2007
EMPLOYEE STOCK PURCHASE PLAN
The purpose of the
2007 Employee Stock Purchase Plan (“the Plan”) is to
provide eligible employees of athenahealth, Inc. (the
“Company”) and each Designated Subsidiary (as defined
in Section 11) with opportunities to purchase shares of the
Company’s common stock, par value $0.01 per share (the
“Common Stock”). 500,000 shares of Common Stock in the
aggregate have been approved and reserved for this purpose, subject
to adjustment as set forth in Section 17 below. The Plan is
intended to constitute an “employee stock purchase
plan” within the meaning of Section 423(b) of the Internal
Revenue Code of 1986, as amended (the “Code”), and
shall be interpreted in accordance with that intent.
1.
Administration . The Plan will be administered by the person
or persons (the “Administrator”) appointed by the
Company’s Board of Directors (the “Board”) for
such purpose. The Administrator has authority at any time to:
(i) adopt, alter and repeal such rules, guidelines and
practices for the administration of the Plan and for its own acts
and proceedings as it shall deem advisable; (ii) interpret the
terms and provisions of the Plan; (iii) make all
determinations it deems advisable for the administration of the
Plan; (iv) decide all disputes arising in connection with the
Plan; and (v) otherwise supervise the administration of the
Plan. All interpretations and decisions of the Administrator shall
be binding on all persons, including the Company and the
Participants. No member of the Board or individual exercising
administrative authority with respect to the Plan shall be liable
for any action or determination made in good faith with respect to
the Plan or any option granted hereunder.
2.
Offerings . The Company will make one or more offerings to
eligible employees to purchase Common Stock under the Plan
(“Offerings”). Unless otherwise determined by the
Administrator, the initial Offering will begin on January 1,
2008 and will end on the following
June 30,
2008 (the “Initial Offering”). Thereafter, unless
otherwise determined by the Administrator, an Offering will begin
on the first business day occurring on or after each January 1 and
July 1 and will end on the last business day occurring on or before
the following June 30 and December 31, respectively. The
Administrator may, in its discretion, designate a different period
for any Offering, provided that no Offering shall exceed six months
in duration or overlap any other Offering.
3.
Eligibility . All individuals classified as employees on the
payroll records of the Company and each Designated Subsidiary are
eligible to participate in any one or more of the Offerings under
the Plan, provided that as of the first day of the applicable
Offering (the “Offering Date”) they are customarily
employed by the Company or a Designated Subsidiary for more than 20
hours a week. Notwithstanding any other provision herein,
individuals who are not contemporaneously classified as employees
of the Company or a Designated Subsidiary for purposes of the
Company’s or applicable Designated Subsidiary’s payroll
system are not considered to be eligible employees of the Company
or any Designated Subsidiary and shall not be eligible to
participate in the Plan. In the event any such individuals are
reclassified as employees of the Company or a Designated Subsidiary
for any purpose, including, without limitation, common law or
statutory employees, by any action of any third party, including,
without limitation, any government agency, or as a result of any
private lawsuit, action or administrative proceeding, such
individuals shall, notwithstanding such reclassification, remain
ineligible for participation. Notwithstanding the foregoing, the
exclusive means for individuals who are not contemporaneously
classified as employees of the Company or a Designated Subsidiary
on the Company’s or Designated Subsidiary’s payroll
system to become eligible to
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participate in
this Plan is through an amendment to this Plan, duly executed by
the Company, which specifically renders such individuals eligible
to participate herein.
(a) An
eligible employee who is not a Participant on any Offering Date may
participate in such Offering by submitting an enrollment form to
his or her appropriate payroll location at least 15 business days
before the Offering Date (or by such other deadline as shall be
established by the Administrator for the Offering).
(b) The
enrollment form will (a) state a whole percentage to be
deducted from an eligible employee’s Compensation (as defined
in Section 11) per pay period, (b) authorize the purchase
of Common Stock in each Offering in accordance with the terms of
the Plan and (c) specify the exact name or names in which
shares of Common Stock purchased for such individual are to be
issued pursuant to Section 10. An employee who does not enroll
in accordance with these procedures will be deemed to have waived
the right to participate. Unless a Participant files a new
enrollment form or withdraws from the Plan, such
Participant’s deductions and purchases will continue at the
same percentage of Compensation for future Offerings, provided he
or she remains eligible.
