INDEMNIFICATION AGREEMENT
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THIS AGREEMENT is made and entered into this 18th day
of November, 1999, between Cerner Corporation, a Delaware
corporation ("Corporation"), and Xxxx Xxxxxxxxx ("Indemnitee").
WITNESSETH:
WHEREAS, Indemnitee is a member of the board of
directors of the Corporation and as such is performing a valuable
service for the Corporation; and
WHEREAS, although Indemnitee has certain rights to
indemnification under the Bylaws and Certificate of Incorporation
of the Corporation, such Bylaws and Certificate of Incorporation
specifically provide that they are not exclusive and thereby
contemplate that the Corporation may enter into agreements with
its officers and directors; and
WHEREAS, the Corporation and Indemnitee desire to enter
into this Agreement to provide to Indemnitee additional rights to
indemnification in consideration of Indemnitee's continued
service to the Corporation as a director;
NOW, THEREFORE, in consideration of Indemnitee's
continued service as a director of the Corporation after the date
hereof and for and in consideration of the premises and the
covenants contained herein, the Corporation and Indemnitee do
hereby promise and agree as follows:
1. Indemnification. The Corporation hereby agrees to
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hold harmless and indemnify Indemnitee to the fullest extent
permitted by Section 145, Title 8 of the Delaware Code, as in
effect on the date of the execution of this Agreement and as it
may hereafter be amended, or any other statutory provision
permitting or authorizing such indemnification which is adopted
subsequent to the execution of this Agreement.
2. Maintenance of Insurance. So long as Indemnitee
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shall continue to serve as a director of the Corporation (or
shall continue at the request of the Corporation or on behalf of
the Corporation to serve as a director, officer, employee or
agent of any Other Enterprise) and thereafter so long as
Indemnitee shall be subject to any possible claim or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative, investigative or appellate by reason of the fact
that Indemnitee is or was a director of the Corporation (or is or
was serving in any of said other capacities at the request of the
Corporation), the Corporation may maintain director liability
insurance if such insurance becomes reasonably available and if,
in the business judgment of the board of directors of the
Corporation as it may exist from time to time, both (i) the
premium cost for such insurance is reasonable, and (ii) the
coverage provided by such insurance is not so limited by
exclusions that there is insufficient benefit provided by such
director liability insurance.
3. Additional Indemnification. Subject only to the
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provisions in Sections 4, 5, 6 and 7 of this Agreement, the
Corporation hereby further agrees to hold harmless and indemnify
Indemnitee:
(a) Against any and all liabilities and expenses,
including without limitation, judgments, amounts paid in
settlement (provided that such settlement and all amounts
paid in connection therewith are approved in
advance by the Corporation, which approval shall not be
unreasonably withheld), attorneys' fees, ERISA excise
taxes or penalties, fines and other expenses actually
and reasonably incurred by Indemnitee in connection
with any threatened, pending or completed action, suit
or proceeding (including without limitation the
investigation, defense, settlement or appeal of such
action, suit or proceeding), whether civil, criminal,
administrative, investigative or appellate (including
an action by or in the right of the Corporation) to
which Indemnitee is, was or at any time becomes a
party, or is threatened to be made a party, by reason
of the fact that Indemnitee is, was or at any time
becomes a director of the Corporation, or is or was
serving at the request of the Corporation as a
director, officer, agent or employee of any Other
Enterprise; and
(b) Otherwise to the fullest extent as may be
provided to Indemnitee by the Corporation pursuant to
the non-exclusivity provisions of paragraph 28 of the
Corporation's Bylaws and subsection (f) of Section 145,
Title 8 of the Delaware Code relating to
indemnification.
