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EXHIBIT 8.1
[JENKENS & ▇▇▇▇▇▇▇▇▇ LETTERHEAD]
October 20, 2000
Southside Bancshares, Inc.
Southside Capital Trust II
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: FEDERAL INCOME TAX OPINION REQUIRED UNDER ARTICLE VI, SECTION 601(b)
OF THAT AMENDED AND RESTATED TRUST AGREEMENT (THE "TRUST AGREEMENT")
DATED NOVEMBER , 2000 AMONG SOUTHSIDE BANCSHARES, INC. ("COMPANY"),
WILMINGTON TRUST COMPANY ("PROPERTY TRUSTEE"), WILMINGTON TRUST
COMPANY ("DELAWARE TRUSTEE"), ▇▇▇ ▇▇▇▇▇▇ AND ▇▇▇ ▇. ▇▇▇▇▇▇
("ADMINISTRATIVE TRUSTEES") AND HOLDERS (AS DEFINED IN THE TRUST
AGREEMENT).
Gentlemen:
Jenkens & ▇▇▇▇▇▇▇▇▇, a Professional Corporation (the "Firm"), has acted
as special tax counsel to Southside Bancshares, Inc., a Texas corporation, and
Southside Capital Trust II (the "Trust Issuer") in connection with the
Registration Statement on Form S-2 (the "Registration Statement") filed by the
Company and the Trust Issuer with the Securities and Exchange Commission
(Registration Nos. 333-47974 and 333-47974-1) on October 20, 2000, under the
Securities Act of 1933, as amended (the "Act"), for the purpose of registering
1,725,000 shares of convertible trust preferred securities (the "Convertible
Preferred Securities") to be issued by the Trust Issuer, the Company's
convertible junior subordinated debentures (the "Convertible Debentures"), and
the Company's guarantee with respect to the Convertible Preferred Securities
(the "Guarantee"). You have requested the opinions set forth in Section C
hereof. All capitalized terms used in this opinion letter and not otherwise
defined herein have the same meaning as set forth in the Registration Statement.
Set forth below are our opinions and assumptions and the documents upon
which we have relied in rendering our opinions.
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A. Documents Reviewed
In connection with the opinions rendered below, we have relied upon the
following documents:
1. the form of Amended and Restated Trust Agreement of
Southside Capital Trust II (the "Trust Agreement");
2. the Certificate of Trust of Southside Capital Trust II,
dated as of October 12, 2000 (the "Certificate of Trust");
3. the form of Convertible Preferred Securities Certificate of
Southside Capital Trust II (the "Convertible Preferred
Securities Certificate");
4. the form of Convertible Preferred Securities Guarantee
Agreement for Southside Bancshares, Inc.(the "Convertible
Preferred Securities Guarantee Agreement");
5. the form of Agreement as to Expenses and Liabilities;
6. the form of Convertible Subordinated Debentures; and
7. the form of Indenture for Southside Bancshares, Inc. (the
"Indenture")
in each case in the form filed as an exhibit to the Registration Statement. In
addition we have relied upon representations made to us by the Company (the
"Certificate").
B. Assumptions
In connection with the opinions rendered below, we have assumed:
1. that all signatures on all documents submitted to us are
genuine, that all documents submitted to us as originals are authentic, that all
documents submitted to us as copies are accurate, that all information submitted
to us is accurate and complete, and that all persons executing and delivering
originals or copies of documents examined by us are competent to execute and
deliver such documents; and
2. that the Trust Agreement, the Certificate of Trust, the
Convertible Preferred Securities Certificate, the Convertible Preferred
Securities Guarantee Agreement, the Agreement as to Expenses and Liabilities;
the Convertible Subordinated Debentures and the Indenture when executed, will be
executed in substantially the form reviewed by us and that the terms of the
Subordinated Debentures when established in conformity with the Indenture will
not violate any applicable law.
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C. Opinions
Based solely upon the documents and assumptions set forth above, and
conditioned upon the initial and continuing accuracy of the factual
representations set forth in the Certificate as of the date hereof, and assuming
full compliance with the terms of the Trust Agreement and the Indenture, it is
our opinion that for United States federal income tax purposes:
1. The Trust will be classified for United States federal income
tax purposes as a grantor trust and not as an association taxable as a
corporation. The Convertible Debentures will be classified as indebtedness of
the Company. Accordingly, each holder of Convertible Preferred Securities will
be treated as owning an undivided beneficial interest in the Convertible
Debentures.
2. The statements contained under the heading "Federal Income Tax
Consequences" in the Registration Statement, insofar as it relates to statements
of law or legal conclusions, are our opinion and such statements are true,
correct, and complete in all material respects. Although such statements do not
purport to discuss all possible United States federal income tax consequences of
the purchase, ownership and disposition of Convertible Preferred Securities, it
is our opinion that such statements are, in all material respects, a fair and
accurate summary of the United States federal income tax consequences of the
purchase, ownership and disposition of Convertible Preferred Securities, based
upon current law as they relate to holders described therein.
D. Limitations
1. Except as otherwise indicated, the opinions contained in this
letter are based upon the Internal Revenue Code of 1986, as amended (the "Code")
and its legislative history, the Treasury regulations promulgated thereunder
(the "Regulations"), judicial decisions, and current administrative rulings and
practices of the Internal Revenue Service, all as in effect on the date of this
letter. These authorities may be amended or revoked at any time. Any such
changes may or may not be retroactive with respect to transactions entered into
or contemplated prior to the effective date thereof and could significantly
alter the conclusions reached in this letter. There is no assurance that
legislative, judicial, or administrative changes will not occur in the future.
We assume no obligation to update or modify this letter to reflect any
developments that may occur after the date of this letter.
2. The opinions expressed herein represent counsel's best legal
judgment and are not binding upon the Internal Revenue Service or the courts and
are dependent upon the accuracy and completeness of the documents we have
reviewed under the circumstances, the assumptions made and the factual
representations contained in the Certificate. To the extent that any of the
factual representations provided to us in the Certificate is with respect to
matters set forth in the Code or the Regulations, we have reviewed with the
individuals making such factual representations the relevant portions of the
Code and the applicable Regulations and are reasonably satisfied that such
individuals understand such provisions and are capable of making such factual
representations. We have made no independent investigation of the facts
contained in the documents and assumptions set forth above, the factual
representations set forth in the Certificate, or the Registration Statement. No
facts have come to our attention, however, that would cause us to question the
accuracy and completeness of such facts or documents in a material way. Any
material inaccuracy or incompleteness in these
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documents, assumptions or factual representations (whether made by the Company
or otherwise) could adversely affect the opinions stated herein.
3. Our opinion is limited to those federal income tax issues
specifically considered herein and no opinion is expressed as to any other
federal income tax consequence of the transactions contemplated by the Trust
Agreement except as specifically set forth herein, and this opinion may not be
relied upon except with respect to the consequences specifically discussed
herein. This opinion does not address the various state, local or foreign tax
consequences that may be applicable as a result from the transactions
contemplated by the Trust Agreement.
4. This opinion letter is issued for your benefit and the holders
of Convertible Preferred Securities and no other person or entity may rely
hereon without our express written consent. This opinion letter may be filed as
an exhibit to the Registration Statement. Furthermore, we consent to the
reference to Jenkens & ▇▇▇▇▇▇▇▇▇, a Professional Corporation, under the captions
"Certain Federal Income Tax Consequences" and "Legal Matters." In giving this
consent, we do not thereby admit that we are within the category of persons
whose consent is required under section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
JENKENS & ▇▇▇▇▇▇▇▇▇,
a Professional Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇, Authorized Signatory