TAX SHARING AGREEMENT
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BETWEEN
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▇▇▇▇▇▇▇ PURINA COMPANY
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AND
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ENERGIZER HOLDINGS, INC.
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THIS AGREEMENT (the "Agreement") dated as of April 1, 2000 is made by and
between ▇▇▇▇▇▇▇ PURINA COMPANY ("▇▇▇▇▇▇▇"), a corporation organized under the
laws of the State of Missouri, and ENERGIZER HOLDINGS, INC. ("Energizer"), a
corporation organized under the laws of the State of Missouri.
WHEREAS, ▇▇▇▇▇▇▇ is the common parent of an affiliated group of domestic
corporations within the meaning of Section 1504(a) of the U. S. Internal Revenue
Code of 1986, as amended (the "Code"), which group includes Energizer (such
corporations hereinafter referred to collectively as the "▇▇▇▇▇▇▇ Domestic
Subsidiaries" and individually as a "▇▇▇▇▇▇▇ Domestic Subsidiary", and such
affiliated group shall be referred to as the "▇▇▇▇▇▇▇ Group");
WHEREAS, ▇▇▇▇▇▇▇ is also the parent of certain directly or indirectly owned
foreign corporations (such corporations hereinafter referred to collectively as
the "▇▇▇▇▇▇▇ Foreign Affiliates", and individually as a "▇▇▇▇▇▇▇ Foreign
Affiliate"), as more specifically defined below.
WHEREAS, on or before April 1, 2000, Energizer will become the common
parent of an affiliated group of domestic corporations within the meaning of
Code Section 1504(a) (such corporations hereinafter referred to collectively as
the "Energizer Domestic Subsidiaries" and individually as a "Energizer Domestic
Subsidiary", and such affiliated group shall be referred to as the "Energizer
Group");
WHEREAS, on or before April 1, 2000, Energizer will also become the parent
of certain directly or indirectly owned foreign corporations (such corporations
hereinafter referred to collectively as the "Energizer Foreign Affiliates" and
individually as the "Energizer Foreign Affiliate"), as more specifically defined
below.
WHEREAS, ▇▇▇▇▇▇▇ intends to distribute to its shareholders all of its stock
in Energizer (the "Distribution") in accordance with the terms and conditions of
the Agreement and Plan of Reorganization between ▇▇▇▇▇▇▇ and Energizer dated as
of April 1, 2000 (the "Plan of Reorganization") on April 1, 2000 (the
"Distribution Date") in accordance with a favorable ruling from the Internal
Revenue Service ("IRS") dated February 4, 2000 that the Distribution qualifies
as a nontaxable distribution of stock of a controlled corporation under Code
Section 355; and that certain ancillary transactions also qualify as nontaxable
under Code Section 355, 368(a)(1)(D), 332, 351and 367; and,
WHEREAS, ▇▇▇▇▇▇▇ and Energizer believe that it is in their mutual best
interests to set forth in this Agreement the rights, obligations and duties of
each party with respect to various tax matters relating to the Energizer Group
and the Energizer Foreign Affiliates which may arise as a result of the
Distribution.
NOW, THEREFORE, in consideration of the premises and of the agreements
herein set forth, ▇▇▇▇▇▇▇, (on its own behalf and on behalf of the ▇▇▇▇▇▇▇
Domestic Subsidiaries and the ▇▇▇▇▇▇▇ Foreign Affiliates) and Energizer (on its
own behalf and on behalf of the Energizer Domestic Subsidiaries and the
Energizer Foreign Affiliates), hereby agree as follows:
ARTICLE I. DEFINITIONS
For purposes of the provisions set forth in this Agreement,
(a) The term "Audit(s)" shall mean any audit or examination undertaken
by a Tax authority with respect to Taxes.
(b) The term "Battery Business" shall have the same meaning as the term
is given in the Plan of Reorganization.
(c) The term "Controversy(ies)" shall mean any action involving a Tax
authority before any administrative or judicial body which results from a
disagreed Tax adjustment proposed during the course of an Audit.
(d) The term "Domestic" as used herein to modify the terms "Tax",
"Taxes" or "Return", shall mean with respect to any U.S. federal, territorial,
state or local government.
(e) The terms "Energizer Employee" or "Former Energizer Employee" shall have
the same meaning as such term is given in the Plan of Reorganization.
(f) The term "Energizer Foreign Affiliate" shall mean any entity which on
the Distribution Date is owned directly or indirectly by Energizer, and is
formed under the laws of a government other than the United States, its states
or territories.
(g) The term "Foreign" as used herein to modify the terms "Tax", "Taxes" or
"Return", shall mean with respect to any government which is not an U.S.
federal, territorial, state or local government.
(h) The term "Former Battery Business" shall have the same meaning as
the term is given in the Plan of Reorganization.
(i) The term "Former ▇▇▇▇▇▇▇ Business" shall have the same meaning as
the term is given in the Plan of Reorganization.
(j) The term "▇▇▇▇▇▇▇ Business" shall have the same meaning as the term
is given in the Plan of Reorganization.
(k) The term "▇▇▇▇▇▇▇ Employee" shall have the same meaning as the term
is given in the Plan of Reorganization.
(l) The term "▇▇▇▇▇▇▇ Foreign Affiliate" shall mean any entity which on
the Distribution Date is owned directly or indirectly by ▇▇▇▇▇▇▇, is formed
under the laws of a government other than the United States, its states or
territories, and is not an Energizer Foreign Affiliate.
