Exhibit 10.01
TAX ALLOCATION AGREEMENT
among
METAVANTE HOLDING
COMPANY,
METAVANTE CORPORATION,
NEW M&I CORPORATION
and
MARSHALL & ILSLEY
CORPORATION
Dated as of April 3,
2007
TAX ALLOCATION
AGREEMENT
TAX ALLOCATION AGREEMENT (this
“ Agreement ”), dated as of April 3, 2007,
among Metavante Holding Company, a Wisconsin corporation and, as of
the date hereof, a wholly-owned subsidiary of MI Corp. (“
MVT Holding ”), Metavante Corporation, a Wisconsin
corporation and, as of the date hereof, a wholly-owned subsidiary
of MI Corp. (“ MVT Corp. ”) (MVT Holding and MVT
Corp., collectively, the “ MVT Parties ”),
Marshall & Ilsley Corporation, a Wisconsin corporation
(“ MI Corp. ”), and New M&I Corporation, a
Wisconsin corporation (“ New MI Corp. ”) (MI
Corp. and New MI Corp., collectively, the “ MI Parties
”).
RECITALS
WHEREAS, MI Corp. is the common
parent of an affiliated group of corporations within the meaning of
Section 1504(a) of the Internal Revenue Code of 1986, as
amended (the “ Code ”), which currently files
consolidated federal Income Tax Returns (the “ Affiliated
Group ”);
WHEREAS, pursuant to the Separation
Agreement dated as of the date hereof between the MVT Parties and
the MI Parties (as may be amended from time to time in accordance
with its terms, the “ Separation Agreement ”)
and the Investment Agreement (as defined below), MVT Holding will
distribute all of the issued and outstanding shares of New MI Corp.
common stock (“ New MI Corp. Common Stock ”) on
a pro rata basis to holders of record of MVT Holding Common Stock
(as defined in the Investment Agreement) (as described more fully
in the Separation Agreement, the “ Distribution
”);
WHEREAS, the MVT Parties, Montana
Merger Sub Inc., a Wisconsin corporation and, as of the date
hereof, a wholly-owned subsidiary of MVT Holding (“ Merger
Sub ”), and the MI Parties have entered into an
Investment Agreement, dated as the date hereof (the “
Investment Agreement ”) with WPM, L.P., a Delaware
limited partnership (“ Investor ”) pursuant to
which, prior to the Distribution, MI Corp. will undertake the MI
Merger, the MI Conversion, the MVT Distribution, the MI LLC
Contribution and the MI Cash Contribution, and Investor will make
the Equity Investment (as defined in the Separation
Agreement);
WHEREAS, in connection with the
transactions contemplated by the Investment Agreement, one or more
of the members of the MVT Group (as defined below) will incur
approximately $1.75 billion of indebtedness (the “ Debt
Financing ”);
WHEREAS, the parties to this
Agreement intend that (i) the MI Merger and the MI Conversion
will qualify as a reorganization under Section 368(a)(1)(F) of
the Code, (ii) following the MI Merger and the MI Conversion,
MVT Holding will become the common parent of the Affiliated Group;
(iii) the MI Contribution (as defined in the Investment
Agreement) followed by the Distribution will qualify as a
reorganization within the meaning of Section 368(a)(1)(D) of
the Code; and (iv) the Distribution will qualify as a
distribution eligible for nonrecognition under Sections 355(a) and
361(c) of the Code;
WHEREAS, after the Distribution, no
member of the MI Group (as defined below) will be a member of the
Affiliated Group for federal income tax purposes and MI Corp. will
be disregarded as an entity separate from New MI Corp. for U.S.
federal income tax purposes;
WHEREAS, after the Distribution the
Affiliated Group will continue and MVT Holding will be treated as
the common parent of the Affiliated Group for federal income tax
purposes; and
WHEREAS, the MVT Group and the MI
Group desire on behalf of themselves and their successors to set
forth their rights and obligations with respect to Taxes due for
periods before, on and after the Distribution Date.
NOW, THEREFORE, in consideration of
the premises and of the respective agreements and covenants
contained in this Agreement, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01.
General . Capitalized terms used in this Agreement have
the meanings set forth in this Agreement, or, when not so defined,
in the Separation Agreement or the Investment Agreement. As used in
this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
“ Affiliate ” has
the meaning set forth in the Separation Agreement.
“ Affiliated Group
” has the meaning set forth in the first recital.
“ Agreement ”
means this Tax Allocation Agreement as the same may be amended from
time to time.
“ Applicable Federal
Rate ” means the federal short-term rate under
Section 1274(d) of the Code, compounded quarterly.
“ Audit ” means
any audit, assessment of Taxes, other examination by any
Governmental Entity (as defined in the Investment Agreement),
proceeding, or appeal of such a proceeding relating to Taxes,
whether administrative or judicial, including proceedings relating
to competent authority determinations.
“ Code ” has the
meaning set forth in the first recital.
