Exhibit 10.1
    

    

    

    
      The
      athenahealth Executive Incentive Plan

    

    
    	
          
            I.
          

        	
           
        	
          
            Purpose – The purpose of the Executive Incentive Plan (the “Plan”)
            of athenahealth, Inc. (the “Company”) is to:
          

        
	

        	

        	
          
            a.
          

        	
          
            attract, retain, and motivate the highest quality executives;
          

        
	

        	

        	
          
            b.
          

        	
          
            provide participants with a significant incentive that focuses
            their work efforts on the Company’s business strategy to maximize
            revenue, manage expenses, and enable the Company to produce
            long-term growth, thereby increasing its value to the Company’s
            shareholders; and
          

        
	

        	

        	
          
            c.
          

        	
          
            foster a cooperative teaching and learning environment that
            focuses on delivering shareholder value, providing the highest
            level of service to our clients, and respecting each other.
          

        
	
          
            II.
          

        	

        	
          
            Overview – The Plan has two parts, one for the Chief Executive
            Officer (the “CEO”) and another plan for the heads of the
            Corporate/Divisional areas. These plans are designed to reward the
            Company’s executives who satisfy the eligibility requirements of
            Section IV (each, a “Participant”) specifically for annual
            performance that furthers the Company’s business strategy.
            Individual award amounts are determined by the results of the
            overall Company results.  Awards are paid annually for the CEO
            Incentive and quarterly for the Corporate/Divisional Incentive.
          

        
	
          
            III.
          

        	

        	
          
            Plan Period – The Plan will be effective from the effective date
            set forth on the last page of this Plan through December 31st of
            the year in which that effective date occurs (the “Plan Period”).
          

        
	

        	

        	
          
            a.
          

        	
          
            For the CEO Incentive Plan payments of awards will be made
            annually and it is the intent of the Plan that the payment shall
            be paid within 73 days of the close of the Plan Period.
          

        
	

        	

        	
          
            b.
          

        	
          
            For the Corporate/Divisional Incentive Plan payments of awards
            will be made quarterly and it is the intent of the Plan that
            payments for quarters 1, 2 and 3 be paid within 30 days of the
            close of that quarter.  In the case of the 4th Quarter award, it
            is the intent of the Plan that payments shall be paid within 73
            days of the close of the Plan Period.
          

        
	
          
            IV.
          

        	

        	
          
            Plan Eligibility – In order to be considered eligible for an award
            under the Plan, a Participant must:
          

        
	

        	

        	
          
            a.
          

        	
          
            on both September 30th during the Plan Period and the date on
            which the award is to be paid out (the “Award Date”), be an active
            regular full-time or regular part-time employee of the Company or
            one of its subsidiaries in one of the Cohorts listed in the
            Appendix to this Plan;
          

        
	

        	

        	
          
            b.
          

        	
          
            for the CEO Incentive Plan, be the Company’s named Chief Executive
            Officer;
          

        
	

        	

        	
          
            c.
          

        	
          
            for the Corporate/Divisional Incentive Plan, be a Senior Vice
            President or Executive Vice President in charge of a division of
            the Company or with Company-wide responsibilities;
          

        
	

        	

        	
          
            d.
          

        	
          
            not be a participant in another stand-alone incentive plan of the
            Company or any of its subsidiaries; and
          

        
	

        	

        	
          
            e.
          

        	
          
            not be on written or oral performance warning on the Award Date.
          

        


    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
    	
          
            V.
          

        	
           
        	
          
            Change of Control – Participants who are terminated as the result
            of a change in control of the Company, as determined in the sole
            and absolute discretion of the Company’s Board of Directors and
            Chief Executive Officer (the “CEO”), will be eligible for payment
            of awards pro-rated for that portion of the Plan Period during
            which he or she participated in the Plan prior to his or her
            termination.
          

        
	
          
            VI.
          

        	

        	
          
            Death – If a Participant’s employment is terminated by reason of
            death, that Participant shall cease to be a Participant in the
            Plan as of the date of death but will remain eligible for payment
            of an award pro-rated for that portion of the Plan Period during
            which he or she participated in the Plan prior to his or her
            death.  The award will be paid to the Participant’s estate or
            other legally designated beneficiary.
          

        
	
          
            VII.
          

