THIS EMPLOYMENT
AGREEMENT (“Agreement”) is made and entered into as of
August 2, 2004, by and between ATHENAHEALTH, INC. (the
“Company”), and Nancy G. Brown
(“Employee”).
The parties
hereby agree as follows:
(a) The
Company employs Employee, and Employee accepts employment with the
Company, upon the terms and conditions contained in this
Agreement.
(b)
Term of Employment . The Company and Employee acknowledge
that Employee’s employment is at-will, and is for no definite
period of time. Employee acknowledges and agrees that this
Agreement will govern the terms of Employee’s employment with
Company, even though compensation levels may be adjusted by Company
from time to time by assent of the parties hereto.
During the
Employment Period, Employee shall serve as Senior Vice President,
Clinical Cycle Development or in such other positions and with such
other duties and responsibilities as Company shall from time to
time assign to employee. Employee shall perform faithfully for the
Company the duties of Employee’s position and in accordance
with the reasonable directives of the Company. Employee shall
comply with procedures and policies as established by the Company
from time to time. Employee shall devote substantially all of
Employee’s business time and effort to the performance of
Employee’s duties to the Company. Employee acknowledges that
execution of Employee’s duties in a timely, consistent and
prudent manner is vital to the successful operations of the Company
and that it is essential that Employee conduct the duties of this
position with constant and watchful attention.
(a) Employee’s
base salary will be at an annual gross rate of $150,000 (the
“Base Salary”). The Base Salary shall be payable in
accordance with the Company’s payroll practices, as in effect
from time to time, and shall be subject to required federal, state
and local taxes and withholdings. In addition, Employee will be
entitled to a signing bonus of $15,000, payable after both start of
employment and relocation to Boston are fulfilled. The signing
bonus is not based on Employee’s performance and will be paid
in a timely fashion. Employee will be entitled to annual
consideration for a bonus of up to 18.5% of base, 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 that other bonus
payments are generally made by the Company to its
employees.
(b)
In the event the Employee’s employment with the Company is
terminated by Employee for Good Reason (as defined below) or by the
Company without Cause (as defined
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below), the
Company shall within ten business days after the effective date of
termination pay to Employee severance in such amount as is
proportionally (measured by severance amount against base salary)
equal to the average rate of cash severance, if any, that has been
paid by the Company to management level employees who are at or
above Employee’s level of responsibility in the Company and
whose employment was terminated at any time during the two years
prior to Employee’s termination not as a result of settlement
of legal claims and not in situations where “cause” (as
defined in this Agreement or as defined in the employment agreement
related to the particular employee, if different) existed or was
alleged at the time by Company to exist.
(c) For
purposes of Section (a) above, 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) engaging in
dishonest, unethical, or untruthful behavior or statements in the
reasonable belief of the Company’s President 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
physicial disability or infirmity.. Nothing in the foregoing will
waive or modify any obligation of the Company to comply with any
law or regulation including but not limited to any
anti-discrimination law or regulation. Cause shall be deemed to
exist under clauses (iii), (v) and (vi) of this paragraph
only if the events or behavior alleged to constitute
“Cause” continue, in the reasonable judgment of the
Chief Development Officer, 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 if 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.
For purposes of
Section (a) above, the following events shall constitute
“Good Reason”: (i) 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 her position as it existed prior to any such diminution
or (ii) a material breach by the Company of any of the
Company’s obligations under this Agreement, provided that in
the event of termination for Good Reason, Employee shall first
comply with the “Good Reason Process.” “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 without
creating
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further 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. For a termination to
be for Good Reason, Employee must terminate within 30 days of
the date that Employee is entitled to terminate for Good Reason
hereunder. Notwithstanding the foregoing, temporary diminution of
Employee’s responsibilities, authorities, powers, functions
or duties pending investigation or determination of Cause or
pending inquiry into the grounds for or circumstances of any
allegation, investigation or proceeding initiated by any
governmental authority or agency regarding Employee or involving
Employee’s actions for the Company shall not be deemed Good
Reason or a Good Reason event.
Following the
execution of this Agreement, the Company shall grant Employee a
non-qualified option to purchase 190,000 shares of the
Company’s Common Stock. The option grant shall be contingent
upon approval of the Board of Directors and subject to the terms
and conditions in the Company’s stock option plan and in the
Company’s stock option agreement forms, vesting over a period
of four years.
