EXHIBIT 10.1
ATHENAHEALTH, INC.
2007 STOCK OPTION AND INCENTIVE PLAN
As Amended and Restated as of April 23, 2013
SECTION 1.
GENERAL PURPOSE OF THE PLAN; DEFINITIONS

The name of the plan is the athenahealth, Inc. 2007 Stock Option and Incentive
Plan (the “Plan”). The purpose of the Plan is to encourage and enable the
officers, employees, directors and other key persons (including consultants and
prospective employees) of athenahealth, Inc. (the “Company”) and its
Subsidiaries upon whose judgment, initiative and efforts the Company largely
depends for the successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such persons with a
direct stake in the Company’s welfare will assure a closer identification of
their interests with those of the Company and its stockholders, thereby
stimulating their efforts on the Company’s behalf and strengthening their desire
to remain with the Company.
The following terms shall be defined as set forth below:
“Act” means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
“Administrator” means either the Board or the Compensation Committee of the
Board or a similar committee performing the functions of the compensation
committee and which is comprised of not less than two Non-Employee Directors.
“Award” or “Awards,” except where referring to a particular category of grant
under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Deferred Stock Awards, Restricted Stock
Awards, Unrestricted Stock Awards, Cash-based Awards, Performance Shares and
Dividend Equivalent Rights.
“Award Agreement” means a written or electronic agreement setting forth the
terms and provisions applicable to an Award granted under the Plan. Each Award
Agreement is subject to the terms and conditions of the Plan.
“Board” means the Board of Directors of the Company.
“Cash-based Award” means an Award entitling the recipient to receive a
cash-denominated payment.
“Code” means the Internal Revenue Code of 1986, as amended, and any successor
Code, and related rules, regulations and interpretations.
“Committee” means a committee of the Board.
“Covered Employee” means an employee who is a “Covered Employee” within the
meaning of Section 162(m) of the Code.
“Deferred Stock Award” means an Award of phantom stock units to a grantee,
subject to restrictions and conditions as the Administrator may determine at the
time of grant.
“Dividend Equivalent Right” means an Award entitling the grantee to receive
credits based on cash dividends that would have been paid on the shares of Stock
specified in the Dividend Equivalent Right (or other award to which it relates)
if such shares had been issued to and held by the grantee.
“Effective Date” means the date on which the Plan is approved by stockholders as
set forth in Section 21.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
“Fair Market Value” of the Stock on any given date means the fair market value
of the Stock determined in good faith by the Administrator; provided, however,
that if the Stock is admitted to quotation on a national securities exchange,
the determination shall be made by reference to market quotations. If there are
no market quotations for such date, the determination shall be made by reference
to the last date preceding such date for which there are market quotations.
“Incentive Stock Option” means any Stock Option designated and qualified as an
“incentive stock option” as defined in Section 422 of the Code.
“Non-Employee Director” means a member of the Board who is not also an employee
of the Company or any Subsidiary.
“Non-Qualified Stock Option” means any Stock Option that is not an Incentive
Stock Option.
“Option” or “Stock Option” means any option to purchase shares of Stock granted
pursuant to Section 5.
“Performance-based Award” means any Restricted Stock Award, Deferred Stock
Award, Performance Share Award or Cash-based Award granted to a Covered Employee
that is intended to qualify as “performance-based compensation” under
Section 162(m) of the Code and the regulations promulgated thereunder.

1

--------------------------------------------------------------------------------

“Performance Criteria” means the criteria that the Administrator selects for
purposes of establishing the Performance Goal or Performance Goals for an
individual for a Performance Cycle. The Performance Criteria (which shall be
applicable to an individual or to the organizational level specified by the
Administrator, including, but not limited to, the Company or a unit, division,
group, or Subsidiary of the Company) that will be used to establish Performance
Goals are limited to the following: earnings before interest, taxes,
depreciation, and amortization; net income (loss) (either before or after
interest, taxes, depreciation, and amortization); changes in the market price of
our common stock; economic value-added, funds from operations or similar
measure; sales or revenue; acquisitions or strategic transactions; operating
income (loss); cash flow (including, but not limited to, operating cash flow and
free cash flow); return on capital, assets, equity, or investment; stockholder
returns; return on sales; gross or net profit levels; productivity; expense;
margins; operating efficiency; voluntary turnover; corporate compliance;
employee engagement; client days-in-accounts-receivable;
days-in-accounts-receivable in client work buckets; client collections; lost
patient care revenue; client work rate; provider time per relative value unit;
provider documentation time per appointment; client touches per claim; client
tickets per provider; client satisfaction; sales bookings; working capital;
earnings (loss) per share of our common stock; sales or market shares; number of
clients, physicians, and providers; patient throughput; clinical documents;
pay-for-performance revenue; patient no-show rate; patient interactions; days
clinical orders outstanding; closed-loop orders; referral leakage;
headcount-role vacancy; client collection rate; and clinical penetration rate.
“Performance Cycle” means one or more periods of time, which may be of varying
and overlapping durations, as the Administrator may select, over which the
attainment of one or more Performance Criteria will be measured for the purpose
of determining a grantee’s right to and the payment of a Restricted Stock Award,
Deferred Stock Award or Cash-based Award. Each such period shall not be less
than 12 months, except for a Cash-Based Award which shall not have a period of
less than 3 months.
“Performance Goals” means, for a Performance Cycle, the specific goals
established in writing by the Administrator for a Performance Cycle based upon
the Performance Criteria.
“Performance Share Award” means an Award entitling the recipient to acquire
shares of Stock upon the attainment of specified Performance Goals.
“Restricted Stock Award” means an Award entitling the recipient to acquire, at
such purchase price (which may be zero) as determined by the Administrator,
shares of Stock subject to such restrictions and conditions as the Administrator
may determine at the time of grant.
“Sale Event” shall mean (i) the dissolution or liquidation of the Company,
(ii) the sale of all or substantially all of the assets of the Company on a
consolidated basis to an unrelated person or entity, (iii) a merger,
reorganization or consolidation in which the outstanding shares of Stock are
converted into or exchanged for securities of the successor entity and the
holders of the Company’s outstanding voting power immediately prior to such
transaction do not own a majority of the outstanding voting power of the
successor entity (or its ultimate parent, if applicable) immediately upon
completion of such transaction, or (iv) the sale of all of the Stock of the
Company to an unrelated person or entity.
“Sale Price” means the value as determined by the Administrator of the
consideration payable, or otherwise to be received by stockholders, per share of
Stock pursuant to a Sale Event.
“Section 409A” means Section 409A of the Code and the regulations and other
guidance promulgated thereunder.
“Stock” means the Common Stock, par value $0.001 per share, of the Company,
subject to adjustments pursuant to Section 3.
“Stock Appreciation Right” means an Award entitling the recipient to receive
shares of Stock having a value equal to the excess of the Fair Market Value of
the Stock on the date of exercise over the exercise price of the Stock
Appreciation Right multiplied by the number of shares of Stock with respect to
which the Stock Appreciation Right shall have been exercised.
“Subsidiary” means any corporation or other entity (other than the Company) in
which the Company has at least a 50 percent interest, either directly or
indirectly.
“Ten Percent Owner” means an employee who owns or is deemed to own (by reason of
the attribution rules of Section 424(d) of the Code) more than 10 percent of the
combined voting power of all classes of stock of the Company or any parent or
subsidiary corporation.
“Unrestricted Stock Award” means an Award of shares of Stock free of any
restrictions.
SECTION 2.
ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE
AWARDS

(a)  Administrator.    The Plan shall be administered by the Administrator.

2

--------------------------------------------------------------------------------

(b)  Powers of Administrator.    The Administrator shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i)  to select the individuals to whom Awards may from time to time be granted;
(ii)  to determine the time or times of grant, and the extent, if any, of
Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Deferred Stock Awards, Unrestricted Stock Awards,
Cash-based Awards, Performance Share Awards and Dividend Equivalent Rights, or
any combination of the foregoing, granted to any one or more grantees;
(iii)  to determine the number of shares of Stock to be covered by any Award;
(iv)  to determine and modify from time to time the terms and conditions,
including restrictions, not inconsistent with the terms of the Plan, of any
Award, which terms and conditions may differ among individual Awards and
grantees, and to approve the form of written instruments evidencing the Awards;
(v)  to accelerate at any time the exercisability or vesting of all or any
portion of any Award, provided that the Administrator generally shall not
exercise such discretion to accelerate Awards subject to Sections 7 and 8 except
in the event of the grantee’s death, disability or retirement or a Sale Event;
(vi)  subject to the provisions of Section 5(c)(ii), to extend at any time the
period in which Stock Options may be exercised; and
(vii)  at any time to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and proceedings as
it shall deem advisable; to interpret the terms and provisions of the Plan and
any Award (including related written instruments); to make all determinations it
deems advisable for the administration of the Plan; to decide all disputes
arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.
All decisions and interpretations of the Administrator shall be binding on all
persons, including the Company and Plan grantees.
(c)  Delegation of Authority to Grant Options and Deferred Stock
Awards.    Subject to applicable law, the Administrator, in its discretion, may
delegate to an officer of the Company all or part of the Administrator’s
authority and duties with respect to the granting of Options and Deferred Stock
Awards, to individuals who are (i) not subject to the reporting and other
provisions of Section 16 of the Exchange Act and (ii) not Covered Employees. Any
such delegation by the Administrator shall include a limitation as to the amount
of Options and Deferred Stock Awards that may be granted during the period of
the delegation and shall contain guidelines as to the determination of the
exercise price, if applicable, and the vesting criteria. The Administrator may
revoke or amend the terms of a delegation at any time but such action shall not
invalidate any prior actions of the Administrator’s delegate or delegates that
were consistent with the terms of the Plan.
(d)  Award Agreement.    Awards under the Plan shall be evidenced by Award
Agreements that set forth the terms, conditions and limitations for each Award
which may include, without limitation, the term of an Award, the provisions
applicable in the event employment or service terminates, and the Company’s
authority to unilaterally or bilaterally amend, modify, suspend, cancel or
rescind an Award.
(e)  Indemnification.    Neither the Board nor the Administrator, nor any member
of either or any delegate thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with the Plan, and the members of the Board and the Administrator (and any
delegate thereof) shall be entitled in all cases to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including, without limitation, reasonable attorneys’ fees) arising or resulting
therefrom to the fullest extent permitted by law and/or under the Company’s
articles or bylaws or any directors’ and officers’ liability insurance coverage
which may be in effect from time to time and/or any indemnification agreement
between such individual and the Company.
(f)  Foreign Award Recipients.    Notwithstanding any provision of the Plan to
the contrary, in order to comply with the laws in other countries in which the
Company and its Subsidiaries operate or have employees or other individuals
eligible for Awards, the Administrator, in its sole discretion, shall have the
power and authority to: (i) determine which Subsidiaries shall be covered by the
Plan; (ii) determine which individuals outside the United States are eligible to
participate in the Plan; (iii) modify the terms and conditions of any Award
granted to individuals outside the United States to comply with applicable
foreign laws; (iv) establish subplans and modify exercise procedures and other
terms and procedures, to the extent the Administrator determines such actions to
be necessary or advisable (and such subplans and/or modifications shall be
attached to this Plan as appendices); provided, however, that no such subplans
and/or modifications shall increase the share limitations contained in
Section 3(a) hereof; and (v) take any action, before or after an Award is made,
that the Administrator determines to be necessary or advisable to obtain
approval or comply with any local governmental regulatory exemptions or
approvals. Notwithstanding the foregoing, the Administrator may not take any
actions hereunder, and no Awards shall be granted, that would violate the
Exchange Act or any other applicable United States securities law, the Code, or
any other applicable United States governing statute or law.

