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EXHIBIT 8
FORM OF TAX OPINION
___________, 2000
Board of Directors
19 Main Street
NewMil Bancorp, Inc.
New Milford, Connecticut 06776
Board of Directors
Nutmeg Federal Savings & Loan Association
301 Main Street
Danbury, Connecticut 06810
Gentlemen/Ladies:
This opinion is being delivered to you in accordance with Section 7.1(f) of
the Agreement and Plan of Merger (the "Agreement"), dated as of May 30, 2000,
by and among NewMil Bancorp, Inc. ("NewMil"), a Delaware corporation, NewMil's
wholly-owned subsidiary, New Milford Savings Bank ("New Milford Savings Bank")
and Nutmeg Federal Savings & Loan Association ("Nutmeg"), a federal savings and
loan association. Pursuant to the Agreement, Nutmeg will be acquired by NewMil
in a transaction whereby Nutmeg will be merged with and into New Milford Savings
Bank (the "Merger").
In connection with the preparation of this opinion, we have examined and
with your consent relied upon the following documents (including all exhibits
and schedules thereto): (1) the Agreement; (2) the Registration Statement on
Form S-4 of NewMil (File No. 333-_______) filed with the Securities and Exchange
Commission on June 28, 2000, as amended by Pre-Effective Amendment No. 1 thereto
filed with the Securities and Exchange Commission on ____________, 2000 (the
"Registration Statement") and/or the Proxy Statement/Prospectus of NewMil and
Nutmeg; (3) representations and certifications made to us by NewMil (attached
hereto as Exhibit A); (4) representations and certifications made to us by
Nutmeg (attached hereto as Exhibit B); (5) such other instruments and documents
related to the formation, organization and operation of NewMil and Nutmeg or to
the consummation of the Merger and the transactions contemplated thereby as we
have deemed necessary or appropriate./1/
_________________
/1/ All capitalized terms used herein and not otherwise defined shall
have the same meaning as they have in the Agreement. All section references,
unless otherwise indicated, are to the Internal Revenue Code of 1986, as amended
(the "Code").
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NewMil Bancorp, Inc.
Nutmeg Federal Savings & Loan Association
___________, 2000
Page 2
The Proposed Transaction
Based solely upon our review of the documents set forth above, and upon
such information as NewMil and Nutmeg have provided to us (which we have not
attempted to verify in any respect), and in reliance upon such documents and
information, we understand that the proposed transaction and the relevant facts
with respect thereto are as follows:
NewMil is the holding company of New Milford Savings Bank, headquartered in
New Milford, Connecticut. Through New Milford Savings Bank, NewMil currently
conducts a general banking business from 14 banking offices located in Fairfield
and Litchfield Counties in Connecticut. On May 31, 2000, NewMil announced that
it had signed a definitive merger agreement to acquire Nutmeg and to merge it
with and into New Milford Savings Bank.
Nutmeg is headquartered in Danbury, Connecticut. Nutmeg is engaged
principally in the business of attracting deposits from the general public and
investing those deposits in residential, consumer and small business loans.
Nutmeg currently serves customers from four banking offices located in the
communities of Danbury (2), Ridgefield and Bethel, Connecticut.
The purpose of the Merger is to enable NewMil to acquire the assets and
business of Nutmeg. After the Merger, Nutmeg's four branch banking offices will
remain open and will be operated as banking offices of New Milford Savings Bank.
The Merger will result in an expansion of New Milford's Savings Bank's primary
market area to include Nutmeg's banking offices. The assets and business of
Nutmeg's four banking offices will broaden NewMil's existing operations in
Fairfield County where New Milford Savings Bank currently has banking offices.
NewMil expects to achieve reductions in the current operating expenses of Nutmeg
upon the consolidation of Nutmeg's operations into New Milford Savings Bank.
It is proposed that pursuant to the Agreement, the banking laws of the
State of Connecticut and the Connecticut Business Corporations Act, Nutmeg merge
with and into New Milford Savings Bank. As a result of the Merger, Nutmeg's
corporate existence will cease and New Milford Savings Bank will be the
surviving corporation. As the surviving corporation, New Milford Savings Bank
will succeed to all of the assets and liabilities of Nutmeg.
By virtue of the Merger, each share of Nutmeg Common Stock and each share
of Nutmeg Preferred Stock issued and outstanding prior to the Effective Time
(other than Shares of Nutmeg
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NewMil Bancorp, Inc.
