UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.      )

Filed by the Registrant x                            Filed by a Party other than the Registrant ¨

Check the appropriate box:

Eclipsys Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Eclipsys Corporation

Three Ravinia Drive

Atlanta, Georgia 30346

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 7, 2010

The annual meeting of stockholders of Eclipsys Corporation (the “Company”) will be held at the Company’s headquarters, located at Three Ravinia Drive, Atlanta, Georgia 30346, on May 7, 2010, at 2:00 p.m., local time, to consider and act upon the following matters:

Stockholders of record at the close of business on March 10, 2010 will be entitled to notice of and to vote at the meeting or any postponement or adjournment thereof. The stock transfer books of the Company will remain open following the record date.

By Order of the Board of Directors,

Brian W. Copple

Secretary

Atlanta, Georgia

March 26, 2010

WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES PLEASE VOTE AS PROMPTLY AS POSSIBLE VIA THE INTERNET OR TELEPHONE AS INSTRUCTED IN THESE MATERIALS OR, IF THIS PROXY STATEMENT WAS MAILED TO YOU, BY COMPLETING, DATING AND SIGNING THE ENCLOSED PROXY CARD AND MAILING IT IN THE ENCLOSED ENVELOPE. NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED STATES.

Important Notice Regarding the Internet Availability of Proxy Materials for the Stockholders Meeting to be Held on May 7, 2010:

The Company’s 2010 Proxy Statement and Annual Report for the fiscal year ended December 31, 2009 are available at www.proxyvote.com.

Eclipsys Corporation

Three Ravinia Drive

Atlanta, Georgia 30346

PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 7, 2010

This proxy statement is furnished in connection with the solicitation of proxies by the board of directors (the “Board of Directors” or the “Board”) of Eclipsys Corporation (the “Company” or “Eclipsys”) for use at the annual meeting of stockholders to be held at the Company’s headquarters, located at Three Ravinia Drive, Atlanta, Georgia 30346, on May 7, 2010 at 2:00 p.m., local time and at any postponement or adjournment thereof (the “Annual Meeting”). You are invited to attend the Annual Meeting, and we request that you vote on the proposals described in this proxy statement. You do not need to attend the Annual Meeting to vote your shares; instead, you can appoint a proxy to vote your shares as explained below.

In accordance with rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), instead of mailing a printed copy of our proxy materials to each stockholder of record on the record date, we are furnishing proxy materials to our stockholders on the Internet and mailing printed copies of the proxy materials only to a limited number of our stockholders. If you have received a printed copy of these proxy materials by mail, you may simply complete, sign and return your proxy card by mail or follow the instructions on your proxy card to submit your proxy via the Internet or telephone. Stockholders receiving a Notice of Internet Availability of Proxy Materials by mail will generally not receive a printed copy of the proxy materials unless they specifically request a printed copy in accordance with the instructions included in the Notice of Internet Availability of Proxy Materials. The Notice of Internet Availability of Proxy Materials provides instructions as to how to (i) access and review the information contained in the proxy materials, (ii) submit voting instructions via the Internet or telephone or by mail, and (iii) request a printed copy of the proxy materials. Proxies must be received by 11:59 p.m. Eastern Time on May 6, 2010 to be counted. We intend to begin distributing our proxy materials to stockholders via paper copy mailing and the Notice of Internet Availability of Proxy Materials on or about March 31, 2010.

Each properly submitted proxy will be voted in accordance with the stockholder’s instructions contained therein. If no choice is specified, executed proxies will be voted:

A stockholder may revoke a proxy at any time before its exercise by entering new voting instructions via the Internet or telephone, by delivery of written revocation or a subsequently dated proxy to our Secretary or by voting in person at the Annual Meeting. To revoke a proxy via the Internet or telephone, you must do so by 11:59 p.m. Eastern Time on May 6, 2010. Attendance at the Annual Meeting will not cause your previously executed proxy to be revoked unless you specifically request such revocation.

The Company will pay all costs of proxy solicitation. In addition to solicitations by mail, our directors, officers and employees, without additional remuneration, may solicit proxies by telephone, facsimile and personal interviews, and we reserve the right to retain outside agencies for the purpose of soliciting proxies. Brokers, custodians and fiduciaries will be requested to forward proxy soliciting materials to the owners of stock held in their names and, as required by law, we will reimburse them for their out-of-pocket expenses in this regard.

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Voting

On March 10, 2010, the record date for the determination of stockholders entitled to vote at the Annual Meeting (the “Record Date”), there were outstanding and entitled to vote an aggregate of 57,267,498 shares of our common stock, constituting all of our voting stock (“Voting Common Stock”). Holders of Voting Common Stock are entitled to one vote per share. The holders of a majority of the shares of Voting Common Stock outstanding on the Record Date and entitled to vote at the Annual Meeting, present in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting and any adjournments and postponements thereof. Shares of Voting Common Stock represented in person or by proxy (including shares that abstain or do not vote with respect to one or more of the matters presented for stockholder approval) will be counted for purposes of determining whether a quorum is present at the Annual Meeting.

The affirmative vote of a plurality of the shares of Voting Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote is required for the election of directors. The affirmative vote of a majority of the shares of Voting Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote is required to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current fiscal year. With regard to the election of directors, votes may be cast in favor of a director or withheld. Because directors are elected by plurality, abstentions from voting and broker non-votes will be excluded from the vote and will have no effect on its outcome. If a quorum is present at the Annual Meeting, the nominees receiving the greatest number of votes (up to three directors) will be elected.

The Board of Directors does not know of any other matters that may come before the Annual Meeting. However, if any other matters are properly presented at the Annual Meeting, the persons acting as proxies will vote, or otherwise act, in accordance with their judgment on such matters. For any proposals other than the election of directors, abstentions are counted in tabulations of the votes cast on a proposal presented to stockholders and generally have the same effect as a vote against the proposal, whereas broker non-votes are not counted for purposes of determining whether a proposal has been approved.

Broker Discretionary Voting

If you hold your shares through a bank or broker, you must give instructions to your bank or broker to vote your shares. You should follow the voting instructions that you receive from your bank or broker. If you do not provide voting instructions, your broker is permitted to use its own discretion and vote your shares on routine matters, such as ratification of the Company’s independent registered public accounting firm. If you do not provide voting instructions with respect to non-routine matters, your broker does not have discretionary authority to vote your shares, which is called a “broker non-vote.” Prior to 2010, the election of directors was considered a routine matter for which brokers could vote your shares. Beginning with this year’s Annual Meeting, brokers are not permitted to vote your shares with respect to the election of directors without receiving voting instructions from you.

Householding of Proxy Materials

Some banks, brokers and other nominee record holders may participate in the practice of “householding” proxy materials. This means that only one copy of our proxy materials or the Notice of Internet Availability of Proxy Materials, as applicable, may have been sent to multiple stockholders in your household. We will promptly deliver a separate Notice of Internet Availability of Proxy Materials and, if applicable, a separate proxy statement and annual report, to you if you contact us at the following address or phone number: Eclipsys Corporation, Three Ravinia Drive, Atlanta, Georgia 30346, phone: (404) 847-5000, Attention: Corporate Secretary. If you want to receive separate copies of our proxy materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker or other nominee record holder, or you may contact us at the above address or phone number.

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PROPOSAL 1 — ELECTION OF DIRECTORS

Our Board of Directors is classified into three classes (designated Class I, Class II and Class III) with members of each class holding office for staggered three-year terms. There are currently three Class III directors, whose terms expire at this Annual Meeting, two Class I directors, whose terms expire at the 2011 annual meeting of stockholders, and three Class II directors, whose terms expire at the 2012 annual meeting of stockholders, in all cases subject to the election and qualification of their successors and to their earlier death, resignation or removal.

Our process for nominating director candidates is described below under the caption “Director Candidate Nominating Procedures.” The Board of Directors nominated Dan L. Crippen, Edward A. Kangas and Craig Macnab to stand for election as Class III directors at the Annual Meeting. The persons named in the enclosed proxy will vote to elect these nominees as Class III directors, unless authority to vote for the election of these nominees is withheld by marking the proxy card to that effect. Each nominee has indicated his willingness to serve, if elected, but if he is unable or unwilling to serve, proxies may be voted for a substitute nominee designated by the Board of Directors. Each nominee, if elected, will hold office until the 2013 annual meeting of stockholders, subject to the election and qualification of his successor and to his earlier death, resignation or removal.

Each of our directors brings to our Board of Directors extensive management and leadership experience gained through service as an executive officer and, in several cases, as a chief executive officer of significant businesses. In these executive roles, they have had significant responsibility for strategy and operations, including management of capital, risk and business cycles. In addition, each of our directors bring relevant experience serving on boards of directors of other companies.

The table below lists our directors and their committee assignments. A summary of the background for each nominee and incumbent is set forth after the table. These background summaries include the specific experience, qualifications, attributes, and/or skills that, together with the general characteristics and qualifications described below under the caption “Director Candidate Nominating Procedures,” contributed to our Board of Directors’ conclusion that the person should serve as a director of Eclipsys.

Director Nominees – Class III

Dan L. Crippen has been a director of Eclipsys since June 2004. Mr. Crippen is currently self-employed as a consultant, advising medical device manufacturers, pharmaceutical companies, medical management firms, healthcare policy organizations, state and local governments, and others conducting business with the federal

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government. He also serves on several non-public boards in the healthcare sector. From 1999 to 2003, Mr. Crippen served as the Director of the Congressional Budget Office. From 1996 to 1999, he was a founding partner of Washington Counsel, P.C., a consulting and law firm. Mr. Crippen previously held senior-level government positions, including Economic Advisor and Chief Counsel to U.S. Senate Majority Leader Howard Baker; Domestic Policy Advisor and Assistant to President Reagan; and Senior Advisor to the Chairman of the SEC.

