Incentive Stock Option Agreement - Cerner Corp. and Jeffrey C. Reene
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, made and entered into this twenty-second day of August, 1991
(the "Granting Date"), by and between CERNER CORPORATION, a Delaware
corporation (the "Company"), and Jeffrey C. Reene (the "Optionee"),
WITNESSETH:
WHEREAS, on January 13, 1984, the Board of Directors of the Company adopted, and
on May 8, 1984, the holders of a majority of the issued and outstanding shares
of the Company's common stock approved, the Cerner Corporation Incentive Stock
Option Plan B (the "Plan") pursuant to which the Company may grant from time
to time, on or prior to November 30, 1993, options to purchase the shares of
Cerner Common Stock (as defined in said Plan) to any employee of the
Company or any of its subsidiary corporations, in such amounts and under such
form of agreements as shall be determined by the Incentive Stock Option
Committee, appointed by the Board of Directors of the Company pursuant to the
Plan; and
WHEREAS, the Incentive Stock Option Committee (the "Committee") has determined
that the Optionee is an employee of the Company or one of its subsidiary
corporations within the meaning of the Plan, and that the Optionee shall be
granted and option to purchase shares of Cerner Corporation Stock on the
terms and conditions herein set forth;
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 attached hereto and hereby
incorporated herein by reference, and all of the terms, conditions and
provisions contained therein shall be deemed to be terms, conditions and
provisions of the Agreement. All terms used herein which are defined in the
Plan shall have the meanings given them in the Plan.
2. Grant of Option. Pursuant to the authorization of the Committee, and
subject to the terms, conditions and provisions of this Agreement, the
Company hereby grants to the Optionee, as a matter of separate inducement and
agreement in connection with employment, but not in lieu of any salary or other
compensation for services, an option (the "Option") to purchase from the Company
all or any part of an aggregate of twenty thousand (20,000) shares of Cerner
Corporation Stock at the purchase price of fifteen dollars and fifty cents
($15.50) per share. The date first written above shall be deemed to be the
granting date of this Option.
3. Term of Option: Exercise in Installments. This Option shall expire with
respect to all shares of Cerner Common Stock subject hereto on August 22,2001
(the "Expiration Date"), unless it shall be terminated at an earlier date in
accordance with the provisions of the Plan. This Option shall become
exercisable in installments as follows:
Number or Percentage Earliest Date on
of Shares Subject to Which Shares May
This Option Be Purchased
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4,000 July 1, 1992
4,000 July 1, 1993
4,000 July 1, 1994
4,000 July 1, 1995
4,000 July 1, 1996
The Optionee may purchase all or any portion of the shares subject to each
installment listed above at any time (i) on or after the respective exercise
date listed above, and (ii) before the Expiration Date (or before an earlier
termination date), in accordance with the provisions of the Plan.
PLEASE REMEMBER THAT YOU MAY LOSE VALUABLE TAX BENEFITS IF YOU SELL OR DISPOSE
OF THE STOCK ACQUIRED UPON THE EXERCISE OF THIS OPTION BEFORE (1) TWO YEARS
HAVE PASSED SINCE THE DATE ON WHICH THIS OPTION WAS GRANTED, OR (2) ONE YEAR
HAS PASSED SINCE THE DATE ON WHICH YOU EXERCISED THIS OPTION. PLEASE CONTACT
YOUR PERSONAL TAX ADVISOR FOR MORE INFORMATION.
4. 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.
5. 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 1993, and may not be
transferred except in accordance of this Incentive Stock Option Agreement and
the Plan.
(b) Subject to the Company's right to repurchase described in paragraph 6
hereof, the shares of stock acquired upon the exercise of the Option may be
transferred, in whole or in part, only upon the following conditions:
(i) Prior to any transfer of any such shares, the holder thereof shall
furnish the Company written notice of the intention to effect such transfer.
Such notice shall describe the manner and circumstances of the proposed transfer
in sufficient detail, and shall contain an undertaking to furnish such further
information as may be required, to enable counsel to render the opinion referred
below. Promptly after receiving such notice, the Company shall obtain from its
counsel a written opinion (a copy of which shall be furnished to the person
giving such notice) as to whether the proposed transfer may be effected without
registration under the Securities Act of 1993.
(ii) If it is the Opinion of said counsel that no such registration is
necessary under the circumstances, then the holder of the shares for which
transfer has been requested shall be entitled to transfer such shares in
accordance with the terms specified in the written notice given the Company.
Each certificate issued to the transferee to evidence the shares so transferred,
and each certificate evidencing any untransferred balance of shares of stock
acquired by the Optionee upon exercise of this Option, shall bear the
restrictive transfer legend described in paragraph 5(a) hereof unless in the
opinion of said counsel such legend is not then required.
(iii) If it is the opinion of said counsel that the proposed transfer may not
be effected without registration under the Securities Act of 1993, then the
Company shall so notify said holder and said transfer shall not be effected.
(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 report which it may be required to file with any governmental
agency.