(c) Notwithstanding
the foregoing, participation in the Plan will neither be permitted
nor be denied contrary to the requirements of the Code.
5.
Employee Contributions . Each eligible employee may
authorize payroll deductions at a minimum of 1 percent up to a
maximum of 10 percent of such employee’s Compensation
for each pay period. The Company will maintain book accounts
showing the amount of payroll deductions made by each Participant
for each Offering. No interest will accrue or be paid on payroll
deductions.
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6.
Deduction Changes . Except as may be determined by the
Administrator in advance of an Offering, a Participant may not
increase or decrease his or her payroll deduction during any
Offering, but may increase or decrease his or her payroll deduction
with respect to the next Offering (subject to the limitations of
Section 5) by filing a new enrollment form at least 15
business days before the next Offering Date (or by such other
deadline as shall be established by the Administrator for the
Offering). The Administrator may, in advance of any Offering,
establish rules permitting a Participant to increase, decrease or
terminate his or her payroll deduction during an
Offering.
7.
Withdrawal . A Participant may withdraw from participation
in the Plan by delivering a written notice of withdrawal to his or
her appropriate payroll location. The Participant’s
withdrawal will be effective as of the next business day. Following
a Participant’s withdrawal, the Company will promptly refund
such individual’s entire account balance under the Plan to
him or her (after payment for any Common Stock purchased before the
effective date of withdrawal). Partial withdrawals are not
permitted. Such an employee may not begin participation again
during the remainder of the Offering, but may enroll in a
subsequent Offering in accordance with Section 4.
8. Grant
of Options . On each Offering Date, the Company will grant to
each eligible employee who is then a Participant in the Plan an
option (“Option”) to purchase on the last day of such
Offering (the “Exercise Date”), at the Option Price
hereinafter provided for, (a) a number of shares of Common
Stock determined by dividing such Participant’s accumulated
payroll deductions on such Exercise Date by the lesser of
85 percent of the Fair Market Value of the Common Stock on (i)
the first day of the Offering or (ii) the Exercise Date, or
(b) such other lesser maximum number of shares as shall have
been established by the Administrator in
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advance of the
Offering; provided, however, that such Option shall be subject to
the limitations set forth below. Each Participant’s Option
shall be exercisable only to the extent of such Participant’s
accumulated payroll deductions on the Exercise Date. The purchase
price for each share purchased under each Option (the “Option
Price”) will be the lesser of 85 percent of the Fair
Market Value of the Common Stock on the first day of the Offering
or on the Exercise Date.
Notwithstanding
the foregoing, no Participant may be granted an option hereunder if
such Participant, immediately after the option was granted, would
be treated as owning stock possessing 5 percent or more of the
total combined voting power or value of all classes of stock of the
Company or any Parent or Subsidiary (as defined in
Section 11). For purposes of the preceding sentence, the
attribution rules of Section 424(d) of the Code shall apply in
determining the stock ownership of a Participant, and all stock
which the Participant has a contractual right to purchase shall be
treated as stock owned by the Participant. In addition, no
Participant may be granted an Option which permits his or her
rights to purchase stock under the Plan, and any other employee
stock purchase plan of the Company and its Parents and
Subsidiaries, to accrue at a rate which exceeds $25,000 of the fair
market value of such stock (determined on the option grant date or
dates) for each calendar year in which the Option is outstanding at
any time. The purpose of the limitation in the preceding sentence
is to comply with Section 423(b)(8) of the Code and shall be
applied taking Options into account in the order in which they were
granted.
9.
Exercise of Option and Purchase of Shares . Each employee
who continues to be a Participant in the Plan on the Exercise Date
shall be deemed to have exercised his or her Option on such date
and shall acquire from the Company such number of whole shares of
Common Stock reserved for the purpose of the Plan as his or her
accumulated payroll deductions on such date will purchase at the
Option Price, subject to any other limitations contained in the
Plan.
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Any amount
remaining in a Participant’s account at the end of an
Offering solely by reason of the inability to purchase a fractional
share will be carried forward to the next Offering; any other
balance remaining in a Participant’s account at the end of
an
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