(m) Tax or Taxes. As used herein, "Tax" or "Taxes" shall mean any and
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all taxes, charges, fees, levies or other assessments, however denominated,
including any interest, penalties, fines, or other additions that may become
payable in respect thereof, that are imposed, by any governmental entity,
whether foreign or domestic, federal, territorial, state or local, or any agency
or political subdivision of any such governmental entity; including, but not
limited to, all income, profits, gross receipts, earnings, net worth, payroll,
withholding, unemployment insurance, Social Security, Medicare Hi,, sales, use,
ad valorem, excise, franchise, license, occupation, real or personal property,
stamp, transfer, value-added, recording, other governmental charges, and other
government obligations of the same or of a similar nature to any of the
foregoing, which any member of the ▇▇▇▇▇▇▇ Group or Energizer Group, or any
▇▇▇▇▇▇▇ Foreign Affiliate or Energizer Foreign Affiliate, is required to pay,
withhold or collect. With respect to Foreign Taxes allocated between or among
the ▇▇▇▇▇▇▇ Business, the Battery Business, any Former ▇▇▇▇▇▇▇ Business, or any
Former Battery Business currently or formerly conducted by a single Foreign
Affiliate, Taxes shall mean the Taxes that would have been imposed had the
Battery Business or Former Battery Business been the sole business of a single
Foreign Affiliate, in accordance with Article III 1(b)(i) hereof.
(n) The term "Tax Return" or "Return" shall mean any return, filing,
questionnaire, information report or other document required to be filed,
including without limitation any amended returns, any documents with respect to
or accompanying payments of estimated Taxes, that may be filed, for any Tax
period with any Tax authority (domestic or foreign) in connection with any Tax
or Taxes (whether or not payment is required to be made with respect to such
filing). As used herein, "Consolidated Tax Return" shall mean a U.S. federal
income Tax Return described in Code Section 1501.
ARTICLE II. DOMESTIC TAXES
1. DOMESTIC TAXES - PREPARATION AND FILING OF TAX RETURNS, PAYMENT OF TAXES,
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ADJUSTMENTS, AUDITS AND CONTROVERSIES.
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(a) Preparation and Filing of Domestic Returns.
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(i) The preparation and filing of any Domestic Tax Return for Energizer or
the Energizer Domestic Subsidiaries for any Tax period ending prior to the
Distribution Date shall be the responsibility of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ shall
consistently prepare and file such Domestic Tax Returns in accordance with its
historical practices.
(ii) Energizer hereby designates and Energizer agrees to cause each of the
Energizer Domestic Subsidiaries to designate ▇▇▇▇▇▇▇ irrevocably as its agent
for the purpose of taking any and all action necessary or incidental to the
filing of any Consolidated Return or any other Domestic Tax Return, as necessary
for any Tax period ending prior to the Distribution Date.
(iii) The preparation and filing of any Domestic Tax Return for Energizer or
the Energizer Domestic Subsidiaries for any Tax period beginning on or
after the Distribution Date shall be the responsibility of Energizer. In
addition, Energizer shall be responsible for the preparation and filing of any
Energizer Domestic Subsidiary Domestic Tax Return for Tax periods beginning
before and ending after the Distribution Date.
(b) Liability for Domestic Taxes.
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(i) Pre-Distribution Date. ▇▇▇▇▇▇▇ shall be liable for, shall hold the
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Energizer Group harmless against, and shall make payment of any Domestic Tax
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which is attributable to the Energizer Group, for any and all Tax periods (or
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portions of periods) ending prior to the Distribution Date, including any such
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liabilities resulting from the Audit or other adjustment to previously filed
Domestic Tax Returns with respect to any such Tax period. Subject to
subparagraph (iii) hereof, ▇▇▇▇▇▇▇ shall be entitled to any and all refunds of
such Domestic Taxes for any such Tax period, including but not limited to
refunds described in subparagraph (iv) hereof. For purposes of this
subparagraph (b), ▇▇▇▇▇▇▇ will be credited for any estimated Domestic Tax
payments made for such Tax periods.
(ii) Post-Distribution Date. Energizer shall be liable for, shall hold the
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▇▇▇▇▇▇▇ Group harmless against, and make payment of any Domestic Tax due which
is attributable to the Energizer Group for all Tax periods beginning on or after
the Distribution Date and shall be entitled to any and all refunds of such
Domestic Taxes for any such Tax period.
(iii) Proration of Taxes. To the extent permitted by law or administrative
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practice, the Tax periods of the Energizer group and each Energizer Domestic
Subsidiary shall end on the day immediately preceding the Distribution Date.
For purposes of determining the liability for Domestic Taxes of an Energizer
Subsidiary for a portion of a taxable year or period that begins before and ends
after the Distribution Date, as necessary under applicable law, the
determination of the Domestic Taxes for the portion of the year or period ending
immediately prior to, and the portion of the year or period beginning on or
after, the Distribution Date shall be determined by assuming that the taxable
year or period ended on the day immediately preceding the Distribution Date,
except that exemptions, allowances or deductions that are calculated on an
annual basis and annual property Taxes shall be prorated on the basis of the
number of days in the annual period elapsed through the day immediately
preceding the Distribution Date.
