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As Of Filer Filing For·On·As Docs:Size 9/11/17 Cerner Corp/MO 8-K:5,9 9/11/17 5:500K |
Document/Exhibit Description Pages Size 1: 8-K Current Report HTML 29K 2: EX-10.1 Material Contract HTML 82K 3: EX-10.2 Material Contract HTML 80K 4: EX-10.3 Material Contract HTML 67K 5: EX-10.4 Material Contract HTML 82K
Exhibit |
A. | You are the Executive Vice President and Chief Financial Officer of Cerner and have been employed by Cerner since November 16, 1992. You have been the Executive Vice President and Chief Financial Officer of Cerner since March 28, 2010. |
B. | You
have entered into an employment agreement with Cerner dated November 16, 1992 (your “Employment Agreement”) and a mutual arbitration agreement with Cerner dated December 6, 2015. |
C. | You and Cerner wish to amend your Employment Agreement by adding contractual severance terms as set forth in this Executive Severance Agreement. |
D. | In
consideration for your continuing employment with Cerner, the restricted stock granted to you on September 1, 2017, the potential severance payments and potential acceleration of the vesting of outstanding equity incentive awards described herein, the potential benefits to you in the event of a Change in Control, and other good and valuable consideration, the receipt and sufficiency of which you and Cerner hereby acknowledge, you and Cerner hereby agree to the following supplemental terms and conditions to your Employment Agreement. |
E. | Definitions of capitalized terms used but not otherwise defined herein can be found in Appendix A. |
1. | PARAGRAPH 2 MODIFICATION. Paragraph 2 of your Employment Agreement is deleted in its entirety and replaced with the following: |
A. | Type. To
the extent permitted by law, your employment relationship with Cerner is "at will," which means that you may resign from Cerner at any time, for any reason or for no reason at all, and without advance notice (except as described below). It also means that Cerner may terminate your employment at any time - for any legally permitted reason or for no reason at all and without advance notice, subject to Cerner’s potential obligations to you under Paragraph 2.C below. |
B. | Resignation and Termination. |
1. | Termination
by Cerner. Cerner may terminate your employment (i) at any time with or without Cause, or (ii) upon your Disability. Your employment with Cerner shall be deemed automatically terminated upon your death. Upon a termination of your employment by Cerner with Cause, due to your death or on account of Disability (each an "Ineligible Severance Event"), Cerner shall pay you within thirty (30) days following your last day of employment (x) any accrued but unpaid base salary, (y) any owed reimbursements for unreimbursed business expenses properly incurred by you prior to your termination date, which shall be subject to and paid in accordance with Cerner’s expense reimbursement policy; and (z) such employee benefits (including equity compensation or cash bonuses earned as of the termination date but not yet paid), if any, to which you may be entitled under Cerner's employee benefit plans as of your termination date; provided that, in no event shall
you be entitled to any payments in the nature of any other severance or termination payments (such as under Cerner’s Enhanced Severance Pay Plan). Those amounts described in this Paragraph 2.B.1 (x), (y) and (z) are referred to herein collectively as the "Accrued |
2. | Termination by You. You may resign from your employment
with Cerner at any time upon written notice to Cerner of your intention to resign from employment. Any resignation notice must be submitted to Cerner at least thirty (30) days prior to your intended last day of employment. Cerner, however, reserves the right either to accelerate your last day of employment or to allow your intended last day of employment to stand. If you resign with fewer than thirty (30) days’ notice, or if you actually leave Cerner’s employ prior to expiration of the notice period without the permission of Cerner, then you agree that (to the extent permitted by law) no Accrued Amounts from the date you submitted your resignation notice to your last day of employment will be owed or paid to you by Cerner. All other Accrued Amounts will be paid. You may also terminate your employment hereunder upon written notice to Cerner in the event of a Constructive Termination (before a Change in Control) or for Good Reason (after a Change in Control) and, subject
to you satisfying your obligations under Paragraph 2.C.3 (Severance Agreement and Release), be entitled to certain severance and benefit compensation as provided in Paragraph 2.C. |
C. | Severance and Benefits. |
1. | Non-Change