In addition to the general characteristics held in common with other directors, the specific qualifications that led our Board of Directors to conclude that Mr. Crippen should serve as a director of Eclipsys include, among other things, his depth of experience in healthcare policy and in the workings of the federal government, which is important to Eclipsys due to the government’s growing influence over the health information technology (HIT) industry through legislative and regulatory initiatives, as well as the government’s role as the largest healthcare payor. Mr. Crippen’s training as an economist (Ph.D.) and his experience in accounting and finance in both the public sector and private enterprise also brings to our Board strong insight in budgeting and financial analysis, and he qualifies as an audit committee financial expert.

Edward A. Kangas has been a director of Eclipsys since June 2004. Mr. Kangas served as Chairman and Chief Executive Officer of Deloitte Touche Tohmatsu from 1989 to 2000. He also served as the Managing Partner of Deloitte & Touche (USA) from 1989 to 1994. He is a director of Hovnanian Enterprises Inc., a national homebuilder; Tenet Healthcare Corporation, a healthcare services company; Intuit, Inc., a software company focusing on consumer and small business financial products; and United Technologies Corp., a diversified company that provides high technology products and services to the building and aerospace industries. From 2004 to 2008, Mr. Kangas also served as a director of Electronic Data Systems Corporation, a provider of technology and outsourcing services. He is a Certified Public Accountant.

In addition to the general characteristics held in common with other directors, the specific qualifications that led our Board of Directors to conclude that Mr. Kangas should serve as a director of Eclipsys include, among other things, his extensive current and past experience serving as a director of companies in industries that are highly relevant to Eclipsys’ business, including hospitals, software, technology, professional services, and outsourcing. Mr. Kangas also has broad international, accounting and financial experience, acquired through years managing Deloitte & Touche and oversight of audits of companies in a wide range of industries. Furthermore, he qualifies as an audit committee financial expert.

Craig Macnab has been a director of Eclipsys since May 2008. Since 2004, Mr. Macnab has served as the Chief Executive Officer and as a director of National Retail Properties, Inc., a real estate investment trust, and in February 2008 was appointed Chairman of its Board of Directors. Mr. Macnab served as the Chief Executive Officer and President of JDN Realty, another real estate investment trust, from 2000 to 2003. In addition, he is a director of Developers Diversified Realty Corporation, a real estate investment trust specializing in shopping centers. Previously, Mr. Macnab was President of Tandem Capital, a private investment company that he founded in January 1997. From 2002 to 2007, he also served as a director of Per-Se Technologies, a provider of healthcare information technology services, prior to its acquisition by McKesson Corporation.

In addition to the general characteristics held in common with other directors, the specific qualifications that led our Board of Directors to conclude that Mr. Macnab should serve as a director of Eclipsys include, among other things, his extensive executive management background, including running a public company, and 20 years of experience in finance and investment banking. Mr. Macnab also brings to the Board healthcare industry experience from his prior service on the Board of Per-Se Technologies.

The Board of Directors recommends a vote FOR the election of Dan L. Crippen, Edward A. Kangas and Craig Macnab as Class III directors.

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Incumbent Directors – Class I

Eugene V. Fife has been a director of Eclipsys since May 1997 and has served as Chairman of the Board since January 2003. From April 2005 to November 14, 2005, Mr. Fife served as Chief Executive Officer and President of Eclipsys on an interim basis. Since December 1999, Mr. Fife has served as the founding principal of Vawter Capital, LLC, a private investment firm. Mr. Fife was formerly a general partner in Goldman Sachs & Co., where he served as a member of its Management Committee and as Chairman of Goldman Sachs International. He retired from Goldman Sachs & Co. in 1995, but continues to serve as a Senior Director of the firm. Mr. Fife is also a director of Caterpillar, Inc., a heavy equipment and engine manufacturer.

In addition to the general characteristics held in common with other directors, the specific qualifications that led our Board of Directors to conclude that Mr. Fife should serve as a director of Eclipsys include, among other things, his 26 years of experience in investment banking, which gives him broad and deep insight regarding financial capital markets, strategic transactions and international business. Mr. Fife’s former service as the interim Chief Executive Officer and President of Eclipsys and long board service also provide an institutional wealth of knowledge about Eclipsys and the healthcare industry generally.

Philip M. Pead has been a director of Eclipsys since February 2009, and President and Chief Executive Officer since May 14, 2009. From March 2007 to May 2009, Mr. Pead served as the Managing Partner of Beacon Point Partners LLC, a healthcare consulting firm. Mr. Pead served as President and Chief Executive Officer of Per-Se Technologies Inc., a provider of healthcare information technology services, from November 2000 until its acquisition by McKesson Corporation in January 2007. Mr. Pead served as the Chairman of Per-Se beginning May 2003, having joined the company in 1997. While at Per-Se, he also served as Executive Vice President and Chief Operating Officer from August 1999 to November 2000. Previously, Mr. Pead served as the Senior Vice President with responsibility for international operations of Dun & Bradstreet Software Services, Inc., a leading developer of software; and as Vice President with responsibility for overseeing the Asian and Latin American operations of Attachmate Corporation, a leading provider of host connectivity solutions. Mr. Pead also serves as a director of Emdeon Inc., a provider of revenue and payment cycle management solutions, connecting payers, providers and patients in the U.S. healthcare system.

In addition to the general characteristics held in common with other directors, the specific qualifications that led our Board of Directors to conclude that Mr. Pead should serve as a director of Eclipsys include, among other things, his lengthy career in the software and HIT industry, including former service as the Chairman, President and Chief Executive Officer of Per-Se Technologies, and since May 2009, his position as the President and Chief Executive Officer of Eclipsys. While at Per-Se Technologies, he was instrumental in a corporate turnaround strategy that included improving the integration of its previously acquired companies, improving operating efficiencies and margins, and dramatically growing the business, all of immediate relevance to Eclipsys. Mr. Pead’s HIT experience is further enhanced by his Board service at Emdeon.

Incumbent Directors – Class II

John T. Casey has been a director of Eclipsys since May 2008. Mr. Casey has served as the Chairman of Medcath Corporation since 2003. He joined the board of Medcath in 1999, and from 2003 to 2006 he also served as Chief Executive Officer. Medcath is a provider of healthcare services focusing on high acuity medical conditions. Mr. Casey served as the Chairman and Chief Executive Officer of Physician Reliance Network, Inc., an administrative management company specializing in medical practice management, clinical research and physician education, from 1997 until its merger with American Oncology Resources in 1999. From 1995 to 1997, Mr. Casey was the Chief Executive Officer of Intecare, LLC, a company formed for the purpose of developing joint venture partnerships with hospitals and integrated healthcare systems. Previously, he served as President and Chief Operating Officer of American Medical International (now Tenet Healthcare Corporation); President and Chief Executive Officer of Presbyterian St. Luke’s Medical Center (now Health One) in Denver; President and Chief Executive Officer of Methodist Health Systems, Inc. in Memphis; and Chairman and Chief Executive Officer of The Samaritan Foundation (now Banner Health) in Phoenix.

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In addition to the general characteristics held in common with other directors, the specific qualifications that led our Board of Directors to conclude that Mr. Casey should serve as a director of Eclipsys include, among other things, his extensive executive management and industry background in running healthcare companies, including serving as the President and Chief Executive Officer at a number of large healthcare systems and most recently a publicly traded provider of healthcare services focusing on high acuity medical conditions, all of which provide unique insight regarding our clients’ needs and valuable perspective of the healthcare business generally.

Judith C. Pelham has been a director of Eclipsys since August 2009. Since May 1995 she has served on the Board of Directors of Amgen Inc., a biotechnology company. From 2005 to 2006, Ms. Pelham also served as a director of Hospira, Inc., a global specialty pharmaceutical and medication delivery company. She served from 2000 to 2004 as President and Chief Executive Officer of Trinity Health, a national system of healthcare facilities. Ms. Pelham retired from Trinity Health in 2004, but continues to serve as its President Emeritus. Previously, she served for seven years as President and Chief Executive Officer of Mercy Health Services, a healthcare system serving Detroit. Ms. Pelham also served for ten years as President and Chief Executive Officer of Daughters of Charity Health Services of Austin, a healthcare system serving central Texas.

In addition to the general characteristics held in common with other directors, the specific qualifications that led our Board of Directors to conclude that Ms. Pelham should serve as a director of Eclipsys include, among other things, her extensive executive management and industry background serving as the President and Chief Executive Officer at a number of large healthcare systems, which provides unique insight regarding our clients’ needs and valuable perspective of the healthcare business generally. Ms. Pelham’s background is further enhanced by her current and past experience serving on the Boards of other health sector companies.

Jay B. Pieper has been a director of Eclipsys since May 1996. Since May 1995, Mr. Pieper has served as Vice President of Corporate Development and Treasury Affairs for Partners HealthCare System, Inc., the parent of Brigham and Women’s Hospital, Inc. and Massachusetts General Hospital. Mr. Pieper is also President of Partners International Medical Services LLC and Chairman of Partners Harvard Medical International. Previously, he was the Senior Vice-President and Chief Financial Officer of Brigham and Women’s Hospital. Mr. Pieper serves on the Board of Directors of Biopure Corporation, a manufacturer of pharmaceuticals; WorldCare, Ltd., a privately held provider of healthcare related insurance and telemedicine products; Boston Biocom, LLC, a privately held biotech firm; and the Friends of the National Library of Medicine, a not-for-profit organization. He is also a member and past director of Financial Executives International.

In addition to the general characteristics held in common with other directors, the specific qualifications that led our Board of Directors to conclude that Mr. Pieper should serve as a director of Eclipsys include, among other things, his accounting, financial, treasury and leadership experience in the healthcare industry, including his service as the Chief Financial Officer of Brigham and Women’s Hospital. His many years of service at a number of significant integrated healthcare systems also provides our Board with valuable insight regarding our clients’ needs. Mr. Pieper’s background is further enhanced by his board experience at a number of other health sector companies and organizations, and he qualifies as an audit committee financial expert.

