exv10w18





Exhibit 10.18



EMPLOYMENT AGREEMENT
v7.4



THIS EMPLOYMENT AGREEMENT (“Agreement’) is made and entered into as of February 24, 2009
by and between ATHENAHEALTH, INC. (the “Company”), and the undersigned Employee (“Employee”).



The parties hereby agree as follows:





          1. Employment; Term.



     (a) The Company employs Employee, and Employee accepts employment with the Company, upon the
terms and conditions contained in this Agreement.



     (b) The Company and Employee acknowledge that Employee’s employment is at-will, and is for no
definite period of time. However, Employee and the Company expect that Employee will work as an
Employee for at least one year and no longer than two years. Employee acknowledges and agrees that
this Agreement will govern the terms of Employee’s employment with Company, even though
compensation levels may be adjusted by Company from time to time by assent of the parties hereto.



     (c) Immediately following Employee’s employment with the Company for at least one year, if
Employee’s service is for a period of three and one half years or less, and provided that Employee
is not invited to serve on the Company’s Board of Directors, Employee shall be offered the
opportunity to serve as a consultant to the Company on mutually agreeable terms through such date
that is no later than three and one half years following the grant date of the Employee Stock
Option described in Schedule A .




          2. Duties.


During the period that Employee is employed under this Agreement (the “Employment Period”),
Employee will serve in the position set forth in the attached Schedule A or in such other positions
and with such other duties and responsibilities as Company will from time to time assign to
employee. Employee will perform the duties of Employee’s position faithfully for the Company and
in accordance with the reasonable directives of the Company. Employee will comply with procedures
and policies as established by the Company from time to time. Employee will devote substantially
all of Employee’s business time and effort to the performance of Employee’s duties to the Company.
Employee acknowledges that execution of Employee’s duties in a timely, consistent and prudent
manner is vital to the successful operations of the Company and that it is essential that Employee
conduct the duties of this position with constant and watchful attention. Employee will
participate in Company’s compliance training and act in accordance with the Company’s Compliance
Principles and its Code of Conduct, in conformity with the Company’s compliance and integrity plan.
Prior to Employee’s termination of employment with the Company, Employee will have performed the
work to (i) hire a replacement COO, or (ii) choose a Company employee for the COO position, or
(iii) plan a structure in which the COO job is eliminated through an organizational structure in
which certain identified operating executives report to the CEO.





          3. Compensation.


Employee’s compensation will be as set forth in the attached Schedule A.





          4. Expenses; Benefits.



     (a) The Company agrees to reimburse Employee, in accordance with the Company’s policies as
amended by the Company from time to time, for reasonable expenses paid or incurred by Employee in
connection with the performance of Employee’s duties for the Company hereunder.



     (b) Employee will be entitled to vacation, sick days and leave of absence in accordance with
Company policies, as amended by the Company from time to time.



     (c) Employee will be entitled to participate in health, life, or disability insurance, and
retirement, pension, or profit-sharing plans that may be instituted by the Company for the benefit
of its management Employees generally, upon such terms contained therein.



 









 






          5. Termination.



     (a) Since Employee’s employment is at-will employment, either Employee or the Company may
terminate Employee’s employment at any time for any reason or for no reason.



     (b) Upon the termination of Employee’s employment for any reason, the parties will have no
further obligations under this Agreement, except that the obligations of Employee under Sections 6,
7, 8, 9 and 10 and the provisions of Sections 12 and 13 will remain in effect and be binding upon
the parties after termination.




          6. Effect of Termination.



     (a) The Company will have no liability or obligation to Employee upon Employee’s termination
other than as specifically set forth in Sections 5(b) and 6, or as provided by law.



     (b) Upon the termination of Employee’s employment, Employee will be entitled to receive only
such portion (if any) of the Base Salary as may have accrued but be unpaid on the date of
termination, any accrued and unpaid vacation pay, outstanding expenses reimbursable under the
Company’s then applicable policies, and other benefits which may be owing through the date of
termination.



