Exhibit 10.2
TAX SHARING
AGREEMENT
THIS TAX SHARING AGREEMENT (the
“Agreement”) dated as of October 1, 2002, between
Nationwide Financial Services, Inc., a Delaware company
(“Nationwide Financial”) and any corporation that may
hereafter be a subsidiary of Nationwide Financial and become a
party hereto as contemplated by Section 8 hereof (collectively, the
“Subsidiaries”).
Nationwide Financial and the Subsidiaries are
members of an affiliated group of corporations as defined in
Section 1504 of the Internal Revenue Code of 1986, as amended (the
“Code”), of which Nationwide Financial is the common
parent. Such affiliated group of corporations is referred to herein
as the “Group.” The Group will file consolidated
federal income tax returns pursuant to Sections 1501 et
seq of the Code. In addition, members of the Group may be
eligible to file consolidated or combined state or local income or
franchise tax returns. Nationwide Financial and the Subsidiaries
desire to allocate among themselves the benefits and burdens which
arise from filing of such consolidated or combined tax returns and,
accordingly, hereby agree as follows:
Section 1. Definitions . As used herein,
the following terms shall have the following meanings (all terms
defined in this Section 1 or in other provisions of this Agreement
in the singular shall have the same meanings when used in the
plural and vice versa ):
“Includible Corporation” shall mean,
with respect to any entity, any corporation that is a subsidiary of
such entity and that now or in the future qualifies under Section
1501 et seq. of the Code as an includible corporation
of an affiliated group of corporations of which such entity is the
parent.
“Obligor” shall mean, individually,
Nationwide Financial and each of the Subsidiaries that is or
becomes a party hereto.
“Tax Year” shall mean each year or
other period during which the Subsidiaries are included in a
consolidated federal income tax return with Nationwide
Financial.
In addition, for purposes of this
Agreement, the “federal income tax liability” or
“federal income tax refund” for any Tax Year shall be
an amount equal to the decrease or increase, respectively, in the
earnings and profits of Nationwide Financial or any Subsidiary as
calculated under Section 1552(a)(2) and Regulation 1.1502-33(d)(3)
(the Percentage Method, using 100%), but without regard to the
provisions of Section 55 of the Code.
Section 2. Representations and Warranties
. Each Obligor hereby represents and warrants to each other Obligor
that:
(a) Such Obligor is a corporation duly
incorporated, validly existing and in good standing under the laws
of the jurisdiction of its incorporation.
(b) None of the execution and delivery of this
Agreement, the consummation of the transaction herein contemplated
or compliance with the terms and provisions hereof will conflict
with or result in a breach of, or require any consent under, the
Charter, Bylaws, Code of Regulations or Articles of Incorporation
of such Obligor, or, to the best knowledge of such Obligor, any
applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any
agreement or instrument to which
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such Obligor is a party or by which such Obligor
is bound or to which such Obligor is subject, or constitute a
default under any such agreement or instrument, or result in the
creation or imposition of any lien on any of the revenues or assets
of such Obligor pursuant to the terms of any such agreement or
instrument.
(c) Such Obligor has all necessary corporate
power and authority to execute, deliver and perform its obligations
under this Agreement; the execution, delivery and performance by
such Obligor of this Agreement have been duly authorized by all
necessary corporate action on its part; and this Agreement has been
duly and validly executed and delivered by such Obligor and
constitutes its legal, valid and binding obligation, enforceable
against such Obligor in accordance with its terms, except as
suchenforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors’ rights and (b) the
application of general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
(d) No authorizations, approvals or consents of
and no filing or registrations with, any governmental or regulatory
authority or agency are necessary for the execution, delivery or
performance by such Obligor of this Agreement or for the validity
or enforceability hereof or such authorizations, approvals,
consents, filings or registrations have been obtained or
made.
Section 3. Consolidated Tax Returns .
Nationwide Financial will file a consolidated federal income tax
return for all taxable periods that it is eligible to do so.
Nationwide Financial and the Subsidiaries agree to file such
consents, elections and other documents and to take such other
action as may be necessary or appropriate to carry out the purposes
of this Section 3. Nationwide Financial will timely pay the
Group’s federal income tax liability for each Tax
Year.
