Document:

exv10w3

Exhibit 10.3

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.

AMENDMENT NO. 1 TO

PROFESSIONAL SERVICES AGREEMENT

This Amendment (this “Amendment”) is effective as of January 1, 2011 (the “Amendment
Effective Date”), and is entered into by and between International Business Machines
Corporation, a New York corporation with a primary business address of Armonk, New York
10504 USA (“IBM”), and athenahealth, Inc., a Delaware corporation with a primary business
address of 311 Arsenal Street, Watertown, Massachusetts 02472 USA (“Athena”), for which
IBM provides services under the Professional Services Agreement effective October 2, 2009, between such parties (the “PSA”).

WHEREAS, Athena and IBM are parties to the PSA;

WHEREAS, Athena and IBM now wish to amend the PSA as set forth herein;

NOW THEREFORE, the parties hereto agree as follows:

	1.	 	Any capitalized terms used and not defined in this Amendment shall have the same meaning as
defined in the PSA.
	 
	2.	 	The first sentence of Section 4(a) of the PSA is hereby deleted and replaced in its entirety
with the following:
	 
	 	 	The initial term of this PSA (the “Initial Term”) shall commence as of the Effective Date and will continue until
December 31, 2015, unless earlier terminated in accordance with the provisions of this PSA, with
two-year automatic renewals to follow the Initial Term (collectively, the “Term”).
	 
	3.	 	The fourth paragraph of Section 2 of Schedule C to the PSA is hereby deleted and replaced
in its entirety with the following:
	 
	 	 	While Athena will strive to provide the volumes necessary to support the annual Baseline
Charges as reflected by the Baseline Charges amount in Exhibit C-2 (Annual Charges), Athena will
commit to the annual Minimum Charges as reflected by Minimum Charges amount set forth in Exhibit
C-2 (Annual Charges). If Athena fails to provide the volumes necessary to support such Minimum
Charges, IBM will invoice for, and Athena will pay, an amount equal to the difference between
the actual charges for a year and the Minimum Charges for such year. In recognition of this
commitment from Athena, IBM will offer, for volumes delivered out of India, the tiered
application of the Foreign Exchange (FX) and Economic Cost Adjustment (ECA) provisions set forth
in Sections 7 and 8 of this Schedule C, respectively.
	 
	4.	 	Sections 7 and 8 of Schedule C to the PSA are hereby deleted and replaced it their
entirety with the following:
	 
		 	7.  Foreign Exchange
	 
	 	 	Subject to Section 6(b) of the PSA and as more fully described below, IBM will annually
calculate and apply an adjustment to the billing rates in Exhibit C-1 (Baselines) based upon
movements in the underlying currency rates, starting on January 1, 2011. IBM has established the
billing rates as of the Effective Date based on the foreign exchange rates identified in the
table below as Current Foreign Exchange Rate (CFER).

Athena / IBM Confidential

 Page 1 of 5 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.

	 	 	 	 	 
	 	 	 	 	CFER
	Service Location	 	Currency	 	1 $U.S. equivalent to:
	India
	 	India (Rupee)
	 	47.72 INR
	 	 	 	 	 
	Philippines
	 	Philippines (Peso)
	 	47.55 Pesos

The actual foreign exchange rate (AFER) for the currency in question, as published in the
New York Times as of October 15th of the previous calendar year, will be used to calculate the
rate adjustment. A foreign exchange rate change percentage for each currency will be calculated
as follows: ((CFER — AFER) / CFER).*

For example, if the AFER for India published in the New York Times as of October 15, 2010,
equals 50.60 INR to 1 USD, the rate adjustment for 2011 would be calculated as follows: *

8. Economic Cost Adjustment (ECA)

For purposes of pricing under this Schedule C and to reflect changes in the cost of
living, the economic indices set forth below will be used for calculating annual economic cost
adjustment for each of the Services, based on its location of delivery, beginning January 1,
2011.

	 	 	 
	Service Location	 	Source
	India

	 	Consumer Price Index for All-India Urban Non-Manual Employees (UNME) as published by
the Government of India, Ministry of Statistics and Programme Implementation
(http://mospi.nic.in/mospi_cpi.htm) (India Price Index)
	 
	 	 
	Philippines

	 	Monthly Consumer Price Index for All Income Households in the National Capitol Region
(NCR) by Commodity Group, All Items, as published by Philippines National Statistics Office
	 

	 	http://www.census.gov.ph/data/sectordata/datacpi.html (Philippines National Capital Region
Price Index)
	 
	 	 
	United States

	 	“Employment Cost Index for total compensation, for
private industry workers” for the “Service Occupations” occupational group (not seasonally
adjusted) published by the United States Bureau of Labor Statistics found
at the following web site http://www.bls.gov/news.release/eci.t05.htm

If one of the above sources stops publishing the referenced index or substantially changes its
content and format, the Parties may substitute another comparable index published by a mutually
agreeable source.

Beginning in 2011, IBM will apply the ECA to monthly invoices beginning in
January of each calendar year. No later than October 31 of each year, IBM will calculate and
communicate to Athena the ECA that IBM will apply to invoices during the following calendar
year. IBM will calculate the ECA based on the percent
increase in the applicable index between the previous two Septembers or over the closest rolling
twelve-month period available at the time of calculation, rounded to the nearest one hundredth
of one percent (the “ECA Factor”). *

The ECA in each calendar year shall be determined as follows:

Adjusted Rate = Prior Rate x (1 + ECA Factor), where “Adjusted Rate” means the particular rate for a Service
for the calendar year for which the cost of living adjustment is being computed, and “Prior Rate” means the
applicable “2009/2010 Rate” for that Service set forth in Exhibit C-1, as such Rate has been adjusted for ECA and foreign exchange adjustment (if any).  *

Athena / IBM Confidential

 Page 2 of 5 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.