     (c) Upon the termination of Employee’s employment for any reason, Employee will immediately
surrender to the Company all Company property in the possession, custody or control of Employee,
including but not limited to all computer hardware, software, computer disks and/or data storage
devices, notes, data, sketches, drawings, manuals, documents, records, data bases, programs,
blueprints, memoranda, specifications, customer lists, financial reports, and equipment and will
also immediately surrender to the Company all documents and other media containing any Confidential
Information (as defined in Section 7 hereof).



     (d) If the Company terminates Employee during Employee’s first year of employment with the
Company for any reason other than for Cause, then the Company shall pay to Employee within thirty
(30) days following such termination a lump sum amount equal to the unpaid portion of Employee’s
housing allowance as agreed pursuant to Schedule A hereto. For purposes hereof, “Cause” means any
of the following: (i) dishonesty, embezzlement, misappropriation of assets or property of the
Company; (ii) gross negligence, misconduct, neglect of duties, theft, fraud, or breach of fiduciary
duty to the Company; (iii) violation of federal or state securities laws; (iv) breach of an
employment, consulting or other agreement with the Company; or (v) the conviction of a felony, or
any crime involving moral turpitude, including a plea of guilty or nolo contendre.



          7. Confidential Information.



     (a) Except as specifically provided in this Section 7(a), “Confidential Information” means all
information or material that relates to any of the Company’s products or services or any phase or
aspect of its operations, business or financial affairs that: (i) is not generally known to the
public, (ii) that is designated by the Company as Confidential, or (iii) that a reasonable person
familiar with the Company’s business would understand is confidential to the Company or would harm
the Company if not kept confidential. Employee acknowledges and agrees that Confidential
Information includes, but is not limited to, the following types of information and other
information of a similar nature (whether or not reduced to writing): Company Inventions (as
defined below), trade secrets, specifications, know-how, processes, formulas, models, work flows,
software completed or in various stages of development, source codes, object codes, research and
development procedures, test results, marketing techniques and materials, marketing and development
plans, price lists, pricing policies, business plans, information relating to customers’ and/or
suppliers’ identities or characteristics or agreements, financial information and projections and
personnel files. Confidential Information also includes, but is not limited to, any information
described above which the Company obtains from another party and which the Company treats and/or
has an obligation to treat as confidential or designates as Confidential Information, whether or
not developed by the Company. Confidential Information comprises information in all forms, spoken,
written, recorded or contained in any media whatsoever, whether now in existence or to be invented
in the future. (The term “Company,” in this Section 7(a), means not only athenahealth, Inc., but
also any company, partnership or entity which, directly or indirectly, controls, is controlled by
or is under common control with athenahealth, Inc.)



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     (b) Employee recognizes and acknowledges that Company is regulated as a Covered Entity under
the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). Employee recognizes and
acknowledges that Employee may have access to Protected Health Information (“PHI”) as defined under
HIPAA in the course of employment and that such PHI is Confidential Information, subject to strict
confidentially and security restrictions under HIPAA, under applicable Company policies and under
other applicable law.



     (c) All Confidential Information and all documents and other media that contain Confidential
Information (whether obtained or created before, during or after the Employment Period) including
but not limited to information relating to all Company Inventions pursuant to the provisions of
Section 8(a) below will remain the property of the Company and not the Employee and will be
delivered to the Company at any time upon the Company’s request and upon the termination of
Employee’s employment.