CORPORATE GOVERNANCE

Director Independence

Eclipsys is required to comply with the director independence rules of the NASDAQ Stock Market, Inc. (“NASDAQ”), on which the Voting Common Stock is listed. A director will qualify as an “independent director” under Rule 5605(a)(2) of the NASDAQ Marketplace Rules if, in the opinion of our Board of Directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our Board of Directors has determined that none of Messrs. Casey, Crippen, Fife, Kangas, Macnab or Pieper or Ms. Pelham has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Accordingly, our Board of Directors has

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concluded that each of these directors is an “independent director” as defined under applicable NASDAQ rules. Mr. Andrew Eckert, a former director who served during part of 2009 and Mr. Pead are not “independent directors” because Mr. Eckert was a former executive officer of Eclipsys during his Board service and Mr. Pead is our President and Chief Executive Officer.

Board Leadership Structure

The Board of Directors determines in its discretion from time to time whether the roles of Chairman and Chief Executive Officer should be combined or split. At present, the Board of Directors separates the role of Chairman of the Board (held by Mr. Fife) from the role of Chief Executive Officer (held by Mr. Pead). Separating these positions allows our Chief Executive Officer to focus on Eclipsys’ day-to-day business, while allowing our Chairman of the Board to lead the Board in its role of providing oversight. Our Board recognizes the time, effort and energy that the Chief Executive Officer is required to devote to his position in the current business environment, as well as the commitment required to serve as our Chairman, particularly as the Board’s oversight responsibilities continue to grow. Accordingly, our Board believes that having separate positions, with an independent non-executive director serving as Chairman, is the appropriate leadership structure for our Company at this time.

Board And Committee Meetings

In 2009, the Board of Directors met 11 times, the Audit Committee met 7 times, the Compensation Committee met 6 times, and the Nominating & Governance Committee met 4 times. During 2009, each director attended at least 75% of the aggregate number of Board meetings and meetings held by all committees on which the director then served.

Stockholder attendance at our annual meetings of stockholders has historically been sparse, so we have generally not incurred the expense of director attendance. However, our 2009 and 2010 annual meetings have been scheduled to coincide with a Board meeting, so directors can attend the annual meeting without subjecting Eclipsys to additional cost. Our Corporate Governance Guidelines call for us to schedule annual meetings of stockholders to coincide with a regularly scheduled Board meeting when possible, and for the directors to attend annual meetings that coincide with Board meetings. A copy of the Guidelines is posted on the “Corporate Governance” section of our Investor Relations website at www.eclipsys.com/investors. All of our directors attended our 2009 annual meeting of stockholders.

Board Committees

The Board of Directors has established three standing committees – Audit, Compensation, and Nominating & Governance – each of which operates under a written charter that has been approved by the Board. A current copy of each committee’s charter is posted on the “Corporate Governance” section of our Investor Relations website at www.eclipsys.com/investors.

Committee membership is indicated in the table above. The Board of Directors has determined that all of the members of each of the Board’s three standing committees are independent as defined under the NASDAQ Marketplace Rules, including, in the case of all members of the Audit Committee, the independence requirements set forth in Rule 10A-3 under the Securities Exchange Act of 1934.

Audit Committee

The Audit Committee’s responsibilities include:

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The Board of Directors has determined that each of Messrs. Crippen, Kangas and Pieper is an “audit committee financial expert” as defined in Item 407(d) of Regulation S-K.

Compensation Committee

The Compensation Committee’s responsibilities include:

In connection with its duty to oversee and administer our equity incentive plans, the Compensation Committee has delegated to the CEO, acting as a committee of the Board, the authority, subject to certain limits, to grant equity awards to employees other than our executive officers. The CEO also makes recommendations to the Compensation Committee regarding compensation for our executive officers.

Frederic W. Cook & Co., Inc. (“Cook”) has been engaged by the Compensation Committee to act as its independent compensation consultant since January 2006. Cook provides analysis and advice regarding our executive compensation practices, including with respect to the amount and form of executive and non-employee director compensation. A representative of Cook generally attends all meetings at which the Compensation

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Committee undertakes significant review of, and/or action with respect to, executive officer or non-employee director compensation. Cook also consults regularly with the Chairman of the Compensation Committee. Cook reports to the Compensation Committee and performs compensation consulting services for the Compensation Committee at its request. Cooke is not engaged to perform services directly for Eclipsys management.

Nominating & Governance Committee

The Nominating & Governance Committee’s responsibilities include:

Director Candidate Nominating Procedures

The process followed by our Nominating & Governance Committee to identify and evaluate director candidates includes requests for recommendations (including through retained third-party search firms, as well as less formal methods such as personal contacts), committee meetings from time to time to evaluate biographical information and material relating to potential candidates, and interviews of candidates by Board members.

In considering whether to nominate any particular candidate, the Nominating & Governance Committee will apply the criteria set forth in our Corporate Governance Guidelines. These criteria include the following candidate general characteristics and qualifications:

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While our Nominating & Governance Committee does not have a formal policy regarding Board diversity, it is a factor that the Nominating & Governance Committee takes into account in indentifying director nominees. The Nominating & Governance Committee believes that diversity is important because different points of view and varied board member backgrounds and practical experience can contribute to the quality of the Board’s operations and decision-making.

The Nominating & Governance Committee does not assign specific weights to particular criteria, but does believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will facilitate the Board’s fulfillment of its responsibilities.

In addition, the Nominating & Governance Committee considers the director candidates’ specific experience, qualifications, attributes, and/or skills, together with the general characteristics and qualifications described above, in identifying and evaluating director candidates. See “Proposal 1 - Election of Directors” above for further details.

Stockholders may recommend individuals to the Nominating & Governance Committee for consideration as potential director candidates and inclusion in our proxy statement for the 2011 annual meeting of stockholders by submitting their names, together with appropriate biographical information and background materials and a statement as to whether the stockholder or group of stockholders making the recommendation has beneficially owned at least $2,000 in market value or 1% of our Voting Common Stock for at least a year as of the date such recommendation is made. Such information should be sent to the Nominating & Governance Committee, c/o Corporate Secretary, Eclipsys Corporation, Three Ravinia Drive, Atlanta, Georgia 30346. Assuming that appropriate biographical and background material has been provided on a timely basis and other procedural requirements have been satisfied, the Nominating & Governance Committee will evaluate stockholder-recommended candidates by following the same process, and applying the same criteria, as it follows for candidates submitted by others. If the Board determines to nominate a stockholder-recommended candidate, then his or her name will be included in our proxy materials, including our proxy card, for the 2011 annual meeting of stockholders.

Stockholders also have the right under our bylaws to directly nominate director candidates at an annual meeting even though the nominee is not included in the proxy statement for the annual meeting at which such nomination is to be considered. Pursuant to our bylaws, in order for any stockholder-recommended director candidate who is not included in the proxy statement for the 2011 annual meeting of stockholders to be brought before the meeting by a stockholder of record, such stockholder must give notice of that director nomination to our Corporate Secretary not earlier than the close of business on the 90th day prior to and not later than the close of business on the 60th day prior to the first anniversary of the preceding year’s annual meeting of stockholders. However, if the date of the annual meeting is more than 30 days before or more than 70 days after such anniversary date, notice by the stockholder to be timely must be delivered not earlier than the close of business on the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the date on which public announcement of the date of the annual meeting is first made by Eclipsys. The notice of director nomination must contain the information required by our bylaws. Candidates nominated by stockholders in accordance with these bylaw procedures for consideration at the 2011 annual meeting of stockholders are not required to be included on our proxy card for that annual meeting.

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Communicating With The Independent Directors

The Board of Directors will give appropriate attention to written communications that are submitted by stockholders, and will respond if and as appropriate. The Chairman of the Board (if an independent director), or the Lead Director (if one is appointed), or the Chairman of the Nominating & Governance Committee, with the assistance of our Chief Financial Officer and General Counsel, is primarily responsible for monitoring communications from stockholders and for providing copies or summaries to the other directors as considered appropriate. Under procedures approved by a majority of the independent directors, communications are forwarded to all directors if they relate to important substantive matters and include suggestions or comments that the Chairman of the Board (if an independent director), or the Lead Director (if one is appointed), or the Chairman of the Nominating & Governance Committee, considers to be important for the directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs or personal grievances and communications that are repetitive or duplicative.

Stockholders who wish to send communications on any topic to the Board may address such communications to Board of Directors c/o Corporate Secretary, Eclipsys Corporation, Three Ravinia Drive, Atlanta, Georgia 30346.

Board’s Role In Risk Oversight

The Board of Directors exercises oversight of risk management consistent with its duty to direct the management of the business and affairs of the Company. The Audit Committee, pursuant to its charter, is responsible for reviewing risks material to the Company and Company policies with respect to risk assessment and risk management. The Audit Committee works directly with members of senior management and the Company’s internal audit staff to fulfill this responsibility and reports as appropriate to the Board. The Board’s other committees also participate in risk oversight by considering risk aspects of matters within the scope of their responsibilities.

Oversight of risk is also effected by the Board as a whole in various ways.

The day-to-day identification and management of risk is the responsibility of the Company’s management. As the market environment, industry practices, regulatory requirements, and the Company’s business evolve, it is expected that management and the Board will respond with appropriate adaptations to risk management and oversight.

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Code Of Business Conduct And Ethics

Eclipsys has adopted a written Code of Business Conduct and Ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Business Conduct and Ethics is posted on the “Corporate Governance” section of our Investor Relations website at www.eclipsys.com/investors. In addition, we intend to post on our website all disclosures that are required by law or the applicable NASDAQ rules concerning any amendments to, or waivers from, any provision of the Code of Business Conduct and Ethics.

