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EXHIBIT 8.1
[FULBRIGHT & JAWORSKI L.L.P. LETTERHEAD]
November 5, 1996
Daniel Industries, Inc.
9753 Pine Lake Drive
Houston, Texas 77055
Gentlemen:
You have requested our opinion concerning certain federal income
tax consequences of the proposed statutory merger (the "Merger") of Blue
Acquisition, Inc., a Delaware corporation ("Sub") and wholly-owned subsidiary
of Daniel Industries, Inc., a Delaware corporation ("Parent"), with and into
Bettis Corporation, a Delaware corporation ("Company"). Descriptions of the
parties and of the Merger and related transactions are set forth in the
Agreement and Plan of Merger, dated as of September 17, 1996 (the "Agreement"),
entered into by Company, Sub, and Parent. Company and Parent have represented
to us that the information contained in the Agreement is accurate and complete
in all material respects as of its execution date. Also, we assume such
information will be accurate and complete in all respects material hereto as of
the effective time of the Merger.
BACKGROUND
In connection with this opinion we have reviewed the Agreement,
and Company and Parent have represented to us that the Merger and related
transactions will be carried out in accordance with the terms of the Agreement.
SUMMARY OF TRANSACTIONS
Pursuant to the Agreement, at the effective time Sub will be
merged with and into Company pursuant to the provisions of and with the effect
provided in the Delaware General Corporation Law. Company will be the
surviving corporation resulting from the Merger. In the Merger, the Company
will succeed to all of the assets of Sub.
At the effective time of the Merger, the issued and outstanding
capital stock of Company will consist solely of shares of common stock, $.01
par value. In the Merger, each share of Company common stock, $.01 par value,
including the related right to purchase one one-thousandth of a share of Series
A Junior Participating Preferred Stock, $.01 par value, of the Company
(collectively, the "Company Stock") not
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owned by Company, Parent, Sub or any wholly-owned subsidiary of Company, Parent
or Sub, will be converted into fifty-eight one-hundredths (.58) of a share of
voting common stock, $1.25 par value, including the related right to purchase
one one-hundredth interest in a share of Series A Junior Participating
Preferred Stock, $1.00 par value, of Parent (collectively, the "Parent Stock")
as provided in the Agreement.
Under the Agreement, cash will be paid in lieu of any fractional
shares of Parent Stock. Apart from the cash paid in lieu of fractional shares,
the consideration paid to Company shareholders for their Company Stock will
consist solely of Parent Stock.
The Agreement provides that the parties intend the Merger to
constitute a reorganization, within the meaning of section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). Further, Company and
Parent have made certain representations to us in certificates dated the same
date as this opinion. Copies of those certificates are attached hereto as
Exhibit A.
Based upon the foregoing and such legal considerations as we deem
relevant, it is our opinion that for federal income tax purposes:
1. The Merger will constitute a reorganization under section
368(a) of the Code.
2. No gain or loss will be recognized by Company, Sub, or
Parent as a result of the Merger.
MISCELLANEOUS
This opinion is based on statutes, regulations promulgated
thereunder, and governmental rulings and court decisions published to date, all
of which are subject to change by the Congress, governmental agencies, and the
courts. Our opinion does not address all tax consequences applicable to the
Merger and is limited to the conclusions set forth above, and no other opinions
are expressed or implied. Further, our opinion is limited to the federal
income tax consequences of the transactions described herein. Thus, for
example, no opinion is expressed concerning any state, local, or foreign tax
consequences of such transactions.
The parties have not requested or received any advance ruling from
the Internal Revenue Service (the "Service") pertaining to the transactions
described herein. Our opinion is not binding upon the Service or any court.
Accordingly, the Service may challenge some or all of the conclusions set forth
above in an audit of a Company shareholder or of one or more of the parties to
the Merger. If such challenge occurs, it may be necessary to resort to
administrative proceedings or litigation in an effort to
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sustain such conclusions, and there can be no assurance that such conclusions
ultimately will be sustained.
The opinions set forth above are based in part upon facts and
representations concerning the transactions contained in the Agreement and upon
the additional representations set forth in the certificates of Company and
Parent, copies of which are attached hereto as Exhibit A. We have not made an
independent investigation to determine the accuracy or completeness of such
facts and representations, and our opinion is conditioned on the accuracy and
completeness of such facts and representations and upon the assumption that
they will be accurate and complete as of the effective time of the Merger.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement on Form S-4 (Registration No. 333-14635) filed with
the Securities and Exchange Commission, and to the reference to us under the
captions "The Merger -- Certain U.S. Federal Income Tax Consequences" and
"Legal Matters" in the Joint Proxy Statement/Prospectus forming a part of the
Registration Statement. In giving this consent, however, we do not hereby
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 Securities and Exchange Commission thereunder.