4. Limitations on Additional Indemnification. (a) The
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Corporation will not hold Indemnitee harmless or provide
indemnification pursuant to Section 3 hereof:
(1) except to the extent that the aggregate
amount of losses to be indemnified thereunder exceeds
the amount of such losses for which Indemnitee is
indemnified either pursuant to (i) the Corporation's
Certificate of Incorporation, Bylaws, vote of
stockholders or disinterested directors or other
agreement, (ii) Sections 1 or 2 hereof, (iii) pursuant
to any director liability insurance purchased and
maintained on behalf of Indemnitee by the Corporation,
or (iv) otherwise than pursuant to this Agreement;
(2) in respect of remuneration paid to Indemnitee
if it shall be determined by a final judgment or other
final adjudication that such remuneration was in
violation of law;
(3) on account of any suit for an accounting of
profits made from the purchase or sale by Indemnitee of
securities of the Corporation pursuant to Section 16(b)
of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any federal, state or
local law;
(4) on account of Indemnitee's conduct which is
finally adjudged by a court to have been knowingly
fraudulent, deliberately dishonest or willful
misconduct; or
(5) if a final adjudication by a court having
jurisdiction in the matter shall determine that such
indemnification is not lawful.
(b) Notwithstanding any other provisions of this
Agreement, if the Indemnitee is or was serving as a director of
the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of any
Other Enterprise, and has been successful on the merits or other-
wise in defense of any action, suit or proceeding referred to in
Section 3 of this Agreement (including the dismissal of any such
action, suit or proceeding without prejudice), or in defense of
any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith
to the extent he has not been fully indemnified therefor other-
wise than pursuant to this Agreement.
5. Advancement of Expenses. Expenses (including
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attorneys' fees) actually and reasonably incurred by an
Indemnitee who may be entitled to indemnification hereunder in
defending an action, suit or proceeding, whether civil, criminal,
administrative, investigative or appellate, shall be paid by the
Corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf
of such Indemnitee to repay such amount if it shall ultimately be
determined that the Indemnitee is not entitled to indemnification
by the Corporation. Notwithstanding the foregoing, no advance
shall be made by the Corporation if a determination is reasonably
and promptly made by (i) the board of directors by a majority
vote of a quorum consisting of directors who were not parties to
the action, suit or proceeding from which the advancement is
requested, or (ii) if a quorum is not obtainable, or even if
obtainable, if a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (iii) by the
stockholders, that, based upon the facts known to the board,
counsel or stockholders at the time such determination is made,
such Indemnitee acted in bad faith and in a manner that such
Indemnitee did not believe to be in or not opposed to the best
interest of the Corporation, or, with respect to any criminal
proceeding, that such Indemnitee believed or had reasonable cause
to believe his conduct was unlawful. In no event shall any
advance be made in instances where the board, stockholders or
independent legal counsel reasonably determines that such
Indemnitee deliberately breached his duty to the Corporation or
its stockholders.
6. Notification and Defense of Claim. Promptly after
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receipt by Indemnitee of notice of the commencement of any
action, suit or proceeding, Indemnitee will, if a claim in
respect thereof is to be made against the Corporation under this
Agreement, notify the Corporation of the commencement thereof;
but the omission so to notify the Corporation will not relieve it
from any liability which it may have to Indemnitee otherwise than
under this Agreement. With respect to any such action, suit or
proceeding as to which Indemnitee notifies the Corporation of the
commencement thereof:
(a) The Corporation will be entitled to
participate therein at its own expense;
(b) Except as otherwise provided below, to the
extent that it may wish, the Corporation jointly with
any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel
satisfactory to Indemnitee. After notice from the
Corporation to Indemnitee of its election so to assume
the defense thereof, the Corporation will not be liable
to Indemnitee under this Agreement for any legal or
other expenses subsequently incurred by Indemnitee in
connection with the defense thereof other than
reasonable costs of investigation or as otherwise
provided below. Indemnitee shall have the right to
employ its own counsel in such action, suit or
proceeding but the fees and expenses of such counsel
incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the
expense of Indemnitee unless (i) the employment of
counsel by Indemnitee has been authorized by the
Corporation, (ii) Indemnitee shall have reasonably
concluded that there may be a conflict of interest
between the Corporation and Indemnitee in the conduct
of the defense of such action, or (iii) the Corporation
shall not in fact have employed counsel to assume the
defense of such action, in each of which cases the fees
and expenses of counsel shall be at the expense of the
Corporation. The Corporation shall not be entitled to
assume the defense of any action, suit or proceeding
brought by or on behalf of the Corporation or as to
which Indemnitee shall have made the conclusion
provided for in (ii) above; and
(c) The Corporation shall not be liable to
indemnify Indemnitee under this Agreement for any
amounts paid in settlement of any action or claim
effected without its prior written consent. The
Corporation shall not settle any action or claim in any
manner which would impose any penalty or limitation on
Indemnitee without Indemnitee's written consent.
