Exhibit 4.5
CERNER CORPORATION
2004 LONG - TERM INCENTIVE PLAN G
The
purpose of the Cerner Corporation Long-Term Incentive Plan G (the
“Plan”) is to encourage designated key associates and
non-employee directors of Cerner Corporation (the
“Company”) and its subsidiaries to contribute
materially to the growth of the Company, thereby benefiting the
Company’s shareholders by aligning the economic interests of
the participants with those of the shareholders.
1. Administration
(a) Committee.
The Plan shall be administered and interpreted by the Compensation
Committee of the Board of Directors or such other committee as the
Board of Directors of the Company (the “Board”) may
designate to administer this Plan (the “Committee”).
The Committee shall consist of three or more members of the Board,
all of whom shall be: (i) “outside directors” as
defined under section 162(m) of the Internal Revenue Code of 1986,
as amended (the “Code”) and related Treasury
regulations, (ii) “non-employee directors” as defined
under Rule 16b-3 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and (iii) in the
judgment of the Board, qualified to administer the Plan and act as
a Member of the Committee pursuant to all applicable rules,
regulations and listing standards of the Nasdaq Stock Market (or
such other stock exchange on which the Stock is traded), including
any applicable standards for independence. Any member of the
Committee who does not satisfy the qualifications set out in the
preceding sentence may recuse himself or herself from any vote or
other action taken by the Committee. The Board may, at any time and
in its complete discretion, remove any member of the Committee and
may fill any vacancy in the Committee.
(b) Committee
Authority. The Committee shall have the sole authority to
(i) determine the individuals to whom grants shall be made
under the Plan; (ii) determine the type, size and terms of the
grants to be made to each such individual; (iii) determine the
time when the grants will be made and the duration of any
applicable exercise or restriction period, including the criteria
for exercisability and the acceleration of exercisability;
(iv) amend the terms (other than terms related to initial
pricing of the shares) of any previously issued Grant and
(v) deal with any other matters arising under the
Plan.
(c) Delegation
by the Committee. The Committee, in its sole discretion and on such
terms and conditions as it may provide, may delegate all or any
part of its authority and powers under this Plan to one or more
Directors or officers of the Company; provided, however, that the
Committee may not delegate its authority and powers (i) with
respect to Section 16 Persons, or (ii) in any way which
would jeopardize the Plan’s qualification under Section
162(m) of the Code or Rule 16b-3.
(d) Committee
Determinations. The Committee shall have full power and authority
to administer and interpret the Plan, to make factual
determinations and to adopt, amend or rescind such rules,
regulations, agreements and instruments for implementing the Plan
and for the conduct of its business as it deems necessary or
advisable, in its sole discretion. The Committee’s
interpretations of the Plan and all determinations made by the
Committee pursuant to the powers vested in it hereunder shall be
conclusive and binding on all persons having any interest in the
Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best
interest of the Company and in keeping with the objectives of the
Plan and need not be uniform as to similarly situated
individuals.
2. Grants
Awards under the
Plan may consist of grants of incentive stock options as described
in Section 5 (“Incentive Stock Options”), nonqualified
stock options as described in Section 5 (“Nonqualified
Stock Options”) (Incentive Stock Options and Nonqualified
Stock Options are collectively referred to as
“Options”), restricted stock as described in
Section 6 (“Restricted Stock”), restricted stock
units as described in Section 6 (“Restricted Stock
Units”), stock appreciation rights as described in
Section 7 (“SARs”), performance units as described
in Section 8 (“Performance Units”), performance
shares as described in Section 8 (“Performance
Shares”), and phantom stock as described in Section 9
(“Phantom Stock”) (hereinafter collectively referred to
as “Grants”). All Grants shall be subject to the terms
and conditions set forth herein and to such other terms and
conditions consistent with this Plan as the Committee deems
appropriate and as are specified in writing by the Committee to the
individual in a grant instrument (the “Grant
Instrument”) or an amendment to the Grant Instrument. The
Committee shall approve the form and provisions of each Grant
Instrument. Grants under a particular Section of the Plan need not
be uniform as among the Grantees. Grants, other than Options or
SARs, shall vest as follows: (a) time based Grants shall have
a minimum three (3) year vesting schedule; and,
(b) performance based Grants shall have a minimum one
(1) year vesting schedule.