This opinion is given to you by us solely for your use and is not
to be quoted or otherwise referred to or furnished to any governmental agency
(other than the Securities and Exchange Commission as an exhibit to the
Registration Statement or to the Service in connection with an examination of
the transactions contemplated by the Agreement) or to other persons without our
prior written consent.
Very truly yours,
Fulbright & Jaworski L.L.P.
Attachments
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DANIEL INDUSTRIES, INC.
OFFICER'S CERTIFICATE
The undersigned, a duly authorized officer of Daniel Industries, Inc.,
a Delaware corporation ("PARENT"), and acting as such, in connection with the
opinions to be delivered by the law firms of Fulbright & Jaworski L.L.P. and
Vinson & Elkins L.L.P. with respect to the Agreement and Plan of Merger dated
as of September 17, 1996 (the "AGREEMENT"), between Parent, Blue Acquisition,
Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ("SUB"),
and Bettis Corporation, a Delaware corporation ("COMPANY"), and recognizing
that said law firms will rely on this Certificate in delivering their
respective opinions, hereby certifies as follows:
1. The fair market value of the Parent stock and other
consideration to be received by the Company's shareholders will be
approximately equal to the fair market value of Company stock surrendered by
such shareholders in exchange therefor.
2. Prior to the Merger, Parent will be in control of Sub within
the meaning of section 368(c) of the Internal Revenue Code of 1986, as amended
(the "CODE").
3. Following the Merger, Company will hold at least 90 percent of
the fair market value of its net assets and at least 70 percent of the fair
market value of its gross assets and at least 90 percent of the fair market
value of Sub's net assets and at least 70 percent of the fair market value of
Sub's gross assets held immediately
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prior to the Merger, taking into account amounts used to pay merger expenses,
and any distributions other than regular dividends.
4. Parent has no plan or intention to (i) liquidate Company, (ii)
merge Company with and into another corporation, (iii) sell or otherwise
dispose of the stock of Company except for transfers of stock to corporations
controlled (within the meaning of section 368(c) of the Code) by Parent, (iv)
cause or permit Company to issue additional shares of its capital stock that
would result in Parent losing control (within the meaning of section 368(c) of
the Code) of Company, (v) cause or permit Company to sell or otherwise dispose
of any of its assets or any of the assets acquired from Sub, except for
dispositions made in the ordinary course of business or transfers of assets to
a corporation controlled by Company, or (vi) reacquire any of Parent stock
issued to the holders of Company stock pursuant to the Merger.
5. Sub will have no liabilities assumed by Company, and will not
transfer to Company any assets subject to liabilities, in the Merger.
6. Following the Merger, Company will continue its historic
business or use a significant portion of its historic business assets in a
business.
7. Parent and Sub will each pay their respective expenses, if
any, incurred in connection with the Merger.
8. There is no intercorporate indebtedness existing between
Parent and Company or between Sub and Company that was issued or acquired or
will be settled at a discount.
9. Parent does not own and has not owned during the past five
years, any shares of the capital stock of Company.
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10. Parent is not an investment company as defined in section
368(a)(2)(F)(iii) and (iv) of the Code.
11. None of the compensation to be received by any
shareholder-employee of Company will be separate consideration for, or
allocable to, any of his or her shares of Company stock; none of the shares of
Parent stock to be received by any shareholder-employee will be separate
consideration for, or allocable to, any employment agreement; and the
compensation paid to any shareholder-employee will be for services actually
rendered and will be commensurate with amounts paid to third parties bargaining
at arm's length for similar services.
12. The payment of cash in lieu of fractional shares of Parent
stock is solely for the purpose of avoiding the expense and inconvenience to
Parent of issuing fractional shares and does not represent separately
bargained-for consideration. The total cash consideration that will be paid
instead of issuing fractional shares of Parent stock will not exceed one
percent of the total consideration that will be issued pursuant to the Merger
to the Company shareholders in exchange for their Company stock. The
fractional share interests will be aggregated, and no Company shareholder will
receive cash in an amount greater than the value of one full share of Parent
stock.
13. The Merger and related transactions will be carried out in
accordance with the terms of the Agreement, including attachments thereto.
14. Parent is authorized to make all of the representations made
by it and set forth herein.
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We understand that (i) you will rely upon the above representations by
us in connection with issuing your opinion, (ii) the representations in this
Certificate are made as of the date hereof and as of the effective date of the
Merger, and (iii) you may disclose these representations in connection with
issuing your opinion.