3

--------------------------------------------------------------------------------

SECTION 3.
STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

(a)  Stock Issuable.    The maximum number of shares of Stock reserved and
available for issuance under the Plan (subject to adjustment as provided in
Section 3(b)) shall be the sum of (i) 9,339,781 shares, plus (ii) the number of
Shares under the Company’s 1997 Stock Plan and 2000 Stock Option and Incentive
Plan (together, the “Prior Plans”) which are not needed to fulfill the Company’s
obligations for awards issued under the Prior Plans as a result of forfeiture,
expiration, cancellation, termination or net issuances of awards thereunder.
Without limiting the generality of the foregoing, not more than 20,000,000
shares shall be issued in the form of Incentive Stock Options under the Plan.
For purposes of this limitation, the shares of Stock underlying any Awards under
the Plan that are forfeited, canceled or otherwise terminated (other than by
exercise) shall be added back to the shares of Stock available for issuance
under the Plan. Further, each share reacquired by the Company to satisfy a tax
withholding obligation pursuant to Awards other than Stock Options and Stock
Appreciation Rights will again become available for issuance under the Plan
pursuant to this Section 3(a) and will increase the number of shares of Common
Stock available for issuance under the Plan by 1.66 shares; and the shares
reserved for issuance under this Plan will not be reduced by each share withheld
(and not issued) to satisfy a tax withholding obligation pursuant to a Deferred
Stock Award. Notwithstanding the foregoing, the following shares shall not be
added to the shares authorized for grant under the Plan: (i) shares tendered or
held back upon exercise of an Option or settlement of an Option or Stock
Appreciation Right to cover the exercise price or tax withholding, and
(ii) shares subject to a Stock Appreciation Right that are not issued in
connection with the stock settlement of the Stock Appreciation Right upon
exercise thereof. In the event the Company repurchases shares of Stock on the
open market, such shares shall not be added to the shares of Stock available for
issuance under the Plan. Subject to such overall limitations, shares of Stock
may be issued up to such maximum number pursuant to any type or types of Award;
provided, however, that Stock Options or Stock Appreciation Rights with respect
to no more than 2,000,000 shares of Stock may be granted to any one individual
grantee during any one calendar year period. The shares available for issuance
under the Plan may be authorized but unissued shares of Stock or shares of Stock
reacquired by the Company.
(b)  Effect of Awards.    Effective for Awards granted on or after April 24,
2012, for purposes of determining the number of shares of Stock available for
issuance under Section 3(a), the grant of any Option or Stock Appreciation Right
shall be deemed an Award for one share of Stock for each share of Stock actually
subject to that Award, and the grant of any full value Award (i.e., an Award
other than an Option or a Stock Appreciation Right) shall be deemed an Award of
1.66 shares of Stock for each share of Stock actually subject to that Award. Any
forfeiture, cancellation, or other termination (other than by exercise) of an
Award shall result in the return of the shares subject to that Award to the
reserved pool of shares of Stock under the Plan in the same ratios.
(c)  Changes in Stock.    Subject to Section 3(c) hereof, if, as a result of any
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar change in the Company’s capital stock, the
outstanding shares of Stock are increased or decreased or are exchanged for a
different number or kind of shares or other securities of the Company, or
additional shares or new or different shares or other securities of the Company
or other non-cash assets are distributed with respect to such shares of Stock or
other securities, or, if, as a result of any merger or consolidation, sale of
all or substantially all of the assets of the Company, the outstanding shares of
Stock are converted into or exchanged for securities of the Company or any
successor entity (or a parent or subsidiary thereof), the Administrator shall
make an appropriate or proportionate adjustment in (i) the maximum number of
shares reserved for issuance under the Plan, including the maximum number of
shares that may be issued in the form of Incentive Stock Options, (ii) the
number of Stock Options or Stock Appreciation Rights that can be granted to any
one individual grantee and the maximum number of shares that may be granted
under a Performance-based Award, (iii) the number and kind of shares or other
securities subject to any then outstanding Awards under the Plan, (iv) the
repurchase price, if any, per share subject to each outstanding Restricted Stock
Award, and (v) the price for each share subject to any then outstanding Stock
Options and Stock Appreciation Rights under the Plan, without changing the
aggregate exercise price (i.e., the exercise price multiplied by the number of
Stock Options and Stock Appreciation Rights) as to which such Stock Options and
Stock Appreciation Rights remain exercisable. The Administrator shall also make
equitable or proportionate adjustments in the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration cash dividends paid other than in the ordinary course or
any other extraordinary corporate event. Notwithstanding the foregoing, no such
adjustment shall be made if the Administrator determines that such action could
cause any Award to fail to satisfy the conditions of any applicable exception
from the requirements of Section 409A or otherwise could subject the grantee to
the additional tax imposed under Section 409A in respect of an outstanding Award
or constitute a modification, extension or renewal of an Incentive Stock Option
within the meaning of Section 424(h) of the Code. The adjustment by the
Administrator shall be final, binding and conclusive. No fractional shares of
Stock shall be issued under the Plan resulting from any such adjustment, but the
Administrator in its discretion may make a cash payment in lieu of fractional
shares.
(d)  Mergers and Other Transactions.    Except as the Administrator may
otherwise specify with respect to a particular Award in the relevant Award
Agreement, in the case of and subject to the consummation of a Sale Event, all
Options and Stock Appreciation Rights that are not exercisable immediately prior
to the effective time of the Sale Event shall become fully exercisable as of the
effective time of the Sale Event, all other Awards with time-based vesting,
conditions or restrictions shall

4

--------------------------------------------------------------------------------

become fully vested and nonforfeitable as of the effective time of the Sale
Event, and all other Awards with conditions and restrictions relating to the
attainment of performance goals may become vested and nonforfeitable in
connection with a Sale Event in the Administrator’s discretion unless in any
case, the parties to the Sale Event agree that Awards will be assumed or
continued by the successor entity. Upon the effective time of the Sale Event,
the Plan and all outstanding Awards granted hereunder shall terminate, unless
provision is made in connection with the Sale Event in the sole discretion of
the parties thereto for the assumption or continuation of Awards theretofore
granted by the successor entity, or the substitution of such Awards with new
Awards of the successor entity or parent thereof, with appropriate adjustment as
to the number and kind of shares and, if appropriate, the per share exercise
prices, as such parties shall agree (after taking into account any acceleration
hereunder). In the event of such termination, (i) the Company shall have the
right, but not the obligation, to make or provide for a cash payment to the
grantees holding Options and Stock Appreciation Rights, in exchange for the
cancellation thereof, in an amount equal to the difference between (A) the Sale
Price times the number of shares of Stock subject to outstanding Options and
Stock Appreciation Rights (to the extent then exercisable at prices not in
excess of the Sale Price) and (B) the aggregate exercise price of all such
outstanding Options and Stock Appreciation Rights, or (ii) each grantee shall be
permitted, within a specified period of time prior to the consummation of the
Sale Event as determined by the Administrator, to exercise all outstanding
Options and Stock Appreciation Rights held by such grantee, including those that
will become exercisable upon the consummation of the Sale Event; provided,
however, that the exercise of Options and Stock Appreciation Rights not
exercisable prior to the Sale Event shall be subject to the consummation of the
Sale Event.
(e)  Substitute Awards.    The Administrator may grant Awards under the Plan in
substitution for stock and stock based awards held by employees, directors or
other key persons of another corporation in connection with the merger or
consolidation of the employing corporation with the Company or a Subsidiary or
the acquisition by the Company or a Subsidiary of property or stock of the
employing corporation. The Administrator may direct that the substitute awards
be granted on such terms and conditions as the Administrator considers
appropriate in the circumstances. Any substitute Awards granted under the Plan
shall not count against the share limitation set forth in Section 3(a).
SECTION 4.
ELIGIBILITY

Grantees under the Plan will be such full or part-time officers and other
employees, directors and key persons (including consultants and prospective
employees) of the Company and its Subsidiaries as are selected from time to time
by the Administrator in its sole discretion.
SECTION 5.
STOCK OPTIONS

(a)  Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve.
(b)  Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is a “subsidiary corporation”
within the meaning of Section 424(f) of the Code. To the extent that any Option
does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option.
(c)  Stock Options granted pursuant to this Section 5(a) shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Administrator
shall deem desirable. If the Administrator so determines, Stock Options may be
granted in lieu of cash compensation at the optionee’s election, subject to such
terms and conditions as the Administrator may establish.
(i)  Exercise Price.    The exercise price per share for the Stock covered by a
Stock Option granted pursuant to this Section 5(a) shall be determined by the
Administrator at the time of grant but shall not be less than one hundred
percent (100%) of the Fair Market Value on the date of grant. In the case of an
Incentive Stock Option that is granted to a Ten Percent Owner, the option price
of such Incentive Stock Option shall be not less than one hundred ten percent
(110%) of the Fair Market Value on the grant date.
(ii)  Option Term.    The term of each Stock Option shall be fixed by the
Administrator, but no Stock Option shall be exercisable more than ten years
after the date the Stock Option is granted. In the case of an Incentive Stock
Option that is granted to a Ten Percent Owner, the term of such Stock Option
shall be no more than five years from the date of grant.
(iii)  Exercisability; Rights of a Stockholder.    Stock Options shall become
exercisable at such time or times, whether or not in installments, as shall be
determined by the Administrator at or after the grant date. The Administrator
may at any time accelerate the exercisability of all or any portion of any Stock
Option. An optionee shall have the rights of a stockholder only as to shares
acquired upon the exercise of a Stock Option and not as to unexercised Stock
Options.
(iv)  Method of Exercise.    Stock Options may be exercised in whole or in part,
by giving written notice of exercise to the Company, specifying the number of
shares to be purchased. Payment of the purchase price may be made by one or more
of the following methods to the extent provided in the Option Award Agreement:
(A)  In cash, by certified or bank check or other instrument acceptable to the
Administrator;

5

--------------------------------------------------------------------------------

(B)  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 restrictions
under any Company plan. Such surrendered shares shall be valued at Fair Market
Value on the exercise date. To the extent required to avoid variable accounting
treatment under FAS 123R or other applicable accounting rules, such surrendered
shares shall have been owned by the optionee for at least six months; or
(C)  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 for the
purchase price; provided that in the event the optionee chooses to pay the
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.
(D)  With respect to Stock Options that are not Incentive Stock Options, by a
“net exercise” arrangement pursuant to which the Company will reduce the number
of shares of Stock issuable upon exercise by the largest whole number of shares
with a Fair Market Value that does not exceed the aggregate exercise price.
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 shares of
Stock to be purchased pursuant to the exercise of a Stock Option will be
contingent upon receipt from the optionee (or a purchaser acting in his stead in
accordance with the provisions of the Stock Option) by the Company of the full
purchase price for such shares and the fulfillment of any other requirements
contained in the Option Award Agreement or applicable provisions of laws
(including the satisfaction of any withholding taxes that the Company is
obligated to withhold with respect to the optionee). In the event an 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 number of
attested shares. In the event that the Company establishes, for itself or using
the services of a third party, an automated system for the exercise of Stock
Options, such as a system using an internet website or interactive voice
response, then the paperless exercise of Stock Options may be permitted through
the use of such an automated system.
(v)  Annual Limit on Incentive Stock Options.    To the extent required for
“incentive stock option” treatment under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the shares of Stock
with respect to which Incentive Stock Options granted under this Plan and any
other plan of the Company or its parent and subsidiary corporations become
exercisable for the first time by an optionee during any calendar year shall not
exceed $100,000. To the extent that any Stock Option exceeds this limit, it
shall constitute a Non-Qualified Stock Option.
SECTION 6.
STOCK APPRECIATION RIGHTS