Compensation Committee Interlocks and Insider Participation

Messrs. Pead, Kangas, and Macnab and Ms. Pelham served for part or all of 2009 as a member of the Compensation Committee. None of Messrs. Kangas or Macnab or Ms. Pelham was at any time during 2009, or at any other time, an officer or employee of Eclipsys. Mr. Pead resigned from the Compensation Committee upon his appointment to the position of President and Chief Executive Officer of Eclipsys. No interlocking relationships exist between the Board of Directors or the Compensation Committee and the board of directors or the compensation committee of any other company.

DIRECTOR COMPENSATION

2009 Director Compensation Table

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As of December 31, 2009, the following director stock awards and option awards were outstanding:

The stock awards outstanding consist solely of deferred stock units (“DSUs”). The option awards outstanding were granted prior to April 2006, when the Company began using DSUs as equity compensation for its non-employee directors.

Narrative Disclosure Related to Director Compensation Table

Each non-employee director of the Company is compensated for service on the Board through a combination of cash fees and equity.

Cash Fees

Cash fees include an annual retainer of $35,000, which is pro-rated from the date new directors join the Board; and attendance fees of $2,000 per Board meeting and $1,500 per committee meeting (with those attendance fees halved for telephonic participation in meetings that are held in-person). In addition, for 2009 the annual chair cash retainer fees were as follows: $20,000 for the Audit Committee Chair; $15,000 for the Compensation Committee Chair; $10,000 for the Nominating & Governance Committee Chair; and $115,000 for the Chairman of the Board. Beginning February 16, 2010, the Board increased the annual cash retainer for service as chair of the Compensation Committee to $20,000.

Equity Compensation

Equity compensation takes the form of deferred stock units (“DSUs”). DSUs granted before the 2008 Omnibus Incentive Plan was approved by our stockholders on June 11, 2008 were issued under Eclipsys’ 2005 Stock Incentive Plan. DSUs granted subsequent to such date have been issued under Eclipsys’ 2008 Omnibus Incentive Plan.

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Initial Awards. In connection with joining the Board, each new non-employee director receives: (i) for inducement and retention purposes, a number of DSUs equal to $75,000 divided by the fair market value of the Voting Common Stock on the date of issuance (the “Inducement DSUs”); and (ii) for compensatory purposes, a number of DSUs equal to the product of $11,000 and the number of full 30-day periods from the date of election or appointment to the Board until the scheduled date of the next regular annual meeting of the Company’s stockholders (if the next annual meeting has not yet been scheduled at the time of calculation of the award, it is assumed that the next annual meeting will be held on the same month and day as the immediately preceding annual meeting) divided by the fair market value of the Voting Common Stock on the date of issuance (the “Pro-Rata DSUs”). The Inducement DSUs and the Pro-Rata DSUs are issued on the date of election or appointment to the Board unless the date of election or appointment to the Board is during a regular quarterly blackout period under the Company’s Insider Trading Policy, in which case the DSUs are granted upon termination of that blackout period. Each Inducement DSU and Pro-Rata DSU represents a notional right to receive one share of Voting Common Stock at the time specified below.

The Inducement DSUs vest in twenty-four (24) equal consecutive monthly increments following the date of award or, if earlier, upon the occurrence of a change in control. The Pro-Rata DSUs vest in the same manner as described below for Annual Grant DSUs.

Annual Awards. Each individual who is elected as a non-employee director at an annual meeting of stockholders, or who is a continuing non-employee director immediately after such annual meeting, will be granted a number of DSUs equal to the quotient obtained by dividing $125,000 by the fair market value of the Voting Common Stock on the date of the annual meeting (the “Annual DSUs”). However, if the date of the annual meeting is during a regular quarterly blackout period under the Company’s Insider Trading Policy, then the Annual DSUs are granted upon termination of that blackout period. Each Annual DSU represents a notional right to receive one share of Voting Common Stock at the time specified below.

The Annual DSUs vest in twelve (12) equal consecutive monthly increments following the date of the annual meeting with respect to which such Annual DSU is made or, if earlier, upon the occurrence of a change in control, or the annual meeting of stockholders immediately following the meeting with respect to which the Annual DSU was granted.

Annual Retainer Deferrals. A non-employee director may elect to receive DSUs in lieu of all or a portion of his or her annual retainer fees. All DSUs issued for deferred cash compensation are fully vested at all times.

Issuance of Shares. Shares of Voting Common Stock equal to the whole number of vested DSUs credited to a non-employee director are issued to the non-employee director on the earlier of the cessation of Board service or a change in control.

Equity Retention Guidelines

The Company’s equity retention guidelines are applicable to the Board of Directors and executive officers. The goal is for Board members to accumulate within five years, and thereafter to retain, vested Eclipsys equity having a value equal to 1.5 times the annual base Board compensation (cash retainer plus annual DSUs). Board members should not sell or otherwise transfer beneficial ownership of (a) more than half of the vested after-tax shares of Voting Common Stock obtained as a result of any restricted stock award, or (b) more than half of the shares of Voting Common Stock subject to the vested portion of any stock option award, if net of such sale or transfer the individual does not meet the applicable equity retention threshold.

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EXECUTIVE OFFICERS

The table below lists our executive officers. A summary of the background and experience of each of these individuals (other than Mr. Pead, whose information is above) is set forth after the table.

Chris E. Perkins has served as our Executive Vice President and Chief Financial Officer since July 2009. Prior to joining Eclipsys, Mr. Perkins served as Executive Vice President and Chief Operating Officer of Per-Se Technologies Inc., a provider of physician practice management services, from January 2006 until its acquisition by McKesson Corporation in January 2007. While at Per-Se, he also served as Executive Vice President and Chief Financial Officer (February 2001 to January 2006) and Senior Vice President of Corporate Development (from April 2000 to February 2001). After the sale of Per-Se, Mr. Perkins served from December 2007 to July 2008 as Executive Vice President and Chief Operating Officer of Emageon, Inc., a NASDAQ-traded provider of radiology and cardiology digital imaging and archiving software. He previously held senior-level positions at AGCO Corporation and audit positions at Arthur Anderson LLP. Mr. Perkins also serves as a director of Immucor, Inc., which develops, manufactures and sells various reagents and automated systems/instruments used primarily by hospitals, clinical laboratories and blood banks.

John E. Deady has served as our Executive Vice President Client Solutions since January 2006. Prior to joining Eclipsys, Mr. Deady served from October 2005 until January 2006 as Vice President and General Manager, Revenue Cycle Solutions, at McKesson Corporation, a provider of healthcare information technology. While at McKesson, he also served as Vice President of Marketing & Sales Support from April 2004 until October 2005; as National Vice President of New Business from October 2002 to April 2004; and National Vice President of Clinical Sales Group from August 2001 to October 2002. Previously, Mr. Deady held executive sales and marketing positions at ADAC Laboratories and Cerner Corporation, and a technical sales position at E.I. du Pont de Nemours and Company.

John P. Gomez has served as our Executive Vice President and Chief Technology Strategy Officer since December 2004. Mr. Gomez joined Eclipsys as Senior Vice President and Chief Technology Officer in August 2003. Prior to joining Eclipsys, he served from October 2002 to January 2003 as Senior Vice President and Chief Technology Officer at WebMD Corporation, a provider of health information services and publications. Prior to that, Mr. Gomez served from February 2001 to October 2002 as Chief Technology Officer and Senior Vice President of strategic business development at Brill Media Holdings, an e-commerce and media publication company. Previously, Mr. Gomez held management technology positions at Microsoft Corporation, HRBlock Advanced Technology and KYMA Technologies, Inc.

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Nitin G. Deshpande has served as our President of Eclipsys India since February 2007. Prior to joining Eclipsys, Mr. Deshpande served from September 2003 to January 2007 as President and Chief Executive Officer of BMC Software India Pvt. Ltd., an enterprise management software provider. From November 2001 to August 2003, he served as Chief Operating Officer of Geometric Software and Solutions, a provider of Product Lifecycle Management (PLM) and Product Development Management (PDM) services and solutions.

John J. McAuley has served as our Senior Vice President Outsourcing and Support since January 2007. Mr. McAuley served as our Senior Vice President of Sales Support from April 2006 to January 2007. Prior to joining Eclipsys, he served as the North America Sales Manager (December 2002 to April 2006) and Vice President and General Manager of Positron Emission Tomography (December 2000 to December 2002) at Philips Medical, a provider a global leader in diagnostic imaging systems, healthcare information technology solutions, and patient monitoring and cardiac devices.

Matthew D. Sappern has served as our Senior Vice President of Professional Services since February 2008.  Mr. Sappern served as our Senior Vice President of Technology Solution Services, including Remote Hosting and Platform Technical Services from January 2007 to February 2008. He also served as our Vice President of Development, heading the Enterprise Solutions team, several clinical development teams and Product Management from November 2003 to January 2007. Prior to joining Eclipsys, Mr. Sappern served as Vice President of Strategic Applications at WebMD Corporation, a provider of health information services and publications. Previously, he also held management roles at Time Warner, Primedia and Young & Rubicam.

W. David Morgan has served as our Senior Vice President of Finance, Chief Accounting Officer and Treasurer since August 2009. Mr. Morgan served as our Interim Chief Financial Officer and Treasurer from January 2009 to August 2009, and Vice President of Finance and Assistant Treasurer from August 2008 to August 2009. Prior to joining Eclipsys, he served as Vice President and Controller of Worldspan LLP, a computerized travel reservation system company. From 2002 to 2005, Mr. Morgan was Controller and interim Chief Financial Officer of MAPICS, Inc., a provider of enterprise software for midsized manufacturers and divisions of large corporations. Mr. Morgan began his career with Arthur Andersen LLP.

