EXHIBIT 10.24
TAX SHARING AGREEMENT
TAX SHARING AGREEMENT, made as of November 25, 2003, by and among Crunch
Holding Corp., a Delaware corporation having its principal place of business at
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Holding"),
and those corporations that have executed this Agreement and whose names and
principal places of business are set forth on Exhibit A hereto (all of which are
direct or indirect domestic subsidiaries of Holding and are includible in the
consolidated Federal income tax return of the affiliated group (within the
meaning of Section 1504 of the Internal Revenue Code of 1986, as amended (the
"Code")) of which Holding is the common parent corporation (hereinafter, the
"Holding Group") for the fiscal year ended June 30, 2003), and such other
parties as may become members of the Holding Group in subsequent fiscal years
for which Holding files a consolidated Federal income tax return as the common
parent corporation of an affiliated group, and who execute this Agreement
(hereinafter, sometimes referred to as a "Subsidiary").
Holding and each Subsidiary wish to provide for payment of the
consolidated Federal income tax and certain state and local tax liabilities of
the Holding Group by Holding; for the contribution to such payment by the
various members of the Holding Group, including Pinnacle Foods Holding
Corporation, a Delaware corporation having its principal place of business at
("PFHC"), and any direct and indirect subsidiaries of PFHC ("PFHC Subsidiaries")
that may be includible in the Holding Group (hereinafter, PFHC and such PFHC
Subsidiaries are sometimes collectively referred to as the "PFHC Group"), to
which such liability may be attributable in whole or in part; and for the
reimbursement by Holding to those Subsidiaries that produce losses or credits in
any fiscal year in the amount of the benefit that such Subsidiary would be
entitled to with respect to such losses or credits on a separate return basis,
or for the benefit, in whole or in part, that such losses or credits produce for
the Holding Group.
In consideration of the foregoing, and of the mutual covenants and
promises herein contained, Holding and the Subsidiaries agree as follows:
SECTION 1. Allocation and Payment of Tax Liability of Members of Group.
(a) For the fiscal year ended June 30, 2004 and for each subsequent
fiscal year for which this Agreement may remain in effect, each Subsidiary, for
so long as it is a member of the Holding Group, shall be required to pay to
Holding (in the manner provided in paragraph 1(c) hereof), as its share of the
consolidated Federal income tax liability of the Holding Group, an amount equal
to the Federal income tax liability that would have been payable by such
Subsidiary for such year if it had filed a separate income tax return for such
year and all prior years; provided, however, that in computing separate return
tax liability, no account shall be taken of any deduction, loss or credit of any
Subsidiary to the extent that such Subsidiary has previously received payment
therefor, pursuant to Section 3 hereof. If a Subsidiary ceases to be a member of
the Holding Group during a taxable year, such Subsidiary shall be required to
pay to Holding only that portion of such Subsidiary's separate return tax
liability that is allocable to the portion of the taxable year in which such
Subsidiary was a member of the Holding Group. Payments shall be required to be
made in each fiscal year pursuant to this Section without regard to the actual
consolidated Federal income tax liability, if any, of the Holding Group for such
year.
(b) For the purposes of this Agreement, if, in any fiscal year, one
or more PFHC Subsidiaries are includible in the Holding Group, all members of
the PFHC Group shall be deemed to constitute a single member of the Holding
Group, and any portion of the Holding Group consolidated Federal income tax
liability for any fiscal year that is apportioned to the PFHC Group in
accordance with this Section shall be allocated among the members thereof in
such manner as they may agree. The amount of separate return tax liability
required to be paid to Holding by PFHC or the PFHC Group in any year pursuant to
this Section shall be determined as if PFHC had filed a consolidated Federal
income tax return for such year and for all prior years, on behalf of itself and
all PFHC Subsidiaries that were includible corporations described in Section
1504(a)(1) of the Code for such year or prior years, as the case may be. If
Holding engages in a merger or similar transaction with a corporation that is
the parent of a consolidated tax group for Federal income tax purposes, and the
Holding tax group is the continuing group for Federal income tax purposes, the
other group should be treated under this agreement in a similar way as the PFHC
Group.
