Exhibit 10.26


 


AMENDED

TAX ALLOCATION AGREEMENT


 


This Agreement is entered into this 1st day of January, 1998, by and
among AmCOMP Incorporated (“Parent”), and AmCOMP Preferred Insurance Company,
AmCOMP Assurance Corporation, Pinnacle Administrative Company and Pinnacle
Benefits, Inc. (collectively referred to as “Subsidiaries”).


 


RECITALS


 


A.                                   AmCOMP Incorporated is a Delaware corporation
authorized to serve as a holding company for AmCOMP Preferred Insurance
Company, AmCOMP Assurance Corporation, Pinnacle Administrative Company and
Pinnacle Benefits, Inc.;


 


B.                                     AmCOMP Preferred Insurance Company, formerly
Pinnacle Assurance Corporation, is a Florida corporation operating under a
certificate of authority from the Florida Department of Insurance as a domestic
stock insurance company;


 


C.                                     AmCOMP Assurance Corporation, formerly Thomas
Jefferson Insurance Company, is a Florida corporation operating under a
certificate of authority from the Florida Department of Insurance as a domestic
stock insurance company;


 


D.                                    Pinnacle Administrative Company, formerly
Florida Administrators, Inc., is a Florida corporation authorized to act
as a management company;


 


E.                                      Pinnacle Benefits, Inc., formerly
Compensation Benefits, Inc., is a Florida corporation authorized to act as
a service company;


 


F.                                      AmCOMP Incorporated, AmCOMP Preferred
Insurance Company, AmCOMP Assurance Corporation, Pinnacle Administrative
Company and Pinnacle Benefits, Inc. are members of an affiliated group (“Group”)
within the meaning of Section 1504(a) of the Internal Revenue Code of
1986, as amended (the “Code”).  The
parties will be filing their federal income tax returns on a consolidated
basis, as required by Section 1502 of the Code and the regulations
thereunder, and wish to provide in a written agreement a method for allocating
among themselves the federal income tax liability of Group;


 


NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, which the parties hereby acknowledge as sufficient, the
parties hereby agree as follows:


 


Section 1

Obligations of Subsidiaries


 


1.1           Separate
Recording.  Subsidiaries shall record
on their books tax calculations based upon separate return calculations where
required.


 


1.2           Estimated Tax
Payments.  On or before the
prescribed due date for each estimated payment of federal income tax each
Subsidiary shall compute the estimated payment that would be required to be made
by that Subsidiary if it filed a separate return subject to the provisions of Section 3
hereof, and pay such amount to Parent or inform Parent in writing that no
estimated payment is owed under this provision.


 





















 


1.3           Taxes Due on Return.  On or before the prescribed due date (without
extension) of the federal consolidated income tax return for Group, each
Subsidiary shall compute the amount of federal income tax the Subsidiary would
be required to pay for the immediately preceding fiscal year if the Subsidiary
had filed a separate return, subject to the provisions of Section 3.2
hereof.  Each Subsidiary shall pay such
amount to Parent, minus the amounts previously paid as estimated tax payments
under Section 1.2 hereof, with respect to such fiscal year, or shall
inform Parent in writing that no payment is owed by Subsidiary or that such
Subsidiary has overpaid and that an amount is owed by Parent to each
Subsidiary.


 


1.4           Documentation. 
Each Subsidiary shall provide to Parent documentation supporting its computation
of the amounts due under this Agreement. 
In the event Parent disagrees with a Subsidiary’s computation, the parties
shall make a good faith effort to resolve their differences within ninety (90)
days after the documentation is provided to Parent.  In the event the parties cannot agree, they
shall submit the issue to the certified public accounting firm then utilized by
Parent for federal income tax matters for a final and binding determination, to
be made within ninety (90) days after submission.


 


Section 2

Obligations of Parent


 


2.1           Generally.  Parent
shall file in a consolidated form all federal tax returns required of itself and
Subsidiaries.


 


2.2           Refunds to Subsidiaries.  In the event Parent owes an amount to
Subsidiary pursuant to Section 1.3, Parent shall pay such amount to
Subsidiary within a reasonable time after filing of the consolidated federal
income tax return of Group, including proper extensions.  Such payment may be made, in Parent’s sole
discretion, in the form of surplus notes or other notes, debt obligations or
securities created or issued by Parent in favor of such Subsidiary.