in Control - Termination by Cerner for other than an Ineligible Severance Event or Resignation following Constructive Termination. Subject to you satisfying your obligations under Paragraph 2.C.3. (Severance Agreement and Release), if, prior to a Change in Control or at any time after twelve (12) months following a Change in Control, (i) Cerner terminates your employment other than in connection with an Ineligible Severance Event or (ii) you resign from employment following a Constructive Termination, Cerner will within sixty (60) days (or later if required by Code Section 409A) of your termination of employment: |
a. | Pay you your Accrued Amounts; and |
b. | Commence
severance payments to you equal to the sum of (i) two (2) year’s base salary (based on your annual base salary at the time of your termination), plus (ii) two (2) times the average annual cash bonus you received from Cerner during the three (3) years preceding the termination of your employment, less (iii) normal tax and payroll deductions. Such severance pay will be payable pro rata during the twenty-four (24) month severance term on Cerner’s regular paydays; and |
c. | Commence payments to you having an aggregate value equal to twenty-four (24) times the difference between the monthly COBRA continuation premium cost to cover you and your dependents (to the extent covered under Cerner's health, vision and
dental the plans on the date of your termination of employment) under Cerner's health, vision and dental plans in effect as of the date of your termination and the monthly amount you were paying for such coverage at the effective date of your termination. Such payments will be payable pro rata during the twenty-four (24) month severance term on Cerner’s regular paydays. Notwithstanding the foregoing, if Cerner making payments under this Paragraph 2.C.1.c would violate the nondiscrimination rules applicable to non-grandfathered plans under the Affordable Care Act or result in the imposition of penalties under the Affordable Care Act, the parties agree to reform this Paragraph 2.C.1.c in a manner as is necessary to comply with the Affordable Care Act; and |
d. | With
respect to outstanding equity awards: |
i. | Fully vest all outstanding unvested stock options or stock appreciation rights granted by Cerner to you and still held by you and all other outstanding equity-based compensation awards that are not intended to qualify as performance-based compensation under Code Section 162(m)(4)(C); provided that, any delays in the settlement or payment of such awards that are set forth in the applicable award agreement and that are required under Code Section 409A ("Section 409A") shall remain in effect; and |
ii. | Cause
all outstanding equity-based compensation awards that are intended to constitute performance-based compensation under Code Section 162(m)(4)(C) (excluding stock options and stock appreciation rights which will fully vest in accordance with Paragraph 2.C.1.d.i) to remain outstanding and vest or be forfeited in accordance with the terms of the applicable award agreements, if the applicable performance goals are satisfied. |
2. | Change in Control - Termination by Cerner for other than an Ineligible Severance Event or Resignation for Good Reason. Subject to you satisfying your obligations under Paragraph 2.C.3 (Severance Agreement and Release), if there is a Change in Control of Cerner
and within twelve (12) months following the date such Change in Control becomes effective Cerner terminates your employment for any reason other than on account of an Ineligible Severance Event or you resign from employment with Good Reason, then Cerner will, within sixty (60) days (or later if required by Code Section 409A) of your termination of employment: |
a. | Pay you your Accrued Amounts; |
b. | Commence severance payments to you equal
to the sum of (i) two (2) years’ base salary (based on your annual base salary at the time of your termination or resignation), plus (ii) two (2) times the average annual cash bonus you received from Cerner during the three (3) years preceding the termination or resignation of your employment, less (iii) normal tax and payroll deductions. Such severance pay will be payable in lump sum within sixty (60) days of the effective date of the termination of your employment; |
c. | Commence payments to you having an aggregate value equal to twenty-four (24) times the difference between the monthly COBRA continuation premium cost to cover you and your dependents (to the extent covered under Cerner's health, vision
