Federal Income Tax Allocation Agreement
For the Period Starting January 1, 1993
This Consolidated Federal Income Tax Allocation Agreement is
entered into this 6th day of August, 1993 to be effective for the period
starting January 1, 1993 between Blue Cross & Blue Shield United of Wisconsin
(BCBSU), United Wisconsin Insurance Company (UWIC), United Wisconsin Services,
Inc. (UWSI), United Wisconsin Proservices, Inc. (UWPS), United Wisconsin Life
Insurance Company (UWLIC), Compcare Health Services Insurance Corporation
(CHSIC), Take Control, Inc. (TC), Meridian Resource, Inc. (MR), Valley Health
Plan, Inc. (MHP) and United Wisconsin Capital Corporation
(UWCC).
Now, therefore, in consideration of their mutual promises and other good and
valuable consideration, BCBSU and each of the subsidiaries on its own behalf
agrees to the attached Federal Tax Allocation Agreement dated August 6, 1993.
In witness whereof, the parties hereto have executed this amendment
as of the day and year first above written.
Exhibit I
August 6, 1993
Tax Allocation Agreement for the BCBS Group
Effective January 1, 1993
The steps required to determine the tax or benefit allocated to each member are
as follows:
1. Determine each member's ordinary taxable income and net capital gain for
the year (before NOL carryforwards).
A member with ordinary income and/or net capital gain is charged a tax
expense equal to 34% of these amounts.
2. Determine each member's current year net capital loss and current year
ordinary loss. If a member's current year losses are used in the
consolidated return, the member receives a 34% tax benefit for the use of
its current year capital losses and a 34% benefit for the use of its
current year ordinary losses.
3. Determine each member's NOL and capital loss carryforwards that can be
utilized in the consolidated tax return. Carryforwards can be utilized in
the order of taxable years in which such losses are sustained beginning
with the taxable year which ends earliest and applying all losses from
taxable years ending on the same date on a pro rata basis. The
Separate Return Limitation Year (SRLY) rules also apply in determining
whether a loss carryover can be utilized.
Each member receives a 34% tax benefit if its NOL carryover is used to
offset ordinary income. If a capital loss and/or NOL carryover is used to
offset current year consolidated capital gain, the member also receives a
34% tax benefit.
4. If a member's ITC credit carryover is utilized in the consolidated tax
return, the member receives a tax benefit equal to 100% of the ITC
utilized.
5. A member will receive a benefit for 100% of the alternative minimum tax
credit attributable to that member that's utilized in the consolidated
return. The amount of alternative minimum tax credit of a member utilized
in any year is determined in accordance with the rules provided in Proposed
Treasury Regulation 1.1502-55(h).
The amount of the credit attributed to a member for any year is determined
in accordance with the rules provided in Proposed Treasury Regulation
1.1502-55(h).
6. A member is charged 100% of its ITC recapture for the year.
7. The consolidated environmental tax is allocated to a member in accordance
with the following formula:
Member's modified alternative minimum taxable income (1)
Less: $2,000,000 divided by the number of members in the group
x .0012 =
Member's portion of consolidated environmental tax
Note that a member with negative modified alternative minimum taxable
income will be allocated a tax benefit with respect to the environmental
tax.
8. A member is allocated alternative minimum tax equal to the alt min credit
that's attributed to that member for the year. (See point 5.)
9. Each member's tax charges and tax benefits are totalled resulting in the
tax allocation to that member for the period.
--------------------
(1) As defined in Section 59A(b) of the IRC
Blue Cross & Blue Shield United of Wisconsin
By:/s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By:/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
United Wisconsin Insurance Company
United Wisconsin Life Insurance Company
United Wisconsin Proservices, Inc.
United Wisconsin Services, Inc.
By:/s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By:/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
Compcare Health Services Insurance Company
By:/s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By:/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
Take Control, Inc.
By:/s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By:/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
Meridian Resource, Inc.
By:/s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By:/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
Valley Health Plan, Inc.
By:/s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By:/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
United Wisconsin Capital Corporation
By:/s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By:/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
Amendment to Federal Income Tax Allocation Agreement
for the Period Starting January 1, 1993
This amendment to the consolidated Federal Income Tax Allocation Agreement is
entered into this 9th day of May, 1994 to be effective for the period starting
January 1, 1993 between Blue Cross & Blue Shield United of Wisconsin (BCBSU),
United Wisconsin Insurance Company (UWIC), United Wisconsin Services, Inc.
(UWSI), United Wisconsin Proservices, Inc. (UWPS), United Wisconsin Life
Insurance Company (UWLIC), Compcare Health Services Insurance Corporation
(CHSIC), Take Control, Inc. (TC), Meridian Resource, Inc. (MR), Valley Health
Plan, Inc. (VHP) and United Wisconsin Capital Corporation (UWCC).
This amendment is made part of the Consolidated Federal Income Tax Allocation
Agreement dated August 6, 1993 for the period starting January 1, 1993.
Under this amendment, the tax rate is changed from 34% to 35%.
Now, therefore, in consideration of their mutual promises and other good and
valuable consideration, BCBSU and each of the subsidiaries on its own behalf
agrees to the attached Federal Tax Allocation Agreement dated August 6, 1993.
In witness whereof, the parties hereto have executed this amendment as of the
day and year first above written.
Blue Cross & Blue Shield United of Wisconsin
By:/s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By:/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
United Wisconsin Insurance Company
United Wisconsin Life Insurance Company
United Wisconsin Proservices, Inc.
United Wisconsin Services, Inc.
By:/s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By:/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
Compcare Health Services Insurance Corporation
By:/s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By:/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
Take Control Inc.
By: /s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
Meridian Resources, Inc.
By: /s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
Valley Health Plan, Inc.
By: /s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
United Wisconsin Capital Corporation
By: /s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx
Vice President
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Treasurer