(iv) Energizer's Carryback of Post-Distribution Deductions, Losses or
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Credits. If (A) Energizer or any Energizer Domestic Subsidiary, shall be
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entitled to carry back any net operating loss, capital loss, or other similar
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losses, deductions or credits derived with respect to any period beginning on or
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after the Distribution Date to any Tax period commencing prior to the
Distribution Date, and (B) any such carry back results in a decrease in Domestic
Taxes paid by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Domestic Subsidiary (as compared to the
Taxes ▇▇▇▇▇▇▇ or such member of the ▇▇▇▇▇▇▇ Group would otherwise have paid
solely without giving effect to such carry back), any Tax refunds (plus
interest) received by ▇▇▇▇▇▇▇ or the ▇▇▇▇▇▇▇ Domestic Subsidiaries as a result
of such carrybacks shall be promptly remitted to Energizer. The ▇▇▇▇▇▇▇ Group
agrees to cooperate with Energizer to obtain such refunds and Energizer agrees
to reimburse the ▇▇▇▇▇▇▇ Group for any reasonable out-of-pocket expenses related
thereto.
(v) Energizer's Claiming, Receiving or Using Refunds and Overpayments. If
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on or after the Distribution Date, the Energizer Group receives any refund or
utilizes the benefit of any overpayment of Domestic Taxes which, in either case,
relates to Domestic Taxes paid by the ▇▇▇▇▇▇▇ Group with respect to a
taxable period or portion thereof ending on or prior to the Distribution Date,
then Energizer shall promptly transfer, or cause to be transferred to ▇▇▇▇▇▇▇
the entire amount of the refund or overpayment (including interest) received or
utilized by the Energizer Group. Energizer agrees to notify ▇▇▇▇▇▇▇ within
thirty (30) days after the discovery of a right to claim any such refund or
overpayment and the receipt of any such refund or utilization of any such
overpayment. Energizer agrees to claim any such refund or to utilize any such
overpayment as soon as possible and to furnish to ▇▇▇▇▇▇▇ all information,
records and assistance necessary to verify the amount of the refund or
overpayment.
(vi) Tax Liabilities/Benefits Resulting from Post Distribution Stock Option
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Exercises by Energizer Employees or Former Energizer Employees. Energizer shall
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be liable for any and all Taxes, including but not limited to, payroll,
Social Security, and Medicare Hi Taxes, imposed on an employer (the "Employer
Taxes") with respect to compensation resulting from the exercise of ▇▇▇▇▇▇▇
stock options on or after the Distribution Date by any Energizer Employee or
Former Energizer Employee, if at the time of the grant of the stock option the
recipient was an Energizer Employee. In the event that ▇▇▇▇▇▇▇, acting on
behalf of Energizer, pays and deposits such Employer Taxes with respect to such
compensation, then ▇▇▇▇▇▇▇ shall be entitled to reimbursement from Energizer of
such Employer Taxes. If as a result of such exercise of a ▇▇▇▇▇▇▇ stock option,
Energizer shall be entitled to claim on the appropriate Tax Return a
corresponding income tax deduction for the compensation expense, resulting in an
actual diminution of any Domestic Taxes, then Energizer shall pay ▇▇▇▇▇▇▇ the
amount of such diminution of Domestic Taxes within thirty (30) days of written
notice by ▇▇▇▇▇▇▇ to Energizer of such option exercise.
(vii) Tax Liabilities Resulting from Post Distribution Stock Option
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Exercises by all Other Employees. ▇▇▇▇▇▇▇ shall be liable for all Employer
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Taxes with respect to compensation resulting from the exercise of ▇▇▇▇▇▇▇ stock
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options on or after the Distribution Date by any Energizer Employee or Former
Energizer Employee, if at the time of the grant of the stock option the
recipient was a ▇▇▇▇▇▇▇ Employee. ▇▇▇▇▇▇▇ shall be entitled to claim on the
appropriate Tax Return a corresponding income tax deduction for the compensation
expense and related Employer Taxes paid.
(viii) Reimbursement of Other Tax Benefits. Energizer shall reimburse
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▇▇▇▇▇▇▇ to the extent of Domestic Tax benefits derived by any member of the
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Energizer Group, for payments made by ▇▇▇▇▇▇▇ on or after the Distribution Date,
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which result in a tax deduction to Energizer or an Energizer Domestic
Subsidiary ("▇▇▇▇▇▇▇ Payments"), provided such ▇▇▇▇▇▇▇ Payments (a) are not
claimed as a deduction by ▇▇▇▇▇▇▇ for Domestic Tax purposes, (b) are deductible
on a Domestic Tax Return of the Energizer Group, and (c) result in a reduction
of Domestic Taxes of Energizer, the Energizer Group, or any Energizer Domestic
Subsidiary. The amount of the payment required hereunder for any taxable period
of Energizer shall be equal to (i) the lesser of (A) Energizer's applicable
Domestic taxable income for such taxable period, or (B) the amount of the
▇▇▇▇▇▇▇ Payments with respect to which Energizer is entitled to claim, on a
Domestic Tax Return, a deduction during such taxable period (reduced by the
amount of income, if any, required to be recognized by Energizer during such
taxable period with respect to the ▇▇▇▇▇▇▇ Payments), multiplied by (ii) the
applicable marginal Domestic Tax rate to which income of the Energizer Group is
subject in such taxable period. Provided, however, if for any taxable period,
(X) Energizer files an amended Domestic Tax Return (or files a carryback or
carryforward claim relating to a net operating loss), or (Y) the IRS adjusts any
item on any Energizer Domestic Tax Return, the amount of the payment required
under this paragraph shall be recomputed (either at the time of the filing of
the amended return, or carryover or carryback claim, or at the time of the final
determination of the IRS adjustment) to reflect such amended return, claim, or
IRS adjustment, and, at such time, either (I) ▇▇▇▇▇▇▇ shall repay any
overpayment to Energizer, or (II) Energizer shall pay any underpayment to
▇▇▇▇▇▇▇.
