Term/Termination
After the Distribution, the term of the Separation and Distribution Agreement is indefinite and it may only be terminated with the prior written consent of both Worthington Steel and us.
Separation Costs
All costs with respect to the Separation incurred prior to the Separation are borne and paid by us, except as otherwise provided by the Tax Matters Agreement.
All costs with respect to the Separation incurred after the Separation are borne and paid by Worthington Steel except to the extent such fees and expenses were incurred in connection with services expressly requested by and incurred to the direct benefit of the Company. In addition, Worthington Steel bears responsibility for all other services provided to or for the benefit of Worthington Steel, whether provided before or after the Separation.
Any costs or expenses incurred by a party for actions requested by the other party to vest in such party all the transferring party’s right, title and interest to the assets allocated to such party shall be borne by the requesting party.
Treatment of Intercompany Arrangements
Except as otherwise set forth in the Separation and Distribution Agreement, upon completion of the Separation, all intercompany balances, accounts and agreements between us or any of our subsidiaries (other than us and our subsidiaries), on the one hand, and Worthington Steel or any of its subsidiaries, on the other hand, were terminated.
Other Matters Governed by the Separation and Distribution Agreement
Other matters governed by the Separation and Distribution Agreement include, among others, confidentiality, access to and provision of records and treatment of outstanding guarantees and similar credit support.
Tax Matters Agreement
the Tax Matters Agreement governs our and Worthington Steel’s respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and certain other matters regarding taxes.
In general, Worthington Steel is responsible for all U.S. federal, state, local and foreign taxes that are (i) imposed with respect to tax returns that include both us and Worthington Steel, to the extent such taxes are attributable to Worthington Steel or its businesses for any tax period (or portion thereof) beginning after the Distribution, (ii) imposed with respect to tax returns that include only Worthington Steel (other than certain domestic income tax returns relating solely to tax periods ending on or before the Distribution Date), (iii) that are not required to be reported on a tax return but are attributable to Worthington Steel or its business and (iv) imposed as a result of any audit adjustment or redetermination or otherwise as a result of any tax contest to the extent such taxes are attributable to Worthington Steel or its business for any tax period. Taxes incurred by Worthington Steel or us relating to or arising out of any failure of the intended tax treatment of the Separation or Distribution will generally be shared equally by Worthington Steel and us. If, however, such failure is attributable to certain acts or omissions by Worthington Steel, inaccuracies, misrepresentations or misstatements relating to Worthington Steel or events involving its common shares or assets, Worthington Steel will generally bear such taxes. Worthington Steel also generally bears fifty percent (50%) of other taxes incurred by Worthington Steel or us relating to or arising out of the Separation and Distribution.
The Tax Matters Agreement requires Worthington Steel to comply with the representations, covenants and agreements made to legal counsel in connection with the tax opinion received regarding the intended tax treatment of the Separation and Distribution. The tax matters agreement also restricts Worthington Steel’s ability to take or fail to take any action if such action or failure to act could adversely affect the intended tax treatment. In particular, in the two years following the Distribution, Worthington Steel may be restricted from, among other things, (i) entering into transactions pursuant to which its equity would be issued or acquired, whether by merger or otherwise, (ii) ceasing to actively conduct certain of its businesses or (iii) disposing of more than a threshold amount of assets used in its business, in each case, unless Worthington Steel obtains a waiver from us or receives a private letter ruling