3. Shares
Subject to the Plan
(a) Shares
Authorized. Subject to the adjustment specified in Section 3(c)
below, the aggregate number of shares of common stock of the
Company (“Company Stock”) that may be issued or
transferred under the Plan is two million (2,000,000) shares.
The
shares may be authorized but
unissued shares of Company Stock or reacquired shares of Company
Stock, including treasury shares and shares purchased by the
Company on the open market for purposes of the Plan. If and to the
extent that shares of Company Stock subject to an outstanding Grant
are not issued by reason of the forfeiture, termination, surrender,
cancellation or expiration while unexercised of such Grant, or by
reason of tendering or withholding of shares (by either actual
delivery or by attestation) to pay all or a portion of the Exercise
Price or to satisfy all or a portion of any tax withholding
obligations relating to the Grant or the exercise of a Grant,
settled in such a manner such that some or all of the shares
covered by the Grant are not issued to a participant, or being
exchanged for a Grant under this Plan that does not involve Company
Stock, then such shares shall immediately again be available for
issuance under this Plan and credited back to the 2,000,000 share
limitation on Company Stock, as applicable. The Committee may from
time to time adopt and observe such procedures concerning the
counting of Shares against the Plan maximum as it may deem
appropriate.
(b) Individual
Limit. During any calendar year, no individual may be granted
Options or other Grants under the Plan that, in the aggregate, may
be settled by delivery of more than five hundred thousand (500,000)
shares of Company Stock, subject to adjustment as provided in
Section 3(c). In addition, with respect to Grants the value of
which is based on the Fair Market Value of Company Stock and that
may be settled in cash (in whole or in part), no individual may be
paid during any calendar year cash amounts relating to such Grants
that exceed the greater of the Fair Market Value (as defined in
Section 5(b)(iii)) of the number of shares of Company Stock
set forth in the preceding sentence either at the date of grant or
at the date of settlement. This provision sets forth two separate
limitations, so that Grants that may be settled solely by delivery
of Company Stock will not operate to reduce the amount or value of
cash-only Grants, and vice versa; nevertheless, Grants that may be
settled in Company Stock or cash must not exceed either
limitation.
With respect to
Grants, the value of which is not based on the Fair Market Value of
Company Stock, no individual may receive Grants pursuant to this
Plan during any calendar year involving a cash value plus shares of
Company Stock with a Fair Market Value at date of grant that, in
the aggregate, exceeds five million dollars
($5,000,000).
Grants to
Non-Employee Directors will be set by the Committee based on either
a formula or a maximum grant amount taking into consideration the
recommendations of at least one independent third party consultant
to the Company’s Board of Directors.
(c) Adjustments.
If there is any change in the number or kind of shares of Company
Stock outstanding (i) by reason of a stock dividend, spin-off,
recapitalization, stock split, or combination or exchange of
shares, (ii) by reason of a merger, reorganization or
consolidation in which the Company is the surviving corporation,
(iii) by reason of a reclassification or change in par value,
or (iv) by reason of any other extraordinary or unusual event
affecting the outstanding Company Stock as a class without the
Company’s receipt of consideration, or if the value of
outstanding shares of Company Stock is substantially reduced as a
result of a spin-off or the Company’s payment of an
extraordinary dividend or distribution, the maximum number of
shares of Company Stock available for Grants, the maximum number of
shares of Company Stock that any individual participating in the
Plan may be granted in any year, the number of shares covered by
outstanding Grants, the kind of shares issued under the Plan, and
the price per share or the applicable market value of such Grants
may be appropriately adjusted by the Committee to reflect any
increase or decrease in the number of, or change in the kind or
value of, issued shares of Company Stock to preclude, to the extent
practicable, the enlargement or dilution of rights and benefits
under such Grants; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated. Any adjustments
determined by the Committee shall be final, binding and conclusive.
If and to the extent that any such change in the number or kind of
shares of Company Stock outstanding is effected solely by
application of a mathematical formula (e.g., a 2-for-1 stock
split), the adjustment described in this Section 3(c) shall be made
and shall occur automatically by application of such formula,
without further action by the Committee.
4. Eligibility
for Participation
(a) Eligible
Persons. All key associates of the Company and its subsidiaries
(“Associates”), including Associates who are officers
or members of the Board, shall be eligible to participate in the
Plan. Members of the Board who are not Associates
(“Non-Employee Directors”) shall be eligible to
participate in the Plan.
