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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On September 10, 2018, Cerner Corporation (“Cerner”) reported that Zane M. Burke tendered his resignation as President of Cerner, to be effective as of the close of business on November
2, 2018.
As part of his separation, Mr. Burke entered into a Separation Agreement with Cerner effective as of September 6, 2018. In recognition of Mr. Burke’s service to Cerner and in consideration of his execution of a general release of claims, the Separation Agreement provides Mr. Burke with the payments and benefits provided for in his existing employment agreement (as amended by his Executive Severance Agreement) as if his employment were terminated by Cerner for no reason, including: (1) cash payments of $56,222.65, less applicable deductions required by law, on a biweekly basis on Cerner’s regular paydays during the twenty-four (24) month period commencing with the November 16, 2018 Cerner payday, which is based on his annual base salary as of the effective date of his
separation, plus his average annual cash bonus during the three years including and preceding Cerner’s second fiscal quarter of 2018, plus the difference between his monthly COBRA continuation premium under Cerner’s health, vision and dental plans in effect as of his separation date and the monthly amount he was paying for such coverage as of his separation date; (2) payment of any performance-based cash incentive compensation earned but not yet paid as of his separation date; and (3) the accelerated vesting of 365,400 unvested stock options and 82,080 unvested restricted stock units (together, the “Cerner Equity Awards”) currently held by Mr. Burke. Mr. Burke will remain subject to, and the separation payments are conditioned upon compliance with, the restrictive covenants contained in his employment agreement and the Separation Agreement, including covenants with respect to non-competition, non-solicitation and confidentiality. If Mr. Burke were to breach any
of the restrictive covenants during the twenty-four (24) month separation payment period, Cerner would be entitled to stop any payments due after the date of breach and claw back all separation payments made prior to the date of breach, as well as any of the Cerner Equity Awards outstanding at the time of breach or, if sold prior to the date of the breach, the proceeds thereof. Upon execution of the Separation Agreement, Mr. Burke ceased to be eligible for any other severance benefits under his employment agreement (as amended by his Executive Severance Agreement) or the Cerner Enhanced Severance Pay Plan, as amended.
The foregoing description of the Separation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Separation Agreement, which Cerner will file as an exhibit to a subsequent periodic report filed with the
U.S. Securities and Exchange Commission.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