▇▇▇▇▇▇▇ will provide, in a timely manner, such information as is reasonably
necessary to substantiate the deduction for a ▇▇▇▇▇▇▇ Payment so as to permit
inclusion of such deduction on the appropriate Domestic Tax Return of Energizer,
the Energizer Group, or any Energizer Domestic Subsidiary. At ▇▇▇▇▇▇▇'▇ written
request, Energizer (a) shall claim the deduction for (and shall not report
income with respect to) a ▇▇▇▇▇▇▇ Payment on the appropriate federal or state
income tax return, and (b) shall contest any claim by a taxing authority
relating to the ▇▇▇▇▇▇▇ Payment, provided ▇▇▇▇▇▇▇ has agreed to indemnify
Energizer in a manner reasonably satisfactory to Energizer for any liability or
loss (including (i) interest and penalties on Taxes, and (ii) any reasonable
out-of-pocket expenses) incurred by Energizer as a result of taking such return
position or pursuing such contest.
(c) Domestic Audits and Controversies.
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(i) ▇▇▇▇▇▇▇ shall exclusively control and direct any Tax Audit or
Controversy with respect to any Domestic Taxes for any Tax period ending prior
to the Distribution Date. Energizer, however, shall have the right to
participate in any such Audit or Controversy to the extent such Audit or
Controversy would impact the Domestic Taxes for which Energizer is liable in
accordance with this Agreement, as determined by Energizer, and ▇▇▇▇▇▇▇ shall
not consent to any resolution, compromise or conclusion of such Audit or
Controversy without the written approval of Energizer, which approval shall not
be unreasonably withheld. Notwithstanding the foregoing, in the event ▇▇▇▇▇▇▇
shall compromise or settle any such deficiency of Domestic Tax without the prior
consent of Energizer, ▇▇▇▇▇▇▇ shall hold Energizer and any Energizer Domestic
Subsidiary harmless against any losses, costs, or damages, including Taxes
resulting from such compromise or settlement.
(ii) Energizer shall exclusively control and direct any Audit or
Controversy with respect to any Domestic Taxes attributable to the Energizer
Group for a Tax period which begins on or after the Distribution Date. ▇▇▇▇▇▇▇,
however, shall have the right to participate in any such Audit or Controversy to
the extent such Audit or Controversy would impact the Domestic Taxes for which
▇▇▇▇▇▇▇ is liable in accordance with this Agreement, as determined by ▇▇▇▇▇▇▇,
and Energizer shall not consent to any resolution, compromise or conclusion of
such Audit or Controversy without the written approval of ▇▇▇▇▇▇▇, which
approval shall not be unreasonably withheld. Notwithstanding the foregoing, in
the event Energizer shall compromise or settle any such deficiency of Domestic
Tax without the prior consent of ▇▇▇▇▇▇▇, Energizer shall hold ▇▇▇▇▇▇▇ and any
▇▇▇▇▇▇▇ Domestic Subsidiary harmless against any losses, costs, or damages,
including Taxes resulting from such compromise or settlement.
(d) Domestic Tax Adjustments.
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(i) If the IRS, or any state or local taxing authority, shall make
an adjustment to any Domestic Tax Return of (A) the ▇▇▇▇▇▇▇ Group, (B) any
▇▇▇▇▇▇▇ Domestic Subsidiary, (C) Energizer, or (D) any Energizer Domestic
Subsidiary for any Tax period ending prior to the Distribution Date, and such
adjustment (including but not limited to adjustments to tax basis determination,
a tax accounting method with respect to its property and accounts included in
and carried forward from ▇▇▇▇▇▇▇ or the ▇▇▇▇▇▇▇ Domestic Subsidiaries prior to
the Distribution Date), consistently applied would require Energizer or the
Energizer Domestic Subsidiaries to make a corresponding adjustment to their
Domestic Tax Returns for periods beginning on or after the Distribution Date,
then,
(A) if such corresponding adjustment in a Domestic Tax Return
of Energizer or any Energizer Domestic Subsidiary results in an actual
diminution of any Domestic Taxes for such period, whether or not an actual
amended return is filed, Energizer shall pay ▇▇▇▇▇▇▇ the amount of such Domestic
Tax either (I) when such refund and related interest are received and required
to be remitted within the period provided in Article VI 3 hereof, or (II) within
thirty (30) days of written notice by ▇▇▇▇▇▇▇ to Energizer of such corresponding
adjustment, if an amended return is not filed.
(B) if such corresponding adjustment in a Domestic Tax Return of Energizer
or any Energizer Domestic Subsidiary results in an increase of any Domestic Tax
for Energizer for such period, and an actual diminution of any Domestic Tax for
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ shall pay Energizer the amount of such Domestic Tax, either due
(I) when such refund and related interest are received and required to be
remitted within the period provided in Article VI 3 hereof, or (II) within
thirty (30) days of written notice by Energizer to ▇▇▇▇▇▇▇ of such corresponding
adjustment, if an amended return is not filed.