(b) Selection
of Grantees. The Committee shall select the Associates and
Non-Employee Directors to receive Grants and shall determine the
number of shares of Company Stock subject to a particular Grant,
and/or shall establish such other terms and conditions applicable
to such Grant, in such manner as the Committee determines.
Associates and Non-Employee Directors who receive Grants under this
Plan shall hereinafter be referred to as
“Grantees.”
5. Granting
of Options
(a) Number of
Shares. The Committee shall determine the number of shares of
Company Stock that will be subject to each Grant of Options to a
Grantee.
(b) Type of
Option and Price.
(i) The
Committee may grant Incentive Stock Options that are intended to
qualify as “incentive stock options” within the meaning
of section 422 of the Code or Nonqualified Stock Options that are
not intended to qualify or any combination of Incentive Stock
Options and Nonqualified Stock Options, all in accordance with the
terms and conditions set forth herein.
(ii) The
purchase price (the “Exercise Price”) of Company Stock
subject to an Option shall be determined by the Committee and shall
be equal to or greater than the Fair Market Value (as defined
below) of a share of Company Stock on the date the Option is
granted; provided, however, that an Incentive Stock Option may not
be granted to an Associate who, at the time of grant, owns stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary of the
Company, unless the Exercise Price per share is not less than 110%
of the Fair Market Value of Company Stock on the date of
grant.
(iii) The
Fair Market Value per share as of any date shall be the closing
reported sale prices of the Stock on The Nasdaq Stock Market (or
such other national securities exchange in the event the Company
stock is not then traded on The Nasdaq Stock Market) as of that
date, or if there is no such reported sales price on the relevant
date, then on the last previous day on which a sale was
reported.
(c) Option
Term. The Committee shall determine the term of each Option. The
term of any Option shall not exceed twelve years from the date of
grant. However, an Incentive Stock Option that is granted to an
Associate who, at the time of grant, owns stock possessing more
than 10% of the total combined voting power of all classes of stock
of the Company, or any parent or subsidiary of the Company, may not
have a term that exceeds five years from the date of
grant.
(d) Exercisability
of Options. Options shall become exercisable in accordance with
such terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument
or an amendment to the Grant Instrument. The Committee may
accelerate the exercisability of any or all outstanding Options at
any time for any reason.
(e) Termination
of Employment, Disability or Death. Except as provided below, an
Option may only be exercised while the Grantee who is an Associate
is employed by the Company. In the event that such a Grantee ceases
to be employed for any reason other than a
“disability”, death, retirement, or a termination for
the convenience of the Company, any Option held by the Grantee
shall terminate at the close of business ninety days after the
Grantee’s last day of employment. In such case, and in all
cases described below under (i), (ii), (iii) and
(iv) below, the Option may be exercised only as to the shares
of Company Stock as to which the Option had become exercisable on
or before the date the Grantee ceases to be an
Associate.
(i) In the
event that the Grantee ceases to be employed in a manner determined
by the Committee or Board, in its sole discretion, to constitute
retirement (which determination shall be communicated to the
Grantee within sixty days of such termination), the Option may be
exercised by the Grantee, or in the case of the Grantee’s
death, by the Grantee’s beneficiaries entitled to do so,
(A) if the Option is an Incentive Stock Option, within three
months following the Grantee’s retirement, or (B) if the
Option is a Nonqualified Stock Option, the Committee, in its
discretion, may provide that the Grantee’s Options shall be
exercisable for up to three years after the date of
retirement.
(ii) In the
event the Grantee dies while he or she is an Associate, within the
period referred to in clause (iv) below, or within the period
described in sub-clause (A) and (B) of clause (i), above,
(A) if the Option is an Incentive Stock Option, the Option may
be exercisable within one year following the Grantee’s date
of death, or (B) if the Option is a Nonqualified Stock Option,
the Committee, in its discretion, may provide that the
Grantee’s Options shall be exercisable for up to three years
after the date of death.
(iii) In the
event the Grantee ceases to be employed by the Company because the
Grantee becomes “disabled”, or if the Grantee becomes
disabled within the period referred to in clause (iv) below,
(A) if the Option is an Incentive Stock Option, the Option may
be exercisable within twelve months following the date
Grantee’s employment has ceased or the date the Grantee
became disabled, whichever is later, or (B) if the Option is a
Nonqualified Stock Option, the Committee, in its discretion, may
provide that the Grantee’s Options shall be exercisable for
up to three years after the date Grantee’s employment has
ceased or the date the Grantee became disabled, whichever is
later.
