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EXHIBIT 8
October 13, 2000
Board of Directors
PEOPLES LTD.
201 Church Street
Wyalusing, Pennsylvania 18853
Our File No. 684-00
Dear Members of the Board:
You have requested our opinion regarding material federal income
tax questions in connection with the transaction contemplated by the Agreement
and Plan of Merger, dated as of June 22, 2000, by and between Citizens &
Northern Corporation, a Pennsylvania business corporation and a Bank Holding
Company, ("Citizens & Northern") and Peoples Ltd., a Pennsylvania business
corporation and a Bank Holding Company, ("Peoples"), pursuant to which Peoples
will merge with and into Citizens & Northern, which will be the surviving
corporation. For purposes of rendering the opinions set forth herein, we have
assumed that the merger transactions between Peoples and Citizens & Northern
will be completed and that all conditions to the obligations of Peoples to
consummate the merger will be subject to the fulfillment (or written waiver by
Peoples) prior to the Effective Time of each of the conditions set forth in
Sections 6.02 (a), (b), (d) and (e) of the Agreement and Plan of Merger.
At the effective date of the merger (the "Merger"), each share of
People's common stock issued and outstanding immediately prior to the effective
date will, by virtue of the Merger, be converted into the right to receive the
number of shares of Citizens & Northern common stock as is provided in Section
3.01 of the Agreement and Plan of Merger. As a result of the Merger, Peoples
State Bank of Wyalusing, Pa., a subsidiary of Peoples, shall merge with and into
Citizens & Northern Bank, subject to the provisions of Section 2.02 of the
Agreement and Plan of Merger.
Peoples shareholders shall exchange their Peoples common stock
certificates for Citizens & Northern common stock certificates, as provided in
Section 3.04 of the Agreement and Plan of Merger. No fractional shares of
Citizens & Northern common stock will issue. In lieu of fractional
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Board of Directors
PEOPLES LTD.
October 13, 2000
Page 2
shares, shareholders of Peoples will receive cash in an amount determined
pursuant to Section 3.03 of the Agreement and Plan of Merger. Shareholders of
Peoples will be entitled to exercise dissenter's rights in connection with the
Merger.
On the effective date, all Treasury shares of Peoples common stock, other
than trust account shares or shares acquired in connection with debts previously
contracted owned by Peoples or any direct or indirect subsidiary of Peoples, if
any, shall be cancelled and retired pursuant to Section 3.01 of the Agreement
and Plan of Merger.
On the effective date, each share of Peoples common stock, other than trust
account shares or shares acquired in connection with debts previously contracted
owned by Citizens & Northern or any direct or indirect subsidiary of Citizens &
Northern, if any, shall be cancelled.
Each share of Citizens & Northern common stock issued and outstanding
immediately prior to the effective date, shall, on and after the effective date,
continue to be issued and outstanding as an identical share of Citizens &
Northern common stock.
Each share of Citizens & Northern common stock issued and held in the
treasury of Citizens & Northern as of the effective date, if any, shall on and
after the effective date, continue to be issued and held in the treasury of
Citizens & Northern.
In connection with the opinion set forth below with respect to the Merger,
we have reviewed and relied upon the following documents:
1. The articles of incorporation, bylaws, and resolutions of People's Board of
Directors;
2. The Agreement and Plan of Merger and all exhibits and attachments to the
Agreement;
3. The Articles of Merger which will be filed in Pennsylvania; and
4. Other documents as we have deemed relevant or appropriate to our opinion.
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Board of Directors
PEOPLES LTD.