(a)  Exercise Price of Stock Appreciation Rights.    The exercise price of a
Stock Appreciation Right shall not be less than 100 percent of the Fair Market
Value of the Stock on the date of grant (or more than the Stock Option exercise
price per share, if the Stock Appreciation Right was granted in tandem with a
Stock Option).
(b)  Grant and Exercise of Stock Appreciation Rights.    Stock Appreciation
Rights may be granted by the Administrator in tandem with, or independently of,
any Stock Option granted pursuant to Section 5 of the Plan. In the case of a
Stock Appreciation Right granted in tandem with a Non-Qualified Stock Option,
such Stock Appreciation Right may be granted either at or after the time of the
grant of such Option. In the case of a Stock Appreciation Right granted in
tandem with an Incentive Stock Option, such Stock Appreciation Right may be
granted only at the time of the grant of the Option.
A Stock Appreciation Right or applicable portion thereof granted in tandem with
a Stock Option shall terminate and no longer be exercisable upon the termination
or exercise of the related Option.
(c)  Terms and Conditions of Stock Appreciation Rights.    Stock Appreciation
Rights shall be subject to such terms and conditions as shall be determined from
time to time by the Administrator, subject to the following:
(i)  Stock Appreciation Rights granted in tandem with Options shall be
exercisable at such time or times and to the extent that the related Stock
Options shall be exercisable.
(ii)  Upon exercise of a Stock Appreciation Right, the applicable portion of any
related Option shall be surrendered.
(iii)  The term of a Stock Appreciation Right may not exceed ten years.
SECTION 7.
RESTRICTED STOCK AWARDS

(a)  Nature of Restricted Stock Awards.    The Administrator shall determine the
restrictions and conditions applicable to each Restricted Stock Award at the
time of grant. Conditions may be based on continuing employment (or other
service relationship) and/or achievement of pre-established performance goals
and objectives. The terms and conditions of each such Award Agreement shall be
determined by the Administrator, and such terms and conditions may differ among
individual Awards and grantees.

6

--------------------------------------------------------------------------------

(b)  Rights as a Stockholder.    Upon the grant of the Restricted Stock Award
and payment of any applicable purchase price, a grantee shall have the rights of
a stockholder with respect to the voting of the Restricted Stock, subject to
such conditions contained in the Restricted Stock Award Agreement. Unless the
Administrator shall otherwise determine, (i) uncertificated Restricted Stock
shall be accompanied by a notation on the records of the Company or the transfer
agent to the effect that they are subject to forfeiture until such Restricted
Stock are vested as provided in Section 7(d) below, and (ii) certificated
Restricted Stock shall remain in the possession of the Company until such
Restricted Stock is vested as provided in Section 7(d) below, and the grantee
shall be required, as a condition of the grant, to deliver to the Company such
instruments of transfer as the Administrator may prescribe.
(c)  Restrictions.    Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the Restricted Stock Award Agreement. Except as may otherwise be
provided by the Administrator either in the Award Agreement or, subject to
Section 18 below, in writing after the Award Agreement is issued, if any, if a
grantee’s employment (or other service relationship) with the Company and its
Subsidiaries terminates for any reason, any Restricted Stock that has not vested
at the time of termination shall automatically and without any requirement of
notice to such grantee from or other action by or on behalf of, the Company be
deemed to have been reacquired by the Company at its original purchase price
from such grantee or such grantee’s legal representative simultaneously with
such termination of employment (or other service relationship), and thereafter
shall cease to represent any ownership of the Company by the grantee or rights
of the grantee as a stockholder. Following such deemed reacquisition of unvested
Restricted Stock that are represented by physical certificates, a grantee shall
surrender such certificates to the Company upon request without consideration.
(d)  Vesting of Restricted Stock.    The Administrator at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company’s right of
repurchase or forfeiture shall lapse. Notwithstanding the foregoing, in the
event that any such Restricted Stock granted to employees shall have a
performance-based goal, the restriction period with respect to such shares shall
not be less than one year, and in the event any such Restricted Stock granted to
employees shall have a time-based restriction, the total restriction period with
respect to such shares shall not be less than three years; provided, however,
that Restricted Stock with a time-based restriction may become vested
incrementally over such three-year period. Subsequent to such date or dates
and/or the attainment of such pre-established performance goals, objectives and
other conditions, the shares on which all restrictions have lapsed shall no
longer be Restricted Stock and shall be deemed “vested.” Except as may otherwise
be provided by the Administrator either in the Award Agreement or, subject to
Section 18 below, in writing after the Award Agreement is issued, a grantee’s
rights in any shares of Restricted Stock that have not vested shall
automatically terminate upon the grantee’s termination of employment (or other
service relationship) with the Company and its Subsidiaries and such shares
shall be subject to the provisions of Section 7(c) above.
SECTION8.
DEFERRED STOCK AWARDS

(a)  Nature of Deferred Stock Awards.    The Administrator shall determine the
restrictions and conditions applicable to each Deferred Stock Award at the time
of grant. Conditions may be based on continuing employment (or other service
relationship) and/or achievement of pre-established performance goals and
objectives. The terms and conditions of each such Award Agreement shall be
determined by the Administrator, and such terms and conditions may differ among
individual Awards and grantees. Notwithstanding the foregoing, in the event that
any such Deferred Stock Award granted to employees shall have a
performance-based goal, the restriction period with respect to such Award shall
not be less than one year, and in the event any such Deferred Stock Award
granted to employees shall have a time-based restriction, the total restriction
period with respect to such Award shall not be less than three years; provided,
however, that any Deferred Stock Award with a time-based restriction may become
vested incrementally over such three-year period. At the end of the deferral
period, the Deferred Stock Award, to the extent vested, shall be settled in the
form of shares of Stock.
(b)  Election to Receive Deferred Stock Awards in Lieu of Compensation.    The
Administrator may, in its sole discretion, permit a grantee to elect to receive
a portion of future cash compensation otherwise due to such grantee in the form
of a Deferred Stock Award. Any such election shall be made in writing and shall
be delivered to the Company no later than the date specified by the
Administrator and in accordance with Section 409A and such other rules and
procedures established by the Administrator. The Administrator shall have the
sole right to determine whether and under what circumstances to permit such
elections and to impose such limitations and other terms and conditions thereon
as the Administrator deems appropriate. Any such future cash compensation that
the grantee elects to deter shall be converted to a fixed number of phantom
stock units based on the Fair Market Value of Stock on the date the compensation
would otherwise have been paid to the grantee but for the deferral.
(c)  Rights as a Stockholder.    A grantee shall have the rights as a
stockholder only as to shares of Stock acquired by the grantee upon settlement
of a Deferred Stock Award; provided, however, that the grantee may be credited
with Dividend Equivalent Rights with respect to the phantom stock units
underlying his Deferred Stock Award, subject to such terms and conditions as the
Administrator may determine.

7

--------------------------------------------------------------------------------

(d)  Termination.    Except as may otherwise be provided by the Administrator
either in the Award Agreement or, subject to Section 18 below, in writing after
the Award Agreement is issued, a grantee’s right in all Deferred Stock Awards
that have not vested shall automatically terminate upon the grantee’s
termination of employment (or cessation of service relationship) with the
Company and its Subsidiaries for any reason.
SECTION 9.    UNRESTRICTED STOCK AWARDS
Grant or Sale of Unrestricted Stock.    The Administrator may, in its sole
discretion, grant (or sell at par value or such higher purchase price as
determined by the Administrator), an Unrestricted Stock Award under the Plan.
Unrestricted Stock Awards may be granted in respect of past services or other
valid consideration, or in lieu of cash compensation due to such grantee.
SECTION 10.
CASH-BASED AWARDS

Grant of Cash-based Awards.    The Administrator may, in its sole discretion,
grant Cash-based Awards to any grantee in such number or amount and upon such
terms, and subject to such conditions, as the Administrator shall determine at
the time of grant. The Administrator shall determine the maximum duration of the
Cash-based Award, the amount of cash to which the Cash-based Award pertains, the
conditions upon which the Cash-based Award shall become vested or payable, and
such other provisions as the Administrator shall determine. Each Cash-based
Award shall specify a cash-denominated payment amount, formula or payment ranges
as determined by the Administrator. Payment, if any, with respect to a
Cash-based Award shall be made in accordance with the terms of the Award and may
be made in cash or in shares of Stock, as the Administrator determines.
SECTION 11.
PERFORMANCE SHARE AWARDS

(a)  Nature of Performance Share Awards.    The Administrator may, in its sole
discretion, grant Performance Share Awards independent of, or in connection
with, the granting of any other Award under the Plan. The Administrator shall
determine whether and to whom Performance Share Awards shall be granted, the
Performance Goals, the periods during which performance is to be measured, which
may not be less than one year, and such other limitations and conditions as the
Administrator shall determine.
(b)  Rights as a Stockholder.    A grantee receiving a Performance Share Award
shall have the rights of a stockholder only as to shares actually received by
the grantee under the Plan and not with respect to shares subject to the Award
but not actually received by the grantee. A grantee shall be entitled to receive
shares of Stock under a Performance Share Award only upon satisfaction of all
conditions specified in the Performance Share Award agreement (or in a
performance plan adopted by the Administrator).
(c)  Termination.    Except as may otherwise be provided by the Administrator
either in the Award agreement or, subject to Section 18 below, in writing after
the Award agreement is issued, a grantee’s rights in all Performance Share
Awards shall automatically terminate upon the grantee’s termination of
employment (or cessation of service relationship) with the Company and its
Subsidiaries for any reason.
SECTION 12.    PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES
(a)  Performance-based Awards.    Any employee or other key person providing
services to the Company and who is selected by the Administrator may be granted
one or more Performance-based Awards in the form of a Restricted Stock Award,
Deferred Stock Award, Performance Share Award or Cash-based Award payable upon
the attainment of Performance Goals that are established by the Administrator
and relate to one or more of the Performance Criteria, in each case on a
specified date or dates or over any period or periods determined by the
Administrator. The Administrator shall define in an objective fashion the manner
of calculating the Performance Criteria it selects to use for any Performance
Period. Depending on the Performance Criteria used to establish such Performance
Goals, the Performance Goals may be expressed in terms of overall Company
performance or the performance of a division, business unit, or an individual.
The Administrator, in its discretion, may adjust or modify the calculation of
Performance Goals for such Performance Period in order to prevent the dilution
or enlargement of the rights of an individual (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction, event
or development, or (ii) in recognition of, or in anticipation of, any other
unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or (iii) in response to, or in anticipation of,
changes in applicable laws, regulations, accounting principles, or business
conditions provided however, that the Administrator may not exercise such
discretion in a manner that would increase the Performance-based Award granted
to a Covered Employee. Each Performance-based Award shall comply with the
provisions set forth below.
(b)  Grant of Performance-based Awards.    With respect to each
Performance-based Award granted to a Covered Employee, the Administrator shall
select, within the first 90 days of a Performance Cycle (or, if shorter, within
the maximum period allowed under Section 162(m) of the Code) the Performance
Criteria for such grant, and the Performance Goals with respect to each
Performance Criterion (including a threshold level of performance below which no
amount will become payable with respect to such Award). Each Performance-based
Award will specify the amount payable, or the formula for determining

