Document:

exv10w41

 

Exhibit 10.41

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”), is made and entered into as of September 16, 2002, by
and between ATHENAHEALTH, INC. (the “Company”), and Robert M. Hueber (“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. Employee’s employment with the Company will commence on
October 7, 2002 (the “Start Date”). 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 consistent with Section 3, below.
“Employment Period” means the period commencing on the Start Date and ending on the effective date
of any termination of Employee’s employment with the Company.

     2. Duties.

     During the Employment Period, Employee shall serve as Vice President Sales or in such other
positions and with such other duties and responsibilities as Company shall from time to time assign
to Employee provided that these shall be at the senior management level within the Company.
Employee shall perform faithfully for the Company the duties of Employee’s position and in
accordance with the 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;
provided that nothing in this Agreement shall be construed as preventing the Employee from: (a)
investing the Employee’s assets in any company or other entity in a manner not prohibited by
Section 8 or 9 and in such form or manner as shall not require any material activities on the
Employee’s part in connection with the operations or affairs of the companies or other entities in
which such investments are made; or (b) engaging in religious, charitable or other community or
non-profit activities that do not impair the Employee’s ability to fulfill his duties and
responsibilities under this Agreement. 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
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it is essential that Employee conduct the duties of this position with constant and watchful
attention.

     3. Compensation.

Employee’s initial base salary will be at an annual gross rate of $188,802.80 (the “Base Salary”)
which shall, in the sole discretion of the Company, be subject to increase during the Employment
Period. The Base Salary and the cash commissions and cash bonuses which Employee may be entitled
to receive under this Agreement and Exhibit A attached hereto may not be reduced (i) unless cash
compensation for substantially all other senior management personnel at the same level and higher
of management seniority within the Company is reduced, as nearly as may be determined, to the same
degree, or (ii) except that Employee’s incentive compensation (and not the Base Salary) may be
reduced as a result of the negotiation contemplated by the following sentence. If, during the
Employment Period, Employee is proposed to be moved to a position other than a senior sales
position in which he is substantially responsible for sales on a Company-wide basis such that
Employee would no longer be entitled to the commissions and/or bonuses payable under this Agreement
and Exhibit A attached hereto, then the Company and Employee will negotiate in good faith a new
incentive compensation package (which may be an increase or decrease from Employee’s then-current
incentive compensation package) for Employee (which will be in addition to the Base Salary) in such
new position in place of such commissions and bonuses. Unless otherwise explicitly stated herein
the Base Salary and all other amounts payable to Employee pursuant to this Agreement shall be
payable in accordance with the Company’s payroll practices, as in effect from time to time, shall
be subject to required federal, state and local taxes and withholdings, and the amount actually
paid to Employee will be the amount payable reduced by any deductions and withholdings as required
by law or as appropriate under the applicable Company employees’ benefits plans. Each year, before
the beginning of the fiscal year, the Company will, after consultation with Employee in his
position of Vice President Sales, set a quota for sales for the entire Company, for such fiscal
year. During each fiscal year, the Company will pay Employee a commission of .5% on all Company
sales made while Employee is acting as Vice President Sales (or another senior sales position in
which he is substantially responsible for sales on a Company-wide basis) up to the amount of the
quota for such fiscal year and a commission of 1% on all Company sales made while Employee is
acting as Vice President Sales (or another senior sales position in which he is substantially
responsible for sales on a Company-wide basis) in excess of the quota for such fiscal year. This
quota for the fiscal year beginning January 1, 2003 will be determined by the Company in good faith
in consultation with Employee in his position as Vice President Sales. For the fiscal year ending
December 31, 2002, the Company will pay Employee a commission of .5% on all Company sales made

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while Employee is acting as Vice President Sales (or another senior sales
position in which he is substantially responsible for sales on a Company-wide basis), commencing
with sales made on the Start Date. The Company will pay Employee a nonrecoverable advance on
commissions at the annual rate of $50,000, payable in equal installments through out the year with
each payment of Base Salary. The calculation of sales and the payment of commissions shall be made
in accordance with the Company’s sales and commissions plan then in effect. The Company calculates
sales for purposes of calculation of its sales and commissions plan on a different basis from the
classification of sales on its books of accounting. The Company will also pay Employee cash
bonuses in accordance with Exhibit A attached hereto to the extent that the conditions for such
bonuses are fulfilled.

