Common use of Approval of Budgets Clause in Contracts

Approval of Budgets. The Joint Policy Board shall have the ------------------- responsibility for and authority to approve each Pod Budget. PQC shall submit each Pod Budget to the Joint Policy Board for approval on a timely basis. Once approved in accordance with this Section 3.8(b), all of PQC, Pod and Pod Physicians shall be bound by the terms of the approved Pod Budget for the following twelve (12) month period or such lesser period as may be provided for in the Budget Guidelines, subject only to any modifications suggested by PQC and/or Pod Physicians and approved by the Joint Policy Board. At any point during a Fiscal Period, including for example if the actual Physician Pod Practice Revenues less actual Physician Pod Practice Expenses is below budgeted levels for such Physician Pod or if there is an actual or projected negative Net Margin the Joint Policy Board may review the budgets for such Physician Pod and make such changes to such budgets, including the aggregate Pod Distributions (as defined in Section 3 of Appendix A to the Employment Agreements), as the Joint Policy Board deems to be appropriate. All capital and operating budgets, and changes thereto, also shall be subject to the approval of PQC. The Joint Policy Board shall not unreasonably withhold its approval of a Pod Budget but if such approval is not forthcoming, the following process shall prevail so that the Pod may remain open to treat patients: (i) If, prior to the commencement of any budget period, the Joint Policy Board has not yet approved the Pod Budget, then PQC and Medical Group will work diligently in good faith to obtain such approval. Until such approval is obtained, the following procedures shall apply: (A) as to any disputed line items, the immediately preceding budget period's Pod Budget shall be controlling until such time, if any, as agreement is reached on the amounts to be allocated to such disputed line items, except that: (1) non-recurring extraordinary items shall not be continued from the Pod Budget for the immediately preceding budget period; (2) if items such as lease payments or payroll taxes are subject to an automatic increase, such increases shall be effective at the increased rate; and (3) for items such as personnel salaries, the total salary number shall be adjusted to take into account changes in the number and classifications of personnel members employed or contracted; and (B) as to any line items which are not in dispute, the new Pod Budget submitted by PQC shall be effective for the new budget period.

