Tax Sharing Agreement
Life-Nonlife
WHEREAS, Financial Holding Corporation (FHC), a Missouri Corporation, as the
common parent of a group of affiliated corporations (Subsidiaries), agrees with
all wholly owned subsidiaries (direct and indirect) of FHC (each a "Subsidiary"
and collectively the "Subsidiaries"), including eligible subsidiaries that are
taxed under Internal Revenue Code Section 801 or a subsidiary owned by such a
company, to file a consolidated corporate tax return and act as agent for all
such corporations, hereinafter each a "Party" and collectively "the Parties."
All eligible affiliated corporations agree to join the consolidated return.
WHEREAS, the Parties wish for economy and other reasons to file a life-nonlife
consolidated income tax return for the years 1995 and thereafter until they
elect to discontinue such agreement as provided by the rules promulgated by the
Internal Revenue Service.
NOW, THEREFORE, the Parties do for their mutual benefit agree as follows:
1. The Parties will execute the appropriate forms to be filed with the
Internal Revenue Service to effect the filing of a consolidated
life-nonlife income tax return for the year 1995 and each year
thereafter until they discontinue such practice in accordance with
the rules of the Internal Revenue Service and this contract or they
become ineligible to file consolidated income tax returns.
2. The Parties to this Agreement shall effect entries on their books and
records to reflect gains and losses as though they were filing
separate income tax returns.
3. The parties shall each maintain accounting records and workpapers
showing the income tax cost or benefit had each filed separate income
tax returns and they shall provide such records to each other upon
request.
4. Any and all tax savings caused by the filing of the consolidated
income tax return will inure to the originating Party of the income,
expense, credit, loss or other item that reduces the taxes from the
aggregate of what would be paid if each Party had filed separately.
5. Any all tax detriments arising from the filing of a consolidated
income tax return shall be charged back to the originating Party of
the income, expense, credit, loss or other item that increases the
tax from the aggregate of what would be paid if each Party had filed
separately.
6. Any losses arising from the filing of consolidated income tax returns
and any rights to average income by carryforwards and carrybacks
shall be equitably divided among the Parties to this Agreement in the
same manner that they benefited from the savings caused by the filing
of consolidated income tax returns notwithstanding Paragraphs 4 and
5.
7. a. The Parties shall settle their balances and make all tax
payments that otherwise would be required to be paid or
refunded by separate return filings. The Parties agree to
indemnify and reimburse each other in accordance with the
terms of this Agreement. Payments in lieu of taxes shall be
made coincident with the time FHC, as common parent, is
required to make estimated and/or final payments to the
Internal Revenue Service (IRS) as required under the payment
provisions of the Internal Revenue Code and the estimated
payment convention selected by FHC.
b. Each Party will pay to FHC an amount no greater than that
Party's tax as computed on a separate return basis. FHC will
pay to each loss Party an amount equal to the reduction in
tax of the group caused by the use of a Party's loss.
c. Under IRS Sections 1.1552-1(a) and 1.1502-33(d), tax will be
calculated using the separate return liability allocation
method (Basic Method 2) and the additional amount allocation
complimentary method (Complimentary Method 2). The
additional amount percentage will be 100%.
8. a. If adjustments (including those arising from an IRS audit
or an amended return) are made to a consolidated federal
income tax return in which FHC and the Subsidiaries are
included that result in a deficiency or overpayment that
would have required a larger or smaller payment made by a
Subsidiary to FHC previously, such Subsidiary shall pay FHC
(or FHC shall pay to such Subsidiary, whichever is
appropriate) an amount plus interest (at the rate prescribed
by the Internal Revenue Service) to reflect the deficiency
or overpayment.
b. Any penalties with respect to the filing of the consolidated
return shall be shared appropriately by those Subsidiaries
whose action or inaction contributed to the imposition of
the penalty.
c. FHC has the sole right to deal with the IRS and to negotiate
any settlement with the IRS. Additionally, any refund will
be paid to FHC initially; FHC will make appropriate payment
to the Subsidiaries thereafter.
9. If future subsidiaries of FHC are acquired or created, FHC will use
its best efforts to cause them to become parties to this Agreement.
This Section also applies to subsidiaries of FHC that are not
immediately eligible to join the consolidated return, when they
become eligible to join the consolidated return.