     4. Stock Option Grant.

Upon the Start Date, the Company shall grant Employee options to purchase 300,000 shares of the
Company’s Common Stock (at the current strike price of $0.62 per share, which is equal to the fair
market value of the shares at the time of grant as determined by the Company’s Board of Directors)
vesting at the rate of 25% of the grant one year from the grant date and an additional
1/36th of the remainder (rounded down to the nearest share) vesting at the end of each
following month until all shares are vested, in accordance with the Company’s current four-year
vesting schedule for new senior-level hires.

This grant will be subject to the terms and conditions in the Company’s stock option plan and in
the Company’s current stock option agreement for vesting of non-qualified options. Employee hereby
represents and warrants to Company on a continuing basis that Employee does not believe or expect
that any unvested portion of any option granted is compensation for past employment or for any work
done prior to the relevant vesting date. Employee acknowledges and agrees that under no
circumstances will Employee’s right to any unvested options become vested unless and until any and
all conditions stated for vesting in the relevant stock option agreement have been fulfilled. The
Company will also grant to Employee options to purchase shares of the Company’s common stock in
accordance with Exhibit A attached hereto to the extent that the conditions for such options grants
are fulfilled.

     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 20 business days of vacation annually, which vacation shall
accrue at a rate of 13.36 business hours per

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month; provided that the maximum vacation accrual
Employee may have at any time shall be 30 days. The vacation year begins on Employee’s anniversary date. Of the
vacation days not taken at the end of the calendar 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 and any other employee benefits plans that may be
instituted by the Company for the benefit of its senior-level management employees generally, upon
such terms contained therein.

     6. Termination

Employee’s employment under this Agreement shall terminate under the following circumstances set
forth in this Section 6.

     (a) Termination by the Company for Cause. Employee’s employment under this Agreement may be
terminated for Cause without further liability on the part of the Company, except as provided in
Section 7(b)(i).

Only the following shall constitute “Cause” for such termination:

(i) willful and material dishonest statements or reports of the Employee to the Company or any
affiliate of the Company or willful and material dishonest acts of the Employee with respect to the
Company or any affiliate of the Company; (ii) the commission by or indictment of the Employee for
(A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud
(“indictment,” for these purposes, meaning an indictment, probable cause hearing or any other
procedure pursuant to which an initial determination of probable or reasonable cause with respect
to such offense is made); (iii) failure to perform to the reasonable satisfaction of the Company’s
Board of Directors (the “Board”) a substantial portion of the Employee’s duties and
responsibilities assigned or delegated under this Agreement or material breach by the Employee of
any of the Employee’s obligations under this Agreement, ; (iv) disloyalty, willful misconduct,
willful insubordination, fraud or breach of fiduciary duty to the Company (v) willful violation of
the rules or policies of the Company or willful breach of Employee’s obligations or representations
under this Agreement; (vi) the unauthorized disclosure of any Company trade secret or other
confidential information of the Company; or (vii) death or mental or physical disability or
infirmity (provided that any insurance or other similar benefits due to Employee as a result of
death or any such disability or infirmity will not be affected by virtue of such events being
deemed to constitute “Cause”);. Cause shall be deemed to exist under clauses (iii), (v) and (vi)
of this

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paragraph only if the events or behavior alleged to constitute “Cause” continue, in the
reasonable judgment of the President or Chief Executive Officer of the
Company, for a period of not less than 30 days after the Company has given written notice to the
Employee of such events or behavior, or Employee has not, within such 30-day period, substantially
cured the effects of such events or behavior, provided that if material and irreparable injury is
likely to result to the Company by reason of the passage of all or any portion of such 30- day
period, then the period shall be deemed waived. The Company will cooperate in good faith with the
Employee’s efforts to correct any Cause event or behavior during the 30-day period following
the written notice. If Employee cures the Cause event or behavior during the 30-day period, Cause
shall be deemed not to have occurred.

          (b) Termination by the Employee For Good Reason. The Employee’s employment under this
Agreement may be terminated for Good Reason by the Employee by written notice to the Board at least
30 days prior to such termination.