     (d) All Confidential Information will be held confidential by Employee. During the Employment
period the Employee will not (nor will Employee assist any other person to), directly or
indirectly: (i) reveal, report, publish or otherwise disclose such Confidential Information to any
person, firm, corporation, association or other entity for any reason or purpose whatsoever except
as necessary in the course of carrying out Employee’s duties hereunder or as expressly authorized
by the Company; or, (ii) use such Confidential Information except for the benefit of the Company
and in the course of Employee’s employment with the Company. In all cases, all disclosure and use
of Confidential Information will, in addition to the foregoing: (i) be limited to and in conformity
with all applicable Company policies and procedures, including but not limited to documentation of
non-disclosure and confidentiality obligations; and, (ii) limited to the amount of information
necessary for the reason or purpose justifying the disclosure or use. After the Employment Period,
Employee will not disclose or use Confidential Information without prior written consent of the
Company that explicitly specifies the disclosure or use; and, any such disclosure or use will be
subject to all obligations and restrictions set forth in this Agreement as if made during the
Employment Period. Both during the Employment Period and at all times thereafter Employee will not
render any services to any person, firm, corporation, association or other entity to whom any such
Confidential Information, in whole or in part, has been disclosed or is threatened to be disclosed
contrary to the provisions of this Section 7(d). This Section 7(d) will not apply to the extent
Employee is required to disclose any Confidential Information by applicable law or legal process
provided that Employee promptly notifies the Company of such pending disclosure and consults with
and cooperates with the Company prior to such disclosure concerning the advisability of seeking a
protective order or other means of preserving the confidentiality of the Confidential Information.




          8. Company Inventions.



     (a) During the Employment Period and thereafter, Employee will disclose promptly to the
Company any and all Company Inventions (as defined below). Employee hereby assigns, and agrees
during the Employment Period and thereafter to assign, to the Company all of Employee’s right,
title and interest in any Company Inventions and in any and all applications and registrations for
any form of intellectual property applicable to any Company Inventions. Employee acknowledges that
all Company Inventions consisting of Works are intended to be “works made for hire”, as that term
is defined in Section 101 of the United States Copyright Act of 1976 (the “Act”), and will be
automatically the sole property of the Company within the meaning of the Act. If the copyright to
any such Works will not be the property of the Company by operation of law, Employee will, without
further consideration, assign to the Company all of my right, title and interest in such the
copyright to such Works. Employee hereby waives, to the extent permitted by law, all claims to
moral rights in any Company Inventions.




(i) “Company Inventions” will mean any and all Inventions and Works in whole or in part
conceived, made or reduced to practice by Employee (either solely or in conjunction with others)
during or after the Employment Period that (A) are made through the use of any of the Company’s
Confidential Information, Company Inventions, equipment, facilities, supplies, funds or
proprietary rights or other property of the Company, (B) relate to the Company’s business or the
Company’s actual or demonstrably anticipated research and development or business, or (C) result
from any work performed by Employee for the Company.



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(ii) “Inventions” will mean any ideas, designs, concepts, techniques, inventions and
discoveries, whether or not patentable or protectable by copyright and whether or not reduced to
practice, including, but not limited to, devices, processes, methods, techniques, algorithms,
trade secrets, and know-how.




(iii) “Works” will mean any and all original works of authorship in any written, electronic,
video, or audio records (or any other tangible medium, existing now or in the future, on which
information is fixed), including without limitation all mask works, software, computer files,
computer programs (in both object and source code), computer interfaces, documentation, and
databases together with any improvements thereon or thereto, derivative works therefrom.




(iv) “Prior Inventions” will mean any and all Inventions made, conceived or first reduced to
practice by Employee, under Employee’s direction or jointly with others prior to Employee’s
employment with the Company, which Employee owns or controls, either solely or jointly with
others.




(v) Employee represents that the attached Schedule B contains a complete list of all Prior
Inventions which Employee desires to exclude from assignment to the Company hereunder. If there
is no such Schedule B attached hereto, or if it is left blank, Employee represents that there
are no such Prior Inventions. Employee agrees that, if in the course of my employment with the
Company, Employee incorporates into a Company product, process or machine a Prior Invention or
Work owned by Employee or in which Employee has an interest (regardless whether such Prior
Invention is listed on Schedule B), or if the manufacture, use, sale, or import of any Company
product or machine or the practice of any Company process would infringe any such Prior
Invention or Work, the Company will automatically be granted and will have a non-exclusive,
royalty-free, fully-paid, irrevocable, transferable, perpetual world-wide license under such
Prior Invention or Work to make, have made, modify, use, import, and/or sell such Company
product or machine or to practice such process or Prior Invention or Work.