For example for services performed out of India, if the applicable US Index for September 2009
is 180, the applicable US index for September 2010 is 182.6, and the applicable US index for
September 2011 is 185, the ECA Factor for 2011 would be *

Each month, IBM will invoice Athena
using the greater than or equal to ninety-five percent (>=95%) volume tier for Indian
Services as set forth in Table 2 below. The actual total invoiced amount for a quarter
(including Manila volumes, billed at the full ECA and FX rate) will be compared against the
Quarterly Baseline Spend for such quarter as set forth in Table 1 below.

TABLE 1

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Q1 Baseline	 	Q2 Baseline	 	Q3 Baseline	 	Q4 Baseline	 	 
	Year	 	Spend	 	Spend	 	Spend	 	Spend	 	Total
	2011
	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 
	2012
	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 
	2013
	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 
	2014
	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 
	2015
	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 

This comparison will be expressed as a percentage and will determine, according to Table 2 below, the revised
pricing IBM will use to calculate and include in the third monthly invoice of each quarter any charges Athena
may have incurred for delivering less than 95% of the relevant quarter’s baseline spend.  IBM will apply these
additional quarterly charges to volumes of work delivered in the given quarter out of India only, as IBM will
always bill Athena 100% FX and ECA at all volume tiers for work conducted out of the Philippines.

TABLE 2

	 	 	 
	Volume Tier	 	Band
	*
	 	*
	*
	 	*
	*
	 	*
	*
	 	*
	*
	 	*
	*
	 	*

*

	5.	 	Exhibit C-2 to Schedule C to the PSA is hereby deleted and replaced in its entirety with
the following table:

Athena / IBM Confidential

 Page 3 of 5 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Exhibit C-2: Annual Charges.	 		 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2009	 	2010	 	2011	 	2012	 	2013	 	2014	 	2015
	Baseline Charges
	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 
	Minimum Charges
	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 

	6.	 	The first paragraph of Section 9 of Schedule C to the PSA is hereby deleted and replaced
in its entirety with the following:
	 
	 	 	In the event of termination for convenience by Athena in accordance with Section 4(b) of
the PSA, IBM will invoice Athena the applicable termination charges for convenience on the
effective date of the termination as set forth in Exhibit C-3 (Termination Charges for
Convenience).
	 
	7.	 	Exhibit C-3 to Schedule C to the PSA is hereby deleted and replaced in its entirety with
the following table:

	 	 	Exhibit C3 — Termination Charges for Convenience

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Termination Charges	 	 	 	 	 	Termination Charges	 	 	 	 	 	Termination Charges
	Month	 	for Convenience	 	Month	 	for Convenience	 	Month	 	for Convenience
	*
	 	 	 	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	*	 	 	$	—	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	 	 	 	 	 	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	 	 	 	 	 	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	 	 	 	 	 	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	 	 	 	 	 	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	 	 	 	 	 	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	 	 	 	 	 	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	 	 	 	 	 	 
	*
	 	$	*	 	 	 	*	 	 	$	*	 	 	 	 	 	 	 	 	 

	8.	 	Except as set forth above, the PSA shall remain unchanged and in full force and effect.

Athena / IBM Confidential

 Page 4 of 5 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.

The PSA, as modified by this Amendment, including its attachments and exhibits (if any), is
the entire agreement and expresses the complete understanding of the Parties with regard to the
subject matter herein and may not be modified, amended, or waived except as provided in the PSA.

In witness whereof, the Parties have executed this Amendment as of the Amendment Effective Date.

International Business Machines Corporation athenahealth, Inc.

	 	 	 	 	 	 	 	 	 

	By:

	 	/s/ Atul Mori
 

Name: Atul Mori
	 	By:
	 	Timothy M. Adams
 

Name: Timothy M. Adams
	 	 
	 

	 	Title: Delivery Exec
	 	 	 	Title: SVP and CFO	 	 
	 
	 	 	 	 	 	 	 	 
	Date: 3/11/11	 	Date: 3/11/11	 	 

Athena / IBM Confidential

 Page 5 of 5exv10wa

Exhibit 10(a)

Exhibit A

Severance Matrix Effective April 1, 2011

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Years of Service	 	Less than 2 years	 	>2, less than 5	 	>5, less than 10	 	> 10
	Role Level	 	Severance Weeks	 	Severance Weeks	 	Severance Weeks	 	Severance Weeks
	Executive Cabinet/Executive Officers / EVP
	 	 	16	 	 	 	24	 	 	 	36	 	 	 	52	 
	Senior Vice President
	 	 	13	 	 	 	20	 	 	 	30	 	 	 	42	 
	Vice President
	 	 	10	 	 	 	16	 	 	 	24	 	 	 	32	 
	Senior Director
	 	 	8	 	 	 	14	 	 	 	21	 	 	 	28	 
	Director
	 	 	6	 	 	 	12	 	 	 	18	 	 	 	24	 
	Levels 2 and 3
	 	 	4	 	 	 	8	 	 	 	12	 	 	 	16	 
	Levels 4 and 5
	 	 	3	 	 	 	6	 	 	 	9	 	 	 	12	 
	Levels 6, 7 and 8
	 	 	2	 	 	 	4	 	 	 	6	 	 	 	8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]