exv10w9






Exhibit 10.9




EMPLOYMENT AGREEMENT




     THIS EMPLOYMENT AGREEMENT (“Agreement”), is made and entered
into as of January 31, 2005, by and between ATHENAHEALTH, INC. (the “Company”), and Derek
Hedges (“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) Term of Employment. The Company and Employee
acknowledge that Employee’s employment is at-will, and is for no definite period of time.
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.




     2. Duties.



     During the Employment Period, Employee shall serve as Director of
Channel Development or in such other positions and with such other duties and
responsibilities as Company shall from time to time assign to employee. Employee
shall perform faithfully for the Company the duties of Employee’s position and in accordance
with the reasonable directives of the Company. Employee shall comply with procedures and policies
as established by the Company from time to time.
Employee shall 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.



     3. Compensation



Employee’s base salary will be at an annual gross rate of $100,000 (the “Base
Salary”), plus potential for $100,000 in incentive based pay if goals are met in accordance
with the Channel Development Compensation Plan, $50,000 of which
will be paid monthly in the form of a draw against commissions (the $50,000 draw against
commissions will be guaranteed in the first year of employment). In
addition, Employee will receive $20,000 as a signing bonus (payment schedule to be determined by
Robert Hueber), plus payment to cover moving expenses (payment



 









 




amount and schedule to be determined by Robert Hueber). 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 may be entitled to annual consideration for a bonus based
on Employee’s and the Company’s performance. Such bonus, if any, shall be
determined by the Company in its sole discretion.




     4. Stock Option Grant,



     Following the execution of this Agreement and subject to the approval of the Board of
Directors, the Company shall grant Employee an option (the “Option”) to purchase 6,500
shares of the Company’s Common Stock, subject to the terms and
conditions in the Company’s stock option plan and in the Company’s stock option agreement.



     5. Expenses; Benefits.



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




          (b) Employee shall be entitled to 17 days of vacation annually,
which vacation shall accrue at a rate of 1.4 business hours per month. The vacation
year begins on Employee’s anniversary date. Of the vacation days not taken at the
end of the vacation year, only ten days may be carried forward to the following year.
Employee may not receive cash in lieu of the days not taken, except with written
consent of the HR Committee.




          (c) Employee shall 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 mid-level management Employees generally, upon such terms
contained therein.




     6. 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 shall have no
further obligations, except that those obligations of
Employee under Sections 7, 8, 9 and 10, and the provisions of Sections 12 and 13
shall remain in effect and binding upon the parties.







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     7. Effect of Termination.



          (a) The Company shall have no liability or obligation to Employee upon Employee’s termination
other than as specifically set forth in this Section 7.




          (b) Upon the termination of Employee’s employment, Employee
shall 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, plus any accrued and unpaid
vacation pay or other benefits which may be owing through the date of termination.




          (c) Upon the termination of Employee’s employment for any reason, Employee shall immediately
surrender to the Company all Company property in
the possession, custody or control of Employee, including but not limited to any 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, equipment
and all other physical forms of expression incorporating or containing any
Confidential Information (as defined in Section 8 hereof), it being distinctly
understood that all such writings, physical forms of expression and other things are exclusive
property of the Company.




     8. Confidential Information and Inventions.



          (a) Employee recognizes and acknowledges that during the course of Employee’s employment with
the Company, Employee shall have access to
Confidential Information. “Confidential Information” means all information or
material not publicly know which relates to any of its products, services or any
phase of its operations, business or financial affairs. 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): trade secrets,
inventions, drawings, file data, documentation, diagrams, specifications, know-how, processes,
formulas, models, flow charts, 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, characteristics and agreements, financial information and
projections and Employee files. Confidential Information also includes 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 owned or developed by the Company.
(The term “Company,” as used in this Section 8, 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) Both during the Employment Period and at all times thereafter,
all Confidential Information which Employee may now possess or access, may
obtain during or after the Employment Period, or may create prior to the end of the Employment
Period will be held confidential by Employee, and Employee will not
(nor will Employee assist any other person to do so), directly or indirectly, (i) reveal,
report, publish or disclose such Confidential Information to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever (other
than in the course of carrying out Employee’s duties hereunder or as expressly
authorized by the Company), (ii) 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 by or at the instance
of Employee, or (iii) use such Confidential Information except for the
benefit of the Company and in the course of Employee’s employment with the
Company. The foregoing will not apply to the extent Employee is required to
disclose any Confidential Information by applicable law or legal process so long as Employee
promptly notifies the Company of such pending disclosure and consults
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.