Brian W. Copple has served as our Chief Legal Officer, General Counsel and Corporate Secretary since June 2005. Prior to joining Eclipsys, Mr. Copple served as Chief Legal Officer and General Counsel of Exult, Inc., a provider of human resources and related business process outsourcing services, for five years until its acquisition by Hewitt Associates. Previously, Mr. Copple was a partner with the law firm of Gibson, Dunn & Crutcher LLP.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our Voting Common Stock and Voting Common Stock equivalents as of March 1, 2010 by (i) each person or entity who is known by us to beneficially own more than 5% of the outstanding shares of Voting Common Stock; (ii) each director or nominee for director; (iii) each of the executive officers named in the Summary Compensation Table set forth below under the caption “Executive Compensation;” and (iv) all directors and executive officers as a group. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares such power with his or her spouse) with respect to the securities listed as beneficially owned by such person or entity. We have no outstanding shares of non-voting common stock.

Our non-employee directors receive a portion of their total compensation for Board service in the form of deferred stock units (“DSUs”). Under the rules of the SEC, DSUs are not included in calculating beneficial ownership of our Voting Common Stock because the holder of a DSU does not have voting or investment power with respect to the DSU or the underlying shares. Nonetheless, we consider the disclosure of DSU ownership to be relevant to investors because the payment ultimately received by the holder of a DSU is in the form of Voting Common Stock. Accordingly, the following table includes a column reflecting the number of DSUs held by each non-employee director even though the underlying shares are not included in the shares reported as beneficially owned or the related percentage ownership calculations.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Overview and Objectives of our Executive Compensation Program

Compensation of our named executive officers is determined by our Compensation Committee, which consists of three independent directors. The primary goals of our compensation program for named executive officers are to retain those individuals and to motivate and reward them for continued service and for performance that increases value for the Company’s stockholders. The compensation program is designed to support these goals in specific ways.

First, annual cash incentive payments are contingent upon meeting specified earnings and other performance objectives. This link between incentive payments and corporate results should tend to support increases in the value of our stock.

Second, stock options are granted with an exercise price equal to the fair market value of our stock on the date of grant, so the value of these awards to recipients depends upon increases in the Company’s stock price. Both stock options and other equity awards will increase in value over time only with sustained performance that should result in a commensurate increase in the value of stockholders’ investments.

Third, the stock options and restricted stock owned by the named executive officers have been issued with vesting periods ranging from three to five years. This provides an incentive for the named executive officers to continue serving through the vesting period and to pursue long-term increases in the value of our stock.

Fourth, base salary and time-based restricted stock provide compensation and help with retention until value can be realized from performance-based incentives and stock-based awards.

In January 2006, the Compensation Committee engaged Frederic W. Cook & Co., Inc. (“Cook”) as its independent compensation consultant, and Cook has continued to serve in that capacity since then. Cook has provided market information and recommendations regarding cash and non-cash compensation and related policies. The Compensation Committee has taken Cook’s information and recommendations into account, along with the Compensation Committee’s views of what is appropriate based upon our circumstances, to formulate our executive compensation programs and the 2009 compensation described in this proxy statement.

By its charter, the Compensation Committee is responsible for determining compensation for the Company’s executive officers. The CEO makes recommendations to the Compensation Committee regarding compensation for other executive officers. The Compensation Committee makes its decisions about the CEO’s compensation in executive session.

Market Comparisons

We attempt to provide aggregate compensation to our named executive officers that is competitive with what they could earn working elsewhere in the industry. These include not only our direct competitors, but also other similarly sized software and business services companies that have operations similar to ours or otherwise provide training and experience relevant to management at Eclipsys. We evaluate our executive compensation by reference to a “comparison group” of publicly traded US-based software and business services companies with revenue and market cap between 1/3x and 3x ours. We believe that such comparisons allow us to gauge the labor market and the relative cost of compensating the named executive officer team.

Cook annually works with the Company and the Compensation Committee to re-evaluate the comparison group. The goal is to find relevant competitors for labor and/or securities market investment, with comparable scope, complexity, R&D, and sales channels in a size range between 1/3x and 3x Eclipsys’. 2009 named officer

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compensation levels were set after review of market data from the following 19 companies: Allscripts, AmSurg, Cerner, Epicor Software, F5 Networks, GSI Commerce, HLTH Corp., Informatica, Itron, Jack Henry, Lawson Software, Micros Systems, MicroStrategy, Omnicell, Quality Systems, Quest Software, Sybase, TIBCO Software, and TriZetto Group. In May 2009, the Compensation Committee again updated the comparison group consistent with Cook’s suggestions by (i) adding athenahealth, Computer Programs & Systems, MedAssets, Phase Forward and SXC Health Solutions, all of which provide technology solutions to healthcare organizations; and (ii) deleting AmSurg, F5 Networks and Itron because of business model differences, and removing Sybase because its market capitalization was too large in comparison to Eclipsys. This is the comparison group that was used in connection with hiring Mr. Pead as CEO in May 2009 and Mr. Perkins as CFO in July and for determining how 2010 compensation changes related to the market.

To assist in hiring decisions related to Messrs. Pead and Perkins, the Compensation Committee also reviewed information from supplemental comparison groups prepared by Cook of comparable companies that had recently hired a CEO or CFO, as applicable. The rationale was to recognize that hiring a CEO and CFO are unique situations, that may transcend specific labor and securities market peers. These comparison companies were considered comparable because they operate in the software and services or healthcare equipment and services industries and have market capitalizations ranging from 1/4 to 4X Eclipsys’ market capitalization. The supplemental comparison group for the CEO hire consisted of Acxiom, Analogic, Cardionet, Earthlink, EV3 Inc., Global Cash Access Holdings, Infogroup, Integral Systems, Quidel Corp., Steris, and Wright Medical Group. The supplemental comparison group for the CFO hire consisted of Acxiom, Advent Software, Forrester Research, HMS Holdings, Mentor Graphics, Metavante Tech, Nuance Communications, Owens & Minor, Solera, United Online, WebSense, and Wind River Systems.

Desired Market Position

In general, the Company’s objective is to provide an aggregate compensation opportunity to our named executive officers at approximately the 75^th percentile of the comparison group, assuming performance at target levels. The Company considers this to be consistent with the objective of hiring and retaining highly qualified management who can cause the Company to be one of the best-performing companies in healthcare information technology. In general, the current aggregate compensation program for our named executive officers moderately overweights salary and underweights incentive compensation relative to this 75^th percentile objective, particularly for those individuals other than Messrs. Pead, Perkins and Morgan because they were recruited at a time when the Company was not profitable and therefore deriving value from incentive payments and equity awards was highly uncertain. The Compensation Committee’s intent is to shift this balance over time so that incentive based awards represent a larger proportion of total compensation. In general, the goal is for salaries to be set at the 50^th percentile based upon market comparisons, with performance-based variable compensation set at the 75^th percentile based upon performance consistent with targets approved by the Committee. Cash incentive compensation would vary depending upon performance against annual objectives, and equity awards would vest over multi-year periods and would include a significant portion linked to annual or longer-term performance objectives. The Compensation Committee’s migration toward this model has driven the restraint in salary increases and increased use of performance-based equity awards described.

Elements of our Executive Compensation Program

The Company’s executive compensation program consists of base salary, equity awards, and eligibility for an annual cash incentive payment based upon attainment of specified corporate performance objectives. We choose to provide these basic compensation elements because they are conventional components of a public company executive compensation program and can be readily assessed against market practices and modified as appropriate, and because we believe that if we did not provide these elements we would be unable to recruit or retain capable executives. In 2009, the Company did not provide its executive officers with deferred compensation arrangements or pension or supplemental retirement benefits, and perquisites were limited. We believe that the base salary, annual

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cash incentive and equity elements of our executive compensation were set at levels that, in the aggregate, represented an attractive compensation package and were adequate to recruit, retain, motivate and reward the executive officers without other compensation elements.

We attempt to provide an aggregate compensation package that is competitive with what our executives could earn elsewhere. We believe that if the Company performs strongly and our stockholders benefit, executive officers should earn compensation that corresponds to such Company performance, and that this in turn motivates officers to operate the company in a manner that increases long-term shareholder value. This argues in favor of weighting compensation toward equity and performance-based payments. On the other hand, we believe executive salaries should deliver sufficient compensation to retain our executive team until value can be derived from performance-based cash incentive and equity components. We attempt to find the right balance among these elements through ongoing review and analysis based upon our operating results and market factors.

Salary

Salaries are paid to secure the services of the executive team and compensate for functional role and responsibility. The Compensation Committee set 2009 base salaries for our named executive officers after considering market information as described below, Cook’s advice, and the Company’s historical executive compensation practices. In the case of Messrs. Pead and Perkins, who were hired in May 2009 and July 2009, respectively, negotiation also played a role.

Salaries for our named executive officers did not increase during 2009 because we determined that their base salary levels were appropriate in light of our market comparisons and the prior year’s performance. The Compensation Committee approved relatively modest salary increases for the named executive officers in 2008, but there were no salary increases for them in 2007 or 2006. For 2010, the Compensation Committee approved salary increases of $25,000 each for Messrs. Pead and Perkins, but no salary increases for the other named executive officers. The Compensation Committee’s restraint on salary increases reflects its intention to have incentive-based compensation make up an increasing proportion of overall compensation relative to salary, and also reflects the competitiveness of the named executive officers’ existing salaries.

