Exhibit 10.
JOINDER NUMBER
2006-1
TO
TAX SHARING
AGREEMENT
This Joinder Number 2006-1 to Tax
Sharing Agreement, dated January 20, 2006, is entered into by and
between ING Life Insurance and Annuity Company
(“ILIAC”) and ING America Insurance Holdings, Inc.
(“ING”), on its own behalf and on behalf of each of its
subsidiaries that are currently parties to that certain Tax Sharing
Agreement hereinafter described (the
“Subsidiaries”).
WHEREAS, ING and the Subsidiaries
are members of an affiliated group, as that term is defined in
Section 1504 of the Internal Revenue Code of 1986, as amended,
which expects to file a consolidated federal income tax return for
each taxable year during which the Subsidiaries are includible
corporations qualified to so file;
WHEREAS, ING and the Subsidiaries
entered into that certain Tax Sharing Agreement attached hereto as
Exhibit A (the “Agreement”) to provide for the manner
of computation of the amounts and timing of payments with regard to
the consolidated federal income tax return of the affiliated group
for each taxable year;
WHEREAS, pursuant to Section 5 of
the Agreement, subsidiaries of ING that were not immediately
eligible to join the affiliated group as of the effective date of
the Tax Sharing Agreement are subsequently allowed to join when
they become eligible to join the affiliated group; and
WHEREAS, ILIAC has become an
eligible subsidiary effective January 1, 2006 and in accordance
with Section 5 of the Agreement is now eligible to join the
affiliated group and become a party to the Agreement;
NOW THEREFORE, in consideration of
the mutual promises set forth herein, and intending to be legally
bound hereby, the parties agree as follows:
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1.
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In accordance with Section 5 of the
Agreement, effective January 1, 2006 (the “Effective
Time”), ILIAC has joined in and become a party to the
Agreement.
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2.
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Notwithstanding paragraph 12 of the
Agreement, with respect to ILIAC, the Agreement: (i) shall be
effective from and after the Effective Time; and (ii) shall apply
to taxable year 2006 and to all subsequent periods unless and until
amended or terminated, as provided in Section 10 of the
Agreement.
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3.
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Except as otherwise specifically
provided in this Joinder Number 2006-1, from and after the
Effective Time, ILIAC shall be subject to all of the terms and
conditions of the Agreement.
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IN WITNESS WHEREOF, the parties have
caused this Joinder Number 2006-1 to be duly executed as of the
date first written above.
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ING America Insurance Holdings,
Inc.
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By:
/s/ David
Pendergrass
Name: David
Pendergrass
Title: Treasurer
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ING Life Insurance and Annuity
Company
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By:
/s/ Paula
Cludray-Engelke
Name: Paula
Cludray-Engelke
Title: Secretary
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Exhibit A
TAX SHARING
AGREEMENT
THIS AGREEMENT is entered into by
and between ING AMERICA INSURANCE HOLDINGS, INC. ("ING") and each
of its undersigned Subsidiaries (“the Subsidiaries”, or
in the singular “Subsidiary”).
WITNESSETH:
WHEREAS, ING and the Subsidiaries
are 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 expects to file a consolidated federal income tax
return for each taxable year during which the Subsidiaries are
includible corporations qualified to so file; and
WHEREAS, it is desirable for the
Subsidiaries and ING 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 to the
Subsidiaries and by the Subsidiaries to ING, 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 a
Subsidiary is included in a consolidated federal income tax return
with ING, the Subsidiary will pay to ING an amount equal to the
regular federal income tax liability (including any interest,
penalties and other additions to tax) that such 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 with regard thereto; (iii) the
Subsidiary's payment will be increased to the extent that such
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 in preparing the
consolidated federal income tax return for ING and its
Subsidiaries.
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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 which could reduce
taxes. Except as provided in subsection (c) of this section, for
each taxable year during which a Subsidiary is included in a
consolidated federal income tax return with ING, ING will pay to
the Subsidiary an amount equal to the tax benefit of the
Subsidiary's Tax Assets generated in such year. The valuation of
the tax benefit attributable to a Subsidiary’s Tax Assets
shall be made by ING, and shall be determined without regard to
whether such Tax Assets are actually utilized in the reduction of
the consolidated federal income tax liability for any consolidated
taxable year.
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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 a Subsidiary (whether by
operation of law or at the discretion of ING) the Subsidiary shall
not be entitled to payment from ING with respect thereto. This
shall be the case whether or not that 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
particular members of the affiliated group, will be paid by such
members. To the extent such taxes are not directly allocable to
particular members of the affiliated group, such taxes will be paid
by ING and/or the Subsidiaries producing the attributes that give
rise to such taxes, in the proportion that such attributes bear to
the total amount of such attributes.
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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 Subsidiaries producing
the attributes that give rise to the AMT or MTC shall pay to, or
receive from, ING such AMT or MTC amount respectively. The
calculation of the AMT or MTC shall be subject to a methodology
determined by ING in its sole discretion, provided, however, that
any method adopted by ING shall not be changed without prior
notification to all affected Subsidiaries. Any payments required
under this subsection are in addition to payments required under
the previous subsections.
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f.
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Unless specifically approved in
writing, all payments made pursuant to this Agreement by a
Subsidiary shall be made by that Subsidiary, and not by any other
company or business unit on behalf of such Subsidiary.
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2
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a.