(e) Domestic Transfer Taxes. ▇▇▇▇▇▇▇ shall pay any and all Domestic
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Taxes required upon, or by virtue of, any transfer of property contemplated
under the Plan of Reorganization including the transfer of shares of stock of
Energizer Domestic Subsidiaries in connection with the Distribution.
(f) Domestic Tax Attributes.
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(i) Any Domestic Tax attribute generated by ▇▇▇▇▇▇▇ or Energizer
shall, to the extent permitted by the applicable law of the Tax jurisdiction in
question, remain with ▇▇▇▇▇▇▇ or Energizer, respectively, or the appropriate
entity. In any case where the applicable law of the Tax jurisdiction in
question requires such Tax attribute to be allocated between ▇▇▇▇▇▇▇ and
Energizer, such allocation shall be made as provided by the law of such
jurisdiction.
Notwithstanding the foregoing, any state or local net operating
losses or Tax credits generated by a member of the Energizer Group for any Tax
period beginning "prior to" rather than "ending prior to" shall be for the
benefit of ▇▇▇▇▇▇▇. As permitted by the applicable law of the appropriate Tax
jurisdiction, such net operating losses or Tax credits shall be first carried
back to prior Tax periods. In the event that (i) the applicable law of the Tax
jurisdiction does not permit the carryback of such losses or Tax credits, or
(ii) such losses or Tax credits cannot be fully utilized in an allowable
carryback, then Energizer shall pay ▇▇▇▇▇▇▇ the amount of the actual diminution
of any state or local Taxes resulting from the utilization by any member of the
Energizer Group of such losses or credits within thirty (30) days of the filing
of the Tax Return reflecting the utilization of such loss or Tax credit, in
accordance with Article VI, 3 hereof.
(ii) Any excess Foreign Tax credits of the ▇▇▇▇▇▇▇ Group, as of
the Distribution Date, as finally determined by ▇▇▇▇▇▇▇ in accordance with Code
Section 904, shall be allocated between the ▇▇▇▇▇▇▇ Group and the Energizer
Group, in accordance with Reg. 1.1502-22T.
(iii) Any earnings and profits of the ▇▇▇▇▇▇▇ Group as of the
Distribution Date, as finally determined by ▇▇▇▇▇▇▇, shall be allocated between
the ▇▇▇▇▇▇▇ Group and the Energizer Group in accordance with Reg. 1.312-10(a).
(iv) Any Capital Loss Carryovers of the ▇▇▇▇▇▇▇ Group, as of the
end of the fiscal year that includes the Distribution Date, as finally
determined by ▇▇▇▇▇▇▇, shall be allocated between the ▇▇▇▇▇▇▇ Group and the
Energizer Group in accordance with
Reg. 1.1502-22T.
(g) Dual Resident Corporations. Energizer shall timely enter into any
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closing agreement with ▇▇▇▇▇▇▇ and the IRS in accordance with Regs Section
1503-2(g)(2)(iv)(B)(2), to the extent necessary to avoid recapture of any "dual
consolidated loss", within the meaning of Regs. Section 1.1503-2(c)(5) generated
by any Energizer Domestic Subsidiary, which constitutes a "dual resident
corporation" within the meaning of Regs. Section 1.1503-2(c)(2). To the extent
Energizer causes the recapture of any "dual consolidated loss" created prior to
the Distribution Date, Energizer shall pay or reimburse ▇▇▇▇▇▇▇ for any taxes
and interest due as a result of the recapture.
(h) Gain Recognition Agreements. Energizer shall timely file any annual
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certifications required by any Agreements to Recognize Gain pursuant to Reg.
1.367(a)-3T(g) entered into by ▇▇▇▇▇▇▇ to defer gain on a transaction including
an Energizer Foreign Affiliate. To the extent Energizer causes the recognition
of any such deferred gain after the Distribution Date, Energizer shall pay or
reimburse ▇▇▇▇▇▇▇ for any Domestic aqTaxes and interest due as a result of the
recognition of such gain.
ARTICLE III. FOREIGN TAXES
1. PREPARATION AND FILING OF TAX RETURNS, PAYMENT OF TAXES, ADJUSTMENTS,
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AUDITS AND CONTROVERSIES.
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(a) Preparation and Filing of Foreign Returns.
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(i) Energizer shall be responsible for the preparation and filing
of any Foreign Tax Return of any Energizer Foreign Affiliate for all Tax
Periods.
(ii) ▇▇▇▇▇▇▇ shall be responsible for the preparation and filing
of any Foreign Tax Return of any ▇▇▇▇▇▇▇ Foreign Affiliate for all Tax Periods.
(b) Liability for Foreign Taxes.
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(i) Subject to (A) the Foreign Transfer Taxes described in
subparagraph (c) below, and (B) any Foreign Taxes with respect to the (I) U.K.