(vi) Employee will keep and maintain adequate and current written records (in the form of notes,
sketches, drawings or such other form(s) as may be specified by the Company) of all Company
Inventions made by Employee during the Employment Period or thereafter (including but not
limited to information relating to all Company Inventions which belong exclusively to the
Company pursuant to the provisions of this Section 8(a)), which records will be available at all
times to the Company and will remain the sole property of the Company. In the event that (A)
any Company Invention is made, conceived of or reduced to practice by Employee, either solely or
in conjunction with others, during the Employment Period, or (B) any Company Invention is made,
conceived of or reduced to practice by Employee after the Employment Period which belongs
exclusively to the Company pursuant to the provisions of this Section 8(a), Employee will
promptly give notice and fully disclose in writing such Company Invention to the Chairman of the
Board and the Board of Directors of the Company.




(vii) Employee will assist the Company (at the Company’s expense), either during or subsequent
to the Employment Period, to obtain and enforce for the Company’s benefit, patents, copyrights,
and mask work protection in any country for any and all Company Inventions made by Employee, in
whole or in part, the rights to which belong to or have been assigned to the Company pursuant to
the provisions of Section 8(a) hereof. Employee agrees to execute all applications,
assignments, instruments and papers and perform all acts as the Company or its counsel may deem
necessary or desirable to obtain any patents, copyrights or mask work protection in such Company
Inventions and otherwise to protect the interests of the Company therein. In the event the
Company is unable to secure Employee’s signature on any document necessary to apply for,
prosecute, obtain, or enforce any patent, copyright, or other right or protection relating to
any Company Invention, whether due to mental or physical incapacity or any other cause, Employed
hereby irrevocably designates and appoints the Company and each of its duly authorized officers
and agents as Employee’s agents and attorney-in-fact, to act for and in Employee’s behalf and
stead to execute and file any such document and to do all other lawfully permitted acts to
further the prosecution, issuance, and enforcement of patents, copyrights, or other right or
protections with the same force and effect as if executed and delivered by Employee.



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          9. Covenant Against Competition; Non-Solicitation. 


Employee covenants and agrees that:




     (a) During the Non-Compete Period (as hereinafter defined), Employee shall not: (i) engage in
any business competitive in the Geographic Area (as hereinafter defined) with the Company Business
(as hereinafter defined), (ii) render any services in any capacity to any person or entity engaged
in any business competitive in the Geographic Area with the Company Business; or, (iii) be or
become the Affiliate of any business competitive in the Geographic Area with the Company Business.



     (b) During the Non-Compete Period and for an additional 12 months, Employee shall not, without
the prior written consent of the Company, directly or indirectly, on behalf of himself or any other
person or entity, solicit or encourage any Employee of the Company or any of its Affiliates to
leave the employment of the Company or any of its Affiliates, or hire any Employee who has left the
employment of the Company or any of its Affiliates within one year of the termination of such
Employee’s employment with the Company or any of its Affiliates.



     (c) During the Non-Compete Period, Employee shall not, in the Geographic Area, directly or
indirectly: (i) solicit or encourage any customer or client of the Company to purchase or use
services or items competitive with the Company Business; (ii) accept orders or business competitive
with the Company Business with respect to any customer or client of the Company or offer or agree
to provide services competitive with the Company Business to any customer or client of the Company;
or (iii) solicit or encourage any person or entity with which Employee had contact on behalf of the
Company to purchase or use services or items of a business competitive with the Company Business.