October 13, 2000
Page 3
In rendering this Opinion, we have relied upon the accuracy and
authenticity of the information contained in these documents. This Opinion is
further based upon the following assumptions that we have made with your consent
and upon which we are relying:
1. Peoples shareholders will receive shares of Citizens & Northern voting
common stock in exchange for their shares of Peoples voting common
stock surrendered in the exchange based upon a formula provided in the
Agreement and Plan of Merger;
2. Immediately following the transaction, Citizens & Northern will
possess all the assets and liabilities possessed by Peoples
immediately prior to the transaction;
3. Citizens & Northern will continue the historic business of Peoples or
will use a significant portion of Peoples's assets in the continuing
business of Citizens & Northern;
4. The Merger will be consummated in accordance with the Agreement and
Plan of Merger, including the satisfaction of all covenants and
conditions to the obligations of the parties without amendment or
waiver thereof;
5. The Merger will qualify as a merger under the applicable laws of the
Commonwealth of Pennsylvania; and
6. The Agreement and Plan of Merger and all other documents and
instruments referred to therein are valid and binding in accordance
with their terms.
Based upon the foregoing facts, documents and assumptions, it is our
opinion that for United States Federal Income Tax purposes:
1. The Merger of Peoples into Citizens & Northern will constitute a
"reorganization" within the meaning of Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended and Peoples and Citizens &
Northern will each be a party to the "reorganization" within the
meaning of Section 368(b) of the Code;
2. No gain or loss will be recognized by Peoples as a result of the
Merger;
3. No gain or loss will be recognized by the shareholders upon the
exchange of their shares of Peoples voting common stock solely for
shares of Citizens & Northern voting common stock pursuant to the
Merger;
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Board of Directors
PEOPLES LTD.
October 13, 2000
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4. The aggregate tax basis of the shares of Citizens & Northern
voting common stock received solely in exchange for shares of Peoples
voting common stock pursuant to the Merger will be the same as the
aggregate tax basis of Peoples voting common stock exchanged therefor;
5. The holding period for the shares of Citizens & Northern voting
common stock received in exchange for shares of Peoples voting common
stock pursuant to the Merger will include the holding period of the
shares of Peoples voting common stock exchanged therefor, provided the
shares of Peoples voting common stock were held as capital assets by
the shareholder at the effective date of the Merger;
6. The payment of cash in lieu of fractional share interests of
Citizens & Northern voting common stock will be treated as if the
fractional share interests were distributed as part of the Merger and
then redeemed by Citizens & Northern. These cash payments will be
treated as having been received as a distribution in full payment in
exchange for the fractional share interest redeemed, as provided in
Section 302(a) of the Code;
7. As provided in Section 381(c)(2) of the Code and related Treasury
Regulations, Citizens & Northern will succeed to and take into account
the earnings and profits, or deficit earnings and profits, of Peoples
as of the Merger. Any deficit in the earnings and profits of Citizens
& Northern or Peoples will be used only to offset the earnings and
profits accumulated after the Merger; and
8. Pursuant to Section 381(a) of the Code and related Treasury
Regulations, Citizens & Northern will succeed to and take into account
the items of Peoples described in Section 381(c) of the Code. These
items will be taken into account by Citizens & Northern subject to the
conditions and limitations, where applicable, of Sections 381, 382,
383, 384 and 1502, of the Code and Treasury Regulations thereunder.
These opinions are based solely upon the documents, facts and assumptions
stated above. Any inaccuracy in or breach of any of the aforementioned
agreements, documents or assumptions, or any change after the date hereof in the
applicable law could adversely affect our opinion. Furthermore, the tax
consequences described above may not be applicable to shareholders subject to
special treatment under certain federal income tax laws, such as foreign
holders.
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Board of Directors
PEOPLES LTD.
October 13, 2000
Page 5
We express no opinion as to any matter not specifically addressed above.
Also, we express no opinion as to the tax consequences of any of the
transactions under any foreign, state or local tax law. Furthermore, our opinion
is based on current federal income tax law and administrative practice, and we
do not undertake to advise you as to any changes in federal income tax law or
administrative practice that may affect our opinion after the date hereof.
We hereby consent to the use of this opinion in the Registration Statement
on Form S-4 of Citizens & Northern, and we further consent to the reference to
our name in the Proxy Statement/Prospectus included as part of the Registration
Statement, under the captions "Material Federal Income Tax Consequences" and
"Legal Matters."
Sincerely,
SHUMAKER WILLIAMS, P.C.
/s/ Nicholas Bybel, Jr.
By Nicholas Bybel, Jr.
