Exhibit 10(k)
CERNER CORPORATION EXECUTIVE DEFERRED
COMPENSATION PLAN
ARTICLE I
RESTATEMENT AND PURPOSE OF PLAN
1.1 Plan Restatement . Cerner
Corporation, a Delaware corporation, originally established the
Cerner Corporation Executive Deferred Compensation Plan effective
August 1, 1999. Pursuant to certain changes required by the
American Jobs Creation Act of 2004 that relate to nonqualified
deferred compensation arrangements, Cerner hereby amends and
restates this Plan effective as of January 1, 2008.
1.2 Purpose of Plan . The purpose of the Plan
is to provide deferred compensation benefits to certain Associates
of Cerner who are members of a select group of management or highly
compensated Associates.
ARTICLE II
DEFINITIONS
2.01 Account shall mean a memorandum account maintained by
the Company for bookkeeping purposes only, to which is credited or
debited, as appropriate, the amount of an Executive’s
Deferral Contributions, Company Contributions (if any), Investment
Return, forfeitures and distributions.
2.02 Associate shall mean an employee of the Company.
2.03 Change of Control Event means the first to occur of any
of the following:
(a) Any
one person, or more than one person acting as a group (as defined
below) acquires ownership of stock of the Company that, together
with stock held by such person or group, constitutes more than
50 percent of the total fair market value or total voting
power of the stock of the Company.
(b) Either:
(i) any one person, or more than one person acting as a group
(as defined below), acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such
person or persons) ownership of stock of the Company possessing
35 percent or more of the total voting power of the stock of
the Company; or (ii) a majority of members of the
Company’s board of directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed
by a majority of the members of the Company’s board of
directors prior to the date of the appointment or election.
(c) Any
one person, or more than one person acting as a group (as defined
below), acquires (or has acquired during the 12-month period ending
on the date of the most
recent
acquisition by such person or persons) assets from the Company that
have a total gross fair market value (“gross fair market
value” means the value of the assets of the Company, or the
value of the assets being disposed of, determined without regard to
any liabilities associated with such assets) equal to or more than
40 percent of the total gross fair market value of all of the
assets of the Company immediately prior to such acquisition or
acquisitions.
(d) For
purposes of this definition, persons will not be considered to be
acting as a group solely because they purchase or own stock, or
purchase assets, of the same corporation at the same time, or as a
result of the same public offering. However, persons will be
considered to be acting as a group if they are owners of a
corporation that enters into a merger, consolidation, purchase or
acquisition of stock or assets, or similar business transaction
with the corporation. If a person, including an entity or entity
shareholder, owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of stock or assets,
or similar transaction, such shareholder is considered to be acting
as a group with other shareholders in a corporation (only with
respect to the ownership in that corporation in the case of an
event described above in paragraph (b) or only to the extent
of the ownership in that corporation in the case of an event
described above in paragraph (c) prior to the transaction
giving rise to the change and not with respect to the ownership
interest in the other corporation.
2.04 Code shall mean the Internal Revenue Code of 1986 as
from time to time amended.
2.05 Committee shall mean the Committee selected by the
Company to be responsible for administering and interpreting the
Plan as provided in Article X.
2.06 Company shall mean Cerner Corporation.
2.07 Company Contributions shall mean Performance
Contributions (if any), Discretionary Contributions (if any) and
Matching Contributions (if any).
2.08 Compensation shall mean the total salary, bonus and
commissions payable to an Executive by the Company in a given Year.
Compensation shall include Deferral Contributions under the Plan
and shall include salary deferral contributions made to a
retirement plan of the Employer intended to qualify under Section
401(k) of the Code.
2.09 Deferral Contribution shall mean the amount credited to
an Executive’s Account for a particular Year pursuant to the
voluntary deferral election of the Executive.
2.10 Designated Beneficiary shall mean the individual,
individuals, trust or estate identified by an Executive to receive
any benefits payable hereunder on account of the death of the
Executive. Each such designation shall revoke any prior designation
executed by the Executive. If no beneficiary is effectively
designated, then the Designated Beneficiary shall be the
Executive’s surviving spouse, but if there is no surviving
spouse then the Designated Beneficiary shall be the personal
representatives of the Executive’s estate.
2.11 Discretionary Contribution shall mean the amount, if
any, allocated by the Company to an Executive’s Account
pursuant to Section 5.2.
2.12 ERISA shall mean the Employee Retirement Income
Security Act of 1974, as from time to time amended.
2.13 Executive shall mean an Associate who satisfies the
requirements for participation in the Plan under Article III
and for whom an Account is maintained.
2.14 Investment Election shall mean the election made by the
Executive from time to time as provided in Article VI which
shall be used for purposes of crediting or debiting, as applicable,
of the Investment Return to the Executive’s Account.
2.15 Investment Return shall mean the hypothetical
investment return, which may include earnings and losses, on the
amounts credited to an Executive’s Account as determined
under Article VI.
2.16 Matching Contributions shall mean the amount allocated
to an Executive’s Account pursuant to Section 5.1.
2.17 Participation Agreement shall mean an agreement
executed by an Executive by which the Executive acknowledges
acceptance of the terms and conditions of the Plan.
2.18 Performance Contribution shall mean the amount, if any,
allocated to an Executive’s Account pursuant to
Section 5.3.
