Exhibit 10.(a)
TAX SHARING
AGREEMENT
THIS AGREEMENT is entered into by
and among ING America Insurance Holdings Inc. (“ING
AIH”), ReliaStar Life Insurance Company of New York (the
“Subsidiary”), ReliaStar Life Insurance Company
(“RLIC”) and Lion Connecticut Holdings Inc.
(“Lion”). Each of RLIC and Lion is the direct or
indirect parent corporation of the Subsidiary, is a member of the
ING AIH affiliated group pursuant to a tax sharing agreement other
than this Agreement, and joins in this agreement as a signatory and
not as a participant in this Agreement.
WITNESSETH:
WHEREAS, effective January 1, 2006
ING AIH and the Subsidiary will be members of an affiliated group
as that term is defined in Section 1504 of the Internal Revenue
Code of 1986, as amended (the "Code"), which consists of ING AIH,
the Subsidiary, and certain other subsidiaries of ING AIH, and
which expects to file a consolidated federal income tax return for
each taxable year during which the Subsidiary is an includible
corporation qualified to so file; and
WHEREAS, it is desirable for the
Subsidiary and ING AIH to enter into this Tax Sharing Agreement
("Agreement") to provide for the manner of computation of the
amounts and timing of payments with regard thereto by ING AIH to
the Subsidiary and by the Subsidiary to ING AIH, and various
related matters;
NOW, THEREFORE, in consideration of
the agreements contained herein and of other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
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a.
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General - For each taxable year during which the
Subsidiary is included in a consolidated federal income tax return
with ING AIH, the Subsidiary will pay to ING AIH an amount equal to
the regular federal income tax liability (including any interest,
penalties and other additions to tax) that the Subsidiary would pay
on its taxable income if it were filing a separate, unconsolidated
return, provided that (i) Tax Assets (as defined herein) will be
treated in accordance with subsection (b) of this section, (ii)
intercompany transactions will be treated in accordance with income
tax regulations governing intercompany transactions in consolidated
returns and subject to any election which may be made by ING AIH
with regard thereto; (iii) the Subsidiary's payment will be
increased to the extent that the Subsidiary generates Other Taxes,
as determined in accordance with subsection (d) of this section;
(iv) such computation will be made as though the highest rate of
tax specified in subsection (b) of Section 11 of the Code were the
only rate set forth in that subsection, and (v) such computation
shall reflect the positions, elections and accounting methods used
by ING AIH in preparing the consolidated federal income tax return
for ING AIH and its subsidiaries.
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It is the intention of the parties
that the tax charge to the Subsidiary under this agreement shall
not be more than it would have paid if it had filed on a separate
return basis. The Subsidiary shall be “paid” for any
foreign tax credits, investment credits, losses or any loss carry
over (“collectively herein referred to as credits) generated
by it, to the extent actually used in the consolidated return.
Payment shall be equal to the “savings” generated by
its credits. All payments shall be recorded on the
Subsidiary’s books as contributed surplus. Once the
Subsidiary is “paid” for its credits, it cannot use
such credits in the calculation of its tax liability under the
separate return basis. Any of the Subsidiary’s credits which
are not used in the consolidated return and for which it has not
been paid shall be retained by the Subsidiary for possible future
use.
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b.
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Tax Assets
- "Tax Asset" shall mean any net
operating loss, net capital loss, investment tax credit, foreign
tax credit, charitable deduction, dividends received deduction or
any other deduction, credit or tax attribute, including carryovers
and carrybacks of such attributes, which could reduce taxes. Except
as provided in subsection (c) of this section, for each taxable
year during which the Subsidiary is included in a consolidated
federal income tax return with ING AIH, ING AIH will pay to the
Subsidiary an amount equal to the tax benefit of the Subsidiary's
Tax Assets to the extent such Tax Assets are utilized in the
reduction of the consolidated federal income tax liability of the
ING AIH group. The extent to which Tax Assets are actually utilized
will be determined in accordance with Income Tax Regulations
Sections 1.1552-1(a)(2) and 1.1502-33(d)(3).
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c.
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Separate Return Years
- To the extent any portion of a Tax
Asset of the affiliated group is carried back to a
pre-consolidation separate return year of the Subsidiary (whether
by operation of law or at the discretion of ING AIH) the Subsidiary
shall not be entitled to payment from ING AIH with respect thereto.
This shall be the case whether or not the Subsidiary actually
receives payment for the benefit of such Tax Asset from the
Internal Revenue Service ("IRS") or from the parent of a former
affiliated group.
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d.
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Other Taxes
- For any taxable year in which the
affiliated group incurs taxes (other than the alternative minimum
tax) such as ITC recapture, environmental tax, etc. (“Other
Taxes”), such taxes, to the extent directly allocable to the
Subsidiary, will be paid by the Subsidiary. To the extent such
taxes are not directly allocable to the Subsidiary, such taxes will
be paid by the Subsidiary in the proportion that its share of such
attributes giving rise to the tax liability bears to the affiliated
group’s total amount of such attributes.
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2
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e.
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Alternative minimum tax ("AMT")
and Related minimum tax credit ("MTC") - For any taxable year in which the affiliated
group incurs an AMT or utilizes a MTC, the Subsidiary shall pay to,
or receive from, ING AIH such AMT or MTC amount respectively to the
extent it produces the attributes giving rise to the AMT or MTC.
The calculation of the AMT or MTC shall be subject to a methodology
determined by ING AIH in its sole discretion, provided, however,
that any method adopted by ING AIH shall not be changed without
prior notification to the Subsidiary. Any payments required under
this subsection are in addition to payments required under the
previous subsections.
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a.
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Determination and
Timing - During and
following a taxable year in which the Subsidiary is included in a
consolidated federal income tax return with ING AIH , it shall pay
to ING AIH, or receive from ING AIH, as the case may be,
installment payments of the amount determined pursuant to section 1
of this Agreement. All settlements under the Agreement shall be
made within 30 days of the filing of the
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