Exhibit 10.2
ATHENAHEALTH, INC.
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE ATHENAHEALTH, INC.
2007 STOCK OPTION AND INCENTIVE PLAN
Name of Optionee:                                        
No. of Option Shares:                                        
Option Exercise Price per Share:
$                                                            
[FMV on Grant Date (110% of FMV if a 10% owner)]
Grant Date:                                        
Expiration
Date:                                                                                
[up to 10 years (5 if a 10% owner)]
     Pursuant to the athenahealth, Inc. 2007 Stock Option and Incentive Plan, as
amended through the date hereof (the “Plan”), athenahealth, Inc. (the “Company”)
hereby grants to the Optionee named above an option (the “Stock Option”) to
purchase on or prior to the Expiration Date specified above all or part of the
number of shares of Common Stock, par value $0.01 per share (the “Stock”), of
the Company specified above at the Option Exercise Price per Share specified
above subject to the terms and conditions set forth herein and in the Plan.
     1. Exercisability Schedule. No portion of this Stock Option may be
exercised until such portion shall have become exercisable. Except as set forth
below, and subject to the discretion of the Administrator (as defined in
Section 1 of the Plan) to accelerate the exercisability schedule hereunder, this
Stock Option shall be exercisable with respect to the following number of Option
Shares on the dates indicated:

          Incremental Number of     Option Shares Exercisable*   Exercisability
Date
                    
  (___%)                       
 
       
                    
  (___%)                       
 
       
                    
  (___%)                       
 
       
                    
  (___%)                       
 
       
                    
  (___%)                       

 

*   Max. of $100,000 per yr.

