Common use of Tax Effect of Payments Clause in Contracts

Tax Effect of Payments. In the event that it is determined that any payment or distribution of any type to or for the benefit of Executive made by Electro Rent, any of its affiliates, any person who acquires ownership or effective control of Electro Rent or ownership of a substantial portion of Electro Rent's assets (within the meaning of section 280G of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the "Code")) or any affiliate of such person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Total Payments"), would be subject to the excise tax imposed by section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are collectively referred to as the "Excise Tax"), then such payments or distributions shall be limited to such amount which would result in no portion of the payments or distributions being subject to the Excise Tax. The benefits to be limited may be selected by Executive as long as he provides a prioritized list within ten (10) days of being notified by Electro Rent of the need for a limitation on Total Payments.