and dental plans on the date of your termination of employment) under Cerner's health, vision and dental plans in effect as of the date of your termination and the monthly amount you were paying for such coverage at the effective date of your termination. Such payments will be payable pro rata during the twenty-four (24) month severance term on Cerner’s regular paydays. Notwithstanding the foregoing, if Cerner's making payments under this Paragraph 2.C.2.c would violate the nondiscrimination rules applicable to non-grandfathered plans under the Affordable Care Act or result in the imposition of penalties under the Affordable Care Act, the parties agree to reform this Paragraph 2.C.2.c in a manner as is necessary to comply with the Affordable Care Act; and |
d. | Fully
vest all outstanding unvested equity incentive awards granted to you under any Cerner equity incentive plans after June 1, 2005. For purposes of this Paragraph 2.C.2.d, any performance-based award shall become vested or settled assuming an "at-target" level of goal achievement had been attained. |
3. | Severance Agreement and Release. As a condition to your receiving severance in accordance with this Paragraph 2.C, upon your resignation or the termination of your employment, you agree to promptly execute and not revoke a written severance agreement, which release will be provided to you within ten (10) days of your termination
date, containing normal and customary provisions, including but not limited to, a release releasing Cerner from any claims against Cerner related to your employment with Cerner that you might have at the time of or following the termination of your employment, and reasonable and customary representations and warranties. |
4. | Forfeiture and Reimbursement. Further, notwithstanding anything to the contrary in this Executive Severance Agreement, if you breach any confidentiality, non-competition or other material provision in your Employment Agreement following the termination of your employment with Cerner, Cerner’s obligation, if applicable, to deliver severance payments and benefits
to you under this Paragraph 2.C, and the vesting of any equity incentive awards described in this Paragraph 2.C, will cease immediately, you will reimburse Cerner the amount of severance payments delivered to you by Cerner prior to such breach by you, and you will forfeit to Cerner all equity incentive awards (or the proceeds of exercised awards) that vested based on or after such termination of your employment and prior to your breach. |
5. | ERISA Claims Review Procedures. To the extent any severance payments described in
this Paragraph 2.C are covered by the Employee Retirement Income Security Act of 1974, as amended, Claims Review Procedures are available from Cerner. |
6. | Compliance with Section 409A. |
a. | General Compliance. This Executive Severance Agreement and any severance payments contemplated to be made hereunder is intended to comply with Section 409A or an exemption thereunder and shall be construed
and administered in accordance with Section 409A. Notwithstanding any other provision of this Executive Severance Agreement, payments provided under this Executive Severance Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Executive Severance Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Executive Severance Agreement shall be treated as a separate payment. Any payments to be made under this Executive Severance Agreement upon a termination of employment shall only be made upon a "separation from service" under Section 409A. Notwithstanding the foregoing, Cerner makes no representations that the payments and benefits provided under
this Executive Severance Agreement comply with Section 409A, and in no event shall Cerner be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by you on account of non-compliance with Section 409A. |
b. | Specified Employees. Notwithstanding any other provision of this Executive Severance Agreement, if any payment or benefit provided to you in connection with your termination of employment is determined to constitute "nonqualified deferred compensation" within the meaning of Section 409A and you are determined to be a "specified employee" as defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not
be paid until the first payroll date to occur following the six-month anniversary of the your termination date or, if earlier, on your death (the "Specified Employee Payment Date"). The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to you in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule. |
c. | Reimbursements. To the extent required by Section 409A, each reimbursement or in-kind benefit provided under this Executive Severance Agreement shall be provided in accordance with the following: |
i. | the
amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; |
ii. | any reimbursement of an eligible expense shall be paid to you on or before the last day of the calendar year following the calendar year in which the expense was incurred; and |
iii. | any right to reimbursements or in-kind
benefits under this Executive Severance Agreement shall not be subject to liquidation or exchange for another benefit. |