          (c) Any Inventions (as defined below) 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 are made through the use of any of
the Confidential Information or any of the Company’s equipment, facilities,
supplies, trade secrets or time, or that relate to the Company’s business or the
Company’s actual or demonstrably anticipated research and development, or that
result from any work performed by Employee for the Company will belong
exclusively to the Company and will be deemed part of the Confidential Information
for purposes of this Agreement, whether or not fixed in a tangible medium of
expression. The term “Inventions,” as used herein, means 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, drawings, works of authorship, computer programs, software, source codes,
object codes, interfaces and networks (and all components of
the foregoing), methods and formulas together with any improvements thereon or
thereto, derivative works therefrom and know-how related thereto. The provisions
of this section are not meant to apply to those inventions (1) that Employee creates without
the use of any Confidential Information of the Company and/or without the
use of any of the Company’s resources, equipment, facilities, supplies, trades secrets
or time, (2) that do not relate to the Company’s business and/or the Company’s
actual or demonstrably anticipated business, research or development, (3) that do
not result from any Company work assigned to or performed by Employee or any
other employee of the Company, and (4) that do not result from any work performed
by Employee during the hours Employee is scheduled to work for the Company or
during the hours Employee is working for the Company.







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          (i) Without limiting the foregoing, any such Inventions will
be deemed to be “works made for hire” and the Company will be deemed to be the
owner thereof, provided that in the event and to the extent such works are
determined not to constitute “works made for hire” as a matter of law, Employee
hereby irrevocably assigns and transfers to the Company all right, title and interest
in and to any such Inventions, including but not limited to all related patents,
copyrights and mask works and all applications therefor and filings and notification
with respect thereto.




          (ii) 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 Inventions made by Employee during the Employment
Period or thereafter (including but not limited to information relating
to all Inventions which belong exclusively to the Company pursuant to the
provisions of this Section 8(c)), 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 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
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(c), Employee
will promptly give notice and fully disclose
in writing such Invention to the Chairman of the Board and the Board of Directors of the
Company.




          (iii) 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 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(c) 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 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 Invention, whether
due to mental or physical incapacity or any other cause, Employee 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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          (d) All memoranda, notes, lists, records and other documents (and
all copies thereof) constituting Confidential Information (including information
relating to all Inventions which belong exclusively to the Company pursuant to the provisions
of Section 8(c) above) made or compiled by Employee or made available
to Employee during or after the Employment Period shall be the Company’s
property, shall be kept confidential in accordance with the provisions of this
Section 8 and shall be delivered to the Company at any time upon request and upon
the termination of Employee’s employment.




          (e) 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 shall not disclose such information to Company or to any Company personnel
nor shall 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 Employee disclose or use Third Party Information with in
connection with employment hereunder; and, if Employee encounters such request
or requirement, Employee will not make such disclosure or use but shall instead
promptly report such request or requirement to the Company’s acting compliance
officer.




          (f) 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 her duties for the
Company.




     9. Covenant Against Competition.



     Employee covenants and agrees that:



          (a) During the Non-Compete Period (as hereinafter defined), Employee shall not, in any
Geographic Area (as hereinafter defined): (i) engage in
any business competitive with the Company Business (as hereinafter defined); (ii)
render any services in any capacity to any person or entity engaged in any business
competitive with the Company Business; or (iii) acquire an interest in any person or entity engaged
in any business competitive with the Company Business as a
partner, shareholder, director, officer, Employee, principal, manager, member,
agent, trustee, consultant or in any other relationship or capacity, provided,
however, Employee may own, directly or indirectly, solely as a passive investment,





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securities of any such entity which are traded on any national securities exchange if Employee
(A) is not a controlling person of, or a member of a group which controls,
such entity, and (B) does not, directly or indirectly, own 1% or more of any class of
securities of such entity.




