This is similar to with the twist that there now exist two strikes K and K', whereby the first strike K sets the trigger and the second strike K' the payoff amount.
A payoff amount is only paid if the referenced variable x is above (call) or below (put) the triger level determined by the first strike K.
The exact amount of that payoff - in case it occurs - is unrelated to K, but solely depends on the second strike K'.
It equals x-K' if call and K'-x if put.
This payoff is equivalent to being a) long a Vanilla payoff at the first strike (same Call/Put type) and b) short a Cash Or Nothing payoff at the first strike (same Call/Put type) with cash payoff equal to the difference between the second and the first strike.
Warning: This payoff can be negative depending on the strikes.
The formal definition is as follows:
x is transformed into ε(x-K') if εx > εK and 0 otherwise where ε, K and K' are constants defined in the contract specification.
Furthermore ε can take only the values 1 or -1 and corresponds to a payoff attribute called