8

--------------------------------------------------------------------------------

the amount payable, upon achievement of the various applicable performance
targets. The Performance Criteria established by the Administrator may be (but
need not be) different for each Performance Cycle and different Performance
Goals may be applicable to Performance-based Awards to different Covered
Employees.
(c)  Payment of Performance-based Awards.    Following the completion of a
Performance Cycle, the Administrator shall meet to review and certify in writing
whether, and to what extent, the Performance Goals for the Performance Cycle
have been achieved and, if so, to also calculate and certify in writing the
amount of the Performance-based Awards earned for the Performance Cycle. The
Administrator shall then determine the actual size of each Covered Employee’s
Performance-based Award, and, in doing so, may reduce or eliminate the amount of
the Performance-based Award for a Covered Employee if, in its sole judgment,
such reduction or elimination is appropriate.
(d)  Maximum Award Payable.    The maximum Performance-based Award payable to
any one Covered Employee under the Plan for a Performance Cycle is
500,000 shares of Stock (subject to adjustment as provided in Section 3(b)
hereof) or $2,000,000 in the case of a Performance-Based Award that is a
Cash-Based Award.
SECTION 13.
DIVIDEND EQUIVALENT RIGHTS

(a)  Dividend Equivalent Rights.    A Dividend Equivalent Right may be granted
hereunder to any grantee as a component of another Award or as a freestanding
award. The terms and conditions of Dividend Equivalent Rights shall be specified
in the Award Agreement. Dividend equivalents credited to the holder of a
Dividend Equivalent Right may be paid currently or may be deemed to be
reinvested in additional shares of Stock, which may thereafter accrue additional
equivalents. Any such reinvestment shall be at Fair Market Value on the date of
reinvestment or such other price as may then apply under a dividend reinvestment
plan sponsored by the Company, if any. Dividend Equivalent Rights may be settled
in cash or shares of Stock or a combination thereof, in a single installment or
installments. A Dividend Equivalent Right granted as a component of another
Award may provide that such Dividend Equivalent Right shall be settled upon
exercise, settlement, or payment of, or lapse of restrictions on, such other
Award, and that such Dividend Equivalent Right shall expire or be forfeited or
annulled under the same conditions as such other Award. A Dividend Equivalent
Right granted as a component of another Award may also contain terms and
conditions different from such other Award.
(b)  Interest Equivalents.    Any Award under this Plan that is settled in whole
or in part in cash on a deferred basis may provide in the grant for interest
equivalents to be credited with respect to such cash payment. Interest
equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.
(c)  Termination.    Except as may otherwise be provided by the Administrator
either in the Award Agreement or, subject to Section 18 below, in writing after
the Award Agreement is issued, a grantee’s rights in all Dividend Equivalent
Rights or interest equivalents granted as a component of another Award that has
not vested shall automatically terminate upon the grantee’s termination of
employment (or cessation of service relationship) with the Company and its
Subsidiaries for any reason.
SECTION 14.
TRANSFERABILITY OF AWARDS

(a)  Transferability.    Except as provided in Section 14(b) below, during a
grantee’s lifetime, his or her Awards shall be exercisable only by the grantee,
or by the grantee’s legal representative or guardian in the event of the
grantee’s incapacity. No Awards shall be sold, assigned, transferred or
otherwise encumbered or disposed of by a grantee other than by will or by the
laws of descent and distribution. No Awards shall be subject, in whole or in
part, to attachment, execution, or levy of any kind, and any purported transfer
in violation hereof shall be null and void.
(b)  Administrator Action.    Notwithstanding Section 14(a), the Administrator,
in its discretion, may provide either in the Award Agreement regarding a given
Award or by subsequent written approval that the grantee (who is an employee or
director) may transfer his or her Awards (other than any Incentive Stock
Options) to his or her immediate family members, to trusts for the benefit of
such family members, or to partnerships in which such family members are the
only partners, provided that the transferee agrees in writing with the Company
to be bound by all of the terms and conditions of this Plan and the applicable
Award.
(c)  Family Member.    For purposes of Section 14(b), “family member” shall mean
a grantee’s child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the grantee’s household (other than a
tenant of the grantee), a trust in which these persons (or the grantee) have
more than 50 percent of the beneficial interest, a foundation in which these
persons (or the grantee) control the management of assets, and any other entity
in which these persons (or the grantee) own more than 50 percent of the voting
interests.
(d)  Designation of Beneficiary.    Each grantee to whom an Award has been made
under the Plan may designate a beneficiary or beneficiaries to exercise any
Award or receive any payment under any Award payable on or after the grantee’s
death. Any such designation shall be on a form provided for that purpose by the
Administrator and shall not be effective until

9

--------------------------------------------------------------------------------

received by the Administrator. If no beneficiary has been designated by a
deceased grantee, or if the designated beneficiaries have predeceased the
grantee, the beneficiary shall be the grantee’s estate.
SECTION 15.
TAX WITHHOLDING

(a)  Payment by Grantee.    Each grantee shall, no later than the date as of
which the value of an Award or of any Stock or other amounts received thereunder
first becomes includable in the gross income of the grantee for Federal income
tax purposes, pay to the Company, or make arrangements satisfactory to the
Administrator regarding payment of, any Federal, state, or local taxes of any
kind required by law to be withheld by the Company with respect to such income.
The Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
grantee. The Company’s obligation to deliver evidence of book entry (or stock
certificates) to any grantee is subject to and conditioned on tax withholding
obligations being satisfied by the grantee.
(b)  Payment in Stock.    Subject to approval by the Administrator, a grantee
may elect to have the Company’s minimum required tax withholding obligation
satisfied, in whole or in part, by authorizing the Company to withhold from
shares of Stock to be issued pursuant to any Award a number of shares with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due.
SECTION 16.
ADDITIONAL CONDITIONS APPLICABLE TO NONQUALIFIED DEFERRED COMPENSATION UNDER
SECTION 409A.

In the event any Stock Option or Stock Appreciation Right under the Plan is
materially modified and deemed a new grant at a time when the Fair Market Value
exceeds the exercise price, or any other Award is otherwise determined to
constitute “nonqualified deferred compensation” within the meaning of
Section 409A (a “409A Award”), the following additional conditions shall apply
and shall supersede any contrary provisions of this Plan or the terms of any
agreement relating to such 409A Award.
(a)  Exercise and Distribution.    Except as provided in Section 16(b) hereof,
no 409A Award shall be exercisable or distributable earlier than upon one of the
following:
(i)  Specified Time.    A specified time or a fixed schedule set forth in the
written instrument evidencing the 409A Award.
(ii)  Separation from Service.    Separation from service (within the meaning of
Section 409A) by the 409A Award grantee; provided, however, that if the 409A
Award grantee is a “key employee” (as defined in Section 416(i) of the Code
without regard to paragraph (5) thereof) and any of the Company’s Stock is
publicly traded on an established securities market or otherwise, exercise or
distribution under this Section 16(a)(ii) may not be made before the date that
is six months after the date of separation from service.
(iii)  Death.    The date of death of the 409A Award grantee.
(iv)  Disability.    The date the 409A Award grantee becomes disabled (within
the meaning of Section 16(c)(ii) hereof).
(v)  Unforeseeable Emergency.    The occurrence of an unforeseeable emergency
(within the meaning of Section 16(c)(iii) hereof), but only if the net value
(after payment of the exercise price) of the number of shares of Stock that
become issuable does not exceed the amounts necessary to satisfy such emergency
plus amounts necessary to pay taxes reasonably anticipated as a result of the
exercise, after taking into account the extent to which the emergency is or may
be relieved through reimbursement or compensation by insurance or otherwise or
by liquidation of the grantee’s other assets (to the extent such liquidation
would not itself cause severe financial hardship).
(vi)  Change in Control Event.    The occurrence of a Change in Control Event
(within the meaning of Section 16(c)(i) hereof), including the Company’s
discretionary exercise of the right to accelerate vesting of such grant upon a
Change in Control Event or to terminate the Plan or any 409A Award granted
hereunder within 12 months of the Change in Control Event.
(b)  No Acceleration.    A 409A Award may not be accelerated or exercised prior
to the time specified in Section 16(a) hereof, except in the case of one of the
following events:
(i)  Domestic Relations Order.    The 409A Award may permit the acceleration of
the exercise or distribution time or schedule to an individual other than the
grantee as may be necessary to comply with the terms of a domestic relations
order (as defined in Section 414(p)(1)(B) of the Code).
(ii)  Conflicts of Interest.    The 409A Award may permit the acceleration of
the exercise or distribution time or schedule as may be necessary to comply with
the terms of a certificate of divestiture (as defined in Section 1043(b)(2) of
the Code).

10

--------------------------------------------------------------------------------

(iii)  Change in Control Event.    The Administrator may exercise the
discretionary right to accelerate the vesting of such 409A Award upon a Change
in Control Event or to terminate the Plan or any 409A Award granted thereunder
within 12 months of the Change in Control Event and cancel the 409A Award for
compensation.
(c)  Definitions.    Solely for purposes of this Section 16 and not for other
purposes of the Plan, the following terms shall be defined as set forth below:
(i) “Change in Control Event” means the occurrence of a change in the ownership
of the Company, a change in effective control of the Company, or a change in the
ownership of a substantial portion of the assets of the Company (as defined in
Section 1.409A-3(g) of the proposed regulations promulgated under Section 409A
by the Department of the Treasury on September 29, 2005 or any subsequent
guidance).
(ii) “Disabled” means a grantee who (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Company or its Subsidiaries.
(iii) “Unforeseeable Emergency” means a severe financial hardship to the grantee
resulting from an illness or accident of the grantee, the grantee’s spouse, or a
dependent (as defined in Section 152(a) of the Code) of the grantee, loss of the
grantee’s property due to casualty, or similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the grantee.
SECTION 17.
TRANSFER, LEAVE OF ABSENCE, ETC.