Only the following shall constitute “Good Reason”: (i) any removal of Employee from the position of
Vice President Sales not for Cause as set forth above unless Employee is offered another senior
management position in the Company no less senior than the position from which he is being removed,
(ii) any significant diminution, without Employee’s prior written consent, in the nature or scope
of Employee’s responsibilities, authorities, powers, functions or duties not for Cause as set forth
above unless Employee is offered another senior management position in the Company no less senior
than his position as it existed prior to any such diminution or (iii) a material breach by the
Company of any of the Company’s obligations under the Agreement, provided that in the event of
termination for Good Reason, Employee shall first comply with the “Good Reason Process” and
provided further that if material and irreparable injury is likely to result to the Employee by
reason of the passage of all or any portion of the period necessary for the Good Reason Process
then the requirement of Good Reason Process shall be deemed waived For purposes of this Agreement,
“Good Reason Process” shall mean that (i) the Employee reasonably determines in good faith that a
“Good Reason” event has occurred; (ii) Employee notifies the Company in writing of the occurrence
of the Good Reason event; (iii) Employee cooperates in good faith with the Company’s efforts, for a
period not less than 30 days following such notice, to modify Employee’s employment situation in a
manner so as to cure any Good Reason; and (iv) notwithstanding such efforts, the Good Reason
continues to exist. If the Company cures the Good Reason event during the 30-day period referenced
in this Section 6(b), Good Reason shall be deemed not to have occurred. If during the pendency of
the Good Reason process the Company terminates the Employee’s employment without Cause, the
Employee shall nevertheless be entitled to receive the termination benefits set forth in Section
7(b)(ii) below.

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          (c) Other Termination. Since Employee’s employment is at-will employment, either the Employee
or the Company may terminate Employee’s employment at any time for any reason or for no reason, subject to the payment of severance to
Employee in certain circumstances as provided in Section 7. The Company may terminate Employee’s
employment without Cause and any termination by the Company other than pursuant to Section 6(a)
above shall be considered a Termination without Cause. Any termination of the Employee’s
employment by the Employee other than pursuant to Section 6(b) above shall be considered a
Termination without Good Reason.

          (d) Upon the termination of Employee’s employment for any reason, the parties shall have no
further obligations under this Agreement, except that those obligations of Employee and the Company
under Sections 7, 8, 9 and 10 of this Agreement and Section A.4. of Exhibit A attached hereto, and
the provisions of Sections 6, 10, 11, 12 and 13 shall remain in effect and binding upon the
parties.

     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
the following:

               (i) Payments Upon Any Termination. Upon any termination of the Employee’s employment for any
reason, the Company shall promptly (i) pay to the Employee all accrued Base Salary, sales
commissions, any benefits under any plans of the Company in which the Employee is a participant to
the full extent of the Employee’s rights under such plans, accrued vacation pay and any business
expense incurred by the Employee in connection with his duties and properly reimbursable hereunder
and (ii) grant to Employee any stock options that are required to be granted in accordance with
Exhibit A attached hereto but are not granted at the time of termination, all to the date of
termination.

               (ii) Payments Upon Termination For Good Reason or Termination Without Cause. In the event the
Employee’s employment with the Company is terminated by Employee for Good Reason pursuant to
Section 6(b) above or by the Company without Cause pursuant to Section 6(c) at any time from the
date of this Agreement to the first anniversary of the Start Date, the Company shall, in addition
to any sum payable under Section 7(b)(i) above, promptly (and in no event more than ten business
days following the effective date of termination)