     (d) As used herein:




(i) A person or entity is an “Affiliate” of another if: (a) it directly or indirectly controls,
is controlled by, or is under common control with the other; (b) it directly or indirectly owns
any interest in the other (except as a passive investment of less than 5% interest of an entity
that is traded on a national securities exchange), is owned in any part by or shares common
ownership in any part with the other; (c) it is a joint venturer, partner, director, officer,
principal, manager, member, agent, or trustee of the other or associated with the other in any
other capacity in which it owes to the other any fiduciary duty or duty of fidelity; or, (d) it
holds itself out as providing a joint, coordinated or integrated service, item or combination of
service(s) and item(s) with the other.




(ii) “Company Business” includes the services and items developed or sold by the Company during
the Employment Period. Company Business will also include services and items planned by the
Company during the Employment period to be developed or sold by it if Employee has been
materially involved in such planning, development or sale. Without limiting the foregoing
definition, Company Business includes the business of providing, selling, contracting for or
arranging for provision, in whole or in part, of medical revenue cycle or medical record
software, software functionality or services.




(iii) Without limitation, a business, service or item will be deemed competitive with the
Company Business if a reasonable customer or client of that competitive business, service, item
would on account of such business, service or item likely forego all or any material part of the
services or items included in the Company Business.




(iv) “Geographic Area” will be the United States.




(v) “Non-Compete Period” will mean the period during which Employee is employed by the Company
and an additional period equal to six months immediately following the termination of Employee’s
employment with the Company, provided that if Employee has been employed for more than six
months by the Company, the additional period following termination will be one year.




          10. Enforcement by Injunction.


Employee acknowledges and agrees that the Company will be immediately, substantially and
irreparably damaged if Employee fails to comply with the provisions of Sections 7, 8 or 9.
Accordingly, the Company will be entitled to bring action in court for (i) an injunction or any
other appropriate decree of specific performance (without the necessity of posting any bond or
other security in connection therewith) in case of any breach or


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threatened breach of Employee’s covenants and obligations under Sections 7, 8 or 9, (ii) damages in
an amount equal to all compensation, profits, monies, accruals, increments or other benefits
derived or received by Employee (or any associated party deriving such benefits, including but not
limited to any future employer of Employee) as a result of any such breach of Employee’s covenants
and obligations under Sections 7, 8 or 9, and (iii) indemnification against any other losses,
damages, costs and expenses, including actual attorneys’ fees and court costs, incurred by the
Company in obtaining any damages and/or injunctive relief as set forth in subsections (i) or (ii)
above. Such remedies will not be exclusive and will be in addition to any other remedy, at law or
in equity, which the Company may have for any breach or threatened breach of Sections 7, 8 or 9 by
Employee. Any action permitted under this Section 10 may be brought in any court having
jurisdiction of the parties, and the parties irrevocably consent to the jurisdiction and venue of
the state courts of Massachusetts and the Federal District Court for the District of Massachusetts
for that purpose. Employee hereby acknowledges and agrees that any breach by Employee of covenants
and obligations under this Agreement will cause damage to the Company in Massachusetts and that
consent to jurisdiction and venue in Massachusetts is reasonable and fair.





          11. Notices.


Any and all notices or other communications required or permitted to be given under any of the
provisions of this Agreement will be in writing and will be deemed to have been duly given (a) when
personally delivered, (b) on the third business day after deposit in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid), (c) on the next day business day after
timely delivery to an overnight courier, or (d) upon confirmation of receipt by facsimile or
e-mail; in each case addressed to the parties at the addresses set forth below their signatures
hereto (or at such other address as any party may specify by notice to all other parties given as
aforesaid).





          12. Arbitration.


Except with respect to remedies and rights set forth in Section 10, any dispute or controversy
arising under this Agreement or concerning Employee’s employment with the Company (including,
without limitation, any controversy as to the arbitrability of any dispute), including but not
limited to any claims arising out of Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, and/or Massachusetts General
Laws Chapter 151B, will be settled exclusively by arbitration to be held in Boston, Massachusetts,
before a single arbitrator in accordance with the rules of the American Arbitration Association
then in effect relating to the arbitration of employment disputes. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction, and the parties irrevocably consent to the
jurisdiction of the Massachusetts courts for that purpose.