Nutmeg Federal Savings & Loan Association
___________, 2000
Page 3
Capital Stock that are owned by Nutmeg as treasury stock or owned directly or
indirectly by NewMil, Nutmeg or any NewMil subsidiary, other than Shares held in
a fiduciary capacity) will be converted into either: (a) the right to receive
$8.25 or $14.4375, respectively in cash, without interest, as adjusted; (b) the
right to receive that number of shares of NewMil Common Stock valued at $8.25 or
$14.4375, respectively, as adjusted (the "Exchange Ratio"), or (c) a combination
of cash and NewMil Common Stock. Certificates for fractions of shares of NewMil
Common Stock will not be issued. In lieu of a fraction of a share of NewMil
Common Stock, each holder of Nutmeg Common Stock or Preferred Stock otherwise
entitled to a fraction of a share of NewMil Common Stock will be entitled to
receive an amount of cash equal to (i) the fraction of a share of the NewMil
Common Stock to which such holder would otherwise be entitled, multiplied by
(ii) $8.25 or $14.4375, as adjusted, respectively. The number of shares of
NewMil Common Stock to be received will depend upon NewMil's average trading
price over a 15 day period ending prior to closing (a similar procedure with
different time periods will apply in the event certain events take place prior
to closing). The dollar equivalent may be adjusted upward based upon the
required sale by Nutmeg of loan servicing rights prior to closing.
No more than 50 percent of the total value of the Merger consideration may
be used to pay Nutmeg shareholders who elect to receive cash instead of NewMil
Common Stock and to pay cash instead of fractional shares. If too many Nutmeg
shareholders elect to receive cash instead of NewMil Common Stock, those Nutmeg
shareholders will receive a prorated amount of cash and the remainder of the
Merger consideration that they are entitled to receive will be paid to them in
NewMil Common Stock at the Exchange Ratio.
At the Effective Time, each option granted by Nutmeg to purchase shares of
Nutmeg Common Stock under the various Nutmeg Stock Plans which is outstanding
and unexercised immediately prior thereto will be converted automatically into
cash or NewMil Common Stock equal to the difference between the option exercise
price and $8.25, as adjusted. Whether the conversion of the option will be into
cash or NewMil common stock will be based on the option holder's election under
the same procedures and restrictions that apply to all Nutmeg shareholders.
Immediately upon the Effective Time, Nutmeg will merge with and into New
Milford Savings Bank in the Merger, with New Milford Savings Bank being the
Surviving Bank in the Merger.
Assumptions and Representations
In connection with rendering this opinion, we have assumed or obtained
representations (and, with your consent, are relying thereon, without any
independent investigation or review thereof,
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NewMil Bancorp, Inc.
Nutmeg Federal Savings & Loan Association
___________, 2000
Page 4
although we are not aware of any material facts or circumstances contrary to or
inconsistent therewith) that:
1. All information contained in each of the documents we have examined
and relied upon in connection with the preparation of this opinion is accurate
and completely describes all material facts relevant to our opinion, all copies
are accurate and all signatures are genuine. We have also assumed that there
has been (or will be by the Effective Time of the Merger) due execution and
delivery of all documents where due execution and delivery are prerequisites to
the effectiveness thereof.
2. The Merger will be consummated in accordance with Connecticut state
law and will qualify as a statutory merger under Connecticut state law.
3. All representations made in the exhibits hereto are true, correct, and
complete in all material respects. Any representation or statement made "to the
best of knowledge" or similarly qualified is correct without such qualification.
4. The Merger will be consummated in accordance with the Agreement and as
described in the Proxy Statement/Prospectus (including satisfaction of all
covenants and conditions to the obligations of the parties without amendment or
waiver thereof); NewMil, New Milford Savings Bank and Nutmeg will comply with
all reporting obligations with respect to the Merger required under the Code and
the Treasury Regulations thereunder; and the Agreement and all other documents
and instruments referred to therein or in the Proxy Statement/Prospectus are
valid and binding in accordance with their terms.
Opinion - Federal Income Tax Consequences
Based upon and subject to the assumptions and qualifications set forth
herein, it is our opinion that for Federal income tax purposes the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the Code.
In accordance therewith:
(i) Nutmeg shareholders who receive NewMil Common Stock in the Merger in
exchange for their Nutmeg Common Stock or Series B Preferred Stock will not
recognize gain or loss on their receipt of NewMil Common Stock in such exchange
for federal income tax purposes;
(ii) No gain or loss will be recognized for federal income tax purposes by
NewMil, Nutmeg or New Milford Savings Bank as a result of the Merger;
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NewMil Bancorp, Inc.
