EXHIBIT 10.40
TAX SHARING
AGREEMENT
TAX SHARING AGREEMENT (the
“Agreement”), made as of May 26, 2009, by and among
Wendy’s/Arby’s Group, Inc., a Delaware corporation
(“WAG”), and each other corporation which is a member
of, and each other entity that is disregarded as an entity separate
from a member of, the affiliated group of which WAG is the common
parent and files consolidated and combined income tax returns for
federal and state income tax purposes (each other such corporation
or entity, a “WAG Sub,” and such other corporations and
entities collectively, the “WAG Subs”).
WAG is the common parent of an
affiliated group (within the meaning of Section 1504 of the
Internal Revenue Code of 1986, as amended (the “Code”))
of corporations (collectively, the “WAG Group”) of
which each corporate WAG Sub is a member, and files consolidated
federal income tax returns on the basis of a taxable year
consisting of 52 or 53 weeks ending on the Sunday closest to
December 31st on behalf of itself and all other members of the WAG
Group.
WAG and the WAG Subs desire to
provide for payment by the WAG Subs to WAG of the amounts payable
by the WAG Subs in respect of federal income taxes and of certain
state and local taxes, and for payments by WAG to the WAG Subs, all
as provided herein.
Accordingly, WAG and each WAG Sub
agree as follows:
1.
Agreement to Join in Consolidated Returns
1.1
Each corporate WAG Sub agrees to join with WAG in any consolidated
federal income tax return (“Consolidated Return”) for
any taxable year for which WAG files a Consolidated Return that
includes such WAG Sub.
1.2
Each WAG Sub hereby irrevocably designates WAG as its agent for the
purpose of taking any and all actions necessary or incidental to
the filing of Consolidated Returns. Each WAG Sub agrees to furnish
WAG with any and all information requested by WAG in order to carry
out the provisions of this Agreement; to cooperate with WAG in
filing any return or consent contemplated by this Agreement; to
take such actions as WAG may request, including, but not limited
to, the filing of all elections and the filing of requests for the
extension of time within which to file tax returns; and to
cooperate in connection with any refund claim.
1.3
At WAG’s request and unless such payment shall violate
Section 12 of this Agreement, each WAG Sub shall pay to WAG an
amount in respect of federal income taxes of the WAG Group for such
taxable year, determined in accordance with Section 2 hereof. WAG
shall have the sole responsibility for making any required payments
to the Internal Revenue Service (the “Service”) in
satisfaction of the consolidated federal income tax liability of
the WAG Group for such year whether or not any payment was
requested. For each quarter of each fiscal year that is covered by
this agreement, at WAG’s request, a WAG Sub shall make
payment to WAG, no later than five business days after WAG’s
request, of a portion of the amount required to be paid pursuant to
Section 2 hereof equal to the amount of the installment payment of
estimated income tax such WAG Sub would be required to make to the
Service for such quarter under Section 6655 of the Code;
provided , that WAG may instead request that each applicable
WAG Sub pay to WAG its allocable share (determined in the
reasonable discretion of Wendy’s International Holdings, LLC
(“WIH”)) of the installment payment of the aggregate
estimated income tax that the relevant members of the WIH
Subgroup
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(as defined below) would be required to make to the Service for
such quarter if those members of the WIH Subgroup had filed
consolidated federal income tax returns as a stand-alone group that
did not include any other members of the WAG Group. If WAG fails to
file a Consolidated Return that includes a WAG Sub for any taxable
year for which such WAG Sub has made or caused to be made a payment
or payments pursuant to this Section 1.3, WAG shall promptly refund
such payment or payments.
1.4
At a WAG Sub’s request, the amount of any overpayment or
underpayment made pursuant to Section 1.3 hereof may be credited
against or added to, as the case may be, the amount otherwise
required to be paid for the fiscal quarter within which the amount
of such overpayment or underpayment first becomes reasonably
ascertainable; provided , however , that, upon a WAG
Sub providing to WAG all information that would have been required
by the Service (including supporting schedules) after the close of
any taxable year but within the period described in Section
6425(a)(l) of the Code, WAG shall repay within the period described
in Section 6425 (b)(l) of the Code, the amount of any net remaining
overpayment of tax liability of such WAG Sub for such year.