 


2.3           Adjustments. 
In the event of any adjustment of the tax liability shown on the
consolidated federal income tax return of Group, by reason of an amended
return, claim for refund, audit by the Internal Revenue Service or otherwise,
the separate return tax liability of each Subsidiary under Section 1 shall
be recomputed to give effect to any portion of such adjustment applicable to
such Subsidiary as if it had been made a part of the original computation of
tax liability hereunder.  Such
recomputation and any adjusting payment required as a result shall be made
within a reasonable time after final administrative or judicial determination
of such adjustment.


 


Section 3

Computation of Amounts


 


3.1           Application of Federal Tax Laws.  In the computation of amounts to be paid under
the foregoing sections, all applicable rules of the federal income tax law
shall be applied as though each Subsidiary filed a separate return.


 


3.2           Benefit of Losses and Credits.  Each Subsidiary shall be entitled to utilize
its net operating losses and tax credits (including carrybacks) to the same
extent and in the same manner as it would if it had filed a separate tax
return.


 


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3.3           Consistent
Application.  The applicable rules of
the federal income tax law, including the Internal Revenue Code and any
applicable IRS Regulations or decisions, as well as the provisions of paragraph
3.2 above, shall be applied on a consistent basis from one period to the next.  If a Subsidiary wishes to change the basis on
which it applies any applicable rule of federal income tax law such change
must be approved by the Parent before it is implemented, with any appropriate
adjustments required by Parent.


 


Section 4

Separate Returns


 


In the event any Subsidiary is entitled or required under the Internal
Revenue Code or applicable IRS Regulations to file an amended income tax return
for any prior year in which it filed a return separately from Group, any refund
or additional tax liability shown on such separate return shall be paid
directly to or by the corporation filing the return.


 


Section 5

Termination


 


5.1           Termination of
Affiliated Group.  This Agreement
shall cease to apply to all tax years beginning on or after the date the
parties cease to be members of the same affiliated group filing a consolidated
federal income tax return.


 


5.2           Other
Circumstances.  This Agreement shall
not be terminated under any other circumstances except pursuant to the written
agreement of the parties.


 


Section 6

Miscellaneous


 


6.1           Entire Agreement.  This Agreement contains the entire agreement
of the parties and may not be modified or amended except by an agreement in
writing signed by the parties.


 


6.2           Succession and Assignability.  The
rights and obligations of the parties hereunder shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns.


 


6.3           Amendment.  This Agreement may be amended upon written
approval of all of the parties hereto.


 


6.4           Severability.  If any term, provision or condition contained
in this Agreement shall, to any extent, be held invalid or unenforceable, the
remainder of this Agreement shall not be affected thereby, and each term,
provision and condition of this Agreement not affected shall be valid and
enforceable to the fullest extent permitted by law.


 


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IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the day and
year first above written.


 


 


	
  AmCOMP
  Incorporated

  	
  AmCOMP
  Preferred Insurance Company

  
	
   

  	
   

  
	
   

  	
  /s/ Don Johnson

  	
   

  	
   

  	
  /s/ Don Johnson

  	
   

  
	
  By:

  	
  Don
  Johnson

  	
   

  	
  By:

  	
  Don
  Johnson

  	
   

  
	
   

  	
  Chief
  Financial Officer

  	
   

  	
   

  	
  Chief
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pinnacle
  Administrative Company

  	
  AmCOMP
  Assurance Corporation

  
	
   

  	
   

  
	
   

  	
  /s/ Don Johnson

  	
   

  	
   

  	
  /s/ Don Johnson

  	
   

  
	
  By:

  	
  Don
  Johnson

  	
   

  	
  By:

  	
  Don
  Johnson

  	
   

  
	
   

  	
  Chief
  Financial Officer

  	
   

  	
   

  	
  Chief
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pinnacle
  Benefits, Inc.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Don Johnson

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Don
  Johnson

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Chief
  Financial Officer

  	
   

  	
   

  	
   

  	
   

  



 


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