PURSUANT TO CERNER’S 162(M) PERFORMANCE-BASED COMPENSATION PLAN
PURSUANT TO CERNER’S 162(M) PERFORMANCE-BASED COMPENSATION PLAN
Plan Metrics
Your annual Target Bonus
Level (TBL) is $"Total_TBL". Your total opportunity will be comprised of the following
metrics:
Weighting | Metrics | Timing Code | PF Applies | Scope |
100% | Earnings per Share | Y | Yes | Corporate |
Depending on whether the achievement of the
target metric is at, below or above the target metric amount, your calculated incentive payment will be
increased or decreased in accordance with the table set forth below.
This calculated incentive payment amount, whether or not adjusted based on the Attainment % of the Performance Metric, may also be
reduced depending on your quarterly and annual Performance Factor (PF).
Maximum
Payout
If the established metrics are achieved above
the target metric amount, you may be eligible to be paid up to 140% of your TBL as set forth in the table
below. In addition, if at least the minimum payout Attainment % of the Performance Metric is achieved,
you may be eligible to be paid up to an additional 25% of your TBL, if you receive a PF rating of
“Outstanding” or “Distinguished”. If you receive a PF other than “Outstanding” or “Distinguished,” or the percentage bonus amounts for the “Outstanding” or “Distinguished” categories is
determined to be less than 25%, you will receive a lesser amount (between 0 and 25% of your TBL). Even
if you receive a PF rating of “Outstanding” or “Distinguished,” you may not
receive any payment other than Payout % of your TBL indicated in the table below based on the actual
Attainment % of Performance Metric achieved. In no event may the maximum payout amount be greater
than the lesser of 165% of your TBL or the maximum payout under the executive feature of Cerner’s
162(m) Performance-Based Compensation Plan relative to Section 162(m) of the Internal Revenue Code
(the “162(m) Plan”).
Attainment % of Performance Metric |
Payout % |
107% | 140% |
103% | 120% |
100% | 100% |
97% | 75% |
<97% | 0% |
MAXIMUM PAYOUT REDUCTION-- BASED ON PERFORMANCE FACTOR
You will receive a quarterly and an annual PF rating determined by your direct manager.
A PF rating of “Needs Development” or
“Unacceptable” for any quarter or for the year may result in a 0-100% reduction of your initial calculated
incentive payment. If you receive a “Highly Valued” rating for any quarter or for the year, you
will only receive a payment equal to the applicable Payout % (as set forth above) of your TBL. If the
minimum payout Attainment % of Performance Metric is achieved and you receive an annual PF of
“Outstanding” or “Distinguished,” you may receive a PF adjustment
equal to 0-25% of your TBL, but in no event shall your total payout exceed $MXP (your maximum
payout). Any reductions in calculated incentive payments resulting from a PF rating may not be earned
back.
Payment
Terms, Schedule and Criteria
Terms
Payment
for Y Timing Code Metrics
Payment for cumulative YTD
metrics (Y Timing Code) will be calculated quarterly based on approved quarterly targets
that build cumulatively to a full-year target. For each of the first three quarters of the
year, the Associate will be eligible to be paid 15% of the Associate’s annual TBL
opportunity based on these metrics. At year-end, the remainder of the Associate’s
incentive will be calculated based on the full-year targets.
Timing Code definitions of specific payment timing are located in the CPP Glossary located on MyCerner.
Changes in an Associate’s TBL based on annual compensation adjustments will be reflected in
payment calculations on a pro-rata basis for the appropriate quarters. However, in no
event may the TBL of a Covered Executive (as defined in the Cerner’s 162(m)
Plan) change after the initial 162(m) Plan metrics and Covered Executive’s
eligible performance compensation opportunity are established by the Compensation
Committee.
The year-end calculation of
payments will not affect amounts earned for previous quarters; however, the actual PF
adjustment, if applicable, will apply to incentives earned for the full year.
Corrections to prior period
payments may be made and applied to current period payments earned to ensure accurate
incentive payments.
Timing
Payment of incentives will be made approximately sixty (60) days after the end of a quarter.
Criteria
1. | In order to be eligible for any payments under this Agreement, Cerner must have received the Associate’s signed Cerner Associate Employment Agreement, which governs the terms of the Associate’s employment at Cerner. |
2. | Participation under this Agreement begins as of the beginning of the first full quarter of employment in, or assignment to, an eligible role under Cerner’s 162(m) Plan. Newly eligible Associates will satisfy the “full quarter” requirement as long as they are actively working within the first fifteen (15) working days of the quarter. |
3. | Payments under Xxxxxx’s 162(m) Plan for any one quarter or the year will be forfeited if the Associate failed to complete performance reviews/self appraisals as required by Cerner’s Human Resources group. Any balance of the payout that could have been attained is forfeited and will not be paid in subsequent quarters. |
4. | Exceptions to the above items will be considered and determined by the 162(m) Plan Administrator(s), in his/her sole discretion. |
Other
Considerations
1. | Termination of Participation: An Associate’s participation under this Agreement will be terminated immediately in the event of termination of employment, for any reason (voluntarily or involuntarily), or transfer to a non-162(m) Plan role. The Associate will be entitled to payment for any earned but not paid amounts. Payments are earned only for completed quarters; i.e., if participation is terminated at any time before the completion of a quarter, no incentive will be paid for that quarter. |
2. | Leave of Absence: Eligibility for Associates who are not actively at work for more than six weeks of any quarter will be subject to the guidelines set forth in the CPP Leave Policy (located on myCerner). |
3. | Repayments to Cerner: In the event an Associate’s employment is terminated, for any reason (voluntarily or involuntarily), and such Associate owes money to Cerner, for any reason, or is required to return incentive payments, Cerner may deduct the amounts owed from all accounts due to such Associate, such as salary, advances, vacation, expense reimbursement or incentive payments, and the Associate will be liable for the balance, if any. |
4. | Modifications to this Agreement: The 162(m) Plan Administrator reserves the right, in its sole discretion, to interpret and modify this Agreement: (a) during the 162(m) Plan year to coincide with changing corporate objectives, and (b) during or after the 162(m) Plan year to: (i) avoid windfall profits unintentionally derived from the 162(m) Plan design that may result from the highly variable nature of many Client Agreement(s) or market conditions and/or (ii) adjust profits or terminate this Agreement when an Associate’s performance has been documented by management to be unacceptable. Such modifications will occur only under the authority of the 162(m) Plan Administrator(s), in their sole discretion. Any component of this Agreement may be adjusted to ensure that the Associate receives adequate, yet reasonable, compensation. In no event may the 162(m) Plan Administrator (I) increase the amount of compensation payable that would otherwise have been payable upon the attainment of the original performance metric, as such metric was established during the initial allowable period of time under Section 162(m) of the Code for establishing “performance based compensation” or (II) make any modifications or interpretations to the 162(m) Plan which will jeopardize the deductibility of performance-based compensation payable hereunder, unless the 162(m) Plan Administrator expressly acknowledges in connection with the modification or interpretation that the availability of Code Section 162(m)’s performance-based compensation exemption is not desired. |
Capitalized terms in this Agreement have the meanings set forth in the CPP Glossary or the contents of this document.