D. | Partial Accelerated Vesting upon a Change in Control. In connection with a Change in Control, 50% of each outstanding and unvested equity incentive award granted to you under any Cerner equity incentive plan after June 1, 2005 and prior to the date of the Change in Control becomes effective will become vested on the date the Change in Control becomes effective. The remaining 50% of each such outstanding equity incentive award that has not yet vested will continue to vest according to its vesting schedule (unless
your employment is terminated for any reason other than in connection with an Ineligible Severance Event or you resign for Good Reason within twelve (12) months following the date the Change in Control becomes effective, in which case 100% of such award will become vested as provided above in Paragraph 2.C.2; or in the event your employment is terminated for any reason other than in connection with an Ineligible Severance Event or a Constructive Termination at any time after twelve (12) months following a Change in Control, in which case 100% of such award will become vested as provided above in Paragraph 2.C.1). For purposes of this Paragraph 2.D, any |
E. | Modified 280G Carve-Back. Notwithstanding anything contained in this Executive Severance Agreement to the contrary, if on an after-tax basis the aggregate payments and benefits paid pursuant to Paragraph 2.C.2 or Paragraph 2.D would be larger if the portion of such payments and benefits constituting "parachute payments" under Code Section 280G were reduced by the minimum amount necessary to avoid the imposition of the excise tax under Code Section 4999, then such payments and benefits shall be reduced by the minimum amount necessary to avoid such excise tax. Any such reduction shall occur in a manner that maximizes
your economic position. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A, and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero. Any determination required under this Paragraph 2.E shall be made in writing in good faith by an accounting firm selected by Cerner, which is reasonably acceptable to you (the “Accountants”). Cerner and you shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Paragraph 2.E. Cerner shall be responsible for all fees and expenses of the Accountants. |
F. | 409(a)
Modifications. Notwithstanding anything to the contrary herein, Cerner may modify your Employment Agreement and this Executive Severance Agreement from time to time without your consent if Cerner’s legal counsel deems doing so to be advisable to comply with Section 409A of the Code and you agree that any such modifications shall be binding upon you. |
2. | PARAGRAPH 3 MODIFICATION. The following is added to Paragraph 3 of your Employment Agreement: |
3. | ENTIRE AGREEMENT AND PRIOR AGREEMENTS. |
/s/ Marc G. Naughton | |
Cerner
Corporation | |
By: | /s/ Julia M. Wilson |
Executive Vice President and Chief People Officer | |
(i) | The acquisition by any individual, entity or group (a
“Person”) within the meaning of Section 12(d)(3) or 13(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of either: (A) the then outstanding shares of common stock of Cerner (the “Outstanding Cerner Common Stock”), or (B) the combined voting power of the then outstanding voting securities of Cerner entitled to vote generally in the election of directors (the “Outstanding Cerner Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (X) any acquisition directly from Cerner, (Y) any acquisition by Cerner, or (Z) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Cerner or any corporation controlled by Cerner; or |
(ii) | Individuals
who, as of the date hereof, constitute the Cerner Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Cerner’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or |
(iii) | Consummation
of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Cerner ( a “Business Combination”), in each case, unless, following such Business Combination, (A), all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Cerner Common Stock and Outstanding Cerner Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of Cerner resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Cerner or all or substantially all of Cerner’s assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Cerner Common Stock and Outstanding Cerner Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of Cerner or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common stock of Cerner resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the Board of Directors of Cerner resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the board, providing for such Business Combination; or |
(iv) | Approval
by the shareholders of Cerner of a complete liquidation or dissolution of Cerner. |
