AND THE OFFERING -- Federal Tax
Consequences of the Restructuring" in the Restructuring Prospectus. In giving
such consent, we do not admit that we are "experts" within the meaning of
Section 11 of the Securities Act of 1933, as amended, or that we are within the
category of persons whose consent is required by Section 7 of the Securities Act
or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/
QUARLES & BRADY LLP