Incentive Compensation

Incentive compensation is intended to link executive pay directly to achievement of annual Company operating performance objectives. We believe this aligns the interests of our named executive officers with stockholders in pursuit of short to medium-term performance that should create value for our stockholders. For all of our named executive officers other than our current CEO, Mr. Pead, our former CEO, Mr. Eckert, and Mr. Morgan, the 2009 cash incentive compensation target was $200,000; the CEO incentive compensation targets were $800,000 for Mr. Eckert and $650,000 for Mr. Pead (pro-rated for his partial year of service), and Mr. Morgan’s target was $137,500. For all executive officers, incentive compensation was payable based solely upon performance against Company objectives because fundamental financial performance is required to build stockholder value. In addition, we think a uniform bonus approach that is funded by corporate financial performance helps foster a sense of teamwork and common purpose among our management team.

Funding of our 2009 cash incentive compensation plan was based upon a non-GAAP earnings per share measure because this was viewed as correlating with stockholder value. Actual payments from the funded bonus pool were a function of non-GAAP earnings, sales bookings (new business and renewals), and client satisfaction measured by improvement in scores for the Company’s enterprise clinical software and enterprise financial software. Client satisfaction was based upon data prepared by KLAS, a widely followed health information technology survey and ratings service. These performance objectives were weighted 60% to non-GAAP earnings per share, 20% to bookings, and 20% to client satisfaction. We structured the plan to focus upon earnings per share to motivate and reward performance against the fundamental measure that, together with our growth prospects, is the most important determinant of the value many investors ascribe to the Company’s stock. We

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also chose to include sales bookings because current sales are the primary source of revenue growth in future periods, and are therefore critical to our future success. We chose client satisfaction to support our efforts to improve operational quality by motivating and rewarding focus upon the way clients view the Company.

We used a non-GAAP earnings per share measure that excluded from GAAP earnings non-cash equity compensation expense, restructuring initiatives, income tax, non-cash amortization of intangible assets associated with our 2008 acquisitions, reduction of deferred revenue and related deferred costs as a result of purchase accounting adjustments in connection with our acquisition or Premise Corporation in 2008, and realized loss on sale of auction rate securities. The use of non-GAAP earnings was intended to focus on operating performance within executives’ control and to minimize any disincentive to take corporate actions that are in the Company’s best interests. Further, many investors and analysts use comparable non-GAAP measures in their evaluation of the Company.

The 2009 incentive plan target thresholds associated with these performance objectives were set in connection with our annual budgeting process and were designed for consistency with our strategic plans and performance projections. Earnings per share triggering payments under the plan were required to be determined net of those payments because the cost of incentive compensation should be considered in evaluating financial performance.

The plan established $.60 as the threshold non-GAAP earnings level required to begin funding the bonus pool under the incentive plan. The plan called for actual results for each performance objective to be plotted against the range from threshold to target, with performance at target representing 100%, and the resulting percentage, weighted as described above, was to determine the portion of the target incentive payment actually payable due to results achieved against that performance objective. Plan funding was set to reach 100% of target at non-GAAP earnings of $.88 per share, representing approximately 16% growth over 2008 non-GAAP results. The plan was approved in March of 2009 following a very difficult fourth quarter 2008 and in the face of challenging market conditions, and in that context, it was believed that plan funding at 100% of target would represent solid improvement over the prior year, requiring strong execution. Payments under the 2009 plan were made at 143.2% of target, based upon performance following 2009 non-GAAP earnings of $1.04 per share.

For more information about 2009 incentive plan compensation, see “Narrative Disclosure Related to Summary Compensation Table and Grants of Plan-Based Awards Table – Bonuses and Non-Equity Incentive Plan Compensation.”

No payments were earned under the Company’s 2008 incentive compensation plan (by named executive officers or other participants) because the Company’s 2008 non-GAAP earnings were below the minimum required to fund the plan.

Our 2007 incentive compensation plan based payments upon the Company’s non-GAAP earnings, sales bookings (new business and renewals), and revenue, weighted 50%, 25%, and 25%, respectively. Revenue was included because it was considered to be an important measure of growth for the Company. For each of the performance objectives, the plan established minimum and target performance levels ($.72 and $.80, respectively, for non-GAAP earnings, $510 million and $638 million, respectively, for bookings, and $456 million and $480 million, respectively, for revenue). Performance at or above the minimum level for each performance objective was required to fund the incentive plan. We set the minimums at levels representing solid improvement over the prior year, which we expected to achieve, and the targets at levels that would represent significant growth over the prior year, and that we thought would be attainable with strong execution throughout the year. Payments under the 2007 plan were made at 99% of target, based upon performance essentially in-line with the target levels for each of the performance objectives.

For 2009, the aggregate incentive payments paid to named executive officers was $1.8 million (including $413,150 and $100,000 paid as guaranteed bonuses to Messrs. Pead and Perkins, respectively), which represented approximately 15% of the total 2009 Company-wide target incentive pool for all participants. For

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2007, aggregate incentive payments paid to named executive officers were $1.2 million, which represented less than 15% of the total 2007 Company-wide target incentive pool for all participants. The aggregate target incentive pools and payments for the named executive officers and for all participants for 2009 and 2007 were established in connection with budgeting for target earnings. Executive officer target incentive payments were set after considering market compensation information and in connection with salary levels and equity compensation to reach a level of overall target compensation considered appropriate as described below. The Compensation Committee is more concerned with the appropriateness of overall compensation levels than with maintaining a specified portion of the aggregate incentive pool for executive officers.

Under our incentive compensation plans, the Compensation Committee retains discretion to modify payment levels, and the Compensation Committee can also decide to make bonus payments outside of the incentive compensation plan. This discretion was not exercised for 2007, 2008 or 2009. The incentive compensation plans have provided that plan incentives for any year may not be paid in excess of target unless the Board of Directors approves a Company budget for the next year that includes projected earnings and revenue that the Board considers appropriate. The Compensation Committee included this requirement in order to prevent potential funding of bonuses above target at the expense of future performance. Payments under the 2009 incentive compensation plan were approved after the Board’s approval of the Company’s 2010 budget.

Equity

Overview

We use equity compensation to align the longer-term interests of named executive officers and stockholders, and to help retain named executive officers over time. Equity awards are made based upon target total direct compensation for each named executive officer based upon market and size-related factors, which are used to establish the overall annual budget for company-wide equity awards and to allocate the budget to executive officers. The expected value of equity over time is also considered, with the intent that the equity component, when combined with cash elements, approximates the target aggregate compensation over time. This requires us to assess the “value” of equity based awards, both in terms of their cost to the Company from an accounting point of view for budget purposes, as well as in terms of their value to executive officer recipients.

Generally, annual equity awards for named executive officers are made as part of our annual executive compensation review process, which usually occurs in the first quarter of each calendar year so that past performance and the new budget can be considered. In 2009, these approvals took place in February, except that awards to Messrs. Pead and Perkins were made in February and July, 2009, respectively, in connection with their hire, and approval of equity awards for Mr. Morgan were made in August 2009 as a special grant in connection with his promotion to Senior Vice President, Chief Accounting Officer and Treasurer, after his service as interim CFO.

At the time management equity awards were approved in February 2009, the broad economy was struggling, there was uncertainty in the healthcare information technology market, including reduced purchasing by clients, and the Company had suffered a difficult fourth quarter 2008. Share values of Eclipsys and other companies in the comparison group assembled by Cook had also declined significantly in recent months. This context presented complexities in determining equity compensation, because lower stock prices meant that larger awards would be required to deliver target values based upon the Black-Scholes methodology used by the Company to calculate equity compensation expense, but larger awards would be more dilutive and consume authorized plan shares more quickly. The Committee determined that a fair response to this scenario would be to “split the difference” and deliver more share-equivalents but less grant “value” by reducing the number of awards from what would have been required to deliver target value versus historical benchmarks, while increasing the number compared to the previous year, but not so much as to fully make up for the decline in stock price and deliver value comparable to historical awards or historical market data provided when stock prices were higher. The Compensation Committee decided to adopt this approach and to issue time-based equity awards at what was believed to approximate the median level that would be adopted by the comparison group. In addition, the

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Committee approved performance-based awards, as described below, at levels such that, if the performance conditions were met, total equity compensation would be at approximately the 75^th percentile of the comparison group. The outcome of this approach was that approximately 60% of the equity awards made to the named executive officers in 2009 were time-based, and approximately 40% were performance based.

Stock Option Grant Guidelines

Our Stock Option Grant Guidelines provide that stock options for all recipients, including named executive officers, will generally be granted on the regularly scheduled grant date coinciding with or next following the date on which the grant is approved. Regularly scheduled stock option grant dates are on the 14^th day (or if the 14th day is not a business day on which the securities markets are open, then the next business day following the 14^th) of the second and third calendar months of each fiscal quarter. However, if a scheduled grant date falls during any regularly scheduled quarterly blackout period under the Company’s insider trading policy, then that grant date will occur on the day the blackout period ends. The guidelines permit the Board or Compensation Committee to choose grant dates other than the specified grant dates on a case-by-case basis, but this discretion has not been exercised to date.

These guidelines were implemented for three primary reasons. First, they tend to reduce perceptions of inequity among grant recipients who would otherwise receive stock options in the same general time frame but with different exercise prices. Second, concentrating grants reduces administration. Third, we believe that, in general, it is appropriate to grant stock options following the release of quarterly or annual financial information, so that the fair market value exercise price of the options is likely to reflect all financial and other information (positive or negative) about the Company that is generally available to all investors at the time of the grant. The Company does not have a program, plan or practice to time the release of material non-public information for the purpose of affecting the value of compensation for the named executive officers.