        	

        	
          
            Disability/Retirement – If a Participant’s employment is
            terminated by reason of disability or retirement, he or she shall
            cease to be a Participant in the Plan on the effective date of
            such disability or retirement but will remain eligible for payment
            of an award pro-rated for that portion of the Plan Period during
            which he or she participated in the Plan prior to his or her
            disability or retirement.
          

        
	
          
            VIII.
          

        	

        	
          
            New Hires/Transfers In – An employee becomes a Participant upon
            being hired or transferred into a Plan-eligible position on or
            before September 30th during the Plan Period and qualifies for
            payment of an award as outlined in Section XIII, Individual Awards.
          

        
	
          
            IX.
          

        	

        	
          
            Promotions/Other Changes in Positions (to Eligible Positions) – An
            employee whose position changes (lateral transfer, promotion,
            etc.) within the Company to a position eligible for participation
            in the Plan during the Plan Period shall, if already a
            Participant, remain a Participant in the Plan and, if not already
            a Participant, become a Participant on the effective date of such
            promotion/change in position.  The employee shall be eligible for
            payment of an award using the target levels for his or her new
            position, pro-rated for that portion of the Plan Period during
            which he or she participates in the Plan in that new position.  If
            the employee was already a Participant, he or she will remain
            eligible for payment of an award using the target levels in effect
            prior to the change in position, pro-rated for that portion of the
            Plan Period during which he or she participated in the Plan in the
            prior position.
          

        
	
          
            X.
          

        	

        	
          
            Promotions/Other Changes in Positions (to Ineligible Positions) –
            A Participant whose position changes (lateral transfer, demotion,
            etc.) within the Company to a position ineligible for
            participation in the Plan during the Plan Period shall cease to be
            a Participant in the Plan on the effective date of such
            demotion/change in position, but will remain eligible for payment
            of an award pro-rated for that portion of the Plan Period during
            which he or she participated in the Plan prior to his or her
            demotion/change in position.
          

        
	
          
            XI.
          

        	

        	
          
            Termination – If a Participant’s employment with the Company is
            terminated prior to the Award Date other than due to death,
            disability, or retirement, he or she shall forfeit any unpaid
            awards.  This rule applies regardless of whether it was the
            Participant or the Company that terminated the employment and
            whether the termination was with or without cause.
          

        


    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
    	
          
            XII.
          

        	
           
        	
          
            Funding
          

        
	

        	

        	
          
            a.
          

        	
          
            Overall Plan Funding – The Plan begins to fund as the Company
            starts to attain its threshold Corporate scorecard targets.  The
            Plan funds fully upon achievement of the Company’s corporate
            scorecard targets.  The funding of the Plan may be increased or
            decreased based on Company performance, as determined by the
            Compensation Committee of the Company, the Board of Directors, and
            the CEO in their absolute discretion.
          

        
	

        	

        	
          
            b.
          

        	
          
            CEO Award Pool Funding – The Board of Directors in their absolute
            discretion will determine the criteria for the allocation of the
            Overall Plan Funding.  Performance is based on the level of Net
            Income.  Finance determines the level of awards based upon Net
            Income achievement and will make award recommendations to the
            Board of Directors, accordingly.
          

        
	

        	

        	
          
            c.
          

        	
          
            Payment – It is the Company’s intent to pay the Award Pool out
            fully, without reduction due to changes in the number of
            Participants between December 31 and the Award Date.
          

        
	
          
            XIII.
          

        	

        	
          
            Individual Awards –
          

        
	

        	

        	
          
            a.
          

        	
          
            CEO Award
          

        
	

        	

        	

        	
          
            i.
          

        	
          
            The Board of Directors in their absolute discretion will determine
            the general criteria that apply to the allocation of the CEO Award.
          

        
	

        	

        	

        	
          
            ii.
          

        	
          
            Participants are subject to maxima for awards as determined by the
            size of the Award Pool and/or guidelines allocated to the CEO.
          

        
	

        	

        	

        	

        	
          
            1.
          

        	
          
            The Participant will have performance targets set in relation to
            the division in which he or she works.
          

        
	

        	

        	

        	

        	
          
            2.
          

        	
          
            The Participant’s awards will be based on that Participant’s
            contribution to Corporate objectives as well as individual
            business goals.
          

        
	

        	

        	

        	

        	
          
            3.
          

        	
          
            Total cash compensation (base salary plus incentive award) is
            considered and may affect the final award.
          

        
	

        	

        	

        	
          
            iii.
          