For purposes of the Plan, the following events shall not be deemed a termination
of employment:
(a)  a transfer to the employment of the Company from a Subsidiary or from the
Company to a Subsidiary, or from one Subsidiary to another; or
(b)  an approved leave of absence for military service or sickness, or for any
other purpose approved by the Company, if the employee’s right to re-employment
is guaranteed either by a statute or by contract or under the policy pursuant to
which the leave of absence was granted or if the Administrator otherwise so
provides in writing.
SECTION 18.
AMENDMENTS AND TERMINATION

The Board may, at any time, amend or discontinue the Plan and the Administrator
may, at any time, amend or cancel any outstanding Award for the purpose of
satisfying changes in law or for any other lawful purpose, but no such action
shall adversely affect rights under any outstanding Award without the holder’s
consent. Except as provided in Section 3(b) or 3(c), without prior stockholder
approval in no event may the Administrator exercise its discretion to reduce the
exercise price of outstanding Stock Options or Stock Appreciation Rights or
effect repricing through cancellation and re-grants or cancellation of Stock
Options or Stock Appreciation Rights in exchange for cash. Any material Plan
amendments (other than amendments that curtail the scope of the Plan), including
any Plan amendments that (i) increase the number of shares reserved for issuance
under the Plan, (ii) expand the type of Awards available under, materially
expand the eligibility to participate in, or materially extend the term of, the
Plan, or (iii) materially change the method of determining Fair Market Value,
shall be subject to approval by the Company stockholders entitled to vote at a
meeting of stockholders. In addition, to the extent determined by the
Administrator to be required by the Code to ensure that Incentive Stock Options
granted under the Plan are qualified under Section 422 of the Code or to ensure
that compensation earned under Awards qualifies as performance-based
compensation under Section 162(m) of the Code, Plan amendments shall be subject
to approval by the Company stockholders entitled to vote at a meeting of
stockholders. Nothing in this Section 18 shall limit the Administrator’s
authority to take any action permitted pursuant to Section 3(c).
SECTION 19.
STATUS OF PLAN

With respect to the portion of any Award that has not been exercised and any
payments in cash, Stock or other consideration not received by a grantee, a
grantee shall have no rights greater than those of a general creditor of the
Company unless the Administrator shall otherwise expressly determine in
connection with any Award or Awards. In its sole discretion, the Administrator
may authorize the creation of trusts or other arrangements to meet the Company’s
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.
SECTION 20.
GENERAL PROVISIONS

(a)  No Distribution.    The Administrator may require each person acquiring
Stock pursuant to an Award to represent to and agree with the Company in writing
that such person is acquiring the shares without a view to distribution thereof.

11

--------------------------------------------------------------------------------

(b)  Delivery of Stock Certificates.    Stock certificates to grantees under
this Plan shall be deemed delivered for all purposes when the Company or a stock
transfer agent of the Company shall have mailed such certificates in the United
States mail, addressed to the grantee, at the grantee’s last known address on
file with the Company. Uncertificated Stock shall be deemed delivered for all
purposes when the Company or a Stock transfer agent of the Company shall have
given to the grantee by electronic mail (with proof of receipt) or by United
States mail, addressed to the grantee, at the grantee’s last known address on
file with the Company, notice of issuance and recorded the issuance in its
records (which may include electronic “book entry” records). Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or
deliver any certificates evidencing shares of Stock pursuant to the exercise of
any Award, unless and until the Board has determined, with advice of counsel (to
the extent the Board deems such advice necessary or advisable), that the
issuance and delivery of such certificates is in compliance with all applicable
laws, regulations of governmental authorities and, if applicable, the
requirements of any exchange on which the shares of Stock are listed, quoted or
traded. All Stock certificates delivered pursuant to the Plan shall be subject
to any stop-transfer orders and other restrictions as the Administrator deems
necessary or advisable to comply with federal, state or foreign jurisdiction,
securities or other laws, rules and quotation system on which the Stock is
listed, quoted or traded. The Administrator may place legends on any Stock
certificate to reference restrictions applicable to the Stock. In addition to
the terms and conditions provided herein, the Board may require that an
individual make such reasonable covenants, agreements, and representations as
the Board, in its discretion, deems necessary or advisable in order to comply
with any such laws, regulations, or requirements. The Administrator shall have
the right to require any individual to comply with any timing or other
restrictions with respect to the settlement or exercise of any Award, including
a window-period limitation, as may be imposed in the discretion of the
Administrator.
(c)  Stockholder Rights.    Until Stock is deemed delivered in accordance with
Section 20(b), no right to vote or receive dividends or any other rights of a
stockholder will exist with respect to shares of Stock to be issued in
connection with an Award, notwithstanding the exercise of a Stock Option or any
other action by the grantee with respect to an Award.
(d)  Other Compensation Arrangements; No Employment Rights.    Nothing contained
in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
(e)  Trading Policy Restrictions.    Option exercises and other Awards under the
Plan shall be subject to the Company’s insider trading policy and procedures, as
in effect from time to time.
(f)  Forfeiture of Awards under Sarbanes-Oxley Act.    If the Company is
required to prepare an accounting restatement due to the material noncompliance
of the Company, as a result of misconduct, with any financial reporting
requirement under the securities laws, then any grantee who is one of the
individuals subject to automatic forfeiture under Section 304 of the
Sarbanes-Oxley Act of 2002 shall reimburse the Company for the amount of any
Award received by such individual under the Plan during the 12-month period
following the first public issuance or filing with the United States Securities
and Exchange Commission, as the case may be, of the financial document embodying
such financial reporting requirement.
SECTION 21.
EFFECTIVE DATE OF PLAN

This Plan shall become effective upon approval by the holders of a majority of
the votes cast at a meeting of stockholders at which a quorum is present. No
grants of Stock Options and other Awards may be made hereunder after the tenth
(10th) anniversary of the 2013 Annual Meeting of Stockholders and no grants of
Incentive Stock Options may be made hereunder after April 22, 2023.
SECTION 22.
GOVERNING LAW

This Plan and all Awards and actions taken thereunder shall be governed by, and
construed in accordance with, the laws of the State of Delaware, applied without
regard to conflict of law principles.

12

--------------------------------------------------------------------------------

ATHENAHEALTH, INC.
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED
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 in this Incentive Stock
Option Agreement (the “Agreement”) 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.

1

--------------------------------------------------------------------------------

2.    Vesting Acceleration After A Sale Event.
(a)    Double-Trigger Acceleration. If a Sale Event occurs and either (i) the
Optionee’s Service with the Company or its successor or any affiliate thereof
(all of the foregoing, collectively, the “Successor Company”) is terminated by
the Successor Company without Cause or (ii) the Optionee’s Service with the
Successor Company is terminated by the Optionee with Good Reason, in either case
within twelve months after the effective time of the Sale Event, then,
immediately prior to such termination, this Stock Option shall become fully
vested and, if applicable, fully exercisable. If the Optionee is required to
resign his or her position with the Company as a condition of a Sale Event, then
this Stock Option shall become fully vested and exercisable immediately prior to
the effectiveness of such resignation.
(b)    “Cause” means that, in the reasonable determination of the Successor
Company, (i) the Optionee has committed an act that materially injures the
business of the Successor Company; (ii) the Optionee has refused or failed to
follow lawful and reasonable directions of the board of directors of the
Successor Company or the appropriate individual to whom the Optionee reports;
(iii) the Optionee has willfully or habitually neglected his or her duties with
the Successor Company; (iv) the Optionee has been convicted of a felony that is
likely to inflict or has inflicted material injury on the business of the
Successor Company; or (v) the Optionee has committed a material fraud,
misappropriation, embezzlement, or other act of gross dishonesty that resulted
in material loss, damage, or injury to the Successor Company. Regardless of the
foregoing, the conduct described in clauses (ii) or (iii) shall not constitute
Cause unless such conduct has not been cured within fifteen days following
receipt by the Optionee of written notice from the Successor Company or the
board of directors of the Successor Company, as the case may be, specifying the
particulars of his or her conduct constituting Cause.
(c)    “Good Reason” means that any of the following are undertaken without the
Optionee’s express written consent:
(i)    the assignment to the Optionee of any duties or responsibilities that
result in a significant diminution in his or her function as in effect
immediately prior to the effective date of the Sale Event, provided that a mere
change in title or reporting relationships shall not constitute Good Reason;
(ii)    a ten percent or greater reduction in the Optionee’s annual target total
cash compensation (that is, base salary, plus any cash bonus that would be paid
for Optionee’s performance at a “meets expectations” level and the Company
exactly meeting its performance targets, plus any sales commissions that would
be due for Optionee exactly meeting any sales quota that he or she may have), as
in effect on the effective date of the Sale Event;
(iii)    a relocation of the Optionee’s business office to a location more than
fifty miles from the location at which he or she performed duties as of the
effective date of the Sale Event, except for required travel by the Optionee on
the Successor Company’s business to an extent substantially consistent with his
or her business travel obligations prior to the Sale Event; or

2

--------------------------------------------------------------------------------

(iv)    a material breach by the Successor Company of any provision of this
Agreement.
(d)    “Service” means the Optionee’s uninterrupted service with the Company and
any successor company or any affiliate thereof, whether as an employee,
director, or consultant. A change in the capacity in which the Optionee renders
service or a change in the entity for which the Optionee renders such service
shall not terminate the Optionee’s Service, provided that there is no
interruption or termination of the Optionee’s service with the Company and any
successor company or any affiliate. The board of directors or the chief
executive officer of any successor company may determine, using reasonable
discretion, whether Service shall be considered interrupted in the case of any
leave of absence, including sick leave, military leave, or any other personal
leave. Regardless of the foregoing, a leave of absence shall be treated as
Service for purposes of vesting in this Stock Option only to such extent as may
be provided in the Successor Company’s leave of absence policy or in the written
terms of the Optionee’s leave of absence.
3.    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 or to such other person as
the Company may designate 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

3

--------------------------------------------------------------------------------

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 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.
4.    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 4(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.
(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

4

--------------------------------------------------------------------------------

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 the Company’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 schedule for so long as the
Optionee remains at least 80% of a full-time equivalent employee (“FTE”) at the
Company. If the Optionee’s employment status changes to below 80% FTE, then the
exercisability schedule of this Stock Option shall be suspended. If the Optionee
remains below 80% FTE for one year, then any portion of this Stock Option that
is not exercisable on the date of the change in employment status to below 80%
FTE 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.
5.    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.
6.    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.
7.    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.

5

--------------------------------------------------------------------------------

8.    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.
9.    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.
10.    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.
11.    Acceptance. The foregoing Agreement shall be deemed accepted and the
terms and conditions thereof hereby agreed to by the Optionee upon notice to the
Optionee.

6

--------------------------------------------------------------------------------

ATHENAHEALTH, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR COMPANY EMPLOYEES
UNDER THE AMENDED AND RESTATED
ATHENAHEALTH, INC.
2007 STOCK OPTION AND INCENTIVE PLAN
Name of Optionee:________________________________
No. of Option Shares:_____________________________
Option Exercise Price per Share: $____________________
[FMV on Grant Date]
Grant Date:______________________________
Expiration Date:_________________________________
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 in this Non-Qualified Stock Option
Agreement (the “Agreement”) and in the Plan. This Stock Option is not intended
to be an “incentive stock option” under Section 422 of the Internal Revenue Code
of 1986, as amended.
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
_____________ (___%)
____________
_____________ (___%)
____________
_____________ (___%)
____________
_____________ (___%)
____________

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.