Approval of Budgets. The Joint Policy Board (a) Authorization. Manager and SMGC shall have use their good faith efforts to reach agreement on the ------------------- responsibility for and authority to approve each Pod Budget. PQC shall submit each Pod Budget to the Joint Policy Board for approval on a timely basis. Once approved in accordance with this Section 3.8(b), all of PQC, Pod and Pod Physicians shall be bound by the terms of the approved Pod Operating Budget for the ensuing calendar year at the third quarter meeting at which such Operating Budget is presented by Manager under Section 2.8 above. If Manager and SMGC are unable to reach agreement on such Operating Budget at such meeting, within ten (10) days following twelve (12) month period or the conclusion of such lesser period as may be provided for in the meeting SMGC shall submit to Manager, with a copy to all owners of SMGC, a revised Operating Budget Guidelines, subject only to any modifications suggested by PQC and/or Pod Physicians and approved by the Joint Policy Board. At any point during a Fiscal Period, including for example if the actual Physician Pod Practice Revenues less actual Physician Pod Practice Expenses is below budgeted levels for such Physician Pod or if there ensuing year that SMGC is an actual or projected negative Net Margin willing to accept. Following Manager's receipt of such revised Operating Budget, SMGC and Manager shall continue to use their good faith efforts to reach agreement on the Joint Policy Board may review the budgets Operating Budget for such Physician Pod ensuing calendar year. If SMGC and make Manager are unable to reach agreement on such changes to such budgets, including the aggregate Pod Distributions (as defined in Section 3 of Appendix A to the Employment Agreements), as the Joint Policy Board deems to be appropriate. All capital and operating budgets, and changes thereto, also shall be subject to the approval of PQC. The Joint Policy Board shall not unreasonably withhold its approval of a Pod Operating Budget but if such approval is not forthcoming, the following process shall prevail so that the Pod may remain open to treat patients: (i) If, by December 1st prior to the commencement of any budget periodthe calendar year in which such Operating Budget is to be effective, the Joint Policy Board has not yet approved the Pod Budget, then PQC and Medical Group will work diligently in good faith to obtain such approval. Until such approval is obtained, the following procedures shall apply: (A) as to any disputed line items, the immediately preceding budget period's Pod Default Budget shall be controlling deemed to be the agreed upon Operating Budget for such ensuing calendar year until such time as the parties otherwise agree upon an Operating Budget for such year or such Operating Budget is established by an order of an arbitrator pursuant to the provisions of Article XI. The Default Budget shall mean the greater of 1) the Operating Budget in effect for the calendar year immediately preceding the calendar year for which the parties are unable to reach agreement on an Operating Budget or 2) the Operating Budget set forth on Exhibit "C" attached hereto (provided, however, the "Capital" portion of each Operating Budget specified in 1) or 2) above shall be excluded from such Operating Budgets); plus a capital amount of $250,000 to be utilized for capital expenditures relating to the System. Notwithstanding the language of the preceding sentence the following shall apply: 1) the General and Administrative Fee under Section 5.1 below to be included in the Default Budget for any year shall, unless the parties have otherwise agreed upon such Fee, be the Default General and Administrative Fee for such year and 2) each time, if anyand at such time as, as agreement is reached on the amounts to be allocated to such disputed line items, except that: (1) non-recurring extraordinary items shall not be continued from the Pod Budget for the immediately preceding budget period; (2) if items such as lease payments or payroll taxes are subject to an automatic increase, such increases shall be effective at the increased rate; and (3) for items such as personnel salaries, the total salary number shall be adjusted to take into account changes in the number and classifications of personnel members employed or contracted; and (B) as to any line items which are not in dispute, the new Pod Budget submitted by PQC shall be effective for the new budget period.expansion under Section

Approval of Budgets. The Joint Policy Board shall have the ------------------- -------------------- responsibility for and authority to approve each Pod Budget. PQC shall submit each Pod Budget to the Joint Policy Board for approval on a timely basis. Once approved in accordance with this Section 3.8(b), all of PQC, Pod and Pod Physicians shall be bound by the terms of the approved Pod Budget for the following twelve (12) month period or such lesser period as may be provided for in the Budget Guidelines, subject only to any modifications suggested by PQC and/or Pod Physicians and approved by the Joint Policy Board. At any point during a Fiscal Period, including for example if the actual Physician Pod Practice Revenues less actual Physician Pod Practice Expenses is below budgeted levels for such Physician Pod or if there is an actual or projected negative Net Margin the Joint Policy Board may review the budgets for such Physician Pod and make such changes to such budgets, including the aggregate Pod Distributions (as defined in Section 3 of Appendix A to the Employment Agreements), as the Joint Policy Board deems to be appropriate. All capital and operating budgets, and changes thereto, also shall be subject to the approval of PQC. The Joint Policy Board shall not unreasonably withhold its approval of a Pod Budget but if such approval is not forthcoming, the following process shall prevail so that the Pod may remain open to treat patients: (i) If, prior to the commencement of any budget period, the Joint Policy Board has not yet approved the Pod Budget, then PQC and Medical Group will work diligently in good faith to obtain such approval. Until such approval is obtained, the following procedures shall apply: (A) as to any disputed line items, the immediately preceding budget period's Pod Budget shall be controlling until such time, if any, as agreement is reached on the amounts to be allocated to such disputed line items, except that: (1) non-recurring extraordinary items shall not be continued from the Pod Budget for the immediately preceding budget period; (2) if items such as lease payments or payroll taxes are subject to an automatic increase, such increases shall be effective at the increased rate; and (3) for items such as personnel salaries, the total salary number shall be adjusted to take into account changes in the number and classifications of personnel members employed or contracted; and (B) as to any line items which are not in dispute, the new Pod Budget submitted by PQC shall be effective for the new budget period.