        	
          
            Actual awards will depend on the Company’s Net Income and the
            performance of the Participant.
          

        
	

        	

        	

        	
          
            iv.
          

        	
          
            Final awards are subject to the approval of the Board of Directors.
          

        
	

        	

        	

        	
          
            v.
          

        	
          
            Awards are paid in cash unless otherwise designated by the Board
            of Directors.
          

        
	

        	

        	
          
            b.
          

        	
          
            Corporate Awards
          

        
	

        	

        	

        	
          
            i.
          

        	
          
            The CEO in his or her absolute discretion will determine the
            general criteria that apply to the allocation of individual awards.
          

        
	

        	

        	

        	
          
            ii.
          

        	
          
            Participants are subject to maxima for awards as determined by the
            size of the Award Pool and/or guidelines allocated by the CEO.
          

        
	

        	

        	

        	

        	
          
            1.
          

        	
          
            Each Participant will have individual performance targets set in
            relation to the division in which he or she works.
          

        


    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
    	

        	
           
        	

        	

        	
          
            2.
          

        	
          
            Each Participant’s awards will be based on that Participant’s
            contribution to Company as well as individual business goals.
          

        
	

        	

        	

        	

        	
          
            3.
          

        	
          
            Total cash compensation (base salary plus incentive award) is
            considered and may affect the final awards.
          

        
	

        	

        	

        	
          
            iii.
          

        	
          
            Actual awards will depend on the Company’s overall performance and
            the performance of the individual Participants.
          

        
	

        	

        	

        	
          
            iv.
          

        	
          
            Final awards are subject to the approval of the CEO.
          

        
	

        	

        	

        	
          
            v.
          

        	
          
            Awards are paid in cash unless otherwise designated by the CEO.
          

        
	
          
            XIV.
          

        	

        	
          
            Legal Statement
          

        
	

        	

        	
          
            a.
          

        	
          
            Employment and Governing Law – The Plan is subject to the laws of
            the Commonwealth of Massachusetts and does not imply any form of
            continued employment.
          

        
	

        	

        	
          
            b.
          

        	
          
            Amending the Plan – This Plan may be subject to change in part or
            in whole without notice at the discretion of the Company’s Board
            of Directors and the CEO (the “Plan Administrators”).  The Plan
            Administrators also reserve the right to terminate the Plan at any
            time without notice.
          

        
	

        	

        	
          
            c.
          

        	
          
            Tax Withholding – No part of any award shall be required to be
            delivered until the applicable Participant (or, if that
            Participant is deceased, his or her estate or legally appointed
            beneficiary) has had the full amount of required tax withholding
            due in connection with such award delivery withheld or has made
            other provisions satisfactory to the Company for the required tax
            withholding due in connection with such award delivery.
          

        
	

        	

        	
          
            d.
          

        	
          
            Benefits – The award amounts may not be counted as part of any
            pension, retirement, or benefits plan unless specifically stated
            within the plan document of that particular pension, retirement,
            or benefits plan.
          

        


    

    

    

    
      This Plan Document is effective 1/1/2011 and supersedes any prior annual
      incentive plan document
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      Appendix

2011
      SVP Corporate Incentive Plan Targets and Weightings


    

    
    	
           
        	
           
        	
           
        	
           
        	
           
        
	
          Executive
        	
          
            Low
(“Below”
Rating)
          

        	
          
            Target
(“Meets”
Rating)
          

        	
          
            High
(“Exceeds”
Rating)
          

        	
          
            Corporate
 Weighting
          

        
	
          
            Divisional
Executives
          

        	
          40%
        	
          60%
        	
          70%
        	
          100%
        
	
          
            Chief
Operating
Officer
          

        	
          50%
        	
          70%
        	
          80%
        	
          100%
        


    

    

    

    
      Notes:
    

    	
        The above table describes the levels and weightings by the
        Participant’s position.
      
	
        Actual awards are a factor of Company funding based on the performance
        of Company results against plan (the scorecard); and
      
	
        The Low, Target and High award percentages listed above are applicable
        to each Participant and are based upon their performance appraisal
        rating as determined by the CEO from the prior Plan Year.
      
	
        For every percentage point over (or under) the weighted Company
        target, the Participant’s Incentive target will increase (or in the
        case of being under target, decrease) by 2 percentage points for a
        maximum potential award of 100% of the eligible earned base salary.