          13. Miscellaneous.



     (a) If any provision of Sections 7, 8 or 9 is held to be unenforceable or overly broad, it is
the intention of the parties that the court or tribunal making such determination will modify such
provision so that the provision will be enforceable to the broadest extent permitted under the law,
and that such provision will then be applicable in such modified form. The provisions of the
various limitations in Sections 7, 8 and 9 will be construed to be cumulative, and the scope or
interpretation of one limitation will not be construed to nullify or reduce the limiting effect of
another limitation.



     (b) Employee warrants and agrees that the restrictions set forth in Section 9 are reasonable
and necessary to preserve to the Company valuable proprietary and confidential information that
gives the Company advantage over its competitors and that violation by Employee of that Section
will naturally, necessarily and inevitably result in the disclosure of such information to the
competitors of the Company, to its irreparable and material damage.



     (c) To the extent, if any, that Employee possesses or has knowledge of information that is
proprietary to a third party or that is subject to confidentiality restrictions properly placed
upon it by a third party that would prevent Company from having access to such information
(collectively “Third Party Information”), Employee will not disclose such information to Company or
to any Company personnel nor will Employee use such information in the conduct of Employee’s
employment hereunder. Employee’s duties hereunder expressly exclude use or disclosure of such
information. Company expressly disclaims any request or requirement that



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Employee disclose or use Third Party Information in connection with employment hereunder; and,
if Employee encounters such request or requirement, Employee will not make such disclosure or use
but will instead promptly report such request or requirement to the Company’s acting compliance
officer.



     (d) To the extent that Employee has been employed or retained by any third party in the past
whereby Employee has come into possession of Third Party Information, Employee warrants and
represents that Employee’s duties for Company as they have been described by Company in negotiation
of this Agreement are not substantially similar to those duties that Employee undertook for any
such third party such that any Third Party Information would naturally, necessarily or inevitably
be used or disclosed by Employee in performing his or her duties for the Company.



     (e) Employee warrants and represents to the Company that Employee is not party to any
agreement or understanding (including but not limited to any non-compete, non-disclosure,
non-solicitation or similar agreement) that would prohibit, restrict or impair the ability of
Employee to work in any capacity or position at the Company.



     (f) Any and all undertakings by the Company in this Agreement (including Schedule A or any
amendment of Schedule A) with respect to any future grant of shares or options to purchase shares
of stock of the Company are undertakings only to recommend such grant to the Board of Directors or
its designee; and, all such grants are subject to and contingent upon separate prior approval of
the Board of Directors of the Company or its designee (which approval may be withheld for any
reason or for no reason), subject to determination by the Board of Directors or its designee with
respect to strike price and vesting schedule and subject to the terms and conditions in the
Company’s applicable stock option or stock benefit plan and in the Company’s stock option or stock
benefit agreement forms that are current at the time of approval. Notwithstanding any provision in
this Agreement or any other document or statement to the contrary, no grant to Employee of any
option to purchase shares of stock of the Company will be deemed compensation for past work or for
past performance of Employee under any circumstances but will instead be solely an incentive to
potential future performance from the date of vesting forward of such right; and, Employee will
have no rights, entitlement or expectation of rights with respect to any such option or with
respect to the stock subject to any such option except as explicitly set forth in the Company’s
applicable stock option plan and stock option agreement forms.



     (g) This writing constitutes the entire agreement of the parties with respect to the subject
matter hereof and may not be modified, amended or terminated except by a written agreement signed
by all parties hereto, provided however that compensation levels may be adjusted by assent of the
parties, which assent of Company will be in writing and signed on behalf of Company stating the
adjusted level and which assent of Employee may be established by acceptance by Employee of
compensation at such adjusted level.



