Severance Distribution Clause Samples

Severance Distribution. The Company will pay to Executive an amount equal to $1,600,000 (the "Severance Distribution"), divided as follows: The Company will continue to pay Executive at his current base pay rate (approximately $40,000 a month) through the earlier of (1) the closing of any financing by or through L▇▇▇▇▇ Brothers; or (2) September 30, 2000. When the first of these two events occurs, a calculation will be made as to the number of months remaining between the date of the occurrence and July 31, 2001; then, the total of the base pay payments (starting with the payment made on July 28, 2000) will be subtracted from the $1,600,000 amount. The remainder amount will be divided by the total months remaining until July 31, 2001, and then payments will be made in equal monthly amounts thereafter until July 31, 2001.

Severance Distribution. The Operating Partnership will pay to Executive an amount equal to $1,750,000 (the "Severance Distribution"), of which $600,000 shall be payable on the day following the Revocation Period set forth in Section 15 below. The balance shall be paid, without interest, in eighteen (18) equal monthly installments of $63,888.89 payable on the last day of each month (or, in the event such day is not a business day on the next succeeding business day) commencing March 31, 2000. All payments made by the Operating Partnership pursuant to subparagraphs (a) and (c) above shall be treated as "guaranteed payments" within the meaning of Section 707(c) of the Internal Revenue Code of 1986, as amended (the "Code"). The Company agrees that, except to the extent that it would be detrimentally affected, the Operating Partnership will specifically allocate, in accordance with Section 704(c) of the Code, the corresponding deductions that are available to the Operating Partnership as a result of such distributions as guaranteed payments to the Executive to the maximum extent to which the Executive can utilize the same on his individual federal or state income tax returns for any calendar year. All payments made by the Operating Partnership pursuant to subparagraph (b) above shall be deemed a distribution pursuant to Section 731(a) of the Code and not as a guaranteed payment pursuant to Section 707(c) of the Code. The provisions of this Section 2 shall supercede any provisions in the Operating Partnership's Partnership Agreement which are contrary hereto. All payments or distributions not made when due in accordance with this Section 2 shall accrue interest at a rate per annum equal to the prime or base lending rate from time to time announced by Mercantile - Safe Deposit & Trust Company plus 2.5% (the "Interest Rate"). In the event any payment or distribution pursuant to this Section 2 is not made within 30 days after it becomes due, then all remaining obligations of the Company under this Section 2 shall immediately become due and payable. In the event of any such acceleration, all costs of collection incurred by Executive (including attorneys' fees) shall be borne by the Company.