CERNER CORPORATION PLAN D STOCK
OPTION AGREEMENT
THIS AGREEMENT, made and entered into this twelfth day of
January, 1996 (the "Granting Date"), by and between CERNER
CORPORATION, a Delaware corporation (the "Company"), and Xxxxxx
X. Xxxxxxxx, M.D. (the "Optionee"),
WITNESSETH:
WHEREAS, the Stock Option Committee of the Board of Directors of
the Company (the "Committee") has determined that the Optionee is
eligible to receive an option to purchase shares of common stock
of the Company under the Company's Non-Qualified Stock Option
Plan (the "Plan");
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained and other good and valuable
consideration, the parties hereto do hereby agree as follows:
1. Incorporation of the Plan. A copy of the Plan is
incorporated herein by reference and all of the terms,
conditions and provisions contained therein shall be deemed
to be contained in this Agreement.
2. Grant of Option. Pursuant to the authorization of the
Committee, and subject to the terms, conditions and
provisions contained in this Agreement, the Company hereby
grants to the Optionee an option (the "Option") to purchase
from the Company all or any part of an aggregate of One
Hundred Thousand (100,000) shares of Cerner Common Stock at
the purchase price of eighteen dollars and fifty cents
($18.50) per share.
The number of shares of common stock subject to the Option
and the purchase price per share shall be appropriately
adjusted to reflect any stock dividends, stock splits, split
ups or combinations of outstanding shares of common stock of
the Company. The date first written above shall be deemed
to be the granting date of this Option.
This Option grant is made in conjunction with the role of
Senior Vice President and Member of the Board of Directors,
currently performed by the Optionee as of the granting date.
The definition and responsibilities of this role will be based
annually on the description incorporated in the then-current
Incentive Plan documentation or comparable document. Future
vesting of shares granted in this Option will be evaluated as
explained in paragraph 4. Vesting will be contingent on
continued performance of this role and other factors as determined
by the President and Chairman of the Board of the Company.
3. Exercise in Installments. This Option shall become
exercisable in installments ("Installment") as shown on
Exhibit A with the first Installment becoming exercisable
one year following the date of Associate's permanent
relocation of residency to Kansas City ("First Installment
Date") and each subsequent Installment on each of the
succeeding nine anniversary dates of the first Installment,
subject to the vesting provisions of paragraph 4. In the event
that one person or entity (other than one currently holding,
directly or indirectly, fifteen percent or more of the Company's
outstanding voting securities) acquires direct or indirect
voting control of sixty five percent (65%) or more of the
Company's outstanding voting securities (a "Change of Control")
prior to the First Installment Date, one third of the
nonexercisable Installments (in the order of the Installments)
shall become immediately exercisable, if a Change of Control
occurs within one year following the First Installment Date
two thirds of the nonexercisable Installments (in the order
of the Installments) shall become immediately exercisable and
if a Change of Control occurs after one year following the
First Installment Date all nonexercisable Installments shall
become immediately exercisable.
4. Option Vesting and Termination. The Optionee may purchase
all or any portion of the shares subject to each Installment
listed on Exhibit A at any time on or after the exercise
dates listed on Exhibit A that have become "Vested".
"Vested" means that (a) the Optionee has continued to
perform the role noted in paragraph 2, or an equivalent or
superior role as assigned by the Chairman of the Board and
President of the Company, (b) that the Optionee's
performance in the assigned role has been reviewed by the
President and Chairman of the Board of the Company and such
performance has been deemed satisfactory, and (c) that they
have issued a written statement to the Optionee stating the
amount of shares which are vested at each of the dates set
forth on Exhibit A. All shares subject to this Option shall
become Vested immediately if there occurs a Change of
Control. This Option may not be exercised as to any shares
that do not become Vested.
This Option shall expire with respect to all shares of
Cerner Common Stock subject hereto at the earlier of (a)
twenty-five (25) years from the date first above written,
(b) Associate reaching the age of seventy (70) years or (c)
termination of the Associate's employment (other than
retirement of Associate from the Company at or after the age
of sixty-five) with the Company or any of its subsidiaries;
provided, however, that (i) if such termination occurs by
reason of the Optionee's death or disability, the Optionee,
or Optionee's estate, shall have three hundred sixty five
(365) calendar days following such date to exercise this
Option as to the number of shares exercisable on such
termination date and (ii) if such termination occurs by
reason of the Optionee's death or disability or dismissal by
the Company, other than dismissal resulting from a breach by
the Associate of any of the provisions of Associate's
Employment Agreement with the Company, the Associate's
performance of illegal, fraudulent or criminal acts or the
Associate's engaging in willful misconduct or gross
negligence in regard to the performance of Associate's
duties for the Company, this Option shall Vest as to the
shares subject to the next Installment following the date of
such termination and the Optionee, or Optionee's estate,
shall have three hundred sixty five (365) calendar days
following the date of such termination to exercise this
Option as to such shares. Associate shall be deemed to be
disabled if, in the opinion of the Board of Directors of the
Company, the Associate has been unable to perform
Associate's assigned duties for a continuous period of one
hundred eighty (180) days.
