EXHIBIT 10.4
TAX SHARING AGREEMENT
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This AGREEMENT is effective as of the first day of the consolidated return year
beginning April 1, 1994, by and between FMC Corporation, a Delaware corporation
("FMC") and FMC Gold Company, a Delaware corporation, and FMC Paradise Peak
Corporation, FMC Jerritt Canyon Corporation, Meridian Gold Company and FMC
Minerals Corporation, its wholly owned subsidiaries, plus any companies which
become subsidiaries hereafter (hereinafter collectively referred to as "FMC
Gold").
WITNESSETH
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WHEREAS, FMC is the common parent corporation of an affiliated group of
corporations (the "FMC Group") within the meaning of Section 1504(a) of the
Internal Revenue Code of 1986 (the "Code"), and FMC Gold is a member of said
affiliated group; and
WHEREAS, FMC files various separate, consolidated, and/or combined unitary state
income tax returns; and
WHEREAS, FMC and FMC Gold deem it appropriate to define the method and the
manner by which the Federal and state income tax liability or benefit of the FMC
Group shall be allocated and paid amongst the parties;
NOW, THEREFORE, in consideration of the premises of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. DETERMINATION OF FMC GOLD'S ALLOCABLE FEDERAL INCOME TAX LIABILITIES OR
BENEFITS
(a) FMC shall prepare and file a consolidated federal income tax return
for each year, commencing with the taxable year ending December 31,1994,
during the term of this Agreement (a "Consolidated Return Year") and pay
any consolidated federal income tax liability (the "Tax Liability") of the
FMC Group in respect of such year. FMC is hereby irrevocably constituted
the exclusive agent and attorney-in-fact of FMC Gold to file such return,
pay such tax, and take any action reasonably necessary or appropriate in
connection with the determination of the ultimate liability of the FMC
Group for such tax, including, without limiting the generality of the
foregoing, contesting the assessment of any deficiency, entering into any
closing agreement, compromise, or settlement, filing any amended return,
and prosecuting any action for a refund, on behalf of the FMC Group. FMC
Gold shall execute any consents or documents relating to any of the
foregoing.
Tax Sharing Agreement - Page 2
(b) For each Consolidated Return Year, there shall be computed, the
federal income tax liability of FMC Gold, including alternative minimum tax
("AMT") and the environmental tax provided in Section 59A, and any other
federal tax, as if FMC Gold had filed a separate federal income tax return
under the Code for the taxable year ending December 31, 1994 and all
subsequent taxable years subject to this Agreement.
(c) The tax liability/benefit of FMC Gold shall be determined upon the
following basis:
(i) Carrybacks and/or carryovers of AMT credits, net operating
losses, investment tax credits, foreign tax credits, capital losses,
excess charitable contributions and similar tax attributes shall be
determined in accordance with the limitations and restrictions of the
Code and Regulations applicable to such tax year and shall be
accounted for as if separate federal income tax returns had been filed
by FMC Gold commencing with the taxable year ending December 31, 1994
and for all subsequent taxable years covered by this Agreement.
(ii) Any tax benefits made available to the FMC Group by FMC Gold in
any taxable year commencing with the taxable year ending December 31,
1994 or any subsequent taxable year covered by this Agreement and not
utilized by FMC Gold shall be allocated to FMC Gold only in the year,
and to the extent, that such benefits could have been utilized by FMC
Gold on a separate return basis (such as AMT credits of FMC Gold or a
net operating loss of FMC Gold made available to the FMC Group). Such
allocation shall give rise to an adjustment in favor of FMC Gold to
reduce its separate return tax liability in an amount equal to the
amount of the United States federal income tax saving which FMC Gold
could have affected in such year, or in later years in the case of
carryovers, by its own use on a separate return basis of such tax
benefit.
(iii) In the case of carrybacks of tax benefits to an earlier year in
which FMC Gold could have utilized such tax benefit, but not before
the taxable year ending December 31, 1987, FMC shall pay to FMC Gold
an amount equal to the benefit that FMC Gold would have derived from
the carryback on a separate return basis. FMC shall not pay or credit
any amounts to FMC Gold for the use of FMC Gold tax benefits which FMC
Gold would have been unable to utilize on a separate return basis.
(iv) Intercompany transactions between FMC Gold and any other member
of FMC Group shall be taken in the manner required by Regulations
Section 1.1502-13.
Tax Sharing Agreement - Page 3
(v) If, at any time, FMC Gold ceases to be includible in the
affiliated FMC Group within the meaning of Code Section 1504 (a), the
Alternative Minimum Tax Credit ("MTC") allocable to FMC Gold shall be based upon
the formulary allocation provided in the Consolidated Return Regulations for
purposes of computing earnings and profits (as currently provided in Prop. Reg.
Sec 1.1502-55(h)(6)(vi) and Prop. Reg. Sec. 1.1502-55 (h) (7)). To the extent
that this amount is greater than MTC attributable to FMC Gold on a separate
return basis as computed under clauses 1(c)(i), 1(c)(ii), 1 (c)(iii) and
1(c)(iv) of this Agreement, FMC Gold must pay the difference to FMC. To the
extent this amount is less than MTC attributable to FMC Gold on a separate
return basis as computed under clauses 1(c)(i), 1(c)(ii), and 1(c)(iii) and
1(c)(iv) of this Agreement, FMC must pay the difference to FMC Gold.
2. DETERMINATION OF FMC GOLD'S STATE TAX LIABILITIES OR
BENEFITS
(a) Commencing with the taxable year ending December 31, 1994, FMC shall
include FMC Gold in the combined unitary income tax returns in all states
in which it is possible to do so and FMC Gold will not file separate income
tax returns for any state in which it is included in the FMC combined
unitary tax return.
