EXHIBIT 8
[PHELPS DUNBAR, L.L.P LETTERHEAD]
October 26, 2000
Britton & Koontz Capital Corporation
Britton & Koontz First National Bank, N.A.
500 Main Street
Natchez, Mississippi 39120
Ladies and Gentlemen:
We have acted as counsel to Britton & Koontz Capital
Corporation ("B & K") and Britton & Koontz First National Bank, N.A. ("B & K
Bank") in connection with the Agreement and Plan of Merger among B & K, B & K
Bank, Louisiana Bancshares, Inc. ("Louisiana Bancshares") and Louisiana Bank &
Trust Company ("Louisiana Bank"), dated as of August 25, 2000 (the "Agreement").
We have been requested to issue our opinion as to certain Federal income tax
matters described in Section 8.02(g) of the Agreement.
The Agreement and the transactions contemplated therein are
more fully described in the Form S-4 Registration Statement declared effective
by the Securities and Exchange Commission (the "Commission") on or about October
27, 2000 and the Proxy Statement forming a part thereof. Capitalized terms
appearing herein and not otherwise defined shall have the meanings ascribed to
them in the Agreement.
In connection with the foregoing, we have examined and are
relying upon the following documents: (1) the Agreement; (2) the Merger
Agreement; (3) the Registration Statement; and (4) such other documents and
public records as we have deemed necessary or appropriate.
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We also have made such legal and factual examinations and
inquiries as we have deemed advisable or necessary for the purpose of rendering
this opinion. We have examined originals or copies of documents, corporate
records and other writings which we consider relevant for the purposes of this
opinion.
In such examination, we have assumed the genuineness of all
signatures appearing on all documents, the legal capacity of all persons signing
such documents, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified, conformed or photostatic copies, the accuracy and completeness of all
corporate records made available to us by B & K, B & K Bank, Louisiana
Bancshares and Louisiana Bank, and the truth and accuracy of all facts set forth
in all certificates provided to or examined by us.
The opinions contained herein are based upon the
representations and statements contained in the aforementioned documents and are
limited in all respects to matters of Federal income tax law. In rendering our
opinion, we have assumed the following:
(a) The fair market value of the B & K common stock to be received by each
shareholder of Louisiana Bancshares will be approximately equal to the fair
market value of the Louisiana Bancshares common stock surrendered therefor.
(b) There is no plan or intention by the shareholders of Louisiana Bancshares
who own five percent (5%) or more of the Louisiana Bancshares common stock
and, to the best of the knowledge of the management of Louisiana
Bancshares, there is no plan or intention on the part of the remaining
Louisiana Bancshares shareholders to sell, exchange, or otherwise dispose
of a number of shares of B & K common stock to be received in the Merger
that would reduce such shareholders' aggregate ownership of B & K common
stock to a number of shares having a value, as of the date of the Merger,
of less than 50% of the value of all of the formerly outstanding Louisiana
Bancshares common stock as of the same date. For purposes of this
assumption, shares of Louisiana Bancshares common stock held by
shareholders of Louisiana Bancshares and exchanged for cash or other
property, or surrendered by dissenters, or exchanged for cash in lieu of
fractional shares of B & K common stock will be treated as outstanding
Louisiana Bancshares common stock on the date of the Merger.
(c) B & K will acquire at least 90% of the fair market value of the net assets
and at least 70% of the fair market value of the gross assets held by
Louisiana Bancshares immediately prior to the Merger. For purposes of this
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assumption, amounts paid by Louisiana Bancshares to dissenters, amounts paid by
Louisiana Bancshares to shareholders who receive cash or other property,
Louisiana Bancshares assets used to pay its reorganization expenses, and
all redemptions and distributions (except for regular, normal dividends)
made by Louisiana Bancshares immediately preceding the Merger will be
included as assets of Louisiana Bancshares held immediately prior to the
Merger.