This Option may be exercised by the Optionee delivering to
the Company a written notice of exercise along with either a
cash payment in the amount of the purchase price for such
shares, shares of Cerner stock having a fair market value
equal to the exercise price or by stating in the written
notice of exercise that the Optionee wishes a "cashless"
exercise. "Cashless" exercise means that only the net
option shares being exercised will be issued by Cerner. The
remainder will be treated as if they were sold at the
current market price in order to satisfy the purchase price
for the exercised shares.
5. Investment Purpose. By accepting this Option, the Optionee
agrees that any and all shares of stock purchased upon the
exercise of this Option will be purchased for investment
purposes, and not with a view to any distribution thereof,
and that each notice of the exercise of any portion of this
Option shall be accompanied by a representation in writing
signed by the Optionee (or by the person or persons entitled
to exercise the Option in the event of the death of the
Optionee) that the shares of stock are being purchased in
good faith for personal investment purposes, and not with a
view to any distribution thereof.
When a registration statement filed with the Securities and
Exchange Commission regarding the shares of common stock
subject to this option agreement becomes effective, the
investment representation contained in this paragraph will
no longer be applicable.
6. Stock Restrictions. The Optionee further agrees that:
(a) Each stock certificate issued pursuant to the
exercise of the Option granted hereby shall bear a legend
to the effect that the shares represented thereby have
not been registered under the Securities Act of 1933, and
may not be transferred except in accordance with the
provisions of this Agreement.
(b) The shares of the stock acquired upon the exercise
of this Option may be transferred, in whole or in part,
only if in the opinion of counsel for the Company such
proposed transfer may be effected without registration
under the Securities Act of 1933 and appropriate state
securities laws or such registration has been effected.
Prior to the transfer of any such shares the holder
thereof shall furnish the Company written notice of the
intention to effect such transfer, which notice shall
include the manner and circumstances of the proposed
transfer and such other matters as the Company may
request.
(c) The Optionee shall promptly comply with any request
by the Company for information concerning any disposition
by the Optionee of any shares acquired pursuant to this
Option which the Company may need in connection with an
income tax return or any other return or report which it
may be required to file with any governmental agency.
7. Notices. Any notices or other communications required or
allowed to be made or given to the Company under the terms
of this Agreement shall be addressed to the Company in care
of its Secretary at its offices at 0000 Xxxxxxxxx Xxxxxxx,
Xxxxx Xxxxxx Xxxx, Xxxxxxxx 00000, and any notice to be
given to the Optionee shall be addressed to the Optionee at
the address given beneath the signature hereto. Either
party hereto may from time to time change the address to
which notices are to be sent to such party by giving written
notice of such change to the other party. Any notice
hereunder shall be deemed to have been duly given if and
when addressed as aforesaid, registered and deposited,
postage and registry fee prepaid, in a post office regularly
maintained by the United States Government.
8. Binding Effect and Assignment. This Agreement shall bind
the parties hereto but shall not be assignable by either
party without the express written consent of the other.
9. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Missouri.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its officers hereunto duly authorized and its
corporate seal to be hereunto affixed, and the Optionee has
hereunto set hand as of the day and year first above written.
CERNER CORPORATION
By: /s/Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx, Chairman
[CORPORATE SEAL]
ATTEST:
/s/Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx, President
/s/Xxxxxx X. Xxxxxxxx, M.D.
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Optionee (signature)
Address 10311 Xxxxxxx
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Xxxxxxxx Xxxx, Xxxxxx 00000
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EXHIBIT A
Exercise Date Annual Amount of Shares
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January 12, 1997 7,000
January 12, 1998 8,500
January 12, 1999 10,000
January 12, 2000 11,500
January 12, 2001 13,000
January 12, 2002 13,000
January 12, 2003 13,000
January 12, 2004 8,500
January 12, 2005 8,500
January 12, 2006 7,000
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100,000
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Based on First Installment Date of January 12, 1996 pursuant to
paragraph 3.
