CERNER Corp - FORM 10-Q - EX-10.1 - PERFORMANCE-BASED COMPENSATION PLAN - May 8, 2015

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EXCEL - IDEA: XBRL DOCUMENT - CERNER CorpFinancial_Report.xls
EX-31.2 - CERTIFICATION OF MARC G. NAUGHTON PURSUANT TO SEC. 302 - CERNER Corpex312-cfocertq12015.htm
EX-31.1 - CERTIFICATION OF NEAL L. PATTERSON PURSUANT TO SEC. 302 - CERNER Corpex311-ceocertq12015.htm
EX-32.2 - CERTIFICATION OF MARC G. NAUGHTON PURSUANT TO SEC. 906 - CERNER Corpex322-cfosec906certq12015.htm
EX-32.1 - CERTIFICATION OF NEAL L. PATTERSON PURSUANT TO SEC. 906 - CERNER Corpex321-ceosec906certq12015.htm
10-Q - Q1 2015 FORM 10-Q - CERNER Corpq1201510-q.htm

Exhibit 10.1


 
2015 Executive Performance Agreement
 
 
Pursuant to the Cerner Corporation Performance-Based Compensation Plan
 

Plan Metrics
Your annual Target Bonus Level (TBL) is $«Total_TBL».
Your “Total Opportunity” will be based on attainment of the following Performance Metric:
Weighting
Performance Metric
Timing Code
PF Applies
Scope
100%
Earnings per Share
Y
Yes
Corporate

Depending on whether the achievement of the Performance Metric is at, below or above the target metric amount, your calculated Total Opportunity earned will be increased or decreased in accordance with the table set forth below. This calculated Total Opportunity incentive payment amount, whether or not adjusted based on the Attainment Percentage of the Performance Metric, may also be reduced depending on your quarterly and annual Performance Factor (PF).
MAXIMUM PAYOUT
If the established Performance Metric is achieved above the target metric amount, you may be eligible to be paid up to 140% of your TBL as set forth in the table below. In addition, if at least the minimum payout Attainment Percentage of the Performance Metric is achieved, you may be eligible to be paid up to an additional 25% of your TBL, if you receive a PF rating of “Outstanding” or “Distinguished”. If you receive a PF other than "Outstanding" or "Distinguished," or the percentage bonus amounts for the "Outstanding" or "Distinguished" categories is determined to be less than 25%, you will receive a lesser amount (between 0 and 25% of your TBL). Even if you receive a PF rating of “Outstanding” or “Distinguished,” you may not receive any payment other than the Payout % of your Total Opportunity indicated in the table below based on the actual Attainment % of the Performance Metric achieved.

The maximum payout (the “Maximum Payout”) is capped at «Base %» of your base salary effective March 9, 2015 (the date the performance targets were established).
 
 
Attainment % of Performance Metric
 TBL Payout %
 
 
104%
140%
 
102%
120%
 
100%
100%
 
98%
75%
 
<98%
0%

MAXIMUM PAYOUT REDUCTION - BASED ON PERFORMANCE FACTOR
You will receive a quarterly and an annual PF rating determined by your direct manager, which rating may affect the Total Opportunity incentive payment calculation as set forth below.

A PF rating of "Needs Development" or "Unacceptable" for any quarter or for the year may result in a 0-100% reduction of your initial calculated Total Opportunity incentive payment. If you receive a “Highly Valued” rating for any quarter or for the year, you will only receive a payment equal to the applicable TBL Payout % (as set forth

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above) of your Total Opportunity. If the minimum payout Attainment % of Performance Metric is achieved and you receive an annual PF of “Outstanding” or ““Distinguished,” you may receive an upward PF adjustment equal to 0-25% of your TBL, but in no event shall your total payout exceed your Maximum Payout of $«MXP» unless determined by the Plan Administrator in accordance with Section 6 of this 2015 Executive Performance Agreement (“Agreement”). Any reductions in calculated TBL incentive payments resulting from a PF rating may not be earned back.
Payment Terms, Schedule and Criteria
Terms
Payment for Y Timing Code Metrics
Payment for cumulative YTD metrics (Y Timing Code) will be calculated quarterly based on approved quarterly targets that build cumulatively to a full-year target. For each of the first three quarters of the year, the Associate will be eligible to be paid 15% of the Associate’s annual TBL opportunity based on these metrics. At year-end, the remainder of the Associate's incentive will be calculated based on the full-year targets.

Timing Code definitions of specific payment timing are located in the CPP Glossary (effective January 4, 2015) located on uCERN.