1.5
WAG agrees to indemnify and hold harmless each WAG Sub against and
from any claims of liability for federal income tax, interest
thereon, and penalties with respect thereto asserted by the
Service, arising from any taxable period for which the Agreement is
in effect to the extent such WAG Sub has made a payment in respect
of such liability to WAG pursuant to this Agreement.
1.6
WAG shall have the sole responsibility for the preparation and
filing of the Consolidated Return and Combined Returns required to
be filed by the WAG
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Group. Each WAG Sub shall cooperate fully with WAG in any audit
or any proceeding relating to any Consolidated Return or Combined
Return and shall pay an appropriate share, as determined in
accordance with the Amended and Restated Credit Agreement among
certain WAG Subs, certain lenders, and Citigroup North America,
Inc., as administrative agent, dated as of July 25, 2005, and
amended and restated as of March 11, 2009 (the “2009 Credit
Agreement”), of the expenses of any such audit or other
proceeding. WAG shall have sole control over and discretion as to
the undertaking, conduct, settlement or other disposition of any
tax controversy arising out of any Consolidated Return or Combined
Return filed by the WAG Group.
1.7
At WAG’s election, WAG shall also have the sole preparation
and filing responsibility for a WAG Sub’s separate company
state and local income or franchise tax returns. If any such
election is made, such WAG Sub shall cooperate fully with WAG in
any audit or any proceeding relating to any separate company state
and local tax returns of such WAG Sub, and shall pay an appropriate
share, as determined in accordance with the 2009 Credit Agreement,
of the expenses of any such audit or other proceeding. If any such
election is made, WAG shall have sole control over and discretion
as to the undertaking, conduct, settlement or other disposition of
any tax controversy arising out of any separate company state and
local returns of such WAG Sub filed by WAG.
2.
Computation of Tax Liability of the WAG Group
2.1
For each taxable year for which this Agreement remains in effect,
at WAG’s request, each WAG Sub that is a corporation for
federal income tax purposes shall pay (in the manner provided in
Section 1.3 hereof), an amount equal to the federal
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income tax liability that would have been payable by such WAG
Sub for such taxable year if such WAG Sub had filed a separate
federal income tax return for such year and all prior years for
which this Agreement was in effect (but is not so payable by such
WAG Sub because such WAG Sub is a member of the WAG Group) ,
computed in accordance with the actual elections, conventions and
other determinations with respect to the WAG Group reflected in the
Consolidated Return filed by WAG; provided , however
, that any item of income or loss of a member of the WAG Group that
is treated as deferred on the Consolidated Return filed by WAG
(e.g., gain or loss on an intercompany transaction between members
of the WAG Group that is deferred pursuant to Section 1.1502 -13 or
1.1502 -13T of the Treasury regulations (a “Deferred
Transaction”)) shall be taken into account in computing
taxable income of the WAG Group for purposes of this Agreement only
at such time and in such amount as such item is actually taken into
account on the Consolidated Return filed by WAG. For purposes of
computing the amounts due hereunder for the taxable year of the WAG
Group ended December 28, 2008, the members of the WIH Subgroup (as
defined below) shall be credited with any estimated tax payments
made to the Service prior to September 29, 2008 by or with respect
to such members. Payments made by a WAG Sub pursuant to this
Section, Section 1.3 above and Section 3 shall be in lieu of any
other payment by such WAG Sub on account of its share, if any, of
the consolidated federal income tax liability of the WAG Group for
such taxable year. Except as hereinbefore provided with respect to
a Deferred Transaction, payments made for any taxable year by a WAG
Sub pursuant to this Section 2 shall be made without regard to the
actual consolidated federal income tax liability, if any, of the
WAG Group for such taxable year.
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2.2
Notwithstanding anything in this Agreement to the contrary:
a.
No payments may be made under this Section 2 in respect of taxes of
Arby’s Restaurant Holdings, LLC (“ARH”) and its
direct or indirect subsidiaries (collectively, the “ARH
Subgroup”) relating to any time period up to and including
July 25, 2005;
b.
No payments may be made under this Section 2 in respect of taxes of
Wendy’s International, Inc., an Ohio corporation, and its
direct or indirect subsidiaries (collectively, the “WII
Subgroup”) relating to any time period prior to the WII
Subgroup’s taxable year that includes September 29, 2008;
and
c.
The total payments made under this Section 2 by WIH