Neither the Corporation nor Indemnitee will
unreasonably withhold their consent to any proposed
settlement.
7. Determination of Right to Indemnification. Prior
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to indemnifying an Indemnitee pursuant to this Agreement, unless
ordered by a court, the Corporation shall determine that such
Indemnitee is entitled thereto under the terms of this Agreement.
Any determination that a person shall or shall not be indemnified
under this Agreement shall be made by the board of directors by a
majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding, or if such quorum is
not obtainable, or even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel
in a written opinion or by the stockholders, and such
determination shall be final and binding upon the Corporation;
provided, however, that in the event such determination is
adverse to the Indemnitee, such Indemnitee shall have the right
to maintain an action in any court of competent jurisdiction
against the Corporation to determine whether or not such
Indemnitee is entitled to such indemnification hereunder. If
such court action is successful and the Indemnitee is determined
to be entitled to such indemnification, such Indemnitee shall be
reimbursed by the Corporation for all fees and expenses
(including attorneys' fees) actually and reasonably incurred in
connection with any such action (including without limitation the
investigation, defense, settlement or appeal of such action).
This Agreement shall be applicable to any claim asserted after
the date hereof whether such claim arises from acts or omissions
occurring before or after the date hereof.
8. Certain Definitions. For purposes of this
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Agreement, references to "Other Enterprise" shall include without
limitation any other corporation, partnership, joint venture,
trust or employee benefit plan; references to "fine" or "fines"
shall include any excise taxes assessed on Indemnitee with
respect to any employee benefit plan; references to "defense"
shall include investigations of any action, suit or proceeding as
well as appeals in any threatened, pending or completed action,
suit or proceeding and shall also include any defensive assertion
of a cross claim or counterclaim; and references to "serving at
the request of the Corporation" shall include any service as a
director of the Corporation which imposes duties on, or involves
services by, Indemnitee with respect to an employee benefit plan,
its participants or beneficiaries; and if Indemnitee acted in
good faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee
benefit plan he shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to
in this Agreement. For the purpose of this Agreement, unless the
board of directors of the Corporation shall determine otherwise,
any Indemnitee who shall serve as an officer or director of any
Other Enterprise of which the Corporation, directly or
indirectly, is a stockholder or creditor, or in which the
Corporation is in any way interested, shall be presumed to be
serving as such director or officer at the request of the
Corporation. In all other instances where any Indemnitee shall
serve as a director, officer, employee or agent of an Other
Enterprise, if it is not otherwise established that such
Indemnitee is or was serving as such director, officer, employee
or agent at the request of the Corporation, the board of
directors of the Corporation shall determine whether such
Indemnitee is or was serving at the request of the Corporation,
and it shall not be necessary to show any actual or prior request
for such service, which determination shall be final and binding
on the Corporation and the Indemnitee seeking indemnification.