Nutmeg Federal Savings & Loan Association
___________, 2000
Page 5
(iii) The aggregate tax basis of the NewMil Common Stock received by
shareholders who exchange all or a portion of their Nutmeg Capital Stock solely
or partially for NewMil Common Stock in the Merger will be the same as the
aggregate tax basis of the Nutmeg Capital Stock surrendered in exchange for the
NewMil Common Stock. For the purposes of this opinion, the aggregate tax basis
shall be deemed to include fractional share interests; and
(iv) The holding period of the NewMil Common Stock received by a holder of
Nutmeg Capital Stock in the Merger (including a fractional share interest deemed
received) will include, for Federal income tax purposes, the holding period of
the Nutmeg Capital Stock surrendered in exchange for the NewMil Common Stock.
In addition to the assumptions set forth above, this opinion is subject to
the exceptions, limitations and qualifications set forth below:
1. This opinion represents and is based upon our best judgment regarding
the application of relevant current provisions of the Code and interpretations
of the foregoing as expressed in existing court decisions, administrative
determinations (including the practices and procedures of the Internal Revenue
Service (the "IRS") in issuing private letter rulings, which are not binding on
the IRS except with respect to the taxpayer that receives such a ruling) and
published rulings and procedures all as of the date hereof. An opinion of
counsel merely represents counsel's best judgment with respect to the probable
outcome on the merits and is not binding on the IRS or the courts. There can be
no assurance that positions contrary to our opinions will not be taken by the
IRS, or that a court considering the issues would not hold differently from such
opinions. Neither NewMil nor Nutmeg has requested a ruling from the IRS (and no
ruling will be sought) as to any of the federal income tax consequences
addressed in this opinion. 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 opinion
expressed herein. We undertake no responsibility to advise you of any changes
to relevant law or in the application or interpretation of the federal income
tax laws.
2. This letter addresses only the specific tax opinions set forth above.
This letter does not address any other federal, state, local or foreign tax
consequences that may result from the Merger or any other transaction (including
any transaction undertaken in connection with the Merger).
3. We express no opinion regarding, among other things, the tax
consequences of the Merger (including the opinion set forth above) as applied to
specific shareholders of Nutmeg or that may be relevant to particular classes of
Nutmeg shareholders, such as tax exempt organizations,
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NewMil Bancorp, Inc.
Nutmeg Federal Savings & Loan Association
___________, 2000
Page 6
dealers in securities, financial institutions, insurance companies, corporate
shareholders subject to the alternative minimum tax, non-United States persons,
Nutmeg shareholders who hold shares of Nutmeg Common or Preferred Stock as part
of a straddle, hedge or conversion transaction, or traders in securities who
elect to apply a mark-to-market method of accounting, and holders of shares of
Nutmeg Common Stock acquired upon exercise of stock options or in other
compensatory transactions or through a qualified retirement plan. In addition,
we express no opinion regarding the tax consequences to a holder of an option to
purchase shares of Nutmeg Common Stock who receives NewMil Common Stock in
exchange therefor pursuant to the Merger.
4. Our opinion set forth herein is based upon the description of the
contemplated transactions as set forth above in the section captioned "The
Proposed Transaction," the Agreement and the Proxy Statement/Prospectus. If the
actual facts relating to any aspect of the transactions differ from this
description in any material respect, our opinion may become inapplicable. No
opinion is expressed as to any transaction other than those set forth in the
section captioned "The Proposed Transaction," the Agreement and the Proxy
Statement/Prospectus or to any transaction whatsoever, including the Merger, if
all the transactions described in the section captioned "The Proposed
Transaction," the Agreement and the Proxy Statement/Prospectus are not
consummated in accordance with the terms of the section captioned "The Proposed
Transaction," the Agreement and the Proxy Statement/Prospectus and without
waiver or breach of any material provision thereof or if all of the
representations, warranties, statements and assumptions upon which we relied are
not true and accurate at all relevant times. In the event any one of the
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 is provided to NewMil and Nutmeg only, and without our prior
consent, may not be relied upon, used, circulated, quoted or otherwise referred
to in any manner by any person, firm, governmental authority or entity
whatsoever other than reliance thereon by NewMil, Nutmeg and the Nutmeg
shareholders. Notwithstanding the prior sentence, we hereby consent to the use
of the opinion letter as an exhibit to the Registration Statement and to the use
of our name in the Registration Statement filing of our opinion with applicable
regulatory authorities, if any. In giving the consent, we do not thereby admit
that we are an "expert" within the meaning of the Securities Act of 1993, as
amended.
TYLER COOPER & ALCORN, LLP
By _________________________________
A Partner