Restructuring, (II) Brazilian Restructuring, (III) Mexican Restructuring, (IV)
Argentinean/Chilean Restructuring, or (V) Canadian Restructuring, as described
in Article II of the Plan of Reorganization, or (VI) any other sale,
liquidation, transfer, exchange, merger, or other similar restructuring
transaction initiated by ▇▇▇▇▇▇▇, which resulted in the diminution of any
Domestic Taxes for any Tax periods ending prior to the Distribution Date (the
"Restructurings"), Energizer shall be liable for, shall hold the ▇▇▇▇▇▇▇ Group
and the ▇▇▇▇▇▇▇ Foreign Affiliates harmless against, and shall make payment of
all Foreign Taxes attributable to the Battery Business and any Former Battery
Business, for any and all Tax periods commencing before, on, or after the
Distribution Date, including any such liabilities resulting from an Audit or
other adjustment to previously filed Tax Returns. Other than refunds of the
Foreign Transfer Taxes and Foreign Taxes with respect to the Restructurings,
described in (A) and (B) above, Energizer shall be entitled to any refund of
Foreign Taxes attributable to the Battery Business and any Former Battery
Business for any such Tax periods. The allocation of any such Foreign Taxes
between or among the ▇▇▇▇▇▇▇ Business, the Battery Business, the Former ▇▇▇▇▇▇▇
Business or any Former Battery Business, currently or formerly conducted by a
single ▇▇▇▇▇▇▇ Foreign Affiliate, shall be determined in accordance with the
books and records of ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇ Foreign Affiliate, as though the
Battery Business or Former Battery Business were deemed to have been conducted
as the sole business of a single Foreign Affiliate, and the ▇▇▇▇▇▇▇ Business or
Former ▇▇▇▇▇▇▇ Business were deemed to have been conducted as the sole business
of a single Foreign Affiliate.
(ii) ▇▇▇▇▇▇▇ shall be liable for, shall hold the Energizer Group
and the Energizer Foreign Affiliates harmless against, and shall make payments
of, all (A) Foreign Taxes owed by any ▇▇▇▇▇▇▇ Businesses and Former ▇▇▇▇▇▇▇
Business, for any and all Tax periods commencing before, on, or after the
Distribution Date, including any such liabilities resulting from an Audit or
other adjustment to previously filed Tax Returns and (B) any Foreign Taxes with
respect to the Restructurings. ▇▇▇▇▇▇▇ shall be entitled to any refund of such
Foreign Taxes for any Tax period. The allocation of any such Foreign Taxes
between or among the ▇▇▇▇▇▇▇ Businesses and the Battery Business, the Former
▇▇▇▇▇▇▇ Business, or any Former Battery Business conducted by a single ▇▇▇▇▇▇▇
Foreign Affiliate shall be in accordance with the books and records of ▇▇▇▇▇▇▇
and the ▇▇▇▇▇▇▇ Foreign Affiliate, as though the Battery Business or Former
Battery Business were deemed to have been conducted as the sole business of a
single Foreign Affiliate.
(iii) If, in accordance with this Article III 1(b), either ▇▇▇▇▇▇▇
or Energizer is liable for any portion of the Foreign Taxes payable in
connection with any Foreign Tax Return to be filed by the other, the party
responsible for filing such Return (the "Preparer") shall prepare and deliver to
the other party (the "Payor") a copy of such return and any schedules, work
papers and other documentation then available that are relevant to the
preparation of the portion of such return for which the Payor is or may be
liable hereunder not later than the earlier of (A) twenty (20) days prior to the
due date for such Tax Return (including applicable extensions) (the "Due Date"),
or (B) the date the information is available in the normal course of business.
The Preparer shall not file such return until the earlier of either the receipt
of written notice from the Payor indicating the Payor's consent thereto, or five
(5) days prior to the Due Date to ensure timely receipt of the return by the
taxing jurisdiction.
The Payor shall have the option of providing to the Preparer, at
any time at least ten (10) days prior to the Due Date, written instructions as
to how the Payor wants any, or all, of the items for which it may be liable in
full reflected on such Tax Return. Failure by the Payor to give written
instructions at least ten (10) days prior to the Due Date shall constitute a
waiver by the Payor of its right to provide instructions, to the extent such
failure is prejudicial to the Preparer.
The Preparer shall, in preparing such Return, cause the items for
which the Payor is liable hereunder to be reflected in accordance with the
Payor's instructions unless the Preparer determines that such manner of
reporting is in contravention of applicable law. In the absence of having
received instructions from Payor, such items shall be reported in the manner
determined by the Preparer, which is not in contravention of applicable law, and
consistent with historic business practices, as applicable. The Payor shall
timely pay the Preparer an amount equal to the Foreign Taxes for which it is
liable consistent with the Return, and in accordance with Article VI 3 hereof.
(c) Foreign Transfer Taxes. ▇▇▇▇▇▇▇ shall pay or shall reimburse
------------------------
Energizer or an Energizer Foreign Affiliate as appropriate, for payment of any
and all Foreign Taxes upon, or by virtue of, any transfer of property
contemplated under the Plan of Reorganization, including the transfer of shares
of stock of Energizer Foreign Affiliates to Energizer in connection with the
Distribution. Foreign Tax Returns required to be prepared and filed by
Energizer relating to the transfer of shares of stock of Energizer Foreign
Affiliates to Energizer, must be provided to ▇▇▇▇▇▇▇ by Energizer at least ten
(10) days prior to the due date for such Tax Returns so that ▇▇▇▇▇▇▇ may timely
make any payment of Foreign Transfer Taxes due with respect to such Foreign Tax
Return. ▇▇▇▇▇▇▇ shall reimburse Energizer, or an Energizer Foreign Affiliate,
as appropriate, for any such Foreign Transfer Taxes paid, within thirty (30)
days of presentation of a receipt evidencing payment of such Taxes by the
Foreign Affiliate.
(d) Foreign Audits and Controversies.