     Once exercisable, this Stock Option shall continue to be exercisable at any
time or times prior to the close of business on the Expiration Date, subject to
the provisions hereof and of the Plan.
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     2. Manner of Exercise.
          (a) The Optionee may exercise this Stock Option only in the following
manner: from time to time on or prior to the Expiration Date of this Stock
Option, the Optionee may give written notice to the Administrator of his or her
election to purchase some or all of the Option Shares purchasable at the time of
such notice. This notice shall specify the number of Option Shares to be
purchased.
     Payment of the purchase price for the Option Shares may be made by one or
more of the following methods: (i) in cash, by certified or bank check or other
instrument acceptable to the Administrator; (ii) through the delivery (or
attestation to the ownership) of shares of Stock that have been purchased by the
Optionee on the open market or that are beneficially owned by the Optionee and
are not then subject to any restrictions under any Company plan and that
otherwise satisfy any holding periods as may be required by the Administrator;
(iii) by the Optionee delivering to the Company a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver to
the Company cash or a check payable and acceptable to the Company to pay the
option purchase price, provided that in the event the Optionee chooses to pay
the option purchase price as so provided, the Optionee and the broker shall
comply with such procedures and enter into such agreements of indemnity and
other agreements as the Administrator shall prescribe as a condition of such
payment procedure; or (iv) a combination of (i), (ii) and (iii) above. Payment
instruments will be received subject to collection.
     The transfer to the Optionee on the records of the Company or of the
transfer agent of the Option Shares will be contingent upon the Company’s
receipt from the Optionee of full payment for the Option Shares, as set forth
above and any agreement, statement or other evidence that the Company may
require to satisfy itself that the issuance of Stock to be purchased pursuant to
the exercise of Stock Options under the Plan and any subsequent resale of the
shares of Stock will be in compliance with applicable laws and regulations. In
the event the Optionee chooses to pay the purchase price by previously-owned
shares of Stock through the attestation method, the number of shares of Stock
transferred to the Optionee upon the exercise of the Stock Option shall be net
of the shares attested to.
          (b) The shares of Stock purchased upon exercise of this Stock Option
shall be transferred to the Optionee on the records of the Company or of the
transfer agent upon compliance to the satisfaction of the Administrator with all
requirements under applicable laws or regulations in connection with such
issuance and with the requirements hereof and of the Plan. The determination of
the Administrator as to such compliance shall be final and binding on the
Optionee. The Optionee shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares of Stock subject to this
Stock Option unless and until this Stock Option shall have been exercised
pursuant to the terms hereof, the Company or the transfer agent shall have
transferred the shares to the Optionee, and the Optionee’s name shall have been
entered as the stockholder of record on the books of the Company. Thereupon, the
Optionee shall have full voting, dividend and other ownership rights with
respect to such shares of Stock.
          (c) The minimum number of shares with respect to which this Stock
Option may be exercised at any one time shall be 100 shares, unless the number
of shares with respect to
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which this Stock Option is being exercised is the total number of shares subject
to exercise under this Stock Option at the time.
          (d) Notwithstanding any other provision hereof or of the Plan, no
portion of this Stock Option shall be exercisable after the Expiration Date
hereof.
     3. Termination of Employment; Employment Status Change. If the Optionee’s
employment by the Company or a Subsidiary (as defined in the Plan) is
terminated, the period within which to exercise the Stock Option may be subject
to earlier termination as set forth below.
          (a) Termination Due to Death. If the Optionee’s employment terminates
by reason of the Optionee’s death, any portion of this Stock Option outstanding
on such date may thereafter be exercised, to the extent exercisable on such
date, by the Optionee’s legal representative or legatee for a period of 180 days
from the date of death or until the Expiration Date, if earlier.
          (b) Termination Due to Disability. If the Optionee’s employment
terminates by reason of the Optionee’s disability (as determined by the
Administrator), any portion of this Stock Option outstanding on such date may
thereafter be exercised, to the extent exercisable on the date of termination,
by the Optionee for a period of 180 days from the date of termination or until
the Expiration Date, if earlier. The death of the Optionee during the 180-day
period provided in this Section 3(b) shall extend such period for another
180-days from the date of death or until the Expiration Date, if earlier.
          (c) Termination for Cause. If the Optionee’s employment terminates for
Cause, any portion of this Stock Option outstanding on such date shall terminate
immediately and be of no further force and effect. For purposes hereof, “Cause”
means any of the following: (i) dishonesty, embezzlement, misappropriation of
assets or property of the Company; (ii) gross negligence, misconduct, neglect of
duties, theft, fraud, or breach of fiduciary duty to the Company;
(iii) violation of federal or state securities laws; (iv) breach of an
employment, consulting or other agreement with the Company; or (v) the
conviction of a felony, or any crime involving moral turpitude, including a plea
of guilty or nolo contendre.
          (d) Other Termination. If the Optionee’s employment terminates for any
reason other than the Optionee’s death, the Optionee’s disability, or Cause, and
unless otherwise determined by the Administrator, any portion of this Stock
Option outstanding on such date may be exercised, to the extent exercisable on
the date of termination, for a period of three months from the date of
termination or until the Expiration Date, if earlier. Any portion of this Stock
Option that is not exercisable on the date of termination shall terminate
immediately and be of no further force or effect.
          (e) Employment Status Change. The exercisability of this Stock Option
reflects Athena’s policy that stock option awards accrue over time, and that
such accruals are in consideration for providing continued service to the
Company during substantially all of each work week. Therefore, this Stock Option
will continue to vest under the above Exercisability s Schedule only if the
Optionee devotes at least eighty percent (80%) of the Optionee’s work schedule
to service to the Company. If at any time the Optionee’s employment status is
changed
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to less than 80% time, then any portion of this Stock Option outstanding on such
date may be exercised, to the extent exercisable on the date of change in
employment status, for a period of three months from the date of change in
employment status or until the Expiration Date, if earlier. Any portion of this
Stock Option that is not exercisable on the date of change in employment status
shall terminate immediately and be of no further force or effect.
     The Administrator’s determination of the reason for termination of the
Optionee’s employment shall be conclusive and binding on the Optionee and his or
her representatives or legatees.
     4. Incorporation of Plan. Notwithstanding anything herein to the contrary,
this Stock Option shall be subject to and governed by all the terms and
conditions of the Plan, including the powers of the Administrator set forth in
Section 2(b) of the Plan. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified herein.
     5. Transferability. This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution. This
Stock Option is exercisable, during the Optionee’s lifetime, only by the
Optionee, and thereafter, only by the Optionee’s legal representative or
legatee.
     6. Status of the Stock Option. This Stock Option is intended to qualify as
an “incentive stock option” under Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”), but the Company does not represent or warrant
that this Stock Option qualifies as such. The Optionee should consult with his
or her own tax advisors regarding the tax effects of this Stock Option and the
requirements necessary to obtain favorable income tax treatment under Section
422 of the Code, including, but not limited to, holding period requirements. To
the extent any portion of this Stock Option does not so qualify as an “incentive
stock option,” such portion shall be deemed to be a non-qualified stock option.
If the Optionee intends to dispose or does dispose (whether by sale, gift,
transfer or otherwise) of any Option Shares within the one-year period beginning
on the date after the transfer of such shares to him or her, or within the
two-year period beginning on the day after the grant of this Stock Option, he or
she will so notify the Company within 30 days after such disposition.
     7. Tax Withholding. The Optionee shall, not later than the date as of which
the exercise of this Stock Option becomes a taxable event for Federal income tax
purposes, pay to the Company or make arrangements satisfactory to the
Administrator for payment of any Federal, state, and local taxes required by law
to be withheld on account of such taxable event. The Optionee may elect to have
the minimum required tax withholding obligation satisfied, in whole or in part,
by authorizing the Company to withhold from shares of Stock to be issued.
     8.  No Obligation to Continue Employment. Neither the Company nor any
Subsidiary is obligated by or as a result of the Plan or this Agreement to
continue the Optionee in employment and neither the Plan nor this Agreement
shall interfere in any way with the right of the Company or any Subsidiary to
terminate the employment of the Optionee at any time.
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     9. Notices. Notices hereunder shall be mailed or delivered to the Company
at its principal place of business and shall be mailed or delivered to the
Optionee at the address on file with the Company or, in either case, at such
other address as one party may subsequently furnish to the other party in
writing.

            ATHENAHEALTH, INC.
      By:           Name:           Title:        

The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.

             
Dated:
           
 
           
 
      Optionee’s Signature    
 
           
 
      Optionee’s name and address:    
 
           
 
           
 
           
 
           
 
           
 
           

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