UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)


Filed by the Registrant  ý
Filed by a Party other than the Registrant  ¨
Check the appropriate box:
ý

Preliminary Proxy Statement
  
¨Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  
¨

Definitive Proxy Statement
  
¨Definitive Additional Materials
  
¨Soliciting Material Pursuant to §240.14a-12

CERNER CORPORATION
(Name of Registrant as Specified In Its Charter)

(Name(s) of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
ýNo fee required.
  
¨Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

(1) Title of each class of securities to which transaction applies:


(2) Aggregate number of securities to which transactionstransaction applies:


(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0‑11:11 (set
forth the amount on which the filing fee is calculated and state how it was determined):


(4) Proposed maximum aggregate value of transaction:


(5) Total fee paid:


¨Fee paid previously with preliminary materials.
  



¨Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 





(1) Amount Previously Paid:


(2) Form, Schedule or Registration Statement No.:


(3) Filing Party:


(4) Date Filed:










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PRELIMINARY PROXY STATEMENT - SUBJECