UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 28, 2010
Cerner Corporation
 
(Exact Name of Registrant as Specified in Its Charter)
Delaware
 
(State or Other Jurisdiction of Incorporation)
     
0-15386   43-1196944
     
(Commission File Number)   (IRS Employer Identification No.)
     
2800 Rockcreek Parkway, North Kansas City, Missouri   64117
     
(Address of Principal Executive Offices)   (Zip Code)
(816) 221-1024
 
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
 
(Former Name or Former Address, if Changed Since Last Report)
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

Item 1.01 Entry Into A Material Definitive Agreement.
On May 28, 2010, the Board of Directors of Cerner Corporation (the “Company”) adopted and authorized, and Company management entered into, form Indemnification Agreements (the “Agreements”) with each of its directors and Section 16 Officers (the “Indemnitees”), providing the Indemnitees with indemnification rights in consideration of the Indemnitee’s acceptance of and/or continued service in his/her position as a director and/or an executive officer with the Company. The Agreements provide for Cerner to hold harmless and indemnify each Indemnitee, to the fullest extent permitted by Delaware law and in accordance with the Company’s Bylaws, Articles of Incorporation and the Agreement.
These Agreements are substantially similar to the indemnification agreements entered into with the Company’s directors in prior years and this 2010 Form Indemnification Agreement has been updated to clarify: i) that the termination of any proceeding shall not automatically create a presumption that the Indemnitee to be indemnified did not act in good faith or that the Indemnitee’s conduct was unlawful and ii) the circumstances under which the Company may indemnify the Indemnitee, despite the Indemnitee having been found to be liable to the Company. These Agreements supersede all previous agreements of a similar nature.
The foregoing description of the Agreements do not purport to be a complete statement of the parties’ rights and obligations under the Agreements and the transactions contemplated thereby. The above description is qualified in its entirety by reference to the Form Indemnification Agreement which is filed with this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders.
Cerner Corporation (the “Company”) held its Annual Shareholders’ Meeting on May 28, 2010. The shareholders considered and voted on three proposals submitted for shareholder vote, each of which is described in detail in the Company’s 2010 Proxy Statement. The following is a brief description of the matters voted on at the Annual Shareholders’ Meeting and the final results of such voting:
Proposal No. 1 — The election of two Class III Directors, Gerald E. Bisbee, Jr., Ph.D. and Linda M. Dillman, each to serve for a three year term :
Final Results: Gerald E. Bisbee, Jr., Ph.D. and Linda M. Dillman have been elected as Class III Directors.
                 
    For   Withheld
Gerald E. Bisbee, Jr., Ph.D
    66,786,399       2,272,870  
Linda M. Dillman
    68,630,667       428,602  

 


 

Proposal No. 2 — The ratification of the appointment of KPMG LLP as independent registered public accounting firm of the Company for 2010:
Final Results: The shareholders ratified the appointment of KPMG LLP as independent registered public accounting firm of the Company for 2010.
                         
    For   Against   Abstain
KPMG LLP
    74,389,234       2,607,650       92,489  
Proposal No. 3 — Re-approval of the Company’s Amended and Restated Performance-Based Compensation Plan:
Final Results: The Company’s Amended and Restated Performance-Based Compensation Plan has been approved by the shareholders.
                         
    For   Against   Abstain
Performance-Based Compensation Plan
    74,169,612       2,781,713       138,048  
Item 9.01 Financial Statements and Exhibits.
      c) Exhibits
     
99.1
  2010 Indemnification Agreement Form.

 


 

SIGNATURES
     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.
         
  CERNER CORPORATION
 
 
Date: June 3, 2010  By:   /s/ Marc G. Naughton    
    Marc G. Naughton, Executive Vice President   
    and Chief Financial Officer   

 


 

         
EXHIBIT INDEX
     
Exhibit    
Number   Description
 
   
99.1
  2010 Indemnification Agreement Form.

 

Exhibit 99.1
INDEMNIFICATION AGREEMENT
     THIS AGREEMENT is made and entered into this ___ day of ___, 20___, between Cerner Corporation, a Delaware corporation (“Corporation”), and [Director or Executive Officer Name] (“Indemnitee”).
     WITNESSETH:
     WHEREAS, Indemnitee is a member of the board of directors or a Section 16 Officer (“Executive Officer”) 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 acceptance of his/her position with and his/her continued service to the Corporation as a director or an Executive Officer;
     NOW, THEREFORE, in consideration of Indemnitee’s acceptance of his/her position with and his/her continued service as a director or an Executive Officer 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 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 shall continue to serve as a director or an Executive Officer 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 to 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 or an Executive Officer 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 & Officer (D&O) 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 D&O liability insurance.
     3. Additional Indemnification. Subject only to the 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 or an Executive Officer 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.
     (c) The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal proceeding, had reasonable cause to believe that Indemnitee’s conduct was unlawful.
     4. Limitations on Additional Indemnification. (a) The Corporation will not hold Indemnitee harmless or provide indemnification pursuant to Section 3 hereof:
     (a) 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 D&O liability insurance purchased and maintained by or on behalf of Indemnitee by the Corporation, or (iv) otherwise than pursuant to this Agreement;
     (b) 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;
     (c) 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;
     (d) on account of Indemnitee’s conduct which is finally adjudged by a court to have been knowingly fraudulent, deliberately dishonest or willful misconduct; or
     (e) if a final adjudication by a court having jurisdiction in the matter shall determine that such indemnification is not lawful.

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Notwithstanding any other provisions of this Agreement, in the case of any proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director or Executive Officer of the Corporation, or is or was serving at the Corporation’s request as a director, officer, employee or agent of any Other Enterprise, no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Corporation unless, and only to the extent that, the Delaware Court of Chancery or the court in which such proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.
     5. Advancement of Expenses. Expenses (including 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 interests of the Corporation, or, with respect to any criminal proceeding, that such Indemnitee believed or had reasonable cause to believe his/her 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/her duty to the Corporation or its stockholders.
     6. Notification and Defense of Claim. Promptly after 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 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 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

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      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 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 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 or Executive Officer 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/she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan he/she 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

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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.
  (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 or Executive Officer 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/her election or appointment as a director or Executive Officer of the Corporation and such rights shall continue after Indemnitee has ceased to be a director or Executive Officer 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 reimbursed 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 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/her official capacity and as to action in another capacity while holding his/her directorship or Executive Officer position, 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 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

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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, 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 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 Executive 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.
         
     
     
  [Name], Indemnitee   
     
 
  CERNER CORPORATION,
a Delaware corporation
 
 
     
  Marc G. Naughton, Executive Vice President   
  & Chief Financial Officer   
 
         
[SEAL]

ATTEST:
 
   
     
Randy D. Sims, Secretary     
     
 

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