(c) Each member (or group of members) of the Holding Group shall
make payment to Holding of any consolidated Federal income tax liability
allocated to it pursuant to this Section 1, and Holding shall have sole
responsibility for making any required payments to the Internal Revenue Service
(the "IRS") in satisfaction of the consolidated Federal income tax liability of
the Holding Group for each fiscal year. Subject to the provisions of Section
1(d) below, for each quarter of each fiscal year after the year ended [June 30,
2003], each member (or group of members) of the Holding Group shall make payment
to Holding of any amount required to be paid pursuant to this Section no later
than the date upon which such member (or group of members) would be required to
make an installment payment of estimated income tax to the IRS for such quarter,
in accordance with Section 6655 of the Code. The amount of any overpayment or
underpayment pursuant to this Section shall be credited against or added to, as
the case may be, the amount otherwise required to be paid for the fiscal quarter
within which the amount of such overpayment or underpayment first becomes
reasonably ascertainable; provided, however, that, upon written request
(including supporting schedules) of any member (or group of members), made after
the close of any fiscal year but within the period described in Section
6425(a)(1) of the Code, Holding shall repay to such member (or group of
members), within the period described in Section 6425(b)(1) of the Code, the
amount of any net remaining overpayment of consolidated tax liability made by
such member (or group of members) for such year.
(d) Anything contained in this Agreement to the contrary
notwithstanding, any payment to be made by any party hereto to any other party
hereto may be deferred until such time as either (i) the party obligated to make
such payment elects to make the relevant payment or (ii) the party entitled to
receive such payment demands that such payment be made. All such deferred
payments shall bear interest at an annual rate that approximates the average
interest rate under PFHC's revolving credit facility over the time period that
such payment is deferred, computed on the basis of the actual number of days
elapsed over a 365-day period.
SECTION 2. Payment for Tax Benefits of Members. From and after the date
hereof, if any member (or group of members) of the Holding Group would be
entitled to a refund of Federal income taxes previously paid in any prior fiscal
year, computed on a separate return basis (in the manner described in Section 1
hereof), as a result of any losses, deductions or
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credits claimed by such member (or group of members) for any fiscal year for
which this Agreement may be in effect (any such entitlement to a refund being
referred to herein as a "Separate Return Tax Benefit"), whether by reason of a
carryback of a net operating loss, or a net capital loss or tax credit, or
otherwise, then, upon written request (including supporting schedules) of such
member (or group of members), made within the period described in Section
6411(a) of the Code, Holding shall pay the amount of such Separate Return Tax
Benefit to such member, within the period described in Section 6411(b) of the
Code (subject to the provisions of Section 1(d) above). In the case of PFHC and
PFHC Subsidiaries, the amount of the Separate Return Tax Benefit for any year
shall be computed as if PFHC had filed a consolidated Federal income tax return
for such year and for all prior years on behalf of itself and all other PFHC
Subsidiaries that were includible corporations described in Section 1504(a)(1)
of the Code. The amount of any payment required to be made to any member (or
group of members) pursuant to this Section 2 shall be reduced by any amount
previously paid to such member (or group of members) with respect to such
losses, deductions or credits pursuant to Section 3 hereof.
SECTION 3. Payment for Tax Benefits of Group.
(a) If, for any fiscal year during which this Agreement is in
effect, any member (or group of members) shall have a negative separate return
tax liability (hereinafter, a "Loss Member"), Holding intends to pay to such
Loss Member an amount equal to the tax benefit realized by the Holding Group for
such year (the "Group Tax Benefit") as a result of such negative separate return
tax liability. For purposes of this Agreement, the Group Tax Benefit for any
fiscal year shall be equal to the excess, if any, of (i) the sum of the separate
return tax liabilities of each member of the Holding Group having a positive
separate return tax liability for such year, over (ii) the actual consolidated
Federal income tax liability of the Holding Group for such year. For purposes of
this Section 3, "separate return tax liability" shall be computed in accordance
with, and subject to the exceptions and limitations provided in Treas. Reg.
Section 1.1552-1(a)(2)(ii). "Negative separate return tax liability" shall
similarly be ascertained under the principles of Treas. Reg. Section
1.1552-1(a)(2)(ii), as if the Loss Member had filed a separate return for such
fiscal year as its first separate return year and allocated to such separate
return year carryover and carryback items of consolidated net operating loss,
consolidated net capital loss, consolidated unused investment credit,
consolidated unused foreign tax credit, and consolidated excess charitable
contributions under the provisions of Treas. Reg. Section 1.1502-79. In the case
of the PFHC Group, separate return tax liability and negative separate return
tax liability shall be computed in accordance with the principles set forth in
this Section 3, on a consolidated basis.
(b) Within 90 days after the beginning of each fiscal year for which
this Agreement may be in effect, Holding shall give written notice to each
Subsidiary of its intention to pay one or more Loss Members an amount equal to
all, or any portion, of their proportionate part (determined in the manner
provided in paragraph 3(a)) of any Group Tax Benefit that may be realized by the
Holding Group for such year. Holding intends to make such payments on a
quarterly basis, in the manner described in paragraph 1(c) hereof; provided,
however, that all payments made pursuant to this Section 3 shall be made in the
sole discretion of Holding, and Holding shall have no obligations or liability
whatsoever with respect thereto to any Loss Member; and provided, further, that
any payment made to any Loss Member in a fiscal year pursuant to this Section 3
shall be reduced by any amount previously paid to such Loss Member with respect
to such year under Section 2 hereof.