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pay to Employee a lump-sum cash payment in an
amount equal to the sum of (A) Employee’s annual Base Salary then in effect (but in no event less
than $188,802.80), plus (B) a sum of money equal to (i) the aggregate amount of any commissions paid or
payable to Employee under Section 3 with respect to the Employment Period (not including the
advance on commissions set forth in Section 3, but only to the extent that any amount of that
advance does not represent commissions paid or payable under the formula set forth in Section 3 to
the date of termination) divided by the number of days in the Employment Period times (ii) the
number of days between the date of termination and the date that is one year after the Start Date,
plus (C) a sum of money that is equal to (i) the aggregated amounts of cash bonus available under
Section B of Exhibit A for quarters in the first year following the Start Date that are not ended
as of the date of termination times (ii) a fraction the denominator of which is the number of
quarters that have ended between the Start Date and the date of termination and numerator of which
is the number of quarters during the Employment Period in which Employee has qualified for a bonus
under such Section B, exclusive of this Section 7(b)(ii). In the event the Employee’s employment
with the Company is terminated by Employee for Good Reason or by the Company without Cause at any
time after the first anniversary of the Start Date, the Company shall, in addition to any sum
payable under Section 7(b)(i) above, promptly (and in no event more than ten business days after
the effective date of termination) pay to Employee severance in such amount as is at least equal to
the amount of severance paid by the Company to senior management level employees who terminated
employment during the year prior to Employee’s termination not as a result of settlement of legal
claims or in situations where “cause” (as applicable to the particular employee and not as defined
in this Agreement) existed or was alleged to exist, or, if there was no such termination in such
year, then the most recent termination of a senior management level employee in such circumstances.

          (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.

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     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 known 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.

          (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 any Confidential Information becomes, through no fault of
employee, generally known to the public or within the Company’s industry, or 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

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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
or trade secrets, 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 or trades secrets, (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.

               (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

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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.

          (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 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’s duties hereunder expressly exclude use or disclosure of such
information. Company expressly disclaims any request or

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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 the performance of Employee’s duties for Company as they have been described by
Company in negotiation of this Agreement would not naturally, necessarily or inevitably involve or
require use or disclosure by Employee of Third Party Information.

          (g) Employee warrants and represents that Employee has not retained copies or records of any
Third Party Information from any prior employment or consulting engagement.

     9. Covenant Against Competition.

     Employee covenants and agrees that:

          (a) During the Non-Compete Period (as hereinafter defined), Employee shall not, in the
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, 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.

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          (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 engage the services
competitive with the Company Business of Employee or of 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 of 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.

               (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

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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 breach of Employee’s covenants under Section 8, and (iii)
indemnification against any other losses, damages, costs and
expenses, including reasonable and actual attorneys’ fees and court costs, incurred by the Company
in connection with claims of third parties arising out of any breach of Employee’s covenants under
Section 8. 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 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 Agreement (together with any amendments or additions that are executed by the parties
hereto and that explicitly reference this

-13-

 

Agreement and together with Exhibit A attached)
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.

          (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.

	 	 	 	 	 	 	 
	Robert M. Hueber

	 	athenahealth, Inc.	 	 
	 
	 	 	 	 	 	 
	/s/ Robert M. Hueber
 

Employee signature

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Address: 

41 Claypit Road 

Wayland, MA 01778

	 	By:
	 	/s/ Jonathan Bush
 

Name: Jonathan Bush 

Title:   CEO 

Address: One Moody Street, 

          
      Waltham, MA 02453
	 	 

-14-

 

Exhibit A

Bonus

A. Conditions:

1. The Company will pay contingent bonuses to Employee in the form of cash bonuses and additional
grants of options to purchase Company common stock, subject to the following conditions:

a. All options under this Agreement will be granted under the terms of the Stock Option and
Incentive Plan of the Company in effect at the time that the Company makes the grant and
will be subject to the terms of the stock option agreement generally applied by the Company
to non-qualified grant of bonus stock options to senior-level employees in effect at the
time that the Company makes the grant (except to the extent of the vesting schedule
described below).

b. The option exercise price under the grants will be the fair market value of the stock as
determined by the Board of Directors at the time of the grant.

2. For purposes of calculation of bonuses hereunder, sales will be calculated as set forth in
Section 3 of the Agreement.

3. The right to purchase shares under each option, once granted, will vest in monthly amounts
following the vesting start date at a rate of 2.08% per month of the total shares (rounded down to
the nearest whole share) originally subject to the option, until no further unvested shares remain
subject to the option. For purposes of calculating vesting the vesting start date shall be the date
of the issuance of the option.

4. Any unvested shares remaining under an option grant made under this Exhibit A of this Agreement
will vest immediately upon termination of the Employee’s employment by the Company without Cause or
Termination of the Employee’s employment for Good Reason.