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(i) Energizer shall exclusively control and direct any Audit or
Controversy with respect to any Energizer Foreign Affiliate. ▇▇▇▇▇▇▇, however,
shall have the right to participate in any such Audit or Controversy to the
extent such Audit or Controversy would impact the Foreign Taxes or Domestic
Taxes for which ▇▇▇▇▇▇▇ is liable in accordance with this Agreement. Energizer
shall not consent to any resolution, compromise or conclusion of such Audit or
Controversy without the written approval of ▇▇▇▇▇▇▇, which approval shall not be
unreasonably withheld. Notwithstanding the foregoing, in the event Energizer
shall compromise or settle any such deficiency of Foreign Tax without the prior
consent of ▇▇▇▇▇▇▇, Energizer shall hold ▇▇▇▇▇▇▇ and any ▇▇▇▇▇▇▇ Foreign
Affiliate harmless against any losses, costs, or damages, including Taxes
resulting from such compromise or settlement.
(ii) ▇▇▇▇▇▇▇ shall exclusively control and direct any Tax Audit or
Controversy as to any Foreign Tax with respect to any ▇▇▇▇▇▇▇ Foreign Affiliate.
Energizer, however, shall have the right to participate in any such Audit or
Controversy to the extent such Audit or Controversy would impact the Foreign
Taxes for which Energizer is liable in accordance with this Agreement. ▇▇▇▇▇▇▇
shall not consent to any resolution, compromise or conclusion of such Audit or
Controversy without the written approval of Energizer, which approval shall not
be unreasonably withheld. Notwithstanding the foregoing, in the event ▇▇▇▇▇▇▇
shall compromise or settle any such deficiency of Foreign Tax without the prior
consent of Energizer, ▇▇▇▇▇▇▇ shall hold Energizer and any Energizer Foreign
Affiliate harmless against any losses, costs, or damages, including Taxes
resulting from such compromise or settlement.
(e) Foreign Tax Attributes.
------------------------
Subject to subparagraph (c) above regarding Foreign Transfer Taxes,
any Foreign Tax attribute generated by ▇▇▇▇▇▇▇ or Energizer shall, to the extent
permitted by the applicable law of the Tax jurisdiction in question, remain with
▇▇▇▇▇▇▇ or Energizer, respectively, or the appropriate entity. In any case
where the applicable law of the Tax jurisdiction in question requires such Tax
attribute to be allocated between ▇▇▇▇▇▇▇ and Energizer, such allocation shall
be made as provided by the law of such jurisdiction. In the event the
applicable law of the Tax jurisdiction requires that such Tax Attribute be
allocated between the parties based on a method of allocation agreed to by the
parties, ▇▇▇▇▇▇▇ and Energizer shall apply an allocation method reasonably
agreed to by both parties.
ARTICLE IV. ARBITRATION
For the purposes of this Agreement, all computations or recomputations of
Tax liability, and all computations or recomputations of any amount or any
payment (including, but not limited to, computations of the amount of the tax
liability, any loss or credit or deduction, statutory tax rate for a year,
interest payments, and adjustments) and all determinations of payments or
repayments, or determination of any other nature required to be made pursuant to
this Agreement, shall be based on the assumptions and conclusions of the party
making the computations. If either ▇▇▇▇▇▇▇ or Energizer objects thereto in
writing, addressed to the other party, the provisions of Article [_____] the
Plan of Reorganization shall be applicable to resolve any issues under this Tax
Sharing Agreement.
ARTICLE V. ENERGIZER POST-DISTRIBUTION TRANSACTIONS
1. Energizer shall, and shall cause each member of the Energizer Group and
each Energizer Foreign Affiliate to comply with each representation and
statement made, or to be made, to the IRS in connection with any ruling
obtained, or to be obtained, by ▇▇▇▇▇▇▇ from the IRS with respect to any
transaction contemplated by the Plan of Reorganization. Neither Energizer nor
any member of the Energizer Group shall for a period of thirty (30) months, with
respect to transactions described in subparagraphs I, III, IV, V, and VI, below;
and twenty-four months with respect to the transaction described in subparagraph
II below, following the Distribution Date engage in any of the following
transactions, unless, in the sole discretion of ▇▇▇▇▇▇▇, either (a) an opinion
in form and substance satisfactory to ▇▇▇▇▇▇▇ is obtained from counsel to
Energizer, the selection of which counsel is agreed to by ▇▇▇▇▇▇▇ or (b) a
supplemental ruling is obtained from the IRS, in either case to the effect that
such transactions would not adversely affect the tax consequences of the
transactions contemplated by the Plan of Reorganization to (i) ▇▇▇▇▇▇▇ or any
member of the ▇▇▇▇▇▇▇ Group, (ii) Energizer or any member of the Energizer
Group, or (iii) the ▇▇▇▇▇▇▇ shareholders. The transactions subject to this
provision include: (I) making a material disposition (including transfers from
one member of the Energizer Group to another member of the Energizer Group), by
means of a sale or exchange of assets or shares of stock, a distribution to
shareholders, or otherwise, of any of its assets (other than the transactions
contemplated by the Plan of Reorganization) except in the ordinary course of
business; (II) repurchasing any Energizer Shares, unless such repurchase
satisfies the requirements of Section 4.05(1)(b) of Revenue Procedure 96-30;
(III) issuing capital stock of Energizer (or a successor to Energizer), whether
incident to a stock offering, an acquisition transaction, or otherwise, or
participating in a transaction in which shareholders of Energizer (or a
successor to Energizer) exchange or otherwise dispose of their stock in
Energizer (or a successor to Energizer), if the aggregate amount of shares
issued or disposed of in any such transactions represents a "fifty percent (50%)
or greater interest" in the total issued and outstanding stock of Energizer (or
a successor to Energizer) within the meaning of section 355(d)(4) of the Code;
provided that Energizer further agrees to notify ▇▇▇▇▇▇▇ in advance of any such
transactions that would result in the issuance or disposition of an aggregate
amount of shares representing a ten percent (10%) or greater interest in the
total issued and outstanding stock of Energizer; (IV) liquidating or merging
with any other corporation (including a member of the Energizer Group); (V)
ceasing to engage in the active conduct of a trade or business within the
meaning of Section 355(b)(2) of the Code; or (VI) any other transaction, action,
or event which is, in any material respect, inconsistent with any of the
representations or statements made to the IRS in connection with the request for
any ruling obtained, or to be obtained, with respect to any transaction
contemplated by the Plan of Reorganization. Energizer hereby represents that
neither Energizer nor any member of the Energizer Group has any present
intention to undertake any of the transactions set forth above, except as set
forth in the ruling request submitted to the IRS with respect to the
Distribution.