6. Company's Right to Repurchase Shares. In the event that the Optionee (i)
dies, (ii) ceases to be employed by the company or any of its subsidiary
corporations at any time before the expiration of three(3) years after the date
on which this Option was last exercised or any of the option granted under this
Plan, or (iii) desires to sell, pledge, hypothecate, transfer or otherwise
dispose of or encumber all or any portion of the shares of stock that were
purchased upon the exercise of this Option, the Company shall have the right
to repurchase all or any portion of the shares of stock which wee acquired by
the Optionee (or by the person or persons entitled to exercise this Option in
the event of the death of the Optionee) pursuant to the exercise of this Option,
upon the following terms and conditions:
(a) Period -- Unless exercisable as a result of the death of the Optionee, the
Company's right shall commence upon the date of which the Optionee ceases to be
employed by the Company or one of its subsidiary corporations or the date on
which the Optionee delivers to the Company written notice of desire to sell,
pledge, hypothecate, transfer or otherwise dispose of or encumber all or any
portion of the stock purchased upon the exercise of this Option, and shall
expire thirty (30) days after such date. Failure of the Company to exercise
its right during such thirty (30) day period shall be deemed to constitute a
waiver of such right. However, if the Optionee fails to sell, pledge,
hypothecate, transfer or otherwise dispose of or encumber all or any portion
of the stock that was acquired upon the exercise of this Option within sixty
(60) days after the date on which the Company shall be deemed to have waived its
right, its right shall be reinstated and again operative upon the Optionee's
death, termination of employment or any subsequent proposed disposition of such
stock.
In the event that its right to repurchase becomes exercisable by reason of the
death of the Optionee, the Company's right shall commence on the date of the
Optionee's death and shall expire twelve (12) months after the date on which
it receives written notice of the Optionee's death from the legal representative
appointed by and qualified in a probate court of competent jurisdiction. If
no legal representative of the Optionee is appointed within sixty (60) days
after the death of the Optionee, then the Company shall be considered a
creditor of the estate and shall have all rights conferred upon creditors of the
estate of the Optionee by the state in which the Optionee was domiciled at the
date of death.
(b) Exercise -- The Company shall exercise its right by delivering to the
Optionee, the legal representative or the person or persons who exercised this
Option after the death of the Optionee (the "Holder") a written notice stating
the number of shares with respect to which it is exercising its right to
repurchase. Such written notice shall be deemed to be effective as of the
earlier of (i) the date on which it is received by the Holder, or (ii) the date
on which it is placed in the United States Mail, postage prepaid and addressed
to the Holder.
(c) Price -- The price at which shares of stock may be repurchased by the
Company upon the exercise of its right described in this paragraph 6 shall be
fair market value of such shares on the date that such right is exercised. In
the event that the Company's right becomes exercisable by reason of the
Optionee's desire to sell, pledge, hypothecate, transfer or otherwise dispose
of or encumber such stock, however, the purchase price shall not be less than
any bona fide cash offer which the Optionee has receive therefor.
(d) Payment -- The Company may pay for the stock repurchased from the Holder
pursuant to its exercise of the right described in this paragraph 6 --
(i) if the Holder has held such option stock for three years or less,
either by a lump sum cash payment at the time it exercises its right to
repurchase pursuant to this paragraph 6, or, at the Company's discretion, partly
by a lump sum cash payment (in the amount equal to the lesser of (A) the
original option price paid by the Holder for such stock, or (B) the then fair
market value of such stock) at the time of repurchase and partly by a promissory
note requiring the Company to make equal annual cash installment payments over a
period of not more than ten (10) years, or
(ii) if the Holder has held such option stock for more than three years, by a
lump sum cash payment at the time it exercises its right to repurchase pursuant
to this paragraph 6, unless the Holder will, upon completion of the Company's
repurchase of all or a portion of the option stock and taking into account all
prior sales by the Holder of Cerner Common Stock to the Company, have sold back
to the Company an aggregate number of shares exceeding one-half of one percent
(1/2%) of its issued and outstanding shares of Cerner Common Stock (determined
at the time of such repurchased), in which event the Company may, in its sole
discretion, elect to pay partly by a lump sum cash payment (in the amount equal
to the lessor of (A) the original option price paid by the Holder for such
stock, or (B) the then fair market value of such stock) at the time of
repurchase and partly by a promissory note requiring the Company to make equal
annual cash installment payments over a period of not more than ten (10) years.
Simple interest shall accrue on the unpaid balance of any promissory note issued
by the Company pursuant to this paragraph 6 at the rate of ten percent (10%)
per year.
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 2800
Rockcreek Parkway, North Kansas City. Missouri 64117, 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 sent to such party be 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. This Agreement shall bind, and except as specifically
provided in the Plan and this Agreement, shall inure to the benefit of, the
respective heirs, legal representatives, successors and assigns of the parties
hereto.
9. Governing Law. This Agreement shall be constructed 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 a the day and year first
above written.
CERNER CORPORATION
[CORPORATE SEAL] By:/s/Neal L. Patterson
Neal L. Patterson, Chairman
ATTEST:
/s/Clifford W. Illig
Clifford W. Illig, President
By:/s/Jeffrey C. Reene
Optionee
2420 West 103rd Street
Leawood, KS 66206
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Address