Common use of ORTHODONTIC ENTITY EMPLOYEE BENEFIT PLANS Clause in Contracts

ORTHODONTIC ENTITY EMPLOYEE BENEFIT PLANS. (a) Effective immediately before the Acquisition Closing Date, the Orthodontic Entity and Orthodontist shall freeze or terminate all "employee benefit plans" (as that term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) that are (i) sponsored or maintained by the Orthodontic Entity or Orthodontist and (ii) are set forth on SCHEDULE 4.8(A) (the "Practice Plans"). In connection with such actions, all account balances and accrued benefits under all tax-qualified Practice Plans (within the meaning of Section 401(a) of the Code) shall be made fully vested and nonforfeitable. (b) Effective on the Acquisition Closing Date, Orthodontist shall become a participating employer in AOI's employee benefit plans set forth on SCHEDULE 4.8(B) (the "AOI Plans") with respect to Orthodontist's employees. Orthodontist acknowledges that AOI will sponsor a defined contribution plan and that Orthodontist may be precluded by Section 401(k)(2)(B)(i) from paying distributions in connection with the termination of any Practice Plan that contains a "cash or deferred arrangement" within the meaning of Section 401(k) of the Code. Accordingly, AOI shall take all actions as it may determine to be reasonable to facilitate the merger of the assets and liabilities of any tax-qualified Practice Plan into a tax-qualified AOI Plan if such merger of tax-qualified plans is requested by Orthodontist. (c) With respect to any Practice Plan or AOI Plan, neither Orthodontist nor AOI shall take any action or make any contribution to such plan that would cause such plan to become disqualified for federal tax purposes. Orthodontist shall not adopt, maintain, or continue any employee benefit plan after the Acquisition Closing Date without the prior written approval of AOI. (d) Expenses incurred in connection with Practice Plans, including without limitation the compensation of counsel, accountants, corporate trustees, and other agents shall be Excluded Orthodontic Entity and Orthodontist Expenses. (e) The contribution and administration expenses for the Orthodontist, Orthodontic Entity Professional Employees (which are not expenses payable by the AOI Plans or by the participants in the AOI Plans) shall be included in Orthodontist's operating budget. Orthodontist and AOI shall not make employee benefit plan contributions or payments for their respective employees in excess of such budgeted amounts unless required by law or the terms of the AOI Plans. AOI shall make contributions or payments with respect to the AOI Plans on behalf of eligible Orthodontic Entity Professional Employees and Orthodontic Entity Employees and those contributions or payments shall be treated as Orthodontic Entity and Orthodontist Expenses, Apple Expenses or Excluded Orthodontic Entity and Orthodontist Expenses as elsewhere provided in this Agreement. (f) AOI shall have the sole and exclusive authority to adopt, amend, or terminate any employee benefit plan for the benefit of its employees and employees of other entities aggregated with AOI pursuant to Section 414(b), (c), (m) (o) of the Code.