2.19 Permanent Disability shall mean an Executive:
(a) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (b) is,
by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than
12 months, receiving income replacement benefits for a period
of not less than three months under a Company-sponsored accident or
health plan covering Associates.
2.20 Plan shall mean the Cerner Corporation Executive
Deferred Compensation Plan as contained herein and as from time to
time amended.
2.21 Separation from Service means an Executive’s
death, retirement or other termination of employment with the
Company. A Separation from Service shall not occur if the Executive
is on military leave, sick leave or other bona fide leave of
absence (such as temporary employment by the government) if the
period of such leave does not exceed six months, or if longer, as
long as the Executive’s right to reemployment with the
Company is provided either by statute or by contract.
“Separation from Service” shall be interpreted in a
manner consistent with Code Section 409A(a)(2)(A)(i) and the
applicable Treasury regulations issued thereunder.
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2.22 Specified Associate means an Associate that would be a
“specified employee” as defined in
Section 409A(a)(2)(B)(i) of the Code and Department of
Treasury regulations and other interpretive guidance issued
thereunder.
2.23 Termination of Employment shall have the same meaning
as Separation from Service.
2.24 Unforeseeable Emergency means a severe financial
hardship to an Executive resulting from an illness or accident of
the Executive, the Executive’s spouse or a dependent (as
defined in Code Section 152) of the Executive, loss of the
Executive’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Executive.
2.25 Year shall mean the calendar year.
ARTICLE III
PARTICIPATION
3.1 Designation by Company . Prior to the
first day of each Year the Company shall designate certain
Associates as eligible Executives to make Deferral Contributions
hereunder for such Year; provided, however, that if an Associate
becomes employed by the Company after the first day of a Year or
receives a promotion after the first day of the Year such that the
Associate meets the criteria set forth in Section 3.2, then
the Company may designate such Associate as an Executive eligible
to make Deferral Contributions hereunder at any time during such
Year. In addition, at any time the Company determines to make
Company Contributions hereunder, the Company shall designate
certain Associates as Executives eligible for allocations of
specific types of such Company Contributions.
3.2 Criteria for Designation . An Associate
must be a member of a select group of management or highly
compensated Associates within the meaning of ERISA as determined by
the Company in order to be designated by the Company as an
Executive eligible to make Deferral Contributions under the Plan or
as an Executive eligible for allocation of any Company
Contributions under the Plan.
ARTICLE IV
DEFERRAL CONTRIBUTIONS
4.1 Time of Election .
(a) Deferral Contributions. An Executive’s
election to make Deferral Contributions with respect to services
performed in a particular Year must be made prior to the first day
of such Year; provided, however, that if an Associate not
previously eligible to make Deferral Contributions is designated
during a Year as eligible to make Deferral Contributions for such
Year then such Associate’s election to make Deferral
Contributions must be made within 30
days
after the Associate is designated as an eligible Executive by the
Company and such newly eligible Associate’s deferral election
shall relate only to compensation earned after the date such
election in made. An eligible Executive must make a new election
with respect to each Year for which the Executive elects to make
Deferral Contributions. All elections made by an Executive are
revocable until 4:00 p.m. on the last business day of the calendar
year before the calendar year for which the deferral election
relates. Except as provided below in Sections 4.3 and 4.4,
after 4:00 p.m. on such date, all standing elections become
irrevocable for such upcoming year.
(b) Company Contributions. An Executive must
make an election as to the form (e.g., lump sum or installments) of
payment(s) attributable to Company Contributions, if any, made
during a particular Year before the first day of the Year in which
such Company Contribution will be allocated to the
Executive’s Account.
4.2 Method of Election . An election by an
Executive to make Deferral Contributions hereunder shall be made in
writing on a form furnished by the Committee and shall be delivered
to the Committee prior to 4:00 p.m. on the last business day of the
Year preceding the Year for which the election relates, or, in the
case of an Executive who first becomes eligible to make Deferral
Contributions during the Year, within 30 days after the
associate first becomes eligible and prior to the day such election
is first effective.
4.3 Change or Termination of Election . Once
an election for Deferral Contributions for a particular Year
becomes irrevocable pursuant to Section 4.1, the Executive
cannot change the election to a greater or lesser amount during
such Year nor can the Executive terminate the election for a
particular Year at any time during such Year; provided, however,
the Committee may permit the Executive to terminate during a Year
the Executive’s election to make Deferral Contributions if
the Committee determines that the Executive has an Unforeseeable
Emergency resulting in a financial need that can be met by the
termination of Deferral Contributions. The Committee may also
permit the Executive to terminate during a Year the
Executive’s election to make Deferral Contributions if the
Executive becomes eligible to receive a hardship distribution
pursuant to Treasury regulations 1.401(k)-1(d)(3). To the extent
any election to make Deferral Contributions is canceled as provided
for under this Section 4.3, such election must be canceled,
and not postponed or otherwise delayed, such that any later
deferral election will be subject to the election timing rules set
forth above in Section 4.1.
4.4 Mandatory Termination of Deferral
Contributions . If a distribution is made to an Executive
on account of an Unforeseeable Emergency as provided in
Section 8.3, then the Executive’s current election (if
any) to make Deferral Contributions shall terminate at the time of
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