1

--------------------------------------------------------------------------------

2.    Vesting Acceleration After A Sale Event.
(a)    Double-Trigger Acceleration. If a Sale Event occurs and either (i) the
Optionee’s Service with the Company or its successor or any affiliate thereof
(all of the foregoing, collectively, the “Successor Company”) is terminated by
the Successor Company without Cause or (ii) the Optionee’s Service with the
Successor Company is terminated by the Optionee with Good Reason, in either case
within twelve months after the effective time of the Sale Event, then,
immediately prior to such termination, this Stock Option shall become fully
vested and, if applicable, fully exercisable. If the Optionee is required to
resign his or her position with the Company as a condition of a Sale Event, then
this Stock Option shall become fully vested and exercisable immediately prior to
the effectiveness of such resignation.
(b)    “Cause” means that, in the reasonable determination of the Successor
Company, (i) the Optionee has committed an act that materially injures the
business of the Successor Company; (ii) the Optionee has refused or failed to
follow lawful and reasonable directions of the board of directors of the
Successor Company or the appropriate individual to whom the Optionee reports;
(iii) the Optionee has willfully or habitually neglected his or her duties with
the Successor Company; (iv) the Optionee has been convicted of a felony that is
likely to inflict or has inflicted material injury on the business of the
Successor Company; or (v) the Optionee has committed a material fraud,
misappropriation, embezzlement, or other act of gross dishonesty that resulted
in material loss, damage, or injury to the Successor Company. Regardless of the
foregoing, the conduct described in clauses (ii) or (iii) shall not constitute
Cause unless such conduct has not been cured within fifteen days following
receipt by the Optionee of written notice from the Successor Company or the
board of directors of the Successor Company, as the case may be, specifying the
particulars of his or her conduct constituting Cause.
(c)    “Good Reason” means that any of the following are undertaken without the
Optionee’s express written consent:
(i)    the assignment to the Optionee of any duties or responsibilities that
result in a significant diminution in his or her function as in effect
immediately prior to the effective date of the Sale Event, provided that a mere
change in title or reporting relationships shall not constitute Good Reason;
(ii)    a ten percent or greater reduction in the Optionee’s annual target total
cash compensation (that is, base salary, plus any cash bonus that would be paid
for Optionee’s performance at a “meets expectations” level and the Company
exactly meeting its performance targets, plus any sales commissions that would
be due for Optionee exactly meeting any sales quota that he or she may have), as
in effect on the effective date of the Sale Event;
(iii)    a relocation of the Optionee’s business office to a location more than
fifty miles from the location at which he or she performed duties as of the
effective date of the Sale Event, except for required travel by the Optionee on
the Successor Company’s business to an extent substantially consistent with his
or her business travel obligations prior to the Sale Event; or

2

--------------------------------------------------------------------------------

(iv)    a material breach by the Successor Company of any provision of this
Agreement.
(d)    “Service” means the Optionee’s uninterrupted service with the Company and
any successor company or any affiliate thereof, whether as an employee,
director, or consultant. A change in the capacity in which the Optionee renders
service or a change in the entity for which the Optionee renders such service
shall not terminate the Optionee’s Service, provided that there is no
interruption or termination of the Optionee’s service with the Company and any
successor company or any affiliate. The board of directors or the chief
executive officer of any successor company may determine, using reasonable
discretion, whether Service shall be considered interrupted in the case of any
leave of absence, including sick leave, military leave, or any other personal
leave. Regardless of the foregoing, a leave of absence shall be treated as
Service for purposes of vesting in this Stock Option only to such extent as may
be provided in the Successor Company’s leave of absence policy or in the written
terms of the Optionee’s leave of absence.
3.    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 or such other person as
the Company may designate 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.

3

--------------------------------------------------------------------------------

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 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.
4.    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 4(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.
(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

4

--------------------------------------------------------------------------------

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 the Company’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 schedule for so long as the
Optionee remains at least 80% of a full-time equivalent employee (“FTE”) at the
Company. If the Optionee’s employment status changes to below 80% FTE, then the
exercisability schedule of this Stock Option shall be suspended. If the Optionee
remains below 80% FTE for one year, then any portion of this Stock Option that
is not exercisable on the date of the change in employment status to below 80%
FTE 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.
5.    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.
6.    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.
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.
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

5

--------------------------------------------------------------------------------

with the Company or, in either case, at such other address as one party may
subsequently furnish to the other party in writing.
10.    Acceptance. The foregoing Agreement shall be deemed accepted and the
terms and conditions thereof hereby agreed to by the Optionee upon notice to the
Optionee.

6

--------------------------------------------------------------------------------

ATHENAHEALTH, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR NON-EMPLOYEE DIRECTORS
UNDER THE AMENDED AND RESTATED
ATHENAHEALTH, INC.
2007 STOCK OPTION AND INCENTIVE PLAN
Name of Optionee:__________________________
No. of Option Shares: __________
Option Exercise Price per Share: $_______________
[FMV on Grant Date]
Grant Date:_________________________________
Expiration Date:____________________
[No more than 10 years]
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, who is a Director of the Company but
is not an employee of the Company, 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 in this Non-Qualified Stock Option
Agreement (the “Agreement”) and in the Plan. This Stock Option is not intended
to be an “incentive stock option” under Section 422 of the Internal Revenue Code
of 1986, as amended.
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
_____________ (___%)
____________
_____________ (___%)
____________
_____________ (___%)
____________
_____________ (___%)
____________

1

--------------------------------------------------------------------------------

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.
2.    Vesting Acceleration After A Sale Event.
(a)    Double-Trigger Acceleration. If a Sale Event occurs and either (i) the
Optionee’s Service with the Company or its successor or any affiliate thereof
(all of the foregoing, collectively, the “Successor Company”) is terminated by
the Successor Company without Cause or (ii) the Optionee’s Service with the
Successor Company is terminated by the Optionee with Good Reason, in either case
within twelve months after the effective time of the Sale Event, then,
immediately prior to such termination, this Stock Option shall become fully
vested and, if applicable, fully exercisable. If the Optionee is required to
resign his or her position with the Company as a condition of a Sale Event, then
this Stock Option shall become fully vested and exercisable immediately prior to
the effectiveness of such resignation.
(b)    “Cause” means that, in the reasonable determination of the Successor
Company, (i) the Optionee has committed an act that materially injures the
business of the Successor Company; (ii) the Optionee has refused or failed to
follow lawful and reasonable directions of the board of directors of the
Successor Company or the appropriate individual to whom the Optionee reports;
(iii) the Optionee has willfully or habitually neglected his or her duties with
the Successor Company; (iv) the Optionee has been convicted of a felony that is
likely to inflict or has inflicted material injury on the business of the
Successor Company; or (v) the Optionee has committed a material fraud,
misappropriation, embezzlement, or other act of gross dishonesty that resulted
in material loss, damage, or injury to the Successor Company. Regardless of the
foregoing, the conduct described in clauses (ii) or (iii) shall not constitute
Cause unless such conduct has not been cured within fifteen days following
receipt by the Optionee of written notice from the Successor Company or the
board of directors of the Successor Company, as the case may be, specifying the
particulars of his or her conduct constituting Cause.
(c)    “Good Reason” means that any of the following are undertaken without the
Optionee’s express written consent:
(i)    the assignment to the Optionee of any duties or responsibilities that
result in a significant diminution in his or her function as in effect
immediately prior to the effective date of the Sale Event, provided that a mere
change in title or reporting relationships shall not constitute Good Reason;
(ii)    a ten percent or greater reduction in the Optionee’s annual target total
cash compensation, as in effect on the effective date of the Sale Event;
(iii)    a relocation of the Optionee’s business office to a location more than
fifty miles from the location at which he or she performed duties as of the
effective date of the Sale Event, except for required travel by the Optionee on
the Successor Company’s business to an extent substantially consistent with his
or her business travel obligations prior to the Sale Event; or

2

--------------------------------------------------------------------------------

(iv)    a material breach by the Successor Company of any provision of this
Agreement.
(d)    “Service” means the Optionee’s uninterrupted service with the Company and
any successor company or any affiliate thereof, whether as an employee,
director, or consultant. A change in the capacity in which the Optionee renders
service or a change in the entity for which the Optionee renders such service
shall not terminate the Optionee’s Service, provided that there is no
interruption or termination of the Optionee’s service with the Company and any
successor company or any affiliate. The board of directors or the chief
executive officer of any successor company may determine, using reasonable
discretion, whether Service shall be considered interrupted in the case of any
leave of absence, including sick leave, military leave, or any other personal
leave. Regardless of the foregoing, a leave of absence shall be treated as
Service for purposes of vesting in this Stock Option only to such extent as may
be provided in the Successor Company’s leave of absence policy or in the written
terms of the Optionee’s leave of absence.
3.    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 or to such other person as
the Company may designate 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

3

--------------------------------------------------------------------------------

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
transfer 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 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.
4.    Termination as Director. If the Optionee ceases to be a Director of the
Company, the period within which to exercise the Stock Option may be subject to
earlier termination as set forth below.
(a)    Termination by Reason of Death. If the Optionee ceases to be a Director
by reason of the Optionee’s death, any portion of this Stock Option outstanding
on such date may be exercised, to the extent exercisable on such date, by his or
her legal representative or legatee for a period of 180 days from the date of
death or until the Expiration Date, if earlier.
(b)    Other Termination. If the Optionee ceases to be a Director for any reason
other than the Optionee’s death, any portion of this Stock Option outstanding on
such date may be exercised, to the extent exercisable on such date, for a period
of 180 days from the date of termination or until the Expiration Date, if
earlier.
5.    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.
6.    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.

4

--------------------------------------------------------------------------------

7.    No Obligation to Continue as a Director. Neither the Plan nor this Stock
Option confers upon the Optionee any rights with respect to continuance as a
Director.
8.    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.
9.    Amendment. Pursuant to Section 18 of the Plan, the Administrator may at
any time amend or cancel any outstanding portion of this Stock Option, but no
such action may be taken that adversely affects the Optionee’s rights under this
Agreement without the Optionee’s consent.
10.    Acceptance. The foregoing Agreement shall be deemed accepted and the
terms and conditions thereof hereby agreed to by the Optionee upon notice to the
Optionee.

5

--------------------------------------------------------------------------------

ATHENAHEALTH, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR NON-EMPLOYEE CONSULTANTS
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]
Grant Date:_________________________________
Expiration Date:____________________
[No more than 10 years]
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, who is a consultant or other service
provider to the Company but is not an employee of the Company, 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. This Stock Option is not intended to be an “incentive stock option”
under Section 422 of the Internal Revenue Code of 1986, as amended.
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
_____________ (___%)
____________
_____________ (___%)
____________
_____________ (___%)
____________
_____________ (___%)
____________
_____________ (___%)
____________

1

--------------------------------------------------------------------------------

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.
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
transfer 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

2

--------------------------------------------------------------------------------

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 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 as Consultant. If the Optionee ceases to be a consultant or
other service provider to the Company for any reason including death or
disability, any portion of this Stock Option outstanding on such date may be
exercised (to the extent exercisable on such date) for a period of three (3)
months from the date of the cessation of the Optionee’s consulting or service
relationship with Company or until the Expiration Date, if earlier. No further
portion of this Option shall become exercisable after the Optionee ceases to be
a consultant or other service provider to the Company.
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.    No Obligation to Continue as a Consultant or Service Provider. Neither the
Plan nor this Stock Option confers upon the Optionee any rights with respect to
continuance as a consultant or other service provider to the Company.
7.    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.