Restricted Stock

In addition to stock options, the Company has granted restricted stock to some employees, including each of the named executive officers. We believe a properly structured equity grant program that combines stock options and restricted stock is likely to be more efficient economically for the Company, and more effective for recruitment and retention, than grants of stock options alone. A stock option provides an incentive to increase the Company’s stock price, while the restricted stock component maintains value, and therefore fulfills a retention and value-maintenance function, even during times that the stock price is not increasing. In the awards made to named executive officers in February 2009, we used combined awards of stock options and restricted stock. This reduced overall compensation expense and dilution compared to grants of options alone, while maintaining the alignment of management and stockholder interests provided by equity compensation and delivering increased perceived value to recipients due to risk reduction provided by restricted stock. Our practice has been to budget for equity awards in terms of “stock option equivalents,” and then count one share of restricted stock as three stock option equivalents for purposes of allocating total stock option equivalents for an individual between stock options and restricted stock. This helps to compensate for the fact that restricted stock carries a higher compensation expense per share than stock options under relevant accounting principles, and also recognizes that restricted stock carries less performance risk because, unlike stock options, it has the potential to deliver value even if the price of the Company’s stock declines from the date of grant.

Performance-Based Equity Awards

The Compensation Committee favors using performance-based equity awards as a component of total compensation, and imposed a one-year EBITDA performance requirement to a portion of the stock options awarded to the named executive officers in February of 2009. These performance-based stock options have a four-year vesting schedule like the other time-based stock options issued by the Company, but were subject to

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forfeiture if 2009 non-GAAP EBITDA was below $69.5 million. The portion subject to the performance goal was the amount above the median for each officer, ensuring that earnout of above-median equity compensation required a minimum corresponding performance. This non-GAAP EBITDA objective was achieved at the end of 2009, so the stock options continue to vest according to their original four-year schedule.

For 2010, the only equity awards authorized to date by the Compensation Committee for named executive officers are performance-based, in the form of Performance Stock Units. These awards were granted to Messrs. Pead (25,000 units), Perkins (50,000 units), Gomez (50,000 units), and Deady (37,500 units). These units represent a contract right for the recipient to receive a number of shares of Eclipsys common stock per unit ranging from zero to 2.25, depending upon Eclipsys total shareholder return over the performance period compared to total shareholder returns of a specified group of 73 other healthcare information technology and software companies. Eclipsys performance at the 50^th percentile will result in issuance of one share per unit, performance at the 25^th percentile or below will result in issuance of no shares, and performance at the 90^th percentile or above will result in issuance of 2.25 shares per unit. Performance between these points is scaled by linear interpolation. Relative performance will be measured and shares distributed at the end of three years, subject to earlier measurement in case of a change in control, and earlier measurement and distribution in case of a qualifying termination of employment. The Committee used a multi-year relative total shareholder return measure as the performance objective to neutralize industry and economic trends and focus on shareholder return relative to the market.

Stock Ownership Guidelines

In 2007, we implemented equity retention guidelines applicable to the Company’s executive officers and directors. The Company’s goal is for executive officers covered by the guidelines to accumulate within five years, and thereafter to retain, vested Eclipsys equity having a value equal to 3.0 times annual base salary for the CEO, and 1.5 times annual base salary for executive officers other than the CEO. An officer covered by the guidelines should not sell or otherwise transfer beneficial ownership of more than half of the vested after-tax shares of Eclipsys common stock obtained as a result of any restricted stock award, or more than half of the shares of Eclipsys common stock subject to the vested portion of any stock option award, if net of such sale or transfer the individual does not meet the applicable equity retention threshold.

Severance and Change in Control Benefits

We use severance benefits to provide enough employment security to induce qualified executive officers to invest their career with Eclipsys. They are also provided to ensure that the Company obtains a release from claims in connection with termination of employment that triggers severance. Severance benefits also assist in retention of the executive team through the uncertainty of a potential change in control transaction that could result in loss of employment. Messrs. Deady, Gomez and Copple have gross-ups to offset any excise tax on excess parachute payments to preserve the net value to them of these severance benefits. Mr. Eckert also had a gross-up. These gross-ups were included in employment agreements negotiated in 2004 and 2005, when such gross-ups were common practice, to recognize that the tax code treats executives differently depending on their previous option exercise decisions and to neutralize any disincentive to negotiate a better transaction price on behalf of Eclipsys shareholders. Messrs. Pead and Perkins do not have excise tax gross-ups, reflecting the Compensation Committee’s more recent view disfavoring such gross-ups.

Named Executive Officers

Philip M. Pead, President & CEO. Mr. Pead was hired in May 2009. His compensation package was determined taking into account market information for CEOs from the Company’s regular comparison group plus the supplemental comparison group for recently hired CEOs, as well as and the hiring package of the previous CEO, and the Compensation Committee’s executive compensation philosophy. The Committee determined that Mr. Pead’s cash compensation would be set at $650,000 in annual salary and a 100% cash incentive compensation target, which was consistent with median for the regular and supplemental comparison groups, and below the cash compensation of the outgoing CEO. This was intended to demonstrate the Committee’s intention

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to make executive compensation more performance-based, as well as the Company’s commitment to cost control and margin improvement. Mr. Pead’s initial hire equity awards included 66,700 shares of restricted stock and 450,000 stock options, which was intended to approximate a median market award for a new CEO at a company comparable to Eclipsys. The vesting of these equity awards on a somewhat front-loaded basis over three years, as described below, was intended to provide initial award vesting similar to the vesting of Mr. Eckert’s new hire equity awards, and to increase somewhat the value of his initial award as an inducement to him to assume the CEO role while minimizing use of approved plan shares. In February 2010, we increased Mr. Pead’s salary by $25,000 and awarded him 25,000 performance stock units, as described above. The Committee decided to increase his salary and make this equity award in recognition of the Company’s above-target performance since he became CEO. His cash compensation remains at approximately the 50^th percentile of the comparison group and his 2010 equity award was well below the 50^th percentile of the comparison group, reflecting the fact that his significant new-hire awards were made less than a year earlier and had originally been intended to include a 2010 equity award.

Chris E. Perkins, Executive Vice President and Chief Financial Officer. Mr. Perkins was hired in July 2009. His compensation package was determined taking into account market information for CFOs from the Company’s regular comparison group plus the supplemental comparison group for recently hired CFOs, as well as the compensation packages of other executive officers of the Company and the Compensation Committee’s executive compensation philosophy. Mr. Perkins’ salary was set at $400,000, which was approximately the 75^th percentile of the ongoing comparison group and the new CFO comparison group, reflecting internal compensation equity in light of the salary levels of the other named executive officers. His target cash incentive compensation was set at 50% of his base salary, which is somewhat below the median for the comparison group but consistent with other named executive officers other than the CEO, resulting in total target cash compensation somewhat below the 50^th percentile for the comparison group but at the median for the new CFO comparison group. His initial hire equity awards included 22,222 shares of restricted stock and 133,334 stock options, which was intended to approximate a median market award of equity for a new-hire CFO at a company comparable to Eclipsys. In February 2010, we increased Mr. Perkins’ salary by $25,000 and awarded him 50,000 performance stock units, as described above. With the salary increase, Mr. Perkins’ total target cash compensation is still at approximately the 50^th percentile of the comparison group; the 2010 equity award was in excess of the 75^th percentile for the comparison group. The Committee decided to increase his salary and make this award in recognition of the expansion of Mr. Perkins’ role to include significant operational responsibilities in addition to the traditional duties of a CFO, and in an effort to concentrate 2010 equity awards to those executive officers expected to contribute most significantly to the Company’s performance over the anticipated three-year performance period for the performance stock units.

John E. Deady, Executive Vice President Client Solutions. We hired Mr. Deady in January 2006, and his only salary increase since that time was in February 2008, when we increased his salary from $450,000 to $475,000. Mr. Deady’s cash incentive compensation target has not been increased since he was hired. These limited cash increases, and three-year average annual equity awards well below median for the comparison group assembled by Cook, were considered to be appropriate in light of the fact that Mr. Deady’s overall compensation was determined to be highly competitive compared to the comparison group. Further, while the Compensation Committee believed modest increases in compensation were justified in 2008 in recognition of Mr. Deady’s significant contributions to the Company’s progress over the last two years, it did not believe it was necessary or appropriate to increase Mr. Deady’s overall compensation significantly. In 2009, Mr. Deady received 16,666 shares of restricted stock, 100,000 time-based stock options, and 85,000 time-based stock options with a one-year minimum EBITDA condition. These awards were made as part of the Company’s annual equity awards process for executive officers and were intended to approximate 50^th percentile awards for his position in the Company if the 2009 EBITDA condition was not met, and 75^th percentile awards if it was met. In February 2010, we awarded him 37,500 performance stock units, as described above. This equity award was in excess of the 75^th percentile for our comparison group. The Committee decided to make this award in an effort to concentrate 2010 equity awards to those executive officers expected to contribute most significantly to the Company’s performance over the anticipated three-year performance period for the performance stock units.

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John P. Gomez, Executive Vice President and Chief Technology Strategy Officer. Before 2008. Mr. Gomez’s last salary increase and equity awards were in 2004. In February 2008, we increased his salary to $475,000 per year and awarded him options to purchase 35,000 shares of our common stock as well as 5,000 shares of restricted stock. This represents a cumulative aggregate salary increase of only approximately 5.6% over a four year period, and annual equity awards well below median for the comparison group. While Mr. Gomez had made significant contributions to the Company’s software development, technology strategy, and business development initiatives, his aggregate compensation was determined to be in excess of the comparison group 75^th percentile, so we determined that it was not necessary or appropriate to increase Mr. Gomez’s overall compensation significantly in 2008. In 2009, Mr. Gomez received 5,000 shares of restricted stock, 60,000 time-based stock options, and 45,000 time-based stock options with a one-year minimum EBITDA condition. These awards were made as part of the Company’s annual equity awards process for executive officers and were intended to approximate 50^th percentile awards for his position in the Company if the 2009 EBITDA condition was not met, and 75^th percentile awards if it was met. Mr. Gomez received no increase in base salary in 2009 or 2010. In February 2010, we awarded him 50,000 performance stock units, as described above. This equity award was in excess of the 75^th percentile for the comparison group. The Committee decided to make this award in an effort to concentrate 2010 equity awards to those executive officers expected to contribute most significantly to the Company’s performance over the anticipated three-year performance period for the performance stock units.

