Post Holdings (POST), Ralcorp (RAH) Amend Tax Allocation Agreement
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On September 26, 2012, Post Holdings, Inc. (NYSE: POST) and Ralcorp Holdings, Inc. (NYSE: RAH) entered into an Amendment to Tax Allocation Agreement, which amended the Tax Allocation Agreement dated as of February 3, 2012, between the Company and Ralcorp.
The Tax Allocation Agreement, among other things, (i) prohibited the Company from making certain repurchases of its stock during the two-year period following the spin-off (the “Spin-Off”) of the Company by Ralcorp unless certain conditions were satisfied, and required the Company to indemnify Ralcorp against all Tax-Related Losses (as defined in the Tax Allocation Agreement) in the event any such repurchases by the Company of its stock during such two-year period would cause the Spin-Off to lose its Tax-Free Status (as defined in the Tax Allocation Agreement), and (ii) required that, prior to taking certain actions described therein, the Company must obtain a private letter ruling from the Internal Revenue Service or a tax opinion, in each case to the effect that such action would not affect the Tax-Free Status. The Amendment amends the Tax Allocation Agreement to eliminate the limitations and obligations described in clauses (i) and (ii) of the preceding sentence and provides that, if the Company engages in certain transactions described in the Amendment and, in connection therewith, obtains a written tax opinion regarding the effect that any such transaction would have on the Tax Free Status, then the Company will deliver a copy of such written tax opinion to Ralcorp within the time period described in the Amendment. In all other respects, the Tax Allocation Agreement remains unmodified and in full force and effect.
The Tax Allocation Agreement, among other things, (i) prohibited the Company from making certain repurchases of its stock during the two-year period following the spin-off (the “Spin-Off”) of the Company by Ralcorp unless certain conditions were satisfied, and required the Company to indemnify Ralcorp against all Tax-Related Losses (as defined in the Tax Allocation Agreement) in the event any such repurchases by the Company of its stock during such two-year period would cause the Spin-Off to lose its Tax-Free Status (as defined in the Tax Allocation Agreement), and (ii) required that, prior to taking certain actions described therein, the Company must obtain a private letter ruling from the Internal Revenue Service or a tax opinion, in each case to the effect that such action would not affect the Tax-Free Status. The Amendment amends the Tax Allocation Agreement to eliminate the limitations and obligations described in clauses (i) and (ii) of the preceding sentence and provides that, if the Company engages in certain transactions described in the Amendment and, in connection therewith, obtains a written tax opinion regarding the effect that any such transaction would have on the Tax Free Status, then the Company will deliver a copy of such written tax opinion to Ralcorp within the time period described in the Amendment. In all other respects, the Tax Allocation Agreement remains unmodified and in full force and effect.
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