Indemnification Agreement - Cerner Corp. and William B. Neaves
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made and entered into this 20th day of September, 2001,
between Cerner Corporation, a Delaware corporation ("Corporation"), and William
B. Neaves ("Indemnitee").
WITNESSETH:
WHEREAS, Indemnitee is a member of the board of directors 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 continued service to the Corporation as a director;
NOW, THEREFORE, in consideration of Indemnitee's continued service as a
director 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 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 of 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 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 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 director 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
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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 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.
4. Limitations on Additional Indemnification. (a) The Corporation will not
hold Indemnitee harmless or provide indemnification pursuant to Section 3
hereof:
(1) 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 director liability insurance purchased and maintained on behalf of
Indemnitee by the Corporation, or (iv) otherwise than pursuant to this
Agreement;
(2) 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;
(3) 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;
(4) on account of Indemnitee's conduct which is finally adjudged by a
court to have been knowingly fraudulent, deliberately dishonest or willful
misconduct; or
(5) if a final adjudication by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
(b) Notwithstanding any other provisions of this Agreement, if the
Indemnitee is or was serving as a director of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee
or agent of any Other Enterprise, and has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
Section 3 of this Agreement (including the dismissal of any such action,
suit or proceeding without prejudice), or in defense of any claim, issue or
matter therein, he/she shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him/her in connection
therewith to the extent he/she has not been fully indemnified therefor
otherwise than pursuant to this Agreement.
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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 interest 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 so 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 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
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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 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 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 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 of the Corporation and
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such rights shall continue after Indemnitee has ceased to be a director 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, 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 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 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.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
and affixed their signatures hereto as of the date first above written.
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William B. Neaves, Indemnitee
CERNER CORPORATION, a Delaware corporation
By
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Marc G. Naughton, Chief Financial Officer
[SEAL]
ATTEST:
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Randy D. Sims, Secretary