(d) Prior to the Merger, B & K will be in control of B & K Bank within the
meaning of Section 368(c) of the Internal Revenue Code of 1986, as amended
("Code").
(e) Following the Merger, B & K will not issue any additional shares of B & K
Bank common stock that would result in B & K losing control of B & K Bank
within the meaning of Section 368(c) of the Code.
(f) B & K has no plan or intention to redeem or otherwise reacquire any of its
common stock to be issued in the Merger.
(g) B & K has no present plan or intention to liquidate Louisiana Bank, to sell
or otherwise dispose of the Louisiana Bank stock, or to sell or otherwise
dispose of any of the Louisiana Bancshares assets that will be acquired in
the Merger, except for such dispositions made in the ordinary course of
business or transfers described in Section 368(a)(2)(C) of the Code.
(h) The liabilities of Louisiana Bancshares to be assumed by B & K, and the
liabilities to which the transferred assets of Louisiana Bancshares are
subject were incurred by Louisiana Bancshares in the ordinary course of its
business and are associated with the assets to be transferred in the
Merger.
(i) Following the Merger, B & K will continue the historic business of
Louisiana Bancshares or use a significant portion of such business assets
in a business.
(j) B & K, B & K Bank, Louisiana Bancshares and Louisiana Bank, and each of
their respective shareholders, will pay their or its own expenses, if any,
incurred in connection with the Merger.
(k) There is no intercorporate indebtedness existing among B & K, Louisiana
Bancshares and Louisiana Bank that was issued, acquired, or will be settled
at a discount.
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(l) Neither B & K, B & K Bank, Louisiana Bancshares nor Louisiana Bank is an
investment company as defined in Section 368(a)(2)(F)(iii) or Section
368(a)(2)(F)(iv) of the Code.
(m) Louisiana Bancshares and Louisiana Bank are not under the jurisdiction of a
court in a Title 11 or bankruptcy matter within the meaning of Section
368(a)(3)(A) of the Code.
(n) The fair market value of the Louisiana Bancshares assets to be transferred
to B & K in the Merger will be equal to or exceed the sum of the
liabilities to be assumed by B & K plus the liabilities, if any, to which
such transferred assets will be subject.
(o) No B & K Bank common stock will be issued to any of the shareholders of
Louisiana Bancshares in the Merger.
(p) B & K does not have any plan or intention to dispose of the Louisiana
Bancshares assets it will receive in the Merger, except for such
dispositions made in the ordinary course of business.
(q) No dividends or distributions, other than regular, normal dividends, have
been or will be made with respect to any Louisiana Bancshares common stock
immediately prior to the Merger.
(r) None of the compensation received or to be received by any Louisiana
Bancshares shareholder, who is also an employee of Louisiana Bancshares,
will be separate consideration for, or allocable to, any shares of
Louisiana Bancshares common stock.
(s) None of the shares of B & K common stock to be received by any Louisiana
Bancshares shareholder, who is also an employee of Louisiana Bancshares,
will be separate consideration for, or allocable to, any amounts received
or to be received under any employment agreement or noncompetition
agreement.
(t) None of the amounts to be received by any Louisiana Bancshares shareholder
under any employment agreement or noncompetition agreement will be separate
consideration for, or allocable to, any shares of Louisiana Bancshares
common stock.
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(u) The compensation to be paid to any Louisiana Bancshares shareholder, who is
also an employee of Louisiana Bancshares, will be paid for services
actually rendered and will be commensurate to the compensation paid to
third-parties bargaining at arm's length for similar services or will be
paid pursuant to pre-existing agreements commensurate with agreements made
between third parties bargained for at arm's length.