          (b) During the Non-Compete Period, 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 any Geographic Area, directly or
indirectly (i) solicit or encourage any customer or client
of the Company to engage the services competitive with the Company Business of Employee or any
person or entity (other than the Company) in which Employee is a partner, shareholder, director,
officer, employee, principal, member, manager,
agent, trustee, consultant or engaged in any other relationship or capacity, or (ii)
accept orders or business that is competitive with the Company Business from, or
agree to provide services competitive with the Company Business to, any customer
or client of the Company, on behalf of Employee or any person or entity (other than
the Company) in which Employee is a partner, shareholder, director, officer,
employee, principal, member, manager, agent, trustee, consultant or engaged in
any other relationship or capacity.




          (d) If any provision of Sections 8 or 9 is held to be unenforceable, it
is the intention of the parties that the court making such determination shall
modify such provision, so that the provision shall be enforceable to the greatest
extent permitted under the law, and that such provision shall then be applicable in
such modified form.




          (e) As used herein:




               (i) “Affiliate” shall mean any entity directly or indirectly controlling, controlled by, or
under common control with the Company and any
entity in which the Company is a general partner, member, manager or holder of
greater than a 10% common equity, partnership or membership interest.



               (ii) “Company Business” shall mean the business of the Company at the time a violation of this
Section 9 is alleged to occur or, if such
alleged occurrence is after Employee’s employment is terminated, the business of
the Company at the time such employment terminates.



               (iii) “Geographic Area” shall mean the United States and Canada.



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               (iv) “Non-Compete Period” shall mean the period during
which Employee is employed by the Company and an additional period of one year
following the termination of Employee’s employment with the Company for any
reason.



     10. Enforcement by Injunction.



     Employee acknowledges and agrees that the Company will be irreparably damaged if Employee
fails to comply with the provisions of Sections 8 or 9. Accordingly, the Company shall be entitled
to (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 threatened
breach of Employee’s covenants under Sections 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 under Sections 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. Such remedies shall not be exclusive and shall 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 8 or 9 by Employee.



     11. Notices.



     Any and all notices or other communications required or permitted to be
given under any of the provisions of this Agreement shall be in writing and shall be deemed to
have been duly given when personally delivered or mailed by first class registered mail, return
receipt requested, or by commercial courier or delivery
service, by facsimile or by receipted e-mail, 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.



     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, shall 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, provided, however, that any
claims arising out of Sections 8, 9 and/or 10 of this Agreement may be resolved
either through arbitration or through the court system. Judgment may be entered



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on the arbitrator’s award in any court having jurisdiction, and the parties consent
to the jurisdiction of the Massachusetts courts for that purpose.




     13. Miscellaneous.



          (a) 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 shall be in writing and signed on behalf of Company stating the adjusted
level and which assent of Employee will be established by acceptance by Employee of compensation at
such adjusted level.



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



          (c) If any provisions of this Agreement shall be held unenforceable, such unenforceability
shall attach only to such provisions and shall not render unenforceable any other severable
provisions of this Agreement, and this
Agreement shall 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.



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



          (e) This Agreement shall be deemed to be a contract under the laws
of the Commonwealth of Massachusetts and for all purposes shall be construed and enforced in
accordance with the internal laws of said Commonwealth.



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



	 	 	 	 

	Derek Hedges

	 	athenahealth, Inc.
	 
	 	 
	/s/ Derek Hedges
	 	 
	 
	 	 
	Employee signature
	 	 
	 
	 	 
	Address:

	 	By:
	 	 	 


	11214 Highcrest Drive

	 	Name:
Jonathan Bush

	 

	 	 
	Huntersville, NC 28078

	 	Title:
CEO

	 

	 	 
	 

	 	Address:
One Moody Street,

	 
	 	 
	 

	 	               Waltham,
MA 02453








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