“ Controlling Party
” means the party described as the Controlling Party in
accordance with Section 3.01 .
“ Covered Group ”
means, in the case of any Covered Group Taxes, the group of Persons
that join in the filing of the consolidated, combined or unitary
Tax Return upon which such Covered Group Taxes are
reported.
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“ Covered Group Taxes
” means any federal, state, local or foreign Taxes reportable
on a consolidated, combined or unitary Tax Return for a group that
includes any member of the MI Group, on the one hand, and any
member of the MVT Group, on the other hand.
“ Covered Group Year
” means, in the case of any Covered Group, any Taxable year
of such Covered Group that ends prior to or includes the
Distribution Date.
“ Debt Financing
” has the meaning set forth in the fourth recital.
“ Distribution ”
has the meaning set forth in the second recital.
“ Distribution Date
” has the meaning set forth in the Separation
Agreement.
“ Filing Party ”
has the meaning set forth in Section 2.08 .
“ Final Determination
” means with respect to any issue (a) a decision,
judgment, decree or other order by any court of competent
jurisdiction, which decision, judgment, decree or other order has
become final and not subject to further appeal, (b) a closing
agreement (whether or not entered into under Section 7121 of
the Code) or any other binding settlement agreement (whether or not
with the IRS) entered into in connection with or in contemplation
of an administrative or judicial proceeding, or (c) the
completion of the highest level of administrative proceedings if a
judicial contest is not or is no longer available.
“ GAAP ” has the
meaning set forth in the Investment Agreement.
“ Income Tax ”
means any franchise Tax and any federal, state, local or foreign
Tax measured by or imposed on gross receipts or net income or
profits. For the avoidance of doubt, the term “Income
Tax” shall not include any sales or use Tax.
“ Income Tax Return
” means any Tax Return with respect to Income
Taxes.
“ Indemnifiable Losses
” has the meaning set forth in the Separation
Agreement.
“ Independent Firm
” has the meaning set forth in Article VI .
“ Information ”
has the meaning set forth in the Separation Agreement.
“ Investment Agreement
” has the meaning set forth in the third recital.
“ Investor ” has
the meaning set forth in the third recital.
“ Investor Factual
Representation ” means the representations of Investor
set forth in Section 4.1 of the Investment Agreement
and any factual representation provided by Investor in writing in
connection with the Tax Opinion described in
Section 7.1(f)(ii) of the Investment
Agreement.
“ IRS ” means the
United States Internal Revenue Service.
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“ Liable Party ”
has the meaning set forth in Section 2.08 .
“ MI Corp. ” has
the meaning set forth in the preamble.
“ MI Compensation
Payments ” has the meaning set forth in
Section 2.06(a) .
“ MI Group ” has
the meaning set forth in the Separation Agreement.
“ MI Parties ”
has the meaning set forth in the preamble.
“ MI Specified Refunds
” means any refunds or credits relating to (i) the
transactions described in the complaint filed on March 2,
2007, in the United States District Court for the Eastern District
of Wisconsin, (ii) the “Tempest” transactions
currently in appeals, and (iii) the amended tax returns filed
in connection with securitizations involving auto loans.
“ MI Subsidiary ”
has the meaning set forth in the Separation Agreement.
“ MI Taxes ”
means any Taxes (excluding Restructuring Taxes) that are treated as
MI Taxes under Section 2.05 of this
Agreement.
“ New MI Corp. ”
has the meaning set forth in the preamble.
“ New MI Corp. Common
Stock ” has the meaning set forth in the second
recital.
“ MVT Corp. ” has
the meaning set forth in the preamble.
“ MVT Compensation
Payments ” has the meaning set forth in
Section 2.06(a) .
“ MVT Group ” has
the meaning set forth in the Separation Agreement.
“ MVT Holding ”
has the meaning set forth in the preamble.
“ MVT Parties ”
has the meaning set forth in the preamble.
“ MVT Restructuring Tax
Audit ” has the meaning set forth in
Section 3.02(a) .
“MVT Separate Group
Basis ” means, in
the case of any Covered Group Taxes for a Covered Group Year, the
amount of such Covered Group Taxes for such Covered Group Year that
would have been due if the underlying Covered Group consisted
solely of members of the MVT Group and did not include any members
of the MI Group and computed (i) by taking into account
elections and accounting methods actually used in computing such
Covered Group Taxes for such Covered Group Year, (ii) with
appropriate adjustments to take into account the application of
Treasury Regulations Section 1.1502-13 or similar provisions
of state and local Tax law to any intercompany transactions between
members of the MVT Group (on one hand) and members of the MI Group
(on the other hand), (iii) consistent with past practice
(including past practice of allocating state and local unitary
Taxes and expenses to an entity if that entity caused the filing of
a combined, consolidated or unitary Tax Return) and (iv) with
such other adjustments as are contemplated by this Agreement;
provided , however , that Tax liability for an entity
with nexus in a combined return state shall be based on that
entity’s relative apportionment percentage of the total
apportionment percentage of the actual combined group.