(v) The payment of cash in lieu of fractional shares of B & K common stock is
solely for the purpose of avoiding the expense and inconvenience to B & K
of issuing fractional shares and does not represent separately
bargained-for consideration. The total cash consideration that will be paid
to the Louisiana Bancshares shareholders in lieu of issuing fractional
shares of B & K common stock will not exceed one percent (1%) of the total
consideration that will be issued in the Merger to the Louisiana Bancshares
shareholders in exchange for their stock. The fractional share interest of
each Louisiana Bancshares shareholder will be aggregated and no Louisiana
Bancshares shareholder will receive an amount equal to or greater than the
value of one (1) share of B & K common stock.
On the basis of our examination of the aforementioned
documents, the representations contained therein and the assumptions set forth
above, and having considered the applicable Federal income tax law as it exists
on the date hereof, we are of the opinion that:
(i) The Merger of Louisiana Bancshares with and into B & K will qualify as a
reorganization under Section 368(a)(1)(A) of the Code;
(ii) Neither Louisiana Bancshares nor B & K will recognize any gain or loss
solely as a result of the Merger under Section 361 of the Code;
(iii)No gain or loss will be recognized by the holders of the Louisiana
Bancshares common stock upon the exchange in the Merger of all of their
Louisiana Bancshares common stock solely for shares of B & K common stock
under Section 354 of the Code;
(iv) The aggregate tax basis of the B & K common stock received by the holders
of Louisiana Bancshares common stock who exchange all of their Louisiana
Bancshares common stock solely for the B & K common stock in the Merger
will be the same as the tax basis of the Louisiana Bancshares common stock
surrendered in exchange therefor, less the basis of any fractional share of
B & K common stock settled by cash payment, under Section 358(a)(1) of the
Code;
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(v) The holding period of the B & K common stock received by the holders of the
Louisiana Bancshares common stock will include the holding period during
which the Louisiana Bancshares common stock surrendered in exchange
therefor was held, to the extent that the Louisiana Bancshares common stock
was held as a capital asset on the date of the exchange under Code Section
1223(1) of the Code;
(vi) The payment of cash to the holders of the Louisiana Bancshares common stock
in lieu of fractional share interests in B & K common stock will be treated
for Federal income tax purposes as if the fractional shares were
distributed as part of the exchange and then were redeemed by B & K. These
cash payments will be treated as having been received as distributions in
full payment in exchange for B & K common stock redeemed, as provided under
Section 302(a) of the Code; and
(vii)Where solely cash is received by a holder of the Louisiana Bancshares
common stock in exchange for B & K common stock pursuant to the exercise of
dissenters' rights, such cash will be treated as having been received in
redemption of such holder's Louisiana Bancshares common stock, subject to
the provisions and limitations of Section 302 of the Code.
This opinion is expressly limited to the Federal income tax
consequences of the Merger that are enumerated above. We express no opinion as
to any other Federal income tax consequences of the Merger or to matters
governed by the laws of any state. Furthermore, no opinion is expressed herein
as to the effect of any future acts of the parties or future changes in existing
law. We undertake no responsibility to advise you of any changes after the date
hereof in the law or the facts presently in effect that would alter the scope or
substance of the opinions herein expressed.
This opinion is based on various statutory provisions,
regulations promulgated thereunder, and interpretations thereof by the Internal
Revenue Service and the courts having jurisdiction over such matters as of and
effective on the date hereof, any one or more of which is subject to change
either prospectively or retroactively. There can be no assurance that contrary
positions may not be successfully asserted by the Internal Revenue Service, or
that a court considering such matters would not hold otherwise. Moreover, no
opinion is rendered with respect to the effect, if any, which pending or
proposed legislation may have on any of the foregoing matters.
This letter expresses our legal opinion as to the foregoing
matters based on our professional judgment at this time; it is not, however, to
be construed as a guaranty, nor is it a warranty that a court considering such
matters would not rule in manner contrary to the opinions set forth above.
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We consent to the filing of this opinion as an exhibit to the
Registration Statement. 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 or the General Rules and Regulations of the Commission.
Sincerely,
/s/ Phelps Dunbar, L.L.P.
PHELPS DUNBAR, L.L.P.
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