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EXHIBIT 99.4
AMENDED TAX SHARING AGREEMENT
THIS AMENDED TAX SHARING AGREEMENT (the "Amended Agreement") is made this
24th day of September, 1995 between First Mississippi Corporation, a
Mississippi corporation ("FMC"), FirstMiss Gold Inc., a Nevada corporation
("FirstMiss Gold"), and FMG Inc., a Nevada corporation ("FMG");
WHEREAS, FirstMiss Gold is a subsidiary of FMC and FMG is a subsidiary of
Gold (FirstMiss Gold and FMG are hereinafter referred to collectively as
"Gold");
WHEREAS, FMC is the common parent of an affiliated group of corporations
(the "Affiliated Group") which files consolidated tax returns;
WHEREAS, FMC and Gold are parties to a Tax Sharing Agreement (the "Tax
Sharing Agreement") dated as of October 1, 1987;
WHEREAS, FMC wishes to spin off to the shareholders of FMC the stock of
Gold owned by FMC (the "Spin-Off); and
WHEREAS, in connection with the Spin-Off, FMC and Gold wish to amend the
Tax Sharing Agreement so as fix the respective rights and obligations of the
parties under said agreement following the Spin-Off;
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. TERMINATION OF TAX SHARING AGREEMENT. The Tax Sharing Agreement
shall terminate on the date of the Spin-Off and the parties shall thereafter
have no
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obligations to each other thereunder, except as specifically provided in this
Amended Agreement.
2. SETTLEMENT OF OBLIGATIONS.
(a) In complete satisfaction of any existing obligation of FMC
under the Tax Sharing Agreement to make payment to Gold for the use of any
deduction, credit or allowance of Gold by the Affiliated Group, FMC shall pay
Gold the Settlement Amount, as hereinafter defined, pursuant to the provisions
of subsection 2(c) below.
(b) For purposes of this Amended Agreement, the "Settlement
Amount" shall mean that amount which is equal to (i) the present value, as of
the date of the Spin-Off, of the right to receive payment of the amount of
"Gold Tax Benefits," as hereinafter defined, in twenty (20) equal quarterly
installments beginning on September 30, 1998, computed using a discount rate of
6.5 percent, less (ii) the aggregate amount of any advances in excess of
$5,000,000 made by FMC to Gold between August 22, 1995 and the date of the
Spin-Off. The amount of "Gold Tax Benefits" shall be that amount which is
equal to the difference between (x) the sum of the alternative minimum tax
credit carryovers and the tax benefit of the net operating loss carryovers
which Gold would have been entitled to as of the date of the Spin-Off if Gold
had filed a separate consolidated return during the entire time that Gold was a
member of the Affiliated Group and (y) the amount of the alternative minimum
tax credit carryovers which will be allocated to Gold as of the date of the
Spin-Off pursuant to the consolidated return regulations. The tax benefit of
the net operating loss carryovers, referred to in Section 2(b)(x) above, shall
be computed using a 34% tax rate for periods ending before July 1, 1993, and a
35% tax rate for periods ending after June 30, 1993, based on the taxable year
in which Gold would have incurred the loss.
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(c) The Settlement Amount shall be paid by FMC to Gold as
follows: (i) if between the date of the Spin- Off and the earlier of the date
of the public equity offering of common stock (the "Offering") Gold plans to
effect, or April 28, 1997, Gold requires funds, in addition to those available
to it under its credit facility with Toronto Dominion Bank, Gold may request,
as funds are necessary for mine development, operations and working capital,
payment from FMC of amounts which do not exceed, in the aggregate, the
Settlement Amount, and FMC shall pay Gold such amounts; and (ii) if on the
earlier of the date of the Offering or April 28, 1997, FMC has paid Gold,
pursuant to section (2)(c)(i) above, an aggregate amount of less than the
Settlement Amount, the excess of the Settlement Amount over the amounts
previously paid by FMC pursuant to section 2(c)(i) above shall be paid by FMC
on such date in the form of a reduction in the balance of the loan from FMC to
Gold outstanding on such date.