5. The Employee will qualify for bonuses under this Agreement only if (i) the Employee is employed
by the Company and has otherwise performed his obligations to date under this Agreement at the date
that the milestone required for the issuance of the option is achieved and (ii) Employee has
served in a senior sales position substantially responsible for Company-wide sales for at least 45
days during the quarter to which the relevant bonus

-15-

 

relates (an “Event”). Both the Company and the Employee agree that the Employee shall have no right or
interest in all or any portion of any bonus before the relevant Event. Notwithstanding any
communication, representation or understanding of the parties to the contrary, any and all bonuses
made under this Agreement are made only as an incentive to the performance of the Employee
following the relevant Event and not as consideration for services preceding such Event.

6. The quarterly quota used to calculated the bonuses below will be a quota for sales Company-wide
and will be set before the beginning of any quarter by the Company after consultation with
Employee. In no event will the sum of the quarterly quota’s in a fiscal year exceed the annual
quota set by the Company as set forth in Section 3 of the Agreement. The calculation of sales and
the payment of commissions shall be made in accordance with the Company’s sales and commissions
plan then in effect.

B. Cash Bonus:

The Company will pay Employee a cash bonus for each quarter within a fiscal year that the Company
sales meet the sales quota. The bonus will be in the following amounts and will be paid within
thirty (30) days after the end of each quarter:

	 	(1)	 	$3,000 for the first time during a fiscal year
that the sales quota is met for any fiscal quarter ;
	 
	 	(2)	 	$5,000 for the second time during a fiscal
year that the sales quota is met for any fiscal quarter;
	 
	 	(3)	 	$9,000 for the third time during a fiscal year
that the sales quota is met for any fiscal quarter; and
	 
	 	(4)	 	$15,000 if the sales quota is met in all four
quarters in a fiscal year.

C. Stock Option Bonus:

The Company will grant to Employee a bonus in the form of non-qualified stock options for each
quarter during fiscal years 2002 and 2003 and for each of the first three quarters of fiscal 2004
that the Company sales exceed the sales quota for such quarter. Each option vesting start dates
will be the last day of the quarter in the which the condition giving rise to the option has
occurred, and the options relating to any quarter will be granted at the meeting

-16-

 

of Company’s Board
of Directors next following the end of the quarter. The options will be in the following amounts
under the following conditions:

	 	(1)	 	5,000 options if 105% or more but less that
110% of the sales quota is attained in any quarter;
	 
	 	(2)	 	10,000 options if 110% or more, but less that
115% of the sales quota is attained in any quarter;
	 
	 	(3)	 	15,000 options if 115% or more, but less that
120% of the sales quota is attained in any quarter;
	 
	 	(4)	 	20,000 options if 120% or more, but less that
125% of the sales quota is attained in any quarter; or
	 
	 	(5)	 	25,000 options if 125% or more of the sales
quota is attained in any quarter.

In addition, for every BDM hired by the Company within twenty four (24) months of the date hereof
that attains twelve months of such BDM’s sales quota within the first fifteen months of their hire
date and during the employment of the Employee hereunder, Employee shall receive 20,000
non-qualified options[covered in A].

-17-exv10w42

 

Exhibit 10.42

EMPLOYMENT AGREEMENT

v7.4

          THIS EMPLOYMENT AGREEMENT (“Agreement’) is made and entered into as of            
                        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. 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 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.

               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 b 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 mid-level 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.

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     (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).

               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.)

     (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

2 of 8

 

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.

(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

3 of 8

 

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.

               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:

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(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 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).

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               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 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

6 of 8

 

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 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/ Robert L. Cosinuke
 

Print name: Robert L. Cosinuke

	 	By:
	 	/s/ Jonathan Bush
 

Print name: Jonathan Bush
	 	 
	Print address: 20 Stone Road 

            
            Belmont, MA 02478

	 	 	 	Title: Chief Executive Officer/President 

311 Arsenal St., Watertown, MA 02472	 	 

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SCHEDULE A TO EMPLOYMENT AGREEMENT

Position: Chief Marketing Officer

Compensation: Employee’s base salary will be at an annual gross rate of $250,000.00 (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 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, and shall be paid as and according to the schedule determined by
the Company.

Stock Options: 150,000 Non-Qualified Stock Options in line with the current vesting schedule and
Board Equity Award Policy (note: this grant must be approved by our Compensation Committee)

SCHEDULE B TO EMPLOYMENT AGREEMENT

     The following is a complete list of all Prior Inventions.

     ______ 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: ____ R.C.________

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