EXHIBIT 10(h)
AMENDMENT AND CLARIFICATION OF
THE TAX ALLOCATION AGREEMENT
DATED JANUARY 1, 1988 BY AND
AMONG PROTECTIVE LIFE CORPORATION
AND ITS SUBSIDI
ARIES
The Tax Allocation Agreement dated
January 1, 1988 by and among Protective Life Corporation
(“Parent”) and each of the subsidiaries listed below
(referred to herein individually as a "Subsidiary" and the group of
subsidiaries is collectively referred to herein as the
"Subsidiaries") is hereby amended and restated in its entirety for
the purpose of clarification to read as follows:
RECITALS
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A.
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Parent entered into a Tax Allocation Agreement
with certain of its Subsidiaries on January 1, 1988 (the
“Original Tax Allocation Agreement”). Section 7 of the
Original Tax Allocation Agreement provides that if during a
consolidated return period the Parent or any Subsidiary acquires or
organizes another corporation that is required to be included in
the consolidated return, then such corporation shall join in and be
bound by the Original Tax Allocation Agreement.
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B.
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The parties desire to amend and restate the
Original Tax Allocation Agreement for the purpose of
clarification.
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C.
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Parent is the ultimate parent of an affiliated
group of corporations (within the meaning of Section 1504(a) of the
Internal Revenue Code of 1986, as amended (the "Code")) and each of
the Subsidiaries are included as corporations in such affiliated
group (the "Group").
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D.
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The Subsidiaries are included in the Group's
consolidated federal income tax returns for the taxable year ended
December 31, 1988, and for all future taxable years for which they
are eligible to be so included (the "Consolidated
Period").
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E.
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Parent and each Subsidiary wish to allocate the
consolidated federal income tax liability of the Group among the
members of the Group as provided herein.
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NOW THEREFORE, in consideration of
the covenants and agreements contained herein, the parties agree
that the recitals set forth above are adopted and made part of this
Agreement and further agree as follows:
AGREEMENT
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1.
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Consolidated Return Election and
Preparation
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Parent and the Subsidiaries will
file consolidated federal income tax returns so long as they are
eligible to file such returns. Parent and the Subsidiaries agree to
file such consents, elections and other documents and take such
other actions as may be necessary or appropriate to carry out the
purposes of this Item 1. For any taxable year for which a
consolidated federal income tax return is filed, Parent agrees to
prepare or cause to be prepared and to file such returns and other
appropriate documents as may be necessary on behalf of the
Group.
For each taxable year for which the
Group files a life/non-life consolidated return, the Group will be
comprised of two sub-groups, a group comprised of companies that
are not life insurance companies (the “Non-life
Sub-group”), and a group comprised of life insurance
companies (the “Life Sub-group”) (collectively referred
to as the “Sub-groups”). Parent shall be considered the
parent of the Non-life Sub-group, and Protective Life Insurance
Company shall be considered the parent of the Life Sub-group (each
referred to as a “Sub-group Parent”).
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2.
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Subsidiary Tax Payments
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(a)
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Each of the Subsidiaries shall compute a
separate return tax liability for each taxable year and pay an
amount equal to such separate return tax liability to Parent. Each
Subsidiary's separate return tax liability for any taxable year
shall be equal to the tax liability (including any alternative
minimum tax) such Subsidiary would have incurred had it not been
included in a consolidated federal income tax return with Parent,
as the common parent, and had it filed a federal income tax return
on a separate basis for each such year that it was a member of the
Group. The separate return tax liability of each of the
Subsidiaries shall be determined in a manner consistent with the
methods of accounting and with any elections made in computing the
consolidated income tax liability of the Group.
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(b)
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If a Subsidiary incurs a tax loss, or generates
a tax credit that cannot be utilized to offset the current year
separate return tax liability, the Subsidiary shall only be
entitled to a current benefit for such loss or credit to the extent
such separate company loss or credit can be carried back and used
in determining the prior year’s separate company tax of the
Subsidiary. Any amount not carried back shall carryforward on a
separate company basis. Any such carryforward shall not expire
unless such amount is not utilized in the consolidated
return.
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(c)
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The payments required under this Item 2 shall be
made on a Sub-group basis, with payments due to and from each
Subsidiary to its respective Sub-group Parent in lieu of Parent.
Further, the Life Sub-group shall be treated as a separate
Subsidiary for purposes of determining payments due to or from the
Life Sub-group and the Parent, with such payments due to or from
Protective Life Insurance Company as the Sub-group Parent of the
Life Sub-group. However, Protective Life Insurance Company shall be
entitled to any tax refund attributable to a carryback of a tax
loss of the Life Sub-group. This Item 2(c) shall not affect any
amount to
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