9. Continuation and Enforcement of Indemnification.
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(a) The Corporation expressly confirms and agrees that
it has entered into this Agreement and assumes the obligations
imposed on the Corporation hereby in order to induce Indemnitee
to continue as a director of the Corporation and acknowledges
that Indemnitee is relying upon this Agreement in continuing in
such capacity. The rights to indemnification and advancement of
expenses created by or provided pursuant to this Agreement are
bargained-for conditions of Indemnitee's acceptance and/or
maintenance of his election or appointment as a director of the
Corporation and such rights shall continue after Indemnitee has
ceased to be a director of the Corporation or a director,
officer, employee or agent of any Other Enterprise and shall
inure to the benefit of Indemnitee's heirs, executors,
administrators and estate.
(b) Indemnitee expressly confirms and agrees that
under no circumstances shall the language or any of the promises
and covenants contained in this Agreement be construed or
interpreted as creating a contract of employment.
(c) To the fullest extent permitted by the laws of the
State of Delaware, Indemnitee shall have the right to maintain an
action in any court of competent jurisdiction to enforce and/or
recover damages for breach of the rights to indemnification
created by or provided pursuant to the terms of this Agreement.
If such court action is successful, Indemnitee shall be xxxx
bursed by the Corporation for all fees and expenses (including
attorneys' fees) actually and reasonably incurred in connection
with such action (including without limitation the investigation,
defense, settlement or appeal of such action).
10. Non-Exclusivity. The right to indemnification
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pursuant to this Agreement shall not be deemed exclusive of any
other rights of indemnification to which Indemnitee may be
entitled under any statute, other agreement, the Certificate of
Incorporation, Bylaws, pursuant to a vote of stockholders or
disinterested directors, insurance policy or otherwise, both as
to actions in his official capacity and as to action in another
capacity while holding his directorship, and shall not limit in
any way any right the Corporation may have to create additional
or independent or supplementary obligations to indemnify
Indemnitee.
11. Severability. Each of the provisions of this
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Agreement is a separate and distinct agreement independent of the
others, and if any provision of this Agreement or the application
of any provision hereof to any person or circumstance is held
invalid, illegal or unenforceable by a court for any reason
whatsoever, the remaining provisions of this Agreement and the
application of such provision to other persons or circumstances
shall not be affected thereby. The parties hereto expressly
agree that any provision hereof held invalid, illegal or
unenforceable shall be construed and modified by the court
finding such provision invalid, illegal or unenforceable to the
extent necessary so as to render such provision valid and
enforceable as against all persons or entities and to provide the
maximum possible protection to the person subject to
indemnification hereunder within the bounds of validity, legality
and enforceability. Without limiting the generality of the
foregoing, if the Indemnitee is entitled to indemnification under
this Agreement by the Corporation for some or a portion of the
judgments, amounts paid in settlement, attorneys' fees, ERISA
excise taxes or penalties, fines or other expenses actually and
reasonably incurred by the Indemnitee in connection with any
threatened, pending or completed action, suit or proceeding
(including without limitation, the investigation, defense,
settlement or appeal of such action, suit or proceeding), whether
civil, criminal, administrative, investigative or appellate, but
not, however, for all of the total amount thereof, the
Corporation shall nevertheless indemnify the Indemnitee for the
portion thereof to which such person is entitled.
12. Governing Law. This Agreement shall be governed,
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interpreted and construed in accordance with the laws of the
State of Delaware without regard to any of its conflict of law
rules.
13. Modification; Survival. This Agreement
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constitutes the entire agreement of the parties relating to the
subject matter hereof and no amendment, modification, termination
or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto. The provisions of this
Agreement shall survive the termination of Indemnitee's service
as a director and/or officer of the Corporation with respect to
actions, suits or proceedings brought or instituted in respect of
any action taken or the failure to take any action occurring
prior to such termination of service.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement and affixed their signatures hereto as of
the date first above written.
/s/Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx, Indemnitee
CERNER CORPORATION, a Delaware corporation
By /s/Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, Chief Financial Officer
[SEAL]
ATTEST:
/s/Xxxxx X. Xxxx
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Xxxxx X. Xxxx, Secretary