Changes to an Associate’s TBL, based on any compensation adjustments, will be reflected in payment calculations on a pro-rata basis for the appropriate quarters. However, in no event may the TBL of a Covered Executive (as defined in Cerner's Performance Based Compensation Plan (the “162(m) Plan”)) change after the initial 162(m) Plan metrics and Covered Executive's eligible performance compensation opportunity are established by the Compensation Committee.
The year-end calculation of payments will not affect amounts earned for previous quarters; however, the actual PF adjustment, if applicable, will apply to TBL incentives earned for the full year.
Corrections to prior period payments may be made and applied to current period payments earned to ensure accurate incentive payments.
Timing
Payment of earned TBL will be made approximately sixty (60) days after the end of a quarter in which they are earned.
Criteria
1.
In order to be eligible for any payments under this Agreement, Cerner must have received the Associate’s signed Cerner Associate Employment Agreement, which governs the terms and conditions of the Associate’s employment with Cerner.
2.
Participation under this Agreement begins as of the beginning of the first full quarter of employment in, or assignment to, an eligible role under Cerner's 162(m) Plan. Newly eligible Associates will satisfy the "full quarter" requirement as long as they are actively working within the first sixteen (16) working days of the quarter.
3.
Payments under Cerner's 162(m) Plan for any one quarter or the year will be forfeited if the Associate fails to complete performance reviews/self-appraisals as required by Cerner's Human Resources group. Any balance of the payout that could have been attained is forfeited and will not be paid in subsequent quarters.
4.
Exceptions to the above items will be considered and determined by the Plan Administrator(s), in his/her sole discretion.
Other Considerations
1.
Termination of Eligibility: An Associate’s eligibility under the 162(m) Plan will be terminated immediately in the event of termination of employment with Cerner Corporation or any of its subsidiaries (“Cerner”), for any reason (voluntarily or involuntarily), or transfer to a non-Cerner Performance Plan (CPP) role. Payments are earned only for completed periods (quarters, semi-annual, or annual metrics); i.e., if employment with Cerner is terminated or if participation in the 162(m) Plan is otherwise terminated at any time before the completion of a period, no incentive will be earned or paid for that period. The Associate will be entitled to payment for the earned CPP incentive only

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if he/she is employed or in his/her CPP-eligible role on the last fiscal day of the period. The 2015 fiscal calendar can be found in Exhibit III of the CPP Glossary (effective January 4, 2015) available on uCERN.
2.
Leave of Absence: Eligibility for Associates who are not actively at work for more than six weeks of any quarter will be subject to a reduction in Total Opportunity as set forth in the CPP Leave Policy (located on uCERN).
3.
Repayments to Cerner: In the event an Associate's employment is terminated, for any reason (voluntarily or involuntarily), and such Associate owes money to Cerner, for any reason, or is required to return incentive payments, Cerner may deduct the amounts owed from all accounts due to such Associate, such as salary, advances, vacation pay, expense reimbursements, incentive payments, and other Cerner monies owed to the Associate. To the extent such amounts are not setoff, the Associate remains liable for any remaining balance. Cerner reserves the right to collect any outstanding balance through legal means if necessary.
4.
Incentive Payment Recovery in the Event of a Restatement:  In the event Cerner implements a Mandatory Restatement (as defined in Section 11(viii) of the 162(m) Plan), which restatement relates in whole or in part to the 2015 fiscal year or prior years while the Associate was eligible for CPP, some or all of any amounts paid as an incentive payment earned by the Associate under this Agreement and related to such restated period(s) shall be recoverable and, in all appropriate circumstances and to the extent practicable as determined by Cerner's Board of Directors, must be repaid within ninety (90) days of such restatement(s).  The amount which must be repaid, if any, is the amount by which the compensation paid or received exceeds the amount that would have been paid or received based on the financial results reported in the restated financial statement, in each case determined by the Plan Administrator.  Any amount required to be repaid may be repaid directly by the Associate, setoff against future amounts owed to the Associate by Cerner under this Agreement (if such amounts will be earned and paid within the ninety (90) day payment period) or any other amount owed to the Associate by Cerner, as permitted by applicable law, or paid as otherwise agreed in writing between the Associate and Cerner. Cerner will not be required to award additional CPP payments should the restated financial statements result in a higher CPP payout.
5.
Incentive Payment Recovery in the Event of Fraud or Misconduct:  In the event Cerner implements a Mandatory Restatement, which restatement relates in whole or in part to the 2015 fiscal year or prior years while the Associate was eligible for CPP, all amounts paid as an incentive payment earned by the Associate under this Agreement and related to such restated period(s) shall be fully recoverable and, in all appropriate circumstances and to the extent practicable as determined by Cerner’s Board of Directors, must be repaid within ninety (90) days of such restatement(s) if it is determined by Cerner’s Board of Directors that the Associate engaged in fraud or misconduct that caused or partially caused the need for the restatement.  Any amount required to be repaid may be repaid directly by the Associate, setoff against future amounts owed to the Associate by Cerner under this Agreement (if such amounts will be earned and paid within the ninety (90) day payment period) or any other amount owed to the Associate by Cerner, as permitted by applicable law, or paid as otherwise agreed in writing between the Associate and Cerner.
6.
Modifications to this Agreement: The Plan Administrator reserves the right, in its sole discretion, to interpret and modify this Agreement: (a) during the 162(m) Plan year to coincide with changing corporate objectives, and (b) during or after the 162(m) Plan year to: (i) avoid windfall payments unintentionally derived from the 162(m) Plan design that may result from the highly variable nature of many Client Agreement(s) or market conditions and/or (ii) adjust payments or terminate this Agreement when an Associate’s performance has been documented by management to be unacceptable. Such modifications will occur only under the authority of the Plan Administrator(s), in their sole discretion. Any component of this Agreement may be adjusted to ensure that the Associate receives adequate, yet reasonable, compensation. In no event may the Plan Administrator (I) increase the amount of compensation payable that would otherwise have been payable upon the attainment of the original performance metric, as such metric was established during the initial allowable period of time under Section 162(m) of the Internal Revenue Code for establishing "performance-based compensation" or (II) make any modifications or interpretations to the 162(m) Plan which will jeopardize the deductibility of performance-based compensation payable hereunder, unless the Plan Administrator expressly acknowledges in connection with the modification or interpretation that the availability of Internal Revenue Code Section 162(m)'s performance-based compensation exemption is not desired.
Capitalized terms used but not otherwise defined in this Agreement have the meanings set forth in the CPP Glossary (effective January 4, 2015).

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