(b) For each year, FMC Gold's state income tax liability or benefit for
each combined unitary state shall be determined by subtracting from:
(i) FMC's state income tax liability or benefit based upon FMC's
combined unitary taxable income for such state, excluding FMC's Gold's
income or loss and its payroll, property, and sales factors for such
state.
(ii) FMC's state income tax liability or benefit based upon FMC's
combined unitary taxable income for such state, including FMC Gold's
income or loss and its payroll, property and sales factors for such
state. The excess of subsection (ii) over subsection (i) shall
constitute FMC Gold's state income tax liability, and, the excess of
subsection (i) over subsection (ii) shall constitute FMC Gold's state
income tax benefit for such state.
FMC Gold's state income tax liability or benefit for each year shall be the
sum of its liabilities and benefits for each combined unitary state for which
it is included within FMC's combined unitary return .
Tax Sharing Agreement - Page 4
3. PAYMENTS TO/FROM FMC GOLD WITH RESPECT TO ITS TAX LIABILITIES/BENEFITS
(A) FMC GOLD SHALL PAY TO FMC:
(i) On each date that quarterly estimated tax payments are due
(including those for AMT), the amount of the estimated federal income
tax liability which would have been payable by FMC Gold on such date,
if it were filing on a separate return basis as computed under clause
1 above, even if the FMC Group is not in a United States federal
income tax paying position.
(ii) On the filing date of the FMC Group consolidated return, the
balance, if any, of the tax liability of FMC Gold determined as if FMC
Gold had filed on a separate federal income tax return basis as
computed under clause 1 above, less any payments theretofore made by
FMC Gold pursuant to clause 3(a)(i) above, even if FMC Group is not in
a United States federal income tax paying position.
(iii) On the statutory due date for the filing of each state income
tax return by FMC, or if earlier, the due date of any estimated taxes,
to that extent, the amount of any liability for state tax of FMC Gold
as determined under clause 2 herein.
(B) FMC SHALL PAY TO FMC GOLD:
(i) In the case of an adjustment in favor of FMC Gold as a result of
a carryover which FMC Gold could have utilized on a separate return
basis as described in 1(c)(ii), the amount of the tax saving due to
FMC Gold shall be paid on the statutory due date for the carryover
year(s).
(ii) In the case of an adjustment in favor of FMC Gold as a result of
a carryback which FMC Gold could have utilized on a separate return
basis as described in 1(c)(iii), the amount of the tax saving due to
FMC Gold shall be paid within 10 days of the filing date of the return
year in which the carryback arose.
Tax Sharing Agreement - Page 5
4. REDETERMINATION OF TAX LIABILITY
If any recomputation under any paragraph of this Agreement relating to any
year is required or appropriate for any reason, including, without limiting
the generality of the foregoing, by reason of refunds received or
liabilities incurred as a result of the filing of an amended return or the
examination of a return by the IRS or an application for refund, such
recomputation shall be made forthwith by FMC. In accordance with any such
recomputation, any additional sums payable by FMC Gold to FMC or vice versa
as the case may be, including any penalty or any interest received on any
refund or payable on any deficiency or penalty fairly attributable to the
reduced or additional tax liability, shall be paid by FMC Gold (or by FMC
as the case may be) within 45 days after its receipt of the written
computation reflecting the change or correction.
5. EFFECTIVE DATES AND COVERAGE
(a) The provisions of this Agreement shall become effective as of April 1,
1994 as if FMC Gold had been formed on such date, but will not be
applicable to estimated tax payments due prior to April 1, 1994. The
Agreement shall continue in effect so long as FMC Gold remains a member of
the affiliated group of FMC Group. FMC may terminate the FMC Group at any
time in its sole discretion, in accordance, with the applicable provisions
of the Code and Regulations. If FMC Gold is no longer included in the
Consolidated Return filed by FMC, the provisions of this Agreement with
respect to tax liabilities and benefits in respect of years prior to such
time, but after the date hereof, shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns.
(b) Any subsidiary of FMC Gold which is hereinafter required to join in
the filing of consolidated federal income tax returns with FMC shall become
a party to this Agreement by signing a master copy of this agreement.
6. OTHER MATTERS
(a) This Agreement contains the entire understanding of the parties hereto
with respect to the subject matter contained herein. No alteration,
amendment, or modification of any of the terms of this Agreement shall be
valid unless made by an instrument signed in writing by an unauthorized
officer of each party hereto. Notwithstanding the foregoing, this
Agreement may be amended consistent with the intent of this Agreement by
FMC in its sole discretion to reflect changes in the Code, regulations, or
other precedent thereunder or any state or local tax laws. This Agreement
shall be binding upon and inure to the benefit of each party thereto and
their respective successors and assigns.
(b) The prior tax sharing agreement entered into May 18, 1987 shall
continue to apply with respect to all tax matters to which it pertains for
all tax periods ending on or before May 15, 1990. The prior tax sharing
agreement entered into May 15, 1990 shall apply with respect to all matters
to which it pertains for all tax periods ending on or before the effective
date of this agreement.
Tax Sharing Agreement - Page 6
(c) This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware.
(d) All notices and other communications hereunder shall be deemed to have
been duly given if delivered by hand or mailed certified or registered
mail, postage prepaid to
(I) FMC GOLD COMPANY
7011 Meadowood Way
Reno, Nevada 89502
Attention: President
(II) FMC CORPORATION
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Vice President, Finance
IN WITNESS WHEREOF, this Agreement has been duly executed on the date and year
first above written on behalf of the parties hereto by their respective officers
and duly authorized.
FMC CORPORATION
By: /s/ John E. Rogers
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J.E. Rogers
Assistant Treasurer
FMC GOLD COMPANY
By: /s/ B. J. Kennedy
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B. J. Kennedy
President