(d) Any reduction in the balance of the loan from FMC to Gold
which is made pursuant to section 2(c)(ii) above shall not satisfy or otherwise
affect the obligation of Gold, set forth in Section 2.3(B)(1) of the Loan
Agreement between FMC and Gold of even date herewith, to make a mandatory
$15,000,000 prepayment of said loan out of the net proceeds of the Offering.
3. CONTROL OF AUDITS, ETC.
(a) In the event that any audit or administrative or judicial
proceeding relating to taxes involves an asserted claim which relates solely to
Gold (a "Claim"), FMC shall, at Gold's request, attempt to have such Claim
severed and considered separately from any other issues involved in such audit
or proceeding. If severance of the Claim is accomplished, Gold shall have the
right to control the contest of such Claim with its own
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counsel and at Gold's own expense. FMC shall have the right to participate, at
its own expense, in proceedings relating to such Claim, provided that the
conduct of such proceedings shall remain within the sole control of Gold. In
the event of such severance, Gold shall not settle any Claim in a manner which
would have an adverse impact on FMC unless Gold has indemnified FMC against
such adverse impact and shall also not settle any Claim without the written
consent of FMC, which consent shall not be unreasonably withheld; provided,
however, that the consent of FMC to such settlement shall not be required if
FMC has failed to provide Gold with information which has been reasonably
requested by Gold in connection with the contest of such Claim.
(b) In the event that severance of a Claim is not accomplished,
then FMC shall permit Gold to attend any proceedings relating to such Claim,
and FMC shall take such actions in connection with contesting such Claim as
Gold shall reasonably request; provided, however, that the conduct of all such
proceedings shall remain within the sole control of FMC and FMC shall have no
obligation to take any action in contesting such Claim if such action is
inconsistent with some position being taken by FMC or would have a detrimental
effect on FMC. Notwithstanding the foregoing, FMC shall not settle any Claim
without the written consent of Gold, which consent shall not be unreasonably
withheld; provided, however, that the consent of Gold to such settlement shall
not be required if Gold has failed to provide FMC with information which has
been reasonably requested by FMC in connection with the contest of such Claim.
Gold shall execute any power of attorney or other document requested by FMC to
enable FMC to exercise control over any such proceedings.
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(c) FMC and Gold shall promptly notify the other in writing of
any issue raised by a taxing authority following the Spin-Off which can
reasonably be expected to affect the tax returns of the other party, or which
could give rise to an obligation to make a payment to the other party under the
terms of section 4(a) or 4(b) of this Amended Tax Sharing Agreement.
4. AUDIT ADJUSTMENTS.
(a) If following the Spin-Off any audit adjustment or
redetermination attributable to Gold is made with respect to any consolidated
or combined tax return which includes Gold and relates to a taxable period
prior to the Spin-Off, Gold shall reimburse FMC for any resulting assessments
of tax (including interest, penalties and additions to tax) when, and to the
extent that, the cumulative amount of such assessments, determined on a
consolidated or combined return basis, exceeds $250,000. In the event that any
such audit adjustment or redetermination results in a refund or credit which is
attributable to Gold, FMC shall pay Gold when, and to the extent that, the
cumulative amount of such refunds or credits, determined on a consolidated or
combined return basis, received by FMC exceeds $250,000.
(b) FMC and Gold shall notify the other party of any audit
adjustments which affect the allocation of alternative minimum tax credit
carryovers between the parties as of the date of the Spin-Off. In the event
the cumulative amount of any such reallocated alternative minimum tax credit
carryovers, determined on a consolidated return basis, exceeds $250,000, FMC or
Gold shall make payment to the other party to the extent of such excess.