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SECTION 4. Adjustments. Any adjustment of income, deduction, or credit
that results after the fiscal year in question by reason of any carryback,
amended return, claim for refund, or audit shall be given effect by
redetermining amounts payable and reimbursable for such fiscal year hereunder as
if such adjustment had been part of the original determination hereunder, with
interest payable in the amounts provided in Section 6611 of the Code. Any
increases in the consolidated Federal income tax liability of the Holding Group,
and any penalties and interest imposed with respect to any consolidated Federal
income tax return filed on behalf of the Holding Group, shall be given effect by
redetermining amounts payable for such fiscal year as if such adjustment had
been part of the original determination hereunder.
SECTION 5. Alternative Minimum Tax. Each Subsidiary shall be required to
pay to Holding, as its share of any alternative minimum tax imposed on the
Holding Group pursuant to Section 55 of the Code, an amount of such liability
that Holding shall allocate to each Subsidiary, provided that any such amounts
so allocated pursuant to this Section 5 shall be allocated by Holding in a
manner that is equitable and is consistent with Section 55 and Section 1502 of
the Code, and the Treasury Regulations promulgated thereunder, including any
amendments thereto and consistent with the allocations of tax liability pursuant
to Section 1 hereof.
SECTION 6. State Taxes. If, at any time from and after the date hereof,
the liability of Holding and the Subsidiaries for any state or local income or
franchise taxes is determined on a consolidated or combined basis, this
Agreement shall be applied in like manner to determine liability for, and tax
benefit payments with respect to, such taxes.
SECTION 7. Termination. This Agreement may be terminated at any time upon
mutual agreement of the parties hereto; provided, however, that such termination
shall not relieve Holding of the obligation to make payments to any Subsidiary
pursuant to Section 2 hereof for any separate return tax benefit to which such
Subsidiary would have been entitled (if this Agreement had remained in effect)
as a result of any loss, deductions or credits taken by such Subsidiary for any
fiscal year for which this Agreement was in effect, nor will it relieve Holding
or the Subsidiaries of any obligations pursuant to Section 4 hereof.
SECTION 8. Effective Date. This Agreement shall be effective for the
taxable year of the Holding Group ended [June 30, 2004], and for all taxable
years thereafter.
SECTION 9. Captions. All section captions contained in this Agreement are
for convenience only and shall not be deemed a part of this Agreement.
SECTION 10. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original and all of which, when taken
together, shall constitute one agreement.
SECTION 11. Governing Law. This Agreement shall be governed by the laws
applicable to contracts entered into and to be fully performed within the State
of New York by residents thereof.
SECTION 12. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
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IN WITNESS WHEREOF, Holding and the Subsidiaries have executed this
Agreement as of the day and year first above written.
CRUNCH HOLDING CORP.
By: /s/ C. XXXX XXXXXXXXXXX
---------------------------------
Name: C. Xxxx Xxxxxxxxxxx
PINNACLE FOODS HOLDING CORPORATION
PINNACLE FOODS CORPORATION
PINNACLE FOODS MANAGEMENT CORPORATION
PINNACLE FOODS BRANDS CORPORATION
PF SALES (N. CENTRAL REGION) CORP.
PF SALES, LLC
PF DISTRIBUTION, LLC
PF STANDARDS CORPORATION
By: /s/ N. XXXXXXX XXXX
--------------------------------
Name: N. Xxxxxxx Xxxx
S-1
EXHIBIT A
NAME PRINCIPAL PLACE OF BUSINESS
--------------------------- ---------------------------
PINNACLE FOODS HOLDING 6 Executive Campus
CORPORATION Xxxxxx Xxxx, XX 00000-0000
PINNACLE FOODS CORPORATION 0 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
PINNACLE FOODS MANAGEMENT 6 Executive Campus
CORPORATION Xxxxxx Xxxx, XX 00000-0000
PINNACLE FOODS BRANDS 6 Executive Campus
CORPORATION Xxxxxx Xxxx, XX 00000-0000
PF SALES (N. CENTRAL REGION) 6 Executive Campus
CORPORATION Xxxxxx Xxxx, XX 00000-0000
PF SALES, LLC 0 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
PF DISTRIBUTION, LLC 0 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
PF STANDARDS CORPORATION 0 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
