AMENDMENT TO TAX SEPARATION AGREEMENT
Exhibit 10.3
Execution Copy
AMENDMENT TO TAX SEPARATION AGREEMENT
This Amendment to Tax Separation Agreement (this “Amendment”) is made and entered into as of
March 17, 2008, by and among Retail Ventures, Inc., an Ohio corporation (“RVI”), each RVI Affiliate
(as defined in the Tax Separation Agreement), DSW Inc., an Ohio corporation, and each DSW Affiliate
(as defined in the Tax Separation Agreement).
Recitals
WHEREAS, the parties entered into a certain Tax Separation Agreement, dated as of July 5,
2005, relating to their arrangement concerning certain tax matters and tax and accounting services
(the “Tax Separation Agreement”);
WHEREAS, RVI has sold its entire membership interest in Value City Department Stores LLC, an
Ohio limited liability company; and
WHEREAS, the parties desire to amend the Tax Separation Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements described in this
Amendment, the parties hereby agree as follows:
Agreement
| 1. | The definition of “Shared Services Agreement” in Section 1. Definitions is amended in its entirety to read as follows: |
“Shared Services Agreement” means the Shared Services Agreement, dated effective as of
January 30, 2005, by and between RVI and DSW, as such Shared Services Agreement may be
amended from time to time by mutual agreement of the parties.
| 2. | Section 2.05 is amended in its entirety to read as follows: |
2.05. Tax & Accounting Services Agreement.
(a) In General. DSW shall prepare for RVI any Tax Return described in Section
2.01 of this Agreement and provide other Tax related services to RVI, as set forth on
Schedule 2.05(a) attached hereto (the “Tax & Accounting Services”). In consideration for
the Tax & Accounting Services, RVI shall (i) pay to DSW its respective share, as provided in
the Shared Services Agreement, of any and all costs associated with the maintenance and
operation of DSW’s tax department (including any and all overhead expenses) for each month
in which the Tax & Accounting Services are to be performed, and (ii) reimburse DSW its
respective share, as provided in the Shared Services Agreement, of any and all third party
fees and expenses incurred by DSW; provided, however, that, (i) RVI shall reimburse
DSW for
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one hundred percent (100%) of any and all third party fees and expenses incurred by
DSW solely in connection with the performance of the Tax & Accounting Services, and (ii) RVI
shall not be required to reimburse DSW for any portion of any third party fees and expenses
incurred by DSW solely for the benefit of DSW or any DSW Affiliate. Payment and
reimbursement with respect to Tax & Accounting
Services performed in a particular month shall be made within twenty (20) days of the end of
such month in immediately available funds as instructed by DSW; provided, however,
that, upon termination of the rights and obligations pursuant to this Section 2.05, payment
and reimbursement with respect to all Tax & Accounting Services performed through and
including the effective date of the termination shall be made at least two (2) days prior to
the effective date of the termination. Either party shall have the right to terminate all
rights and obligations pursuant to this Section 2.05 effective upon one hundred and eighty
(180) days written notice to the other party of its cancellation of the Tax & Accounting
Services.
(b) Right to Review. DSW shall provide RVI with (i) any Income Tax Return to
be prepared by DSW for RVI pursuant to the Tax & Accounting Services at least twenty (20)
days prior to the due date of such Tax Return or as is otherwise consistent with past
practice and (ii) any Non-Income Tax Return to be prepared by DSW for RVI pursuant to the
Tax &
Accounting Services at least four (4) days prior to the due date of such Tax Return or as is
otherwise consistent with past practice. RVI shall have the right to comment on any such
Tax Return and DSW shall reasonably consider all comments made by RVI.
(c) Information. RVI shall timely provide all information reasonably requested
by DSW to prepare all Tax Returns, compute all estimated Tax payments (for purposes of
Section 7.01 of this Agreement) and perform the Tax & Accounting Services, and all such
information shall be provided in a manner reasonably requested by DSW. DSW shall provide
RVI with all Tax Returns prepared for RVI pursuant to the Tax & Accounting Services and
copies of any notices or communications from any Taxing Authority relating to any Tax or Tax
Return of RVI or any RVI Affiliate covered by the Tax & Accounting Services. RVI shall
execute and deliver to DSW a power of attorney authorizing the appropriate DSW employees to
sign as “paid preparer” any Tax Return prepared by DSW for RVI pursuant to the Tax &
Accounting Services.
| 3. | Section 3.05 is amended in its entirety to read as follows: |
3.05. Computation. DSW shall provide RVI with a written calculation in
reasonable
detail (including copies of all work sheets and other materials used in preparation thereof)
setting forth the amount of any DSW Separate Tax Liability or estimated DSW Separate Tax
Liability (for purposes of Section 7.01 of this Agreement) and any Taxes related to the DSW
Business. RVI shall have the right to review and comment on such calculation. Any dispute
with respect to such calculation shall be resolved pursuant to Section 10.03 of this
Agreement; provided, however, that, notwithstanding any dispute with respect to any
such calculation, in no event shall any payment attributable to the amount of any DSW
Separate Tax Liability or estimated DSW Separate Tax Liability be paid later than the date
provided in Section 7 of this Agreement.
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| 4. | Section 7.03 is amended in its entirety to read as follows: |
7.03. Redetermination Amounts. In the event of a redetermination of any Tax
Item reflected on any Consolidated Return or Combined Return (other than Tax Items relating
to Distribution Taxes), as a result of a refund of Taxes paid, a Final Determination or any
settlement or compromise with any Taxing Authority which in any case would affect the DSW
Separate Tax Liability, DSW shall prepare a revised pro forma Tax Return in accordance with
Section 2.04(b) of this Agreement for the relevant taxable period reflecting the
redetermination of such Tax Item as a result of such refund, Final Determination, settlement
or compromise. DSW shall pay to RVI, or RVI shall pay to DSW, as appropriate, an amount
equal to the difference, if any, between the
DSW Separate Tax liability reflected on such revised pro forma Tax Return and the DSW
Separate Tax liability for such period as originally computed pursuant to this Agreement.
| 5. | Capitalized terms used in this Amendment and not defined herein shall have the meanings given to them in the Tax Separation Agreement. | |
| 6. | The provision of this Amendment shall become effective as of the date hereof. |
| 7. | Except as expressly amended herein, all terms and provisions of the Tax Separation Agreement shall remain unchanged and in full force and effect. |
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Tax Separation
Agreement as of the date set forth above.
| RETAIL VENTURES, INC. | ||||
| on behalf of itself and each of the RVI Affiliates | ||||
By:
|
/s/ Xxxxx X. XxXxxxx
|
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| Title: Executive Vice President, Chief Financial Officer | ||||
| DSW INC. | ||||
| on behalf of itself and each of the DSW Affiliates | ||||
By:
|
/s/ Xxxxxxx X. Xxxxxx
|
|||
| Title: Senior Vice President, General Counsel | ||||
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