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Determination and
Timing - During and
following a taxable year in which a Subsidiary is included in a
consolidated federal income tax return with ING, it shall pay to
ING, or receive from ING, as the case may be, installment payments
of the amount determined pursuant to section 1 of this Agreement.
Payments shall take place on the dates, on the bases of
calculations, and in amounts that produce cumulative installments,
as follows:
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DATE
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BASIS OF CALCULATION
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CUMULATIVE
INSTALLMENT
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April 15
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Prior
year annual financial statement
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25% of tax liability as
determined in prior year financial statements results updated for
known adjustments
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June 15
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March
31 three month financial statement
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50% of tax liability as
determined by current financial statement annualized
results
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September 15
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June
30 six month financial statement
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75% of tax liability as
determined by current financial statement annualized
results
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December 15
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September 30 nine month financial
statement
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100% of tax liability as
determined by current financial statement annualized
results
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March 15
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Year-end annual financial statement
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100% of tax liability as
determined by actual financial statements results for prior year
updated for known adjustments
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Not earlier than September 15 of
the following year
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Final
tax return
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100% of tax liability for prior
year
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The due dates, basis of calculation
and cumulative installments set forth above and made during a
taxable year are intended to correspond to the applicable
percentages as set forth in Section 6655(e)(2)(B)(ii) of the Code.
Should the Code be amended to alter such provisions, it is hereby
agreed by the parties to this Agreement that the provisions will
correspondingly change. ING may revise the schedule of installment
payments set forth in this paragraph, and may provide for annual
rather than quarterly payments in cases where amounts due fall
below a certain threshold, although any such change shall be
prospective and shall not take effect prior to written notice to
the Subsidiaries.
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b.
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Estimated Taxes and Other
Amounts - ING shall pay
required installments of federal estimated taxes pursuant to Code
section 6655, and such other amounts with respect to taxes shown on
the consolidated return for the taxable year pursuant to any other
applicable provision of the Code ("tax payment"), to the IRS on
behalf of itself and each Subsidiary. ING shall have the sole right
to determine the amount of each such tax payment with respect to
the affiliated group's tax liability for the taxable
year.
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c.
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Additional Payments by
Subsidiary - Should the
amount of any tax payment made by ING under this section exceed the
sum of installment payments made by all Subsidiaries for any
corresponding installment date pursuant to section 2 of this
Agreement, ING may, in its sole discretion, determine such
Subsidiary's fair and reasonable share of that excess, and notify
such Subsidiary thereof and such amount shall be paid over to ING
within 15 business days of the date of notification by ING. Should
ING make any tax payment to the IRS on a date that does not
correspond to the installment dates pursuant to section 2, each
Subsidiary will pay over to ING an amount which ING may in its sole
discretion, determine to be due from such Subsidiary.
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d.
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Penalty in Addition to
Tax - If a penalty or an
addition to tax for underpayment of estimated taxes is imposed on
the affiliated group with respect to any required installment under
section 6655 of the Code, ING shall, in its sole discretion,
determine the amount of each Subsidiary's share of such penalty or
addition to tax, which amount shall be paid over to ING within 15
business days of the date of notification by ING.
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3.
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ADJUSTED
RETURNS - If any
adjustments are made to the income, gains, losses, deductions or
credits of the affiliated group for a taxable year during which a
Subsidiary is a member, whether by reason of the filing of an
amended return, or a claim for refund with respect to such taxable
year, or an audit with respect to such taxable year by the IRS, the
amounts due under this Agreement for such taxable year shall be
redetermined by taking into account such adjustments. If, as a
result of such redetermination, any amounts due under this
Agreement shall differ from the amounts previously paid, then,
except as provided in section 6 hereof, payment of such difference
shall be made by the Subsidiary to ING or by ING to the Subsidiary,
as the case may be, (a) in the case of an adjustment resulting in a
refund or credit, not later than thirty (30) days after the date on
which such refund is received or credit is allowed with respect to
such adjustment or (b) in the case of an adjustment resulting in
the assertion of a deficiency, not later than thirty (30) days
after the Subsidiary is notified of the deficiency. Any amounts due
to or from a Subsidiary under this section shall be determined with
respect to such refund or deficiency and any penalties, interest or
other additions to tax which may be imposed. ING shall indemnify
each Subsidiary in the event the Internal Revenue Service levies
upon such Subsidiary’s assets for unpaid taxes in excess of
the amount required to be paid by such Subsidiary in relation to a
consolidated federal income tax return filed pursuant to this
Agreement.
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4.
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PROCEDURAL
MATTERS - ING shall
prepare and file the consolidated federal income tax return and any
other returns, documents or statements required to be filed with
the IRS with respect to the determination of the federal income tax
liability of the affiliated group. In its sole discretion, ING
shall have the right with respect to any consolidated federal
income tax returns which it has filed or will file, (a) to
determine (i) the manner in which such returns, documents or
statements shall be prepared and filed, including, without
limitation, the manner in which any item of income, gain, loss,
deduction or credit shall be reported, (ii) whether any extensions
may be requested and (iii) the elections that will be made by any
Subsidiary, (b) to contest, compromise or settle any adjustment or
deficiency proposed, asserted or assessed as a result of any audit
of such returns by the IRS, (c) to file, prosecute, compromise or
settle any claim for refund and (d) to determine whether any
refunds to which the affiliated group may be entitled shall be paid
by way of refund or credited against the tax liability of the
affiliated group. Each Subsidiary her
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