(iv) In the
event the Grantee ceases to be employed by the Company because the
Grantee is terminated for the convenience of the Company (as
determined by the Committee or the Board in its sole discretion),
any Incentive Stock Option and/or Nonqualified Stock Option
exercisable on the date of termination of employment may be
exercised by the Grantee within a period determined by the
Committee, in its discretion, commencing on the date of termination
of employment and continuing for up to three years after the date
Grantee’s employment has ceased.
(v) For
purposes of this Section 5(e) and Sections 6, 7 and
8:
(A) The term
“Company” shall mean the Company and its subsidiary
corporations.
(B) “Disability”
or “disabled” shall mean a Grantee’s becoming
disabled within the meaning of section 22(e)(3) of the
Code.
(f) Exercise
of Options. A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of
exercise to the Company with payment of the Exercise Price. The
Grantee shall pay the Exercise Price for an Option as specified by
the Committee (x) in cash, (y) with the approval of the
Committee, by delivering shares of Company Stock owned by the
Grantee (including Company Stock acquired in connection with the
exercise of an Option, subject to such restrictions as the
Committee deems appropriate) and having an aggregate Fair Market
Value for such shares on the date of exercise equal to the
aggregate Exercise Price or (z) by such other method as the
Committee may approve, including attestation (on a form prescribed
by the Committee) to ownership of shares of Company Stock having a
Fair Market Value on the date of exercise equal to the Exercise
Price, or payment through a broker in accordance with procedures
permitted by Regulation T of the Federal Reserve Board. In
addition, the Committee may authorize loans by the Company to
Grantees in connection with the exercise of an Option, upon such
terms and conditions that the Committee, in its sole discretion
deems appropriate. However, the Committee may not authorize any
loans under this Plan to any of the Company’s Section 16
Officers as defined by the Securities Exchange Commission and
determined each year by the Company’s Board of Directors.
Shares of Company Stock used to exercise an Option shall have been
held by the Grantee for the requisite period of time to avoid
adverse accounting consequences to the Company with respect to the
Option. The Grantee shall pay the Exercise Price and the amount of
any withholding tax due (pursuant to Section 10) at the time
of exercise. Shares of the Company Stock shall not be issued upon
exercise of an Option until the Exercise Price is fully paid and
any required withholding is made.
(g) Limits on
Incentive Stock Options. Each Incentive Stock Option shall provide
that, if the aggregate Fair Market Value of the stock on the date
of grant with respect to which Incentive Stock Options are
exercisable for the first time by a Grantee during any calendar
year, under the Plan or any other stock option plan of the Company
or a parent or subsidiary, exceeds one hundred thousand U.S.
dollars ($100,000), then the Option, as to the excess, shall be
treated as a Nonqualified Stock Option.
6. Restricted
Stock and Restricted Stock Units Grants
The
Committee may issue or transfer shares of Company Stock to a
Grantee under a Grant of Restricted Stock or Grant Restricted Stock
Units, upon such terms as the Committee deems appropriate. A
Restricted Stock Unit shall mean any unit granted under this
Section 6 evidencing the right to receive a share of Company
Stock (or a cash payment equal to the Fair Market Value of a share
of Company Stock) at some future date. The following provisions are
applicable to Restricted Stock and Restricted Stock
Units:
(a) General
Requirements. Shares of Company Stock issued or transferred
pursuant to Restricted Stock and Restricted Stock Unit Grants may
be issued or transferred for consideration or for no consideration,
as determined by the Committee. The Committee may establish
conditions under which restrictions on shares of Restricted Stock
and Restricted Stock Units shall lapse over a period of time or
according to such other criteria as the Committee deems appropriate
including, without limitation, restrictions based upon the
achievement of specific performance goals. The period of time
during which the Restricted Stock and Restricted Stock Units will
remain subject to restrictions will be designated in the Grant
Instrument as the “Restriction Period.” Each Restricted
Stock or Restricted Stock Unit shall provide for vesting not more
rapidly than ratably over a three year period unless the Restricted
Stock or Restricted Stock Unit is also subject to performance
restrictions, in which case the minimum Restriction Period shall be
one year.
(b) Number of
Shares. The Committee shall determine the number of shares of
Company Stock to be issued or transferred pursuant to a Restricted
Stock Grant or issuable or transferable pursuant to a Restricted
Stock Unit Grant and the restrictions applicable to such shares or
Restricted Stock Units.
(c)
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