Impact Innovations Key Employee Incentive Plan

IMPACT INNOVATIONS


KEY EMPLOYEE INCENTIVE PLAN


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TABLE OF CONTENTS


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SS.1. PURPOSE.........................................................................................1


SS.2. DEFINITIONS.....................................................................................1
2.1 Board..................................................................................1
2.2 Code...................................................................................1
2.3 Company................................................................................1
2.4 Eligible Employee......................................................................2
2.5 Exchange Act...........................................................................2
2.6 Fair Market Value......................................................................2
2.7 Initial Public Offering................................................................3
2.8 1933 Act...............................................................................3
2.9 Option.................................................................................3
2.10 Option Agreement.......................................................................3
2.11 Option Price...........................................................................3
2.12 Plan...................................................................................3
2.13 Stock..................................................................................3


SS.3. SHARES RESERVED UNDER THE PLAN..................................................................4 SS.4. EFFECTIVE DATE..................................................................................5 SS.5. ADMINISTRATION..................................................................................5 SS.6. ELIGIBILITY.....................................................................................5 SS.7. GRANT OF OPTIONS................................................................................5 SS.8. OPTION PRICE....................................................................................7 SS.9. EXERCISE PERIOD.................................................................................7 SS.10. NONTRANSFERABILITY..............................................................................7 SS.11. SECURITIES REGISTRATION.........................................................................8 SS.12. LIFE OF PLAN....................................................................................9 SS.13. ADJUSTMENT......................................................................................9 SS.14. CHANGE OF CONTROL AND CERTAIN OTHER EVENTS.....................................................10
14.1 Change of Control Events..............................................................10
14.2 Accelerated Vesting...................................................................10
14.3 Conversion of Options.................................................................10
14.4 Notice................................................................................11
14.5 Disposition of Stock Following Change of Control of Company...........................11
14.6 Fractional Shares.....................................................................12


SS.15 AMENDMENT OR TERMINATION.......................................................................12


SS.16. MISCELLANEOUS..................................................................................12
16.1 No Stockholder Rights.................................................................12
16.2 No Contract of Employment.............................................................13
16.3 Other Conditions......................................................................13
16.4 Withholding...........................................................................14
16.5 Construction..........................................................................14
16.6 No "Incentive Stock Option" Treatment.................................................14
16.7 Not Rule 16b-3 Plan...................................................................14
16.8 References............................................................................14


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IMPACT INNOVATIONS
KEY EMPLOYEE INCENTIVE PLAN
SS.1.


PURPOSE


The purpose of this Plan is to provide Eligible Employees with an opportunity to share in the value created in the Company and its subsidiaries, to assist the Company and its subsidiaries in attracting and retaining outstanding personnel, to align the interests of Eligible Employees with the interests of Medaphis Corporation and its stockholders, and to provide incentive to Eligible Employees and to reward Eligible Employees for the performance required to complete a successful Initial Public Offering or other Change of Control of the Company.
SS.2.


DEFINITIONS


Each capitalized term set forth in this ss.2 shall have the meaning set forth opposite such capitalized term for purposes of this Plan and, for purposes of definitions, the singular shall include the plural and the plural shall include the singular.


2.1 Board - means the Board of Directors of the Company.


2.2 Code - means the Internal Revenue Code of 1986, as amended.


2.3 Company - means Impact Innovations Holdings, Inc., a Delaware corporation, and any successor to such corporation.


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2.4 Eligible Employee - means any person who is an employee of the Company, or of any direct and indirect subsidiary of the Company, including without limitation any employee of Impact Innovations Group, Inc., a Delaware corporation, or Impact Innovations Government Solutions, Inc., a Maryland corporation. Eligible Employees shall not include (i) any officer or director of Medaphis Corporation, (ii) any beneficial owner, directly or indirectly, of more than 10% of the outstanding stock of Medaphis Corporation or (iii) any officer or director or 10% beneficial owner of stock of Medaphis Corporation who is subject to the provisions of Section 16 of the Exchange Act with respect to Medaphis Corporation.


2.5 Exchange Act -means the Securities Exchange Act of 1934, as amended.


2.6 Fair Market Value - means, for any date prior to an Initial Public Offering or other Change of Control, the current valuation of a share of Stock as provided by an independent investment banking firm selected by the Board and updated no less often than quarterly. For any date following an Initial Public Offering, Fair Market Value means (i) the closing price for such date for a share of Stock as reported by The Wall Street Journal under the New York Stock Exchange Composite Transactions quotation system (or under any successor quotation system) or, (ii) if the Stock is not traded on the New York Stock Exchange, as reported for such date by The Wall Street Journal under the Nasdaq National Market System quotation system or under the quotation system under which such closing price is reported or, (iii) if The Wall Street Journal does not report such closing price, such closing price as reported for such date by a newspaper or trade journal selected by the Board or, (iv) if no such closing price is available for such date, such closing price as so reported or quoted in accordance with ss.2.6(i), (ii) or (iii) for the immediately preceding business day,


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or, (v) if no newspaper or trade journal reports such closing price or if no such price quotation is available, the price that the Board acting in good faith determines through any reasonable valuation method that a share of Stock might change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts.


2.7 Initial Public Offering - means the first offering for sale by the Company to the public of securities of the same class as any shares subject to an Option granted hereunder pursuant to a registration statement filed in accordance with the 1933 Act or any comparable law then in effect (other than on Forms S-4, S-8 or any other form which does not permit registration of securities by selling stockholders for sale to the public for cash), and the effective date of any such Initial Public Offering shall be the first day on which the securities covered thereby may lawfully be offered and sold pursuant to such registration statement.


2.8 1933 Act - means the Securities Act of 1933, as amended.


2.9 Option - means an option granted under this Plan to purchase Stock.


2.10 Option Agreement - means the written agreement that sets forth the terms of an Option granted to an Eligible Employee under this Plan.


2.11 Option Price - means the price that shall be paid to purchase one share of Stock upon the exercise of the Option granted under this Plan.


2.12 Plan - means this Impact Innovations Key Employee Incentive Plan.


2.13 Stock - means the common stock of the Company, par value $.01 per share.


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SS.3.


SHARES RESERVED UNDER THE PLAN


There shall be 1,500,000 shares of Stock reserved for issuance under this Plan, and such shares of Stock shall be reserved to the extent that the Company deems appropriate from authorized but unissued ...