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(c) FMC shall indemnify Gold against any joint and several
liability for taxes (including interest, penalties and additions to tax) which
are attributable solely to corporations other than Gold, but are imposed on
Gold solely as the result of its inclusion in a consolidated or combined tax
return filed by FMC.
5. CARRYBACKS.
(a) In the event that Gold incurs a regular or alternative minimum
tax net operating loss in a taxable period following the Spin-Off which may be
carried back to a taxable year in which Gold was included in the Affiliated
Group, then Gold shall make an election under section 172(b)(3) of the Internal
Revenue Code of 1986, as amended, (or comparable state law provision) to forego
the carryback period for such loss. If Gold shall fail to make such an
election, FMC shall have no liability to Gold for any refund received by FMC as
a result of the carryback of such loss.
(b) In the event that Gold incurs a capital loss or is entitled to
a credit in a taxable period following the Spin-Off which may be carried back
to a taxable year in which Gold was included in the Affiliated Group, FMC will
pay Gold the lesser of (i) the tax benefit which would result to Gold from such
carryback if Gold's tax liability were computed on a separate return basis, or
(ii) the amount of tax actually refunded to FMC for the taxable year to which
such loss or credit is carried.
6. RECORD RETENTION AND ASSISTANCE. FMC and Gold shall, in accordance
with their existing record retention policies, retain all records, documents,
accounting data and other information (including computer data) which relate to
all tax returns filed for periods prior to the Spin-Off. Each party shall
provide the other with reasonable access to such records and information. If
either party wishes to destroy any such records or
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information, it shall first give 30 days' prior notice to the other party,
which shall have the right at its option to object to such destruction, in
which case the party seeking to destroy such records or information shall at
its option either continue to retain possession of such records or information
or will deliver such records or information the other party. FMC and Gold
shall provide each other with such other cooperation and information as either
of them may reasonably request of the other in connection with the preparation
of tax returns, amended returns, claims for refunds or in connection with any
audit or other examination by any authority or any judicial or administrative
proceeding relating to taxes.
7. MEDIATION AND ARBITRATION. If a dispute arises between FMC and
Gold with respect to this Agreement or the breach thereof, and if such dispute
cannot be settled through negotiations, the parties shall first attempt in good
faith to settle the dispute by mediation under the Commercial Mediation Rules
of the American Arbitration Association. If such dispute cannot be settled by
mediation, it shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association and judgment upon the
award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof. Regardless of any other choice of law provisions
in this Agreement, any arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. Sections 1-16, as amended from time to time.
8. INTEGRATION; AMENDMENT; WAIVER. This Amended Agreement supersedes
the Tax Sharing Agreement and all prior negotiations, agreements and
understandings between the parties with respect to the subject matter hereof,
constitutes the entire agreement between the parties with respect to the
subject matter hereof and may not be altered or amended except in writing
signed by the parties. The failure of either party
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hereto at any time or times to require performance of any provisions of this
Amended Agreement shall in no manner affect the right to enforce the same. No
waiver by either party hereto of any condition, or of the breach of any
provision of this Amended Agreement or the other agreements contemplated
hereby, whether by conduct or otherwise, in any one or more instances, shall be
deemed or construed as a further or continuing waiver of any such condition or
breach or a waiver of any other condition or of the breach of any other
provision herein or therein contained.
Signed, sealed and delivered on the date first above written.
(CORPORATE SEAL) FMC:
FIRST MISSISSIPPI CORPORATION
ATTEST: By: /s/ X. X. XXXXXXXXXX
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Vice President
/s/ XXXXX X. XXXXXXXX
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Secretary
(CORPORATE SEAL) GOLD:
FIRSTMISS GOLD INC.
ATTEST: By: /s/ X. X. XXXXXXXX
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President
/s/ XXXXX X. XXXXXXXX
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Secretary
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(CORPORATE SEAL) FMG:
FMG INC.
ATTEST: By: /s/ X. X. XXXXXXXX
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President
/s/ XXXXX X. XXXXXXXX
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Secretary
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