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“ MVT Subsidiary
” has the meaning set forth in the Separation
Agreement.
“ MVT Tainting Act
” means:
(a) any action (or failure to take
any reasonably available action) by any of the MVT Parties or any
Affiliate of the MVT Parties after the Distribution Date other than
an action contemplated by the Investment Agreement or any of the
Transaction Agreements;
(b) any inaccuracy of any Investor
Factual Representation;
(c) any acquisition or other
transaction involving the equity of any of the MVT Parties or any
Affiliate of the MVT Parties (other than the distribution of the
New MI Corp. Common Stock in the Distribution or the Equity
Investment); or
(d) any Prohibited Act performed by
any of the MVT Parties or any Affiliate of the MVT Parties after
the Distribution Date.
“ MVT Taxes ”
means any Taxes (excluding Restructuring Taxes) that are treated as
MVT Taxes under Section 2.05 of this
Agreement.
“ Past Practice ”
has the meaning set forth in Section 2.01(e)
.
“ Person ” has
the meaning set forth in the Investment Agreement.
“ Post-Distribution
Period ” means any Taxable year or other Taxable period
beginning after the Distribution Date and, in the case of any
Taxable year or other Taxable period that begins on or before and
ends after the Distribution Date, that part of the Taxable year or
other Taxable period that begins at the beginning of the day after
the Distribution Date.
“ Pre-Distribution
Period ” means any Taxable year or other Taxable period
that ends on or before the close of the Distribution Date and, in
the case of any Taxable year or other Taxable period that begins on
or before and ends after the Distribution Date, that part of the
Taxable year or other Taxable period through the close of the
Distribution Date.
“ Private Letter Ruling
” has the meaning set forth in the Investment
Agreement.
“ Prohibited Acts
” has the meaning specified in Section 4.02(a)
.
“ Restricted Period
” has the meaning specified in Section 4.02(a)
.
“ Restructuring Taxes
” means any Taxes (and other liabilities, including liability
to stockholders and the costs of defending against the imposition
of such Taxes and other liabilities) of any member of the MVT Group
or the MI Group arising from or attributable to one or more of the
Transactions (as defined in the Investment Agreement), including
but not limited to (a) any failure of the Distribution to
constitute a distribution eligible for nonrecognition
under
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Sections 355(a) and 361(c), (b) any failure
of the MI Contribution (as defined in the Investment Agreement)
followed by the Distribution to qualify as a reorganization within
the meaning of Section 368(a)(1)(D) of the Code, or
(c) any failure of any stock of New MI Corp. to be treated as
“qualified property” within the meaning of
Section 355(c)(2) or Section 361(c)(2) of the Code
because of the application of Section 355(d) or
Section 355(e) of the Code to the Distribution;
provided , however , that Restructuring Taxes shall
not include any Taxes imposed on the MVT Dividend or any
distributions of cash from Subsidiaries to fund the MVT Dividend
(which Taxes are governed by Section 2.04(d)
).
“ Separation Agreement
” has the meaning set forth in the second recital.
“ Shared Return ”
means a Tax Return described in clause (a) of
Section 2.01 .
“ Subsidiary ”
has the meaning set forth in the Separation Agreement.
“ Tax ” (and,
with correlative meaning, “Taxes” and
“Taxable”) has the meaning set forth in the Investment
Agreement.
“ Tax Carryover
Attribute ” has the meaning specified in
Section 2.07 .
“ Tax Item ”
means any item of income, gain, loss, deduction or credit, or other
attribute that may have the effect of increasing or decreasing any
Tax.
“ Tax Opinion ”
means the tax opinion described in Section 7.1(f)(ii)
of the Investment Agreement.
“ Tax Return ”
has the meaning set forth in the Investment Agreement.
“ Transaction
Agreements ” has the meaning set forth in the Investment
Agreement.
“ Transaction Taxes
” has the meaning set forth in Section 2.04(b)
.
ARTICLE II
TAX RETURNS, TAX PAYMENTS AND TAX
SHARING OBLIGATIONS
SECTION 2.01.
Obligations to File Tax
Returns .
(a) From and after the Distribution
Time, New MI Corp. shall prepare and timely file or cause to be
timely filed all original Income Tax Returns with respect to any
member of the MVT Group for any Taxable year ending on or before
December 31, 2007 (including any original Income Tax Return
for any Covered Group Taxes for any Taxable year ending on or
before December 31, 2007), whether or not such Income Tax
Return includes any member of the MI Group. To the extent a member
of the MI Group is legally unable to sign any such Income Tax
Return, MVT Holding shall sign or cause to be signed such Income
Tax Return. The MVT Parties shall reimburse New MI Corp. for any
Costs (as defined in Section 3.01 ) incurred by MI
Corp. in preparing any Income Tax Return to the extent such Cost is
attributable to the portion of such Income Tax Return relating to
any member of the MVT Group.
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