10. Payments for taxes generated by capital gains or losses from
deferred intercompany transactions will be made as follows:
a. No payment will be made of the tax generated by a deferred
intercompany transaction if the capital gain or loss is from
the sale, distribution, dividend or other transfer of a
controlled entity.
b. Payment will be made of the tax generated by a deferred
intercompany transaction if the capital gain or loss is from
the sale, distribution, dividend or other transfer of a
non-controlled entity.
A controlled entity is any company, partnership, limited liability
entity, etc. of which any member who joins the consolidated federal
return owns 80 percent or more of the entity.
11. This Agreement may be canceled by any Party as to future filings of
consolidated income tax returns upon ninety (90) days written notice
to the other Parties any time that the exercise of such right is not
forbidden by the rules of the IRS, but such cancellation shall not
affect the obligations of any of the Parties incurred prior to the
effective date of such cancellation.
12. In the event that any Party to this Agreement is subject to a levy by
the IRS for unpaid taxes in excess of the amount paid, or due to be
paid, under this agreement, FHC shall cause the Party whose income,
expense, credit, loss or other item that generated the excess tax for
which the levy is issued to indemnify the Party against whom the levy
is issued for the amount under the levy in excess of the amount paid,
or due to be paid, under this Agreement.
13. a. This Agreement shall be administered and interpreted by
the Chief Financial Officer of FHC or by another individual
so designated by the Chief Financial Officer of FHC.
b. Nothing under this Agreement creates any fiduciary
relationship or obligation among FHC and the Subsidiaries
other than those obligations expressly enumerated within
this Agreement.
14. This contract is entered into subject to the prerogatives of the
Texas State Board of Insurance pursuant to Article 21.49-1 of the
Insurance Code and there shall be created thereby no rights superior
to the rights of such regulatory authority when acting in performance
of law to elect to discontinue, rescind or cancel this agreement; all
provided, however, that the effect of such election is recognized to
have implications and to create transactions that can be under
certain circumstances rescinded or terminated only in accordance with
the provisions of the Internal Revenue Code of 1986 and lawful
regulations promulgated thereunder.
EXECUTED the 29th day of December, 1995
Financial Holding Corporation, a Missouri Corporation
By /s/ Xxxx X. Xxxxxx Title Executive Vice President
----------------------------- ---------------------------
Cidat Aviation, a Delaware Corporation
By /s/ Xxxx X. Xxxxxx Title President and Chief Executive
Officer
----------------------------- ----------------------------
Assured Leasing Corporation, a Missouri Corporation
By /s/ Xxxx X. Xxxxxx Title President and Chief Executive
Officer
----------------------------- ----------------------------
Landmark Mortgage Company, a Missouri Corporation
By /s/ Xxxx X. Xxxxxx Title Executive Vice President and
Treasurer
----------------------------- ---------------------------
First Consulting and Administration, Inc., a Missouri Corporation
Title President and Chief Executive
Officer and Treasurer
By /s/ Xxxxxxxx Xxxxxx
----------------------------- ----------------------------
Hanover Financial Corporation, a Missouri Corporation
By /s/ Xxxx X. Xxxxxx Title President and Treasurer
----------------------------- ----------------------------
Xxxxxxx Life, Inc., a Missouri Corporation
By /s/ Xxxx X. Xxxxxx Title President and Chief Executive
Officer
----------------------------- ----------------------------
United Fidelity Life Insurance Company, a Texas Corporation
By /s/ Xxxx X. Xxxxxx Title President and Chief Executive
Officer
----------------------------- ----------------------------
Great Southern Life Insurance Company, a Texas Corporation
By /s/ Xxxx X. Xxxxxx Title President and Chief Executive
Officer
----------------------------- ----------------------------
College Life Insurance Company of America, an Indiana Corporation
By /s/ Xxxx X. Xxxxxx Title President and Chief Executive
Officer
----------------------------- ----------------------------
PFS Holding Company, a Missouri Corporation
By /s/ Xxxx X. Xxxxxx Title President and Chief Executive
Officer
----------------------------- ----------------------------
Premium Finance Specialists, Inc., a Missouri Corporation
By /s/ Xxxxxx Xxxxxxxxxxx Title President
----------------------------- ---------------------------
Premium Finance Specialists of California, a California Corporation
By /s/ Xxxxxx Xxxxxxxxxxx Title President
----------------------------- ---------------------------
PFS Financing Corporation, a Missouri Corporation
By /s/ Xxxxxx Xxxxxxxxxxx Title President
----------------------------- ----------------------------