(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. Employee will be eligible for
expense reimbursement of up to $30,000 for the cost of relocation
to Boston and trips to Boston associated with the move; however,
more than one moving bid must be obtained and reimbursement is
contingent upon submittal of receipts
(b) Employee
shall be entitled to 17 days of vacation annually, which
vacation shall accrue at a rate of 1.4 days per month. The
vacation year begins on Employee’s anniversary date. Of the
vacation days not taken at the end of the vacation year, only ten
days may be carried forward to the following year. Employee may not
receive cash in lieu of the days not taken, except with written
consent of the HR Committee.
(c) Employee
shall be entitled to participate in health, life, or disability
insurance, and retirement, pension, or profit-sharing plans that
may be instituted by the Company for the benefit of its mid-level
management Employees generally, upon such terms contained
therein.
(a) Since
Employee’s employment is at-will employment, either Employee
or the Company may terminate Employee’s employment at any
time for any reason or for no reason.
(b) Upon
the termination of Employee’s employment for any reason, the
parties shall have no further obligations, except that those
obligations of Employee under Sections 7, 8, 9 and 10, and the
provisions of Sections 12 and 13 shall remain in effect and
binding upon the parties.
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7. Effect of
Termination.
(a) The
Company shall have no liability or obligation to Employee upon
Employee’s termination other than as specifically set forth
in this Section 7, or as provided by law.
(b) Upon
the termination of Employee’s employment, Employee shall be
entitled to receive only such portion (if any) of the Base Salary
as may have accrued but be unpaid on the date of termination, plus
severance as provided in Section 3, above, 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 shall immediately surrender to the Company all Company
property in the possession, custody or control of Employee,
including but not limited to any computer hardware, software,
computer disks and/or data storage devices, notes, data, sketches,
drawings, manuals, documents, records, data bases, programs,
blueprints, memoranda, specifications, customer lists, financial
reports, equipment and all other physical forms of expression
incorporating or containing any Confidential Information (as
defined in Section 8 hereof), it being distinctly understood
that all such writings, physical forms of expression and other
things are exclusive property of the Company.
8. Confidential
Information and Inventions.
(a) Employee
recognizes and acknowledges that during the course of
Employee’s employment with the Company, Employee shall have
access to Confidential Information. “Confidential
Information” means all information or material not publicly
know which relates to any of its products, services or any phase of
its operations, business or financial affairs. Confidential
Information includes, but is not limited to, the following types of
information and other information of a similar nature (whether or
not reduced to writing): trade secrets, inventions, drawings, file
data, documentation, diagrams, specifications, know-how, processes,
formulas, models, flow charts, software completed or in various
stages of development, source codes, object codes, research and
development procedures, test results, marketing techniques and
materials, marketing and development plans, price lists, pricing
policies, business plans, information relating to customers and/or
suppliers’ identities, characteristics and agreements,
financial information and projections and Employee files.
Confidential Information also includes any information described
above which the Company obtains from another party and which the
Company treats and/or has an obligation to treat as confidential or
designates as Confidential Information, whether or not owned or
developed by the Company. (The term “Company,” as used
in this Section 8, means not only athenahealth, Inc., but also
any company, partnership or entity which, directly or indirectly,
controls, is controlled by or is under common control with
athenahealth, Inc..)
(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
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person to do
so), directly or indirectly, (i) reveal, report, publish or
disclose such Confidential Information to any person, firm,
corporation, association or other entity for any reason or purpose
whatsoever (other than in the course of carrying out
Employee’s duties hereunder or as expressly authorized by the
Company), (ii) render any services to any person, firm,
corporation, association or other entity to whom any such
Confidential Information, in whole or in part, has been disclosed
or is threatened to be disclosed by or at the instance of Employee,
or (iii) use such Confidential Information except for the
benefit of the Company and in the course of Employee’s
employment with the Company. The foregoing will not apply to the
extent Employee is required to disclose any Confidential
Information by applicable law or legal process so long as Employee
promptly notifies the Company of such pending disclosure and
consults with the Company prior to such disclosure concerning the
advisability of seeking a protective order or other means of
preserving the confidentiality of the Confidential
Information.
(c) Any
Inventions (as defined below) in whole or in part conceived, made
or reduced to practice by Employee (either solely or in conjunction
with others) during or after the Employment Period that are made
through the use of any of the Confidential Information or any of
the Company’s equipment, facilities, supplies, trade secrets
or time, or that relate to the Company’s busines
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