Brian W. Copple, Chief Legal Officer, General Counsel, Secretary. Mr. Copple’s salary of $400,000 is at approximately the 75^th percentile of the comparison group, reflecting internal compensation equity in light of the salary levels of the other named executive officers in 2005, when he was hired. His target cash incentive compensation of 50% of his base salary is significantly below the median for the comparison group but consistent with other named executive officers other than the CEO, resulting in total cash compensation somewhat below the 50^th percentile for the comparison group. In 2009, Mr. Copple received 8,333 shares of restricted stock, 50,000 time-based stock options, and 45,000 time-based stock options with a one-year minimum EBITDA condition. These awards were made as part of the Company’s annual equity awards process for executive officers and were intended to approximate 50^th percentile awards for his position in the Company if the 2009 EBITDA condition was not met, and 75^th percentile awards if it was met. Mr. Copple received no increase in base salary in 2009 or 2010 and no equity awards in 2010.

W. David Morgan, Senior Vice President, Finance; Chief Accounting Officer; Treasurer. Mr. Morgan was hired in July 2008 as our Vice President Finance with a salary of $250,000 per year, an annual cash incentive compensation target of 50% of his base salary, and initial awards of 20,000 stock options and 6,666 shares of restricted stock. This aggregate compensation was intended to approximate the market median for someone of his experience in the position he was hired to fill. Mr. Morgan participated in the Company’s annual employee equity awards process in November of 2008, receiving 6,250 stock options and 2,087 shares of restricted stock. These awards were made in light of Cook’s guidelines regarding median award levels based upon position in the Company, adjusted slightly in light of his recent new-hire awards. Mr. Morgan did not participate in the equity awards made to other named executive officers in February 2009 because of the equity issued to him in August and November of 2008. In January 2009, the Board of Directors appointed Mr. Morgan interim Chief Financial Officer, and in connection with his service as such he received two special cash incentive payments, one in May for $50,000 and another in December for $75,000. These payments were intended to reward him for assuming the CFO role in addition to his other duties, and to compensate for the difference between his salary and the market salary for a chief financial officer. In August 2009, following the Company’s hiring of Mr. Perkins as CFO, Mr. Morgan was promoted to his current role, receiving a $25,000 salary increase and awards of 23,333 stock options and 3,889 shares of restricted stock. These compensation increases were intended to approximate the median for his new role. Mr. Morgan received no increase in base salary and no equity awards in 2010.

R. Andrew Eckert, Former President & CEO. In 2009, Mr. Eckert received 25,000 shares of restricted stock, 150,000 time-based stock options, and 165,000 time-based stock options with a one-year minimum EBITDA condition. These awards were made as part of the Company’s annual equity awards process for executive officers and were intended to approximate 50^th percentile awards for his position in the Company if the

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2009 EBITDA condition were not met, and 75^th percentile awards if it were, as discussed above. Mr. Eckert received no increase in base salary in 2009. Mr. Eckert’s employment terminated in June 2009.

Robert J. Colletti, Former Senior Vice President and Chief Financial Officer. Mr. Colletti’s employment terminated in February 2009, so his compensation was not evaluated by the Compensation Committee in 2009.

Tax Considerations

Historically, Internal Revenue Code Section 162(m), which limits to $1 million our deduction for annual compensation that is not “performance-based” to each of our CEO and three other most highly compensation named executive officers employed at the end of the year (other than the CFO), has not had a significant effect on the Company because few of our executives have had the opportunity to receive annual compensation in excess of $1 million, excluding gains on stock option exercises that would not be taken into account because they should qualify as “performance-based” for Section 162(m) purposes. Nevertheless, in 2007, our stockholders approved the Company’s Incentive Compensation Plan for Specified Officers, and 2008, 2009 and 2010 incentive compensation has been structured pursuant to this plan in an effort to cause that compensation to qualify as “performance-based” and therefore deductible under Section 162(m).

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed the Compensation Discussion and Analysis and discussed the Compensation Disclosure and Analysis with management. Based upon its review and discussions with management, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in the Company’s 2010 proxy statement.

Edward A. Kangas, Chair

Craig Macnab

Judith C. Pelham

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EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

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2009 GRANTS OF PLAN-BASED AWARDS TABLE

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Narrative Disclosure Related to Summary Compensation Table and Grants of Plan-Based Awards Table

Terms of Equity Awards listed in the 2009 Grants of Plan-Based Awards Table

All of the listed equity awards were made as part of the Company’s regular annual equity award process, except that the restricted stock and stock option awards to Messrs. Pead and Perkins were made in connection with commencement of their employment and the restricted stock and stock option awards to Mr. Morgan were made in connection with his promotion. Consistent with the Compensation Committee’s intent to increase use of performance-based equity awards as opposed to those vesting solely based upon passage of time, a significant portion of the time-based stock options granted to executive officers in February 2009 were made subject to cancellation if 2009 non-GAAP EBITDA was below $69.5 million. The stock options were issued with exercise prices equal to the fair market value of the Company’s common stock on the date of grant. Each stock award, other than the stock awards made to Messrs. Pead and Perkins, vests in four equal installments on December 1, 2009, December 1, 2010, December 1, 2011 and December 1, 2012; and each stock option award, other than Mr. Pead’s stock option award, vests with respect to 25% of the underlying shares on the first anniversary of the date of grant and with respect to the remaining 75% of the underlying shares in 36 equal monthly installments thereafter. Mr. Pead’s stock award vests with respect to 65% of the shares on June 1, 2011 and the remaining 35% of the shares on June 1, 2012, and Mr. Pead’s stock option award vests with respect to 75% of the underlying shares in 24 equal consecutive monthly installments beginning on June 14, 2009 and continuing on the 14th day of each month thereafter until and including May 14, 2011; and with respect to the remaining 25%

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of the shares in 12 equal monthly installments beginning June 14, 2011 and ending May 14, 2012. Mr. Perkins’ stock award vests in four equal installments on June 1, 2010, June 1, 2011, June 1, 2012 and June 1, 2013. Vesting of all awards is subject to continued employment. The shares may not be sold and options may not be exercised prior to vesting. Any shares not vested or options not exercised at the time the recipient’s employment with the Company terminates, and that do not vest on an accelerated basis in connection with termination of the recipient’s employment as described in his severance agreement, are terminated.

Bonuses and Non-Equity Incentive Plan Compensation

The plans governing Non-Equity Incentive Plan Compensation earned in 2007 and 2009 were single-year plans with the following basic structure:

For 2009, Messrs. Pead and Perkins had guaranteed bonuses for the first year of their employment, as negotiated when they were hired in May 2009 and July 2009, respectively. Their guaranteed bonuses were calculated as 100% of their bonus targets, pro-rated for their partial year of service during 2009. Accordingly, Mr. Pead’s guaranteed bonus was $413,150 and Mr. Perkins’ guaranteed bonus was $100,000. The payout under the 2009 corporate bonus plan was 143.2% of target for all participants including named executive officers, reflecting performance versus targets as follows: for non-GAAP earnings, $1.04 per share versus a target of $.88 per share; for bookings (new business and renewals), $740 million versus a target of $634 million; and for KLAS scores, 76.1 versus a target of 77 for enterprise clinical software and 75.4 versus a target of 73.5 for enterprise financial software. Non-GAAP earnings excluded non-cash compensation expense and, restructuring initiatives as mentioned above, as well as income tax, non-cash amortization of intangible assets associated with our 2008 acquisitions, reduction of deferred revenue and related deferred costs as a result of purchase accounting adjustments in connection with our acquisition or Premise Corporation in 2008, and realized loss on sale of auction rate securities. Because the payout exceeded 100% of target, Messrs. Pead and Perkins received non-equity incentive plan compensation equal to the amount by which their ratable payment under the plan exceeded their guaranteed bonuses.

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For 2008, the Company failed to achieve the level of non-GAAP earnings specified as the minimum threshold for plan funding, and accordingly no non-equity incentive plan payouts were made for 2008.

For 2007, non-equity incentive plan compensation awards were 99% of target, reflecting 2007 non-GAAP earnings, revenue, and bookings results were all essentially at levels corresponding to payment at target under the plan. For plan purposes, target revenues were $480 million, and the Company’s actual revenues for the year were $477 million. Target non-GAAP earnings were $.80 per share, and non-GAAP 2007 earnings announced by the Company matched that target. Target bookings (new business and renewals) were $638 million and actual bookings were $635 million. Non-GAAP earnings excluded non-cash compensation expense and restructuring initiatives as mentioned above, as well as costs associated with corporate restructuring and relocation initiatives (generally associated with facilities consolidations and related severance), exiting the network services business, the Company’s voluntary stock option review and related derivative litigation, and stock-based compensation expense; as well as the net gain on the sale of the Company’s CPM Resource Center business and an income tax benefit resulting from the partial reversal of a valuation allowance for the Company’s Canadian subsidiary’s net operating losses.

Additional Information

The salaries for all of the named executive officers other than Mr. Morgan are provided for in employment agreements and would trigger severance benefits if reduced. Although the Company does not anticipate paying dividends, if the Company were to pay dividends, they would be payable on the same basis as to other stockholders with respect to vested restricted stock, and with respect to unvested restricted stock issued by June 15, 2009; with respect to unvested shares of restricted stock issued after June 15, 2009, any dividends or other distributions will be held by the Company and not distributed or delivered to holder of the unvested shares unless and until the restricted stock vests.

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EXECUTIVE EQUITY PLAN HOLDINGS AND EXERCISE ACTIVITY

2009 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

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2009 OPTION EXERCISES AND STOCK VESTED TABLE