Dated: November 1, 1996.
DANIEL INDUSTRIES, INC.
By James M. Tidwell
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Its Vice President, Finance
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BETTIS CORPORATION
OFFICER'S CERTIFICATE
The undersigned, a duly authorized officer of Bettis Corporation, a
Delaware corporation ("COMPANY"), and acting as such, in connection with the
opinions to be delivered by the law firms of Fulbright & Jaworski L.L.P. and
Vinson & Elkins L.L.P. with respect to the Agreement and Plan of Merger dated
as of September 17, 1996 (the "AGREEMENT"), between Daniel Industries, Inc., a
Delaware corporation ("PARENT"), Blue Acquisition, Inc., a Delaware corporation
and a wholly-owned subsidiary of Parent ("SUB"), and Company, and recognizing
that said law firms will rely on this Certificate in delivering their
respective opinions, hereby certifies as follows:
1. The fair market value of the Parent stock and other
consideration to be received by the Company's shareholders will be
approximately equal to the fair market value of Company stock to be surrendered
by such shareholders in exchange therefor.
2. After discussions with shareholders of the Company (including
shareholders who own five percent or more of the Company common stock)
management of the Company knows of no plan or intention, and to the best
knowledge of such management, there is no plan or intention by any shareholder
of Company who owns five percent or more of the Company common stock, or on the
part of the remaining shareholders of Company, to sell, exchange, or otherwise
dispose of a number of shares of Parent stock to be received in the Merger that
would reduce the Company's shareholders' ownership of Parent stock to a number
of shares having a value, as of the date of the Merger, of less than 50 percent
of the value of all of the Company stock (including shares of Company stock
exchanged for cash in lieu of fractional shares of Parent stock) outstanding
immediately prior to the date of the Merger. Shares of Company stock and
shares of Parent stock held by Company shareholders and
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otherwise sold, redeemed, or disposed of prior or subsequent to the Merger have
been considered in making this certification.
3. Company and the shareholders of Company will each pay their
respective expenses, if any, incurred in connection with the Merger.
4. There is no intercorporate indebtedness existing between
Parent and Company or between Sub and Company that was issued, acquired, or
will be settled at a discount.
5. In the Merger, shares of Company stock representing control of
Company, as defined in section 368(c) of the Internal Revenue Code of 1986, as
amended (the "CODE"), will be exchanged solely for voting stock of Parent. For
purposes of this representation, shares of Company stock exchanged for cash or
other property originating with Parent will be treated as outstanding Company
stock on the date of the Merger.
6. At the time of the Merger, Company will not have outstanding
any warrants, options, convertible securities, or any other type of right
pursuant to which any person could acquire stock in Company that, if exercised
or converted, would affect Parent's acquisition or retention of control of
Company, as defined in section 368(c) of the Code.
7. Company is not an investment company as defined in section
368(a)(2)(F)(iii) and (iv) of the Code.
8. On the date of the Merger, the fair market value of the assets
of Company will exceed the sum of its liabilities, plus the amount of
liabilities, if any, to which the assets are subject.
9. Company is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of section 368(a)(3)(A) of the Code. That
is, Company is not
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a party to a case under Title 11 of the United States Code or to a
receivership, foreclosure or similar proceeding in a federal or state court.
10. Company will file its federal income tax returns in a manner
which treats the Merger as a reorganization under section 368(a) of the Code.
11. The Merger and related transactions will be carried out in
accordance with the terms of the Agreement, including attachments thereto.
12. The Company is not, on the date of the Merger, and was not,
during the five-year period ending on the date of the Merger, a United States
real property holding corporation, within the meaning of section 897(c)(2) of
the Code (a "USRPHC") or, if the Company is or was a USRPHC, no foreign
shareholder of the Company exchanging stock of the Company for stock of the
Parent pursuant to the Merger held directly or indirectly at any time during
the five-year period ending on the date of the exchange, more than five percent
of the Company stock. For this purpose, a foreign shareholder of the Company
is any shareholder of the Company that is not a citizen or resident of the
United States or a domestic corporation, domestic partnership or domestic
estate or trust, within the meaning of section 7701(a)(30) of the Code.
13. The Company has not transferred any asset to its shareholders
in anticipation of the Merger.
14. The Company is authorized to make all of the representations
made by it and set forth herein.
We understand that (i) you will rely upon the above representations by
us in connection with issuing your opinion, (ii) the representations in this
Certificate are
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made as of the date hereof and as of the effective date of the Merger, and
(iii) you may disclose these representations in connection with issuing your
opinion.
Dated: November 4, 1996.
BETTIS CORPORATION
By W. Todd Bratton
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Its President
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