2. ▇▇▇▇▇▇▇ shall, and shall cause each member of the ▇▇▇▇▇▇▇ Group and each
▇▇▇▇▇▇▇ Foreign Affiliate to refrain from taking any action which would
adversely impact any ruling obtained, or to be obtained, by ▇▇▇▇▇▇▇ from the IRS
with respect to any transaction contemplated by the Agreement of Reorganization.
ARTICLE VI. MISCELLANEOUS PROVISIONS
1. Mutual Cooperation. ▇▇▇▇▇▇▇ and Energizer shall, and shall cause each of
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their Domestic Subsidiaries and Foreign Affiliates to, cooperate with each other
in filing any Tax Returns or consents contemplated by this Agreement and to take
such actions as the other party may reasonably request, including but not
limited to the following: (a) provide data for the preparation of Tax Returns,
including schedules, and make elections that may be required by the other party;
(b) provide required documents and data and cooperate in Audits or
investigations of Tax Returns and execute appropriate powers of attorney in
favor of the other party and/or its agents; (c) file protests or otherwise
contest proposed or asserted tax deficiencies, including filing petitions for
redetermination or prosecuting actions for refund in court, and pursuing the
appeal of such actions; (d) take any of the actions of the type described in
Regulation Section 1.1502-77(a) of the Code (describing the scope of the agency
of the common parent of a group of affiliated corporations); and (v) file
requests for the extension of time within which to file Tax Returns.
2. Maintenance of Books and Records. Until the applicable statute of
------------------------------------
limitations (including periods of waiver), or statute of similar import, has
expired in accordance with laws governing Domestic or Foreign Taxes and Tax
Returns, ▇▇▇▇▇▇▇ and Energizer shall, and shall cause each Domestic Subsidiary
and Foreign Affiliate to, retain all Tax workpapers and related materials
including applicable financial reports in its possession and under its control
used in the preparation of any Tax Return for Tax periods commencing prior to or
on the Distribution Date. ▇▇▇▇▇▇▇ and Energizer will notify the other party
sixty (60) days prior to disposing of any of the aforementioned records and will
deliver to the other party, at the other party's expense, any such records
requested by the other party. In addition, Energizer shall generate and retain
for IRS audit use (i) all necessary electronic data processing ("EDP") records
in accordance with existing agreements with the IRS, and (ii) any necessary
computer hardware needed to process EDP records for the IRS.
3. Payment. Failure to make any payment required under this Agreement will
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result in the accrual of interest on such amount due. Any interest payment
required hereunder shall be calculated from the same date and at the rate used
by the IRS, any foreign, state, or local tax authority, as applicable, in
computing the interest payable by it or to it. Unless otherwise provided, all
payments required to be made under this Agreement from one party to another
shall be made within thirty (30) days after the event which gives rise to the
requirement for payment occurs. Any payments made pursuant to this Agreement
are to be adjusted in the event that future events or new information would, had
they occurred or been known at the time of a payment, have altered the amount of
such payment, so that at the time of such future events or knowledge of such
information, appropriate adjustments shall be made retroactively to include the
consequences of such event or information in the original computation.
4. Energizer Domestic Tax Accruals. Prior to the Distribution Date,
----------------------------------
Energizer will transfer to the books of ▇▇▇▇▇▇▇ any Domestic Tax accrual
balances (credits) recorded on any books of Energizer Domestic Subsidiary as of
the Distribution Date.
5. Governing Law. This Agreement shall be governed and construed in
--------------
accordance with the laws of the State of Missouri and shall be binding on the
successors and assigns of the parties hereto.
6. Entire Agreement. Unless otherwise specified, this Agreement contains
-----------------
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior written agreements, memoranda,
negotiations and oral understandings, if any, and may not be amended,
supplemented or discharged except by performance or by an instrument in writing
signed by all of the parties hereto.
7. Controlling Agreement. In the case of a conflict between the Plan of
----------------------
Reorganization and this Agreement, this Agreement shall control.
8. Counterpart. This Agreement may be executed simultaneously in two or
-----------
more counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
▇▇▇▇▇▇▇ PURINA COMPANY
BY ___________________________________
ENERGIZER HOLDINGS, INC.
BY ___________________________________