Section 4. Payment of Tax Liability . For
each Tax Year, each Subsidiary will pay to Nationwide Financial an
amount equal to the federal income tax liability attributable to
such Subsidiary for such Tax Year within sixty (60) days following
the filing of the consolidated federal income tax return of the
Group.
Section 5. Estimated Taxes . If in any
Tax Year Nationwide Financial believes in good faith that any
Subsidiary will be obligated to make payment to Nationwide
Financial pursuant to Section 4 hereof in respect of such Tax Year,
such Subsidiary may be required by Nationwide Financial to pay such
amounts as would be necessary to make estimated payments in respect
of its federal income tax liability, if any, that the Subsidiary
will be obligated to pay under Section 4 hereof. Nationwide
Financial shall calculate the amount of the payments to be made by
the Subsidiary pursuant to this Section 5 in a manner consistent
with the conventions used by Nationwide Financial to compute its
estimated tax, and shall provide the Subsidiary with at least 10
days’ notice of the amount due. Estimated payments may be
required to be paid by the Subsidiary to Nationwide Financial, even
if no such payment by Nationwide Financial is required at that
time. Estimated payments to be made under this Section 5 shall
include payments due within ninety (90) days following the end of
the Tax Year.
If, following the filing of the Group’s
federal income tax return for any Tax Year, it shall be determined
that the actual payments required to be made by each Subsidiary
pursuant to Section 4 hereof in respect of such Tax Year shall not
be equal to the estimated payments made pursuant to this Section 5,
then each Subsidiary and Nationwide Financial shall make such
adjustments of payments between themselves in such amounts as shall
be necessary so that the payments actually made by such Subsidiary
to Nationwide Financial in respect of such Tax Year shall be equal
to the amounts that should have been paid in respect of such Tax
Year pursuant to Section 4.
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Section 6. Refunds . If, on the basis of
the computation made by Nationwide Financial in accordance with
Section 4 hereof, any Subsidiary is entitled to a federal income
tax refund taking into account all facts in existence at the time
of such determination, but excluding any tax attributes of the
Subsidiary which have been utilized by the Group and for which the
Subsidiary has been previously compensated, Nationwide Financial
shall pay such Subsidiary the amount of the federal income tax
refund within ninety (90) days following the filing of the
consolidated federal income tax return of the Group.
Section 7. Redeterminations . In the
event of any adjustment to the tax return of the Group as filed (by
reason of an amended return, claim for refund or an audit by the
Internal Revenue Service), the liability of Nationwide Financial
and the Subsidiaries shall be redetermined to give effect to any
such adjustment as if it had been made as part of the original
computation of tax liability. Payments shall be made within ninety
(90) days of any corresponding payments to the Internal Revenue
Service or the receipt of any refund from the Internal Revenue
Service. Any payments shall include interest and penalties equal to
the amounts actually paid to, or received from, the Internal
Revenue Service with respect to the redetermination of tax
liabilities. Nationwide Financial shall calculate the amounts of
any such payments and shall give the Subsidiaries at least 10 days
notice of any amounts payable by the Subsidiaries.
Section 8. Future Subsidiaries .
Nationwide Financial and the Subsidiaries agree to cause any
corporation that in the future will qualify as an Includible
Corporation of Nationwide Financial, to become a party hereto as an
additional “‘Subsidiary” hereunder.
Section 9. Administrative Matters
.
9.01 Information . The Subsidiaries shall
provide Nationwide Financial with such information as Nationwide
Financial may need in connection with the preparation of federal
income tax returns for the Group. Nationwide Financial shall
prepare, or have prepared at its expense, the federal consolidated
income tax returns of the Group, and Nationwide Financial and the
Subsidiaries shall cooperate with each other in the preparation of
such federal income returns.
9.02 Audits . Nationwide Financial shall
act as agent for the Subsidiaries in the event of any audit of
Nationwide Financial’s federal consolidated income tax
returns or any consolidated or combined state or local income or
franchise tax returns that may have been filed and in any
administrative or judicial proceedings with respec
