Stock Option Agreement - Cerner Corp. and Michael E. Herman
CERNER CORPORATION PLAN D STOCK
OPTION AGREEMENT
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THIS AGREEMENT, made and entered into this eighth day of
December, 1994 (the "Granting Date"), by and between CERNER
CORPORATION, a Delaware corporation (the "Company"), and Michael
E. Herman (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 twenty-
four thousand (24,000) shares of Cerner Common Stock at the
purchase price of thirty-seven and three-fourths ($37 3/4)
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
Board of Director, 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 3. 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. Term of Option: Exercise in Installments. This option
shall expire with respect to all shares of Cerner Common
Stock subject hereto twenty-five years from the date first
above written (the "Expiration Date"), unless it shall be
terminated at an earlier date in accordance with this
Agreement. This Option shall become exercisable in
installments as follows, subject to the vesting provisions
of paragraph 4:
<PAGE>
Number or Percentage Earliest Date on
of Shares Subject to Which Shares May
This Option Be Purchased
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4,000 May 16, 1995
4,000 May 16, 1996
4,000 May 16, 1997
4,000 May 16, 1998
4,000 May 16, 1999
4,000 May 16, 2000
4. Option Vesting. The Optionee may purchase all or any
portion of the shares subject to each installment listed
above at any time on or after the exercise dates listed
above and before the Expiration Date (or any earlier
termination date) that have become "vested". "Vested" means
that a) the Optionee has continued to perform the role noted
in paragraph 2, or an alternate 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 commensurate
with the role, and c) that they have issued a written
statement to Optionee stating the amount of shares which are
vested at each of the dates set forth above.
Any shares which do not become so "vested" shall no longer
be subject to this Option. This Option shall expire as to
any of such shares not so vested. This Option shall expire
as to all unexercised shares immediately upon termination of
the Associate's employment with the Company or any of its
subsidiaries, except that in the event such employment is
terminated by reason of the Optionee's death or disability
the Optionee, or Optionee's estate, shall have thirty (30)
calendar days following such date to exercise this Option as
to the number of shares exercisable on such date.
This Option may be exercised by Optionee delivering to the
Company a written notice of exercise along with a cash
payment in the amount of the purchase price for such 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 share 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:
<PAGE>
(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 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 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/Neal L. Patterson
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<PAGE>
Neal L. Patterson, Chairman
[CORPORATE SEAL]
ATTEST:
/s/Clifford W. Illig
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Clifford W. Illig, President
/s/Michael E. Herman
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Michael E. Herman
Address 6201 Ward Parkway
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Kansas City, MO 64113
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