TAX SHARING AGREEMENT
AGREEMENT made as of February 16, 2000 among UCAR International Inc.
("UCAR"), and its subsidiaries UCAR Global Enterprises Inc. ("Issuer"), UCAR
Finance Inc. ("Finance Co."), UCAR Carbon Company Inc. ("Carbon"), UCAR
Holdings II Inc. ("Holdings II "), UCAR Holdings III ("Holdings III"), Union
Carbide Grafito, Inc. ("Grafito"), and UCAR Composites Inc. ("Composites")
(collectively, the "subsidiaries").
WHEREAS, UCAR owns all of the issued and outstanding shares of capital
stock of the Issuer and Finance Co., the only class of stock that the Issuer and
Finance Co. is authorized to issue; the Issuer owns all of the issued and
outstanding shares of capital stock of Carbon and of Holdings II, the only
classes of stock that Carbon and Holdings II are authorized to issue; Carbon
owns all of the issued and outstanding share of capital stock of Grafito and
Composites, the only classes of stock that Grafito and Composites are authorized
to issue; Holdings II owns all of the issued and outstanding share of capital
stock of Holdings III, the only class of stock that Holdings III is authorized
to issue; the companies have become members of an affiliated group within the
meaning of section 1504(a) of the Internal Revenue Code of which UCAR is the
common parent corporation (the "Affiliated Group"); and UCAR proposes to include
the subsidiaries in filing a consolidated federal income tax return for the
calendar year 1999 and thereafter; and,
WHEREAS, UCAR and the subsidiaries desire to establish a method for
allocating the consolidated tax liability of the Affiliated Group among its
members and for reimbursing UCAR for the payment of such tax liability;
NOW, THEREFORE, UCAR and the subsidiaries agree as follows:
1. CONSOLIDATED RETURN ELECTION.
If at any time and from time to time UCAR so elects, UCAR and the
subsidiaries will join in the filing of a consolidated federal income tax return
for the calendar year of 1999 and for any subsequent taxable period for which
the Affiliated Group is required or permitted to file such a return. UCAR and
the subsidiaries agree to file such consents, elections, and other documents and
take such other action as may be necessary or appropriate to carry out the
purpose of this Section 1. Any period for which the subsidiaries are included in
a consolidated federal income tax return filed by UCAR is referred to in this
Agreement as a "UCAR Consolidated Return Year."
2. SUBSIDIARIES' LIABILITY TO UCAR FOR UCAR CONSOLIDATED RETURN YEARS.
Within 120 days after the end of each UCAR Consolidated Return Year, the
subsidiaries shall pay to UCAR the amount (if any) of federal income taxes for
which the subsidiaries would have been liable for that year, computed as though
the subsidiaries each had filed a separate return for such Consolidated Return
Year and for all other Consolidated Return Years.
3. INTERIM ESTIMATED PAYMENTS.
Prior to the end of any UCAR Consolidated Return Year, the subsidiaries
shall advance to UCAR (within a reasonable period after request by UCAR) amounts
necessary to reimburse UCAR for that portion of any estimated federal income tax
payments attributable to the inclusion of the companies in the Affiliated Group.
Any amounts so paid in any year shall operate to reduce the amount payable to
UCAR following the end of such year pursuant to Section 2, above, and any
negative balance resulting from such reduction shall promptly be refunded by
UCAR to the subsidiaries.
4. TAX ADJUSTMENTS.
In the event of any adjustment of the tax returns of UCAR and the
subsidiaries as filed (by reason of an amended return, claim for refund, or an
audit by the Internal Revenue Service), the liability of UCAR and the
subsidiaries under Section 2 and 3 shall be redetermined to give effect to any
such adjustment as if it has been made as part of the original computation of
tax liability, and payments between UCAR and the subsidiaries shall be made
within 120 days after any such payments are made or refunds are received, or, in
the case of contested proceedings, within 120 days after a final determination
of the contest.
If any subsidiary ceases to be a member of the Affiliated Group (a
"Deconsolidation Event"), then that subsidiary will indemnify UCAR with respect
to any federal, state or local income, franchise or other tax liability
(including any related interest, additions or penalties) imposed on UCAR as a
result of an audit or other adjustment with respect to any period prior to such
Deconsolidation Event that is attributable to UCAR or to the subsidiary or any
predecessor business thereof (computed as though the subsidiaries each had filed
a separate return for such Consolidated Return Year), but only to the extent
that any such tax liability exceeds any liability for taxes recorded on the
books of UCAR or a subsidiary with respect to any such period.
5. UCAR AND NEW SUBSIDIARIES
If at any time UCAR acquires or creates one or more corporations that are
includable corporations of the Affiliated Group, they shall be subject to this
Agreement and all references to UCAR herein shall thereafter interpreted to
refer to CUAR and such includable corporations as a group.
6. STATE INCOME TAX LIABILITY.
Principles similar to those set forth herein shall apply to allocate
consolidated, combined or unitary state income tax liability among UCAR and the
subsidiaries.
7. SUCCESSORS.
This Agreement shall be binding on and inure to the benefit of any
successor, by merger, acquisition of assets or otherwise, to any of the parties
hereto (including but not limited to any successor of UCAR or the subsidiaries
succeeding to their tax attributes under section 381 of the Internal Revenue
Code), to the same extent as if such successor had been an original party to the
Agreement.
IN WITNESS WHEREOF, UCAR and the subsidiaries have executed this Agreement
by authorized officers thereof as of the date first above written.
DATED: February 16, 2000 UCAR International Inc.
By:/s/ Xxxxx Xxxxxxxx
Its:Comtroller
UCAR Global Enterprises
By : /s/ Xxxxx X. Falls
Its: Treasurer
UCAR Finance Inc.
By: /s/ Xxxxx X. Falls
Its: Treasurer
UCAR Carbon Company, Inc.
By: /s/ Xxxxx X. Falls
Its: Treasurer
UCAR Holdings II, Inc.
By: /s/ Xxxxx X. Falls
Its: Treasurer
UCAR Holdings III, Inc.
By: /s/ Xxxxx X. Falls
Its: Treasurer
Union Carbide Grafito, Inc.
By: /s/ Xxxxx X. Xxxxxxx
Its: President
UCAR Composites Inc.
By: /s/ Xxxxx X. Xxxxxxx
Its: President