3

--------------------------------------------------------------------------------

8.    Amendment. Pursuant to Section 18 of the Plan, the Administrator may at
any time amend or cancel any outstanding portion of this Stock Option, but no
such action may be taken that adversely affects the Optionee’s rights under this
Agreement without the Optionee’s consent.
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:
    
    
    

4

--------------------------------------------------------------------------------

RESTRICTED STOCK UNIT AWARD AGREEMENT
UNDER THE AMENDED AND RESTATED
ATHENAHEALTH, INC.
2007 STOCK OPTION AND INCENTIVE PLAN
Name of Grantee:_____________________
No. of Restricted Stock Units:________________________
Grant Date:____________________________

athenahealth, Inc. (the “Company”) has selected you to receive an award of
Restricted Stock Units identified above, subject to the terms set forth on
Appendix A and the provisions of the Amended and Restated athenahealth, Inc.
2007 Stock Option and Incentive Plan (the “Plan”) and the attached Statement of
Terms and Conditions.

Appendix A
Vesting Schedule
Percentage of Units Vested
Vesting Date
____%
First Anniversary of Grant Date
____%
Second Anniversary of Grant Date
____%
Third Anniversary of Grant Date
____%
Fourth Anniversary of Grant Date

The Administrator may at any time accelerate the vesting schedule set forth
above.

1

--------------------------------------------------------------------------------

STATEMENT OF TERMS AND CONDITIONS
1.Preamble. This Statement contains the terms and conditions of an award
(“Award”) of Restricted Stock Units (“Restricted Stock Units”) made to the
Grantee identified in the Restricted Stock Unit Award Agreement attached hereto
pursuant to the Plan. Each Restricted Stock Unit represents the right to receive
one share of common stock of the Company (“Stock”) on the vesting date of that
unit.
2.    Restrictions and Conditions.
(a)    This Award may not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of by the Grantee prior to vesting.
(b)    If the Grantee’s employment with or service as a director of the Company
and its Subsidiaries is voluntarily or involuntarily terminated for any reason
(including death) prior to vesting of Restricted Stock Units granted herein, all
unvested Restricted Stock Units shall immediately and automatically be forfeited
and returned to the Company.
(c)    The Grantee shall not have any stockholder rights, including voting or
dividend rights, with respect to the shares of Stock subject to the Award until
the Grantee becomes a record holder of those shares of Stock following their
actual issuance pursuant to Section 6 of this Agreement
3.    Vesting of Restricted Stock Units.
The term “vest” as used in this Statement means the lapsing of the restrictions
that are described in this Statement with respect to the Restricted Stock Units.
The Restricted Stock Units shall vest in accordance with the schedule set forth
in Appendix A to this Agreement so long as the Grantee remains at least 80% of a
full-time equivalent employee (“FTE”) at the Company or director of the Company
or a Subsidiary on each vesting date. If the Grantee’s employment status changes
to below 80% FTE, then the vesting schedule of this Award shall be suspended. If
the Grantee remains below 80% FTE for one year, then any unvested Restricted
Stock Units shall be forfeited and returned to the Company on such date.
4.    Vesting Acceleration After A Sale Event.
(a)    Double-Trigger Acceleration. If a Sale Event occurs and either (i) the
Grantee’s Service with the Company or its successor or any affiliate thereof
(all of the foregoing, collectively, the “Successor Company”) is terminated by
the Successor Company without Cause or (ii) the Grantee’s Service with the
Successor Company is terminated by the Grantee with Good Reason, in either case
within twelve months after the effective time of the Sale Event, then,
immediately prior to such termination, this Award shall become fully vested. If
the Grantee is required to resign his or her position with the Company as a
condition of a Sale Event, then this Award shall become fully vested immediately
prior to the effectiveness of such resignation.

2

--------------------------------------------------------------------------------

(b)    “Cause” means that, in the reasonable determination of the Successor
Company, (i) the Grantee has committed an act that materially injures the
business of the Successor Company; (ii) the Grantee has refused or failed to
follow lawful and reasonable directions of the board of directors of the
Successor Company or the appropriate individual to whom the Grantee reports;
(iii) the Grantee has willfully or habitually neglected his or her duties with
the Successor Company; (iv) the Grantee has been convicted of a felony that is
likely to inflict or has inflicted material injury on the business of the
Successor Company; or (v) the Grantee has committed a material fraud,
misappropriation, embezzlement, or other act of gross dishonesty that resulted
in material loss, damage, or injury to the Successor Company. Regardless of the
foregoing, the conduct described in clauses (ii) or (iii) shall not constitute
Cause unless such conduct has not been cured within fifteen days following
receipt by the Grantee of written notice from the Successor Company or the board
of directors of the Successor Company, as the case may be, specifying the
particulars of his or her conduct constituting Cause.
(c)    “Good Reason” means that any of the following are undertaken without the
Grantee’s express written consent:
(i)    the assignment to the Grantee of any duties or responsibilities that
result in a significant diminution in his or her function as in effect
immediately prior to the effective date of the Sale Event, provided that a mere
change in title or reporting relationships shall not constitute Good Reason;
(ii)    a ten percent or greater reduction in the Grantee’s annual target total
cash compensation (that is, base salary, plus any cash bonus that would be paid
for Grantee’s performance at a “meets expectations” level and the Company
exactly meeting its performance targets, plus any sales commissions that would
be due for Grantee exactly meeting any sales quota that he or she may have), as
in effect on the effective date of the Sale Event;
(iii)    a relocation of the Grantee’s business office to a location more than
fifty miles from the location at which he or she performed duties as of the
effective date of the Sale Event, except for required travel by the Grantee on
the Successor Company’s business to an extent substantially consistent with his
or her business travel obligations prior to the Sale Event; or
(iv)    a material breach by the Successor Company of any provision of this
Agreement.
(d)    “Service” means the Grantee’s uninterrupted service with the Company and
any successor company or any affiliate thereof, whether as an employee,
director, or consultant. A change in the capacity in which the Grantee renders
service or a change in the entity for which the Grantee renders such service
shall not terminate the Grantee’s Service, provided that there is no
interruption or termination of the Grantee’s service with the Company and any
successor company or any affiliate. The board of directors or the chief
executive officer of any successor company may determine, using reasonable
discretion, whether Service shall be considered interrupted in the case of any
leave of absence, including sick leave, military leave, or any other personal
leave. Regardless of the foregoing, a leave of absence shall be treated as
Service for purposes of vesting in this Award only to such extent as may be
provided in the

3

--------------------------------------------------------------------------------

Successor Company’s leave of absence policy or in the written terms of the
Grantee’s leave of absence.
5.    Dividend Equivalents.
(a)    If on any date the Company shall pay any dividend on shares of Stock of
the Company, the number of Restricted Stock Units credited to the Grantee shall,
as of such date, be increased by an amount determined by the following formula:
W = (X multiplied by Y) divided by Z, where:
W = the number of additional Restricted Stock Units to be credited to the
Grantee on such dividend payment date;
X = the aggregate number of Restricted Stock Units credited to the Grantee as of
the record date of the dividend;
Y = the cash dividend per share amount; and
Z = the Fair Market Value per share of Stock (as determined under the Plan) on
the dividend payment date.
(b)    In the case of a dividend paid on Stock in the form of Stock, including
without limitation a distribution of Stock by reason of a stock dividend, stock
split or otherwise, the number of Restricted Stock Units credited to the Grantee
shall be increased by a number equal to the product of (i) the aggregate number
of Restricted Stock Units that have been awarded to the Grantee through the
related dividend record date, and (ii) the number of shares of Stock (including
any fraction thereof) payable as dividend on one share of Stock. Any additional
Restricted Stock Units shall be subject to the vesting and restrictions of this
Agreement in the same manner and for so long as the Restricted Stock Units
granted pursuant to this Agreement to which they relate remain subject to such
vesting and restrictions, and shall be promptly forfeited to the Company if and
when such Restricted Stock Units are so forfeited.
6.    Receipt of Shares of Stock.
(a)    The Restricted Stock Units in which the Grantee vests in accordance with
the vesting schedule set forth in Appendix A will be issuable in the form of
shares of Stock immediately upon vesting, subject to the collection of the
minimum withholding taxes in accordance with the share withholding provision of
Section 8 of this Agreement.
(b)    Once a stock certificate (or electronic transfer) has been delivered to
the Grantee in respect of the Restricted Stock Units, the Grantee will be free
to sell the shares of Stock evidenced by such certificate (or electronic
transfer), subject to applicable requirements of federal and state securities
law and the Company’s insider trading policy.
7.    Incorporation of Plan. Notwithstanding anything herein to the contrary,
this Award shall be subject to and governed by all the terms and conditions of
the Plan. Capitalized

4

--------------------------------------------------------------------------------

terms in this Award shall have the meaning specified in the Plan, unless a
different meaning is specified herein.
8.    Tax Withholding. The Grantee shall, not later than the date as of which
the receipt of this Award 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 Grantee may elect to have
the required minimum tax withholding obligation satisfied, in whole or in part,
by authorizing the Company to withhold shares of Stock to be issued to the
Grantee pursuant to this Agreement with an aggregate Fair Market Value that
would satisfy the withholding amount due.
9.    No Obligation to Continue Employment. Neither the Company nor any
Subsidiary is obligated by or as a result of the Plan or this Award to continue
the Grantee in employment and neither the Plan nor this Award shall interfere in
any way with the right of the Company or any Subsidiary to terminate the
employment of the Grantee at any time.
10.    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 Grantee
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.
11.    Acceptance. This Agreement shall be deemed accepted and the terms and
conditions thereof hereby agreed to by the Grantee upon notice to the Grantee.

5

--------------------------------------------------------------------------------

ATHENAHEALTH, INC,
RESTRICTED STOCK AWARD AGREEMENT
UNDER THE ATHENAHEALTH, INC.
2007 STOCK OPTION AND INCENTIVE PLAN
Name of Grantee:_____________________
No. of Shares:________________________
Grant Date:____________________________
Final Acceptance Date:_________________________
Purchase Price per Share:_________________________ (if any)
Pursuant to the athenahealth, Inc. 2007 Stock Option and Incentive Plan (the
“Plan”) as amended through the date hereof, athenahealth, Inc. (the “Company”)
hereby grants a Restricted Stock Award (an “Award”) to the Grantee named above.
Upon acceptance of this Award, the Grantee shall receive the number of shares of
Common Stock, par value $0.01 per share (the “Stock”) of the Company specified
above, subject to the restrictions and conditions set forth herein and in the
Plan.
1.Acceptance of Award. The Grantee shall have no rights with respect to this
Award unless he or she shall have accepted this Award prior to the close of
business on the Final Acceptance Date specified above by signing and delivering
to the Company a copy of this Award Agreement and paying the applicable purchase
price (if any). Upon acceptance of this Award by the Grantee, the shares of
Restricted Stock so accepted shall be issued and held by the Company’s transfer
agent in book entry form, and the Grantee’s name shall be entered as the
stockholder of record on the books of the Company. Thereupon, the Grantee shall
have all the rights of a shareholder with respect to such shares, including
voting and dividend rights, subject, however, to the restrictions and conditions
specified in Paragraph 2 below.
2.    Restrictions and Conditions.
(a)    Any book entries for the shares of Restricted Stock granted herein shall
bear an appropriate legend, as determined by the Administrator in its sole
discretion, to the effect that such shares are subject to restrictions as set
forth herein and in the Plan.
(b)    Shares of Restricted Stock granted herein may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of by the Grantee prior
to vesting.
(c)    If the Grantee’s employment with the Company and its Subsidiaries is
voluntarily or involuntarily terminated for any reason (including death) prior
to vesting of shares of Restricted Stock granted herein, all shares of
Restricted Stock shall immediately and automatically be forfeited and returned
to the Company.
3.    Vesting of Restricted Stock. The restrictions and conditions in
Paragraph 2 of this Agreement shall lapse on the Vesting Date or Dates specified
in the following schedule so long

