EXHIBIT 6(b)
FORM OF
TAX ALLOCATION AND SERVICES AGREEMENT
THIS AGREEMENT made as of this _____ day of __________, 1997, by and
between InvestorsBancorp, Inc. ("IBC"), and InvestorsBank ("Bank").
WHEREAS, the Bank is a wholly-owned subsidiary of IBC; and
WHEREAS, IBC and the Bank wish to preserve the economic rights and
privileges which would accrue to each from the filing of consolidated
state and federal income tax returns and to set forth the agreement
between them regarding those rights and privileges.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained in this Agreement, and other good and valuable consideration,
the receipt and sufficiency of which is acknowledged, the parties agree as
follows:
1. Consolidated Return. IBC and the Bank will file consolidated
state and federal income tax returns for the taxable year ending 1997 and
for any subsequent taxable period for which IBC and the Bank are required
or permitted to file a consolidated return. IBC and the Bank agree to
file such consents and other documents and take such action as may be
necessary to carry out the provision of this paragraph.
2. Calculation of Separate Corporate Income Tax Liability.
2.1 Beginning with the tax year 1997 and each tax year thereafter,
the Bank will calculate its state and federal income tax
liability at its pro rata portion of the consolidated state and
federal income tax liability, and not as if it were to file
separate state and federal income tax returns for such periods.
2.2 In computing the Bank's pro rata portion of the consolidated
state and federal income tax liability:
a. The Bank's pro rata portion of the consolidated state and
federal income tax liability will be based on its
percentage of taxable income to consolidated taxable
income, but shall not exceed 100% of consolidated taxable
income. Notwithstanding anything to the contrary contained
in this Agreement, the tax liability of the Bank shall not
exceed, but may be less than, the amount of tax the Bank
would have paid had the Bank filed a separate tax return.
b. Any dividends received by IBC will be assumed to qualify
for the 100% dividend received deduction of section 243 of
the Internal Revenue Code (the "Code") or shall be
eliminated from such calculation in accordance with IRS
Regulation Section 1.1502-14(a)(1).
c. Limitations on the calculation of a deduction or the
utilization of credits or the calculation of a liability
should be made on a consolidated basis.
d. If the Bank has a taxable loss it will receive the benefit
on a pro rata basis only to the extent a consolidated
benefit is booked. Notwithstanding the foregoing, if the
Bank has a tax loss, the benefit the Bank receives shall
not be less than the benefit it would have received if it
had filed a separate tax return. To the extent a deduction
is not allowed or income is excluded on a consolidated
basis, such item of expense or income shall be excluded in
determining taxable income on a pro rata basis.
e. The direct off-sets to tax liability provided for in
section 46 of the Code shall be allocated to the entity
which generated the credit to the extent such credit is
utilized on a consolidated basis.
f. In calculating any carryback or carryover of net operating
losses, adjustments shall be to such prior or subsequent
year's consolidated tax liability as determined under
section 172(b)(1) of the Code.
3. Method of Payment.
3.1 If the Bank is subject to state and federal income tax liability
as computed under paragraph 2 above, the Bank shall pay such sum
in cash to IBC.
3.2 If the Bank is entitled to a refund of state or federal income
tax liability as computed under paragraph 2 above, IBC shall pay
such sum in cash to the Bank.
3.3 IBC agrees to pay the state and federal income tax liability of
IBC and the Bank until termination of this Agreement.
4. Time of Payment. Any amount to be paid by the Bank to IBC or by
IBC to the Bank by reason of paragraph 2 above shall be paid one day prior
to the date on which settlement of a consolidated tax liability is
required to be made by IBC with the appropriate taxing authority for the
period in question.
5. Adjustment of Tax Liability. In the event of any adjustment of
the tax liability under the consolidated state and federal income tax
returns, by reason of the filing of an amended return or claim for refund,
or arising out of an audit by the Internal Revenue Service or other
regulatory agency, the liability of IBC and the Bank under this Agreement
shall be redetermined after fully giving effect to any such adjustments as
if such adjustment had been made as part of the original computation.
6. Computation of Tax for Statutory and GAAP Purposes. The method
for computation of statutory and GAAP tax liability of the Bank will be
the same as the computation for corporate income tax liability as
specified in paragraph 2 above.
7. Services to IBC. If requested by IBC, the Bank shall perform
accounting services for IBC and shall be reimbursed by IBC on a monthly
basis. The Bank shall maintain a record of the actual time spent by its
employees in providing such accounting services and shall charge and IBC
shall pay on a monthly basis for the actual cost of providing such
services. The actual cost shall be the employee's hourly rate, plus a pro
rata share of the cost of bonuses and other benefits and perquisites of
employment made available to such employee(s).
8. Miscellaneous.
8.1 Captions; Counterparts. Captions in this Agreement are for
convenience only and shall not be considered a part hereof or
effect the construction or interpretation of any provision
hereof. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
8.2 Successors; Assigns. The provision and terms of this Agreement
shall be binding on and inure to the benefit of any successor,
by merger, acquisition of assets or otherwise, to any of the
parties to this Agreement.
8.3 Amendment; Modification. This Agreement may be modified or
amended only by written agreement executed by duly authorized
officers of both parties.
8.4 Term. Unless earlier terminated by mutual agreement of the
parties, this Agreement shall remain in effect with respect to
any year for which consolidated federal income tax returns are
filed by IBC and the Bank.
INVESTORSBANCORP, INC.
By
____________________________________________
Its: ______________________________
INVESTORSBANK
By
____________________________________________
Its: ______________________________
