Common use of Tax Equalization Clause in Contracts

Tax Equalization. Under tax equalization, the Executive’s obligation for income taxes shall not exceed the amount of income tax calculated on Base Salary, short-term annual pay and long-term incentive pay applying his or her home country tax rules without taking into consideration any foreign tax credit. Such amount will be deducted from the Executive’s paycheck. Should additional income taxes arise in the U.S. or Switzerland as a result of the assignment, the Company shall pay the additional tax. The Executive may choose, as an alternative to the U.S. tax equalization program, to be personally responsible for the Swiss income tax on his or her Base Salary, short-term incentive pay and long-term incentive pay. In addition to the tax equalization on the compensation above, the Executive will be reimbursed for any wealth tax due in Switzerland as a result of the assignment.

Tax Equalization. Under tax equalization, the Executive’s obligation for income taxes shall not exceed the amount of income tax calculated each year on Base Salary, short-term annual pay and long-term incentive pay applying his or her home country the U.S. tax rules without taking into consideration any foreign tax credit. Such amount will be deducted from the Executive’s paycheck. Should additional income taxes arise in the U.S. or Switzerland as a result of the assignment, the Company shall pay the additional tax. The Executive may choose, as an alternative to the U.S. tax equalization program, to be personally responsible for the Swiss income tax on his or her the Executive’s Base Salary, short-term incentive pay and long-term incentive pay. In addition to the tax equalization on the compensation above, the Executive will be reimbursed for any wealth tax due in Switzerland as a result of the assignment.