1

--------------------------------------------------------------------------------

as the Grantee remains an employee of the Company or a Subsidiary on such Dates.
If a series of Vesting Dates is specified, then the restrictions and conditions
in Paragraph 2 shall lapse only with respect to the number of shares of
Restricted Stock specified as vested on such date.
Number of
Shares Vested
Vesting Date
_____________ (___%)
____________
_____________ (___%)
____________
_____________ (___%)
____________
_____________ (___%)
____________
_____________ (___%)
____________

Subsequent to such Vesting Date or Dates, the shares of Stock on which all
restrictions and conditions have lapsed shall no longer be deemed Restricted
Stock. The Administrator may at any time accelerate the vesting schedule
specified in this Paragraph 3.
4.    Dividends. Dividends on Shares of Restricted Stock shall be paid currently
to the Grantee.
5.    Incorporation of Plan. Notwithstanding anything herein to the contrary,
this Agreement 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.
6.    Transferability. This Agreement is personal to the Grantee, 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.
7.    Tax Withholding. The Grantee shall, not later than the date as of which
the receipt of this Award 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 Grantee may elect to have
the required minimum tax withholding obligation satisfied, in whole or in part,
by authorizing the Company to withhold from shares of Stock to be issued.
8.    Election Under Section 83(b). The Grantee and the Company hereby agree
that the Grantee may, within 30 days following the acceptance of this Award as
provided in Paragraph 1 hereof, file with the Internal Revenue Service and the
Company an election under Section 83(b) of the Internal Revenue Code. In the
event the Grantee makes such an election, he or she agrees to provide a copy of
the election to the Company.

2

--------------------------------------------------------------------------------

9.    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 Grantee 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 Grantee at any time.
10.    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 Grantee
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:                
Grantee’s Signature

Grantee’s name and address:
    
    
    

3

--------------------------------------------------------------------------------

NOTICE
OF
PERFORMANCE STOCK UNIT AWARD
UNDER THE ATHENAHEALTH, INC.
2007 STOCK OPTION AND INCENTIVE PLAN
Name of Grantee:_____________________
No. of Target Performance Stock Units:________________________ (“Target”)
Grant Date:____________________________
Performance Period:____________________________

This is to inform you that athenahealth, Inc. (the “Company”) has selected you
to receive an award of Performance Stock Units identified above, subject to the
terms set forth on Appendix A hereto and the provisions of the athenahealth,
Inc. 2007 Stock Option and Incentive Plan (the “Plan”) and the attached
Statement of Terms and Conditions.
athenahealth, Inc.
By:         
    Title:

1

--------------------------------------------------------------------------------

Appendix A

2

--------------------------------------------------------------------------------

STATEMENT OF TERMS AND CONDITIONS
1.Preamble.  This Statement contains the terms and conditions of an award
(“Award”) of Performance Stock Units (“Performance Stock Units”) made to the
Grantee identified in the Performance Stock Unit Award Agreement attached hereto
pursuant to the Plan. After the end of the Performance Period, each Performance
Stock Unit earned represents the right to receive one share of common stock of
the Company (“Stock”) on the vesting date of that unit as set forth in Appendix
A.
2.    Restrictions and Conditions.
(a)    This Award may not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of by the Grantee prior to vesting.
(b)    If the Grantee’s employment with or service as a director of the Company
and its Subsidiaries is voluntarily or involuntarily terminated for any reason
(including death) prior to the end of the Performance Period, all Performance
Stock Units shall immediately and automatically be forfeited. If the Grantee’s
employment with or service as a director of the Company and its Subsidiaries is
voluntarily or involuntarily terminated for any reason (including death) after
the end of the Performance Period, all unvested earned Performance Stock Units
shall immediately and automatically be forfeited.
(c)    The Grantee shall not have any stockholder rights, including voting or
dividend rights, with respect to the shares of Stock subject to the Award until
the Grantee becomes a record holder of those shares of Stock following their
actual issuance pursuant to Section 5 of this Agreement
3.    Vesting of Performance Stock Units.
(a)    The term “vest” as used in this Statement means the lapsing of the
restrictions that are described in this Statement with respect to the
Performance Stock Units. The Performance Stock Units earned at the end of the
Performance Period shall vest in accordance with the schedule set forth in
Appendix A to the Performance Stock Unit Award Agreement so long as the Grantee
remains at least 80 percent of a full-time equivalent employee or director of
the Company or a Subsidiary throughout the Performance Period and on each
vesting date. If at any time the Grantee’s employment status is changed to less
than an 80 percent full-time equivalent, then any unvested Performance Stock
Units shall be forfeited and returned to the Company on such date.
(b)    If a Sale Event occurs and either (i) the Grantee’s Service with the
Company or its successor or any affiliate thereof (all of the foregoing,
collectively, the “Successor Company”) is terminated by the Successor Company
without Cause or (ii)  the Grantee’s Service with the Successor Company is
terminated by the Grantee with Good Reason, in either case within 12 months
after the effective time of the Sale Event, then, immediately prior to such
termination, any earned Performance Stock Units not vested shall become fully
vested. If the Grantee is required to resign his or her position with the
Company as a condition of a Sale

3

--------------------------------------------------------------------------------

Event, then any earned Performance Stock Units shall become fully vested
immediately prior to the effectiveness of such resignation.
(c)    “Cause” means that, in the reasonable determination of the Successor
Company, (i) the Grantee has committed an act that materially injures the
business of the Successor Company; (ii) the Grantee has refused or failed to
follow lawful and reasonable directions of the board of directors of the
Successor Company or the appropriate individual to whom the Grantee reports;
(iii) the Grantee has willfully or habitually neglected his or her duties with
the Successor Company; (iv) the Grantee has been convicted of a felony that is
likely to inflict or has inflicted material injury on the business of the
Successor Company; or (v) the Grantee has committed a material fraud,
misappropriation, embezzlement, or other act of gross dishonesty that resulted
in material loss, damage, or injury to the Successor Company. Regardless of the
foregoing, the conduct described in clauses (ii) or (iii) shall not constitute
Cause unless such conduct has not been cured within fifteen days following
receipt by the Grantee of written notice from the Successor Company or the board
of directors of the Successor Company, as the case may be, specifying the
particulars of his or her conduct constituting Cause.
(d)    “Good Reason” means that any of the following are undertaken without the
Grantee’s express written consent:
(i)    the assignment to the Grantee of any duties or responsibilities that
result in a significant diminution in his or her function as in effect
immediately prior to the effective date of the Sale Event, provided that a mere
change in title or reporting relationships shall not constitute Good Reason;
(ii)    a 10 percent or greater reduction in the Grantee’s annual target total
cash compensation (that is, base salary, plus any cash bonus that would be paid
for Grantee’s performance at a “meets expectations” level and the Company
exactly meeting its performance targets, plus any sales commissions that would
be due for Grantee exactly meeting any sales quota that he or she may have), as
in effect on the effective date of the Sale Event;
(iii)    a relocation of the Grantee’s business office to a location more than
fifty miles from the location at which he or she performed duties as of the
effective date of the Sale Event, except for required travel by the Grantee on
the Successor Company’s business to an extent substantially consistent with his
or her business travel obligations prior to the Sale Event; or
(iv)    a material breach by the Successor Company of any provision of this
Agreement.
(e)    “Service” means the Grantee’s uninterrupted service with the Company and
any successor company or any affiliate thereof, whether as an employee,
director, or consultant. A change in the capacity in which the Grantee renders
service or a change in the entity for which the Grantee renders such service
shall not terminate the Grantee’s Service, provided that there is no
interruption or termination of the Grantee’s service with the Company and any
successor company or any affiliate. The board of directors or the chief
executive officer

4

--------------------------------------------------------------------------------

of any successor company may determine, using reasonable discretion, whether
Service shall be considered interrupted in the case of any leave of absence,
including sick leave, military leave, or any other personal leave. Regardless of
the foregoing, a leave of absence shall be treated as Service for purposes of
vesting in an Award only to such extent as may be provided in the Successor
Company’s leave of absence policy or in the written terms of the Grantee’s leave
of absence.
4.    Dividend Equivalents.
(a)    If on any date the Company shall pay any dividend on shares of Stock of
the Company, the number of Performance Stock Units credited to the Grantee
shall, as of such date, be increased by an amount determined by the following
formula:
W = (X multiplied by Y) divided by Z, where:
W = the number of additional Performance Stock Units to be credited to the
Grantee on such dividend payment date;
X = the aggregate number of Performance Stock Units credited to the Grantee as
of the record date of the dividend;
Y = the cash dividend per share amount; and
Z = the Fair Market Value per share of Stock (as determined under the Plan) on
the dividend payment date.
(b)    In the case of a dividend paid on Stock in the form of Stock, including
without limitation a distribution of Stock by reason of a stock dividend, stock
split or otherwise, the number of Performance Stock Units credited to the
Grantee shall be increased by a number equal to the product of (i) the aggregate
number of Performance Stock Units that have been awarded to the Grantee through
the related dividend record date, and (ii) the number of shares of Stock
(including any fraction thereof) payable as dividend on one share of Stock. Any
additional Performance Stock Units shall be subject to the vesting and
restrictions of this Agreement in the same manner and for so long as the
Performance Stock Units granted pursuant to this Agreement to which they relate
remain subject to such vesting and restrictions, and shall be promptly forfeited
to the Company if and when such Performance Stock Units are so forfeited.
5.    Receipt of Shares of Stock.
(a)    The Performance Stock Units in which the Grantee vests in accordance with
the vesting schedule set forth in Appendix A will be issuable in the form of
shares of Stock immediately upon vesting, subject to the collection of the
minimum withholding taxes in accordance with the share withholding provision of
Section 7 of this Agreement.
(b)    Once a stock certificate (or electronic transfer) has been delivered to
the Grantee in respect of the Performance Stock Units, the Grantee will be free
to sell the shares of Stock evidenced by such certificate (or electronic
transfer), subject to applicable requirements of federal and state securities
law and the Company’s insider trading policy.

5

--------------------------------------------------------------------------------

6.    Incorporation of Plan. Notwithstanding anything herein to the contrary,
this Award shall be subject to and governed by all the terms and conditions of
the Plan. Capitalized terms in this Award shall have the meaning specified in
the Plan, unless a different meaning is specified herein.
7.    Tax Withholding. The Grantee shall, not later than the date as of which
the receipt of this Award 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 Grantee may elect to have
the required minimum tax withholding obligation satisfied, in whole or in part,
by authorizing the Company to withhold shares of Stock to be issued to the
Grantee pursuant to this Agreement with an aggregate Fair Market Value that
would satisfy the withholding amount due.
8.    No Obligation to Continue Employment. Neither the Company nor any
Subsidiary is obligated by or as a result of the Plan or this Award to continue
the Grantee in employment and neither the Plan nor this Award shall interfere in
any way with the right of the Company or any Subsidiary to terminate the
employment of the Grantee at any time.
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 Grantee
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.

6