     (h) This Agreement will be binding upon and inure to the benefit of both parties and their
respective successors and assigns, including any corporation with which, or into which, the Company
may be merged or which may succeed to the Company’s assets or business, provided, however, that the
obligations of the Employee are personal and will not be assigned by him or her.



     (i) No waiver by the Company of any breach or default hereunder will be considered valid
unless in writing signed by all parties hereto, and no such waiver will be deemed a waiver of any
subsequent breach or default of a similar nature.



     (j) If any provisions of this Agreement will be held unenforceable, such unenforceability will
attach only to such provisions and will not render unenforceable any other severable provisions of
this Agreement, and this Agreement will be carried out as if any such unenforceable provisions were
not contained herein, unless the unenforceability of such provisions substantially impairs the
benefits of the remaining portions of this Agreement.



     (k) This Agreement may be executed in two or more counterparts, each of which will be deemed
one original.



     (l) This Agreement will be deemed to be a contract that is made in Massachusetts, under the
laws of the Commonwealth of Massachusetts; and, for all purposes this Agreement will be construed
and enforced in accordance with the internal laws of Massachusetts, without regard to conflicts of
laws principles, provided that



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to the extent permitted by Federal law the provisions for arbitration hereunder will be under
and governed by the Federal Arbitration Act.



     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.



	 	 	 	 	 	 	 
	Employee signature:	 	athenahealth, Inc.	 	 
	 
	 	 	 	 	 	 
	/s/ David E. Robinson

	 	By:
	 	/s/ Jonathan Bush	 	 
	 

	 	 	 	 	 	 
	Print name: David E. Robinson

	 	Print name:     Jonathan Bush
	 	 
	Print address: 506 Burr Ridge Club

	 	Title:
	 	CEO	 	 
	Burr Ridge, IL 60527	 	311 Arsenal St., Watertown, MA 02472	 	 






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SCHEDULE A TO EMPLOYMENT AGREEMENT



Position: Chief Operating Officer



Compensation: Employee’s base salary will be at an annual gross rate of $250,000
(the “Base Salary”). The Base Salary shall be payable in accordance with the Company’s payroll
practices, as in effect from time to time, and shall be subject to required federal, state and
local taxes and withholdings. Employee will be eligible for an annual performance bonus based on
70% of Base Salary provided that 100% of the corporate scorecard goals are met. The bonus will be
adjusted by 2% for every 1% variance up or down from the corporate scorecard goals, with maximum
potential bonus 100% of Base Salary. The foregoing is subject to approval by Board compensation
committee and subject to currently applicable Athena compensation policies.



Housing: Employee shall be paid as additional income, subject to withholdings, an annual
housing allowance not to exceed $84,000, payable monthly. Such amount will not be included in the
bonus calculation.



Health/Dental: Not participating



Stock Options: The Company will recommend to the Board of Directors a grant to Employee of
an option to purchase (“Nonqualified Stock Option”) 210,000 shares of the Company’s common stock,
such Option to vest quarterly in accordance with Athena’s current stock option plan over a 4-year
period as long as Employee remains a full-time employee with the Company, a consultant to the
Company commencing immediately after termination of employment, or Employee is appointed to serve
on Athena’s Board of Directors immediately following termination of employment. If Employee serves
for at least one year as an employee, Employee’s right to exercise the vested portion of the
Option, with respect to this initial grant only, would not be cancelled upon termination of
employment, consulting, or Board service. Other terms of the Option grant will be consistent with
the standard Company option award form and stock option plan with expiration at 10 years from date
of grant. If Employee is invited to serve on the Board, Employee would be eligible for a new option
grant for continued Board service four years after the commencement of such Board service.




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SCHEDULE B TO EMPLOYMENT AGREEMENT



The following is a complete list of all Prior Inventions.



þ       No Prior Inventions




          See below description of Prior Inventions (reference and attach additional, initialed sheets
if necessary)



Initials of Employee for Schedules A and B: ____DER_______





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