1. | CERNER’S LETTER OFFERING EMPLOYMENT TO YOU. |
2. | EMPLOYMENT RELATIONSHIP. |
A. | Formation.
By signing this Agreement, you represent that every material fact contained in your resume and application for employment with Cerner is true and accurate to the best of your knowledge and belief. You also agree that falsification of your resume or application is grounds for immediate discharge. |
B. | Type. To the extent permitted by law, your employment relationship with Cerner is "at will", which means that you may resign from Cerner at any time, for any reason, or for no reason at all, and without advance notice (except as described below). It also means that Cerner may terminate your employment at any time, for any legally permitted reason, or for no reason at all, and without
advance notice. |
C. | Resignation and Termination. You agree to cooperate with Cerner by participating fully in an exit interview in the event you leave the employ of Cerner, whether voluntarily or involuntarily. You agree to give Cerner written notice of your intention to resign from employment at least ten (10) business days prior to the last day you intend to work at Cerner. To facilitate the provisions of paragraphs 7 and 8 of this agreement, you also agree to report to Cerner, in conjunction with your written notice of intent, the identity of your new employer and the nature of your proposed duties for that employer. Cerner, however, reserves the right either to accelerate your
intended effective termination date to an earlier actual date or to allow your intended effective termination date to stand. |
D. | SALES ASSOCIATE PROVISIONS. If you are employed by Cerner in a sales capacity, additional provisions incorporated as Attachment IV to this Agreement are applicable to your employment relationship. |
3. | AGREEMENT
NOT TO DISCLOSE OR TO USE CONFIDENTIAL INFORMATION. |
4. | NON-CERNER EMPLOYMENT. |
5. | NEW PRODUCTS AND IDEAS. |
6. | PRIOR INVENTIONS. |
7. | NON-COMPETITION. |
A. | You
will tell any prospective new employer, prior to accepting employment, that this Employment Agreement exists. |
B. | If you have worked for Cerner in a sales capacity, you will not provide services in the United States, or in any country in which Cerner has a business interest, to any Conflicting Organization in connection with the marketing, sale or promotion of any Conflicting Product: |
1. | to any person or organization upon whom you called
or whose account you supervised on behalf of Cerner any time during the last three (3) years of your employment by Cerner, and |
2. | within any states or provinces that were a part of any Cerner territory assigned to you during the last three (3) years of your employment by Cerner. |
C. | If
you have never worked for Cerner in a sales capacity, you will not provide services directly or indirectly related to your employment at Cerner to any Conflicting Organization in the United States or in any country in which Cerner has a business interest. However, you may accept employment with a large Conflicting Organization whose business is diversified. and with a portion of its business that is not a Conflicting Organization, provided that Cerner, prior to your acceptance of such employment, shall receive separate written assurances satisfactory to Cerner from such Conflicting Organization and from you that you will not render services directly or indirectly in connection with any Conflicting Product. |
8. | POST-TERMINATION
PAYMENTS BY CERNER. |
1. | Written
permission to accept available employment, or |
2. | A written release from the non-competition obligations set forth in Paragraph 8 of this Agreement. |
9. | PUBLICITY RELEASE. |
10. | CERNER PROPERTY. |
11. | SYSTEMS AND PHYSICAL SECURITY. |
12. | PRIOR EMPLOYMENT RELATIONSHIPS AND OBLIGATIONS. |
13. | REMEDIES. |
14. | INDEMNIFICATION. |
15. | MODIFICATION. |
16. | NOTICES. |
17. | TERM OF THIS AGREEMENT. |
18. | GOVERNING
LAW. |
19. | SEVERABILITY. |
20. | ENTIRE
AGREEMENT AND PRIOR AGREEMENTS. |
21. | SUCCESSORS. |
/s/ Marc G. Naughton | |
Associate | |
Cerner
Corporation | |
By: | /s/ John Reedy |
Vice President of Administration | |
This ‘8-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
Filed on / For Period End: | 9/11/17 | |||
9/1/17 | 4 | |||
12/6/15 | ||||
3/28/10 | ||||
6/1/05 | ||||
11/16/92 | ||||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/22/22 Cerner Corp. 10-K 12/31/21 135:13M 2/19/21 Cerner Corp. 10-K 12/31/20 140:13M 10/28/20 Cerner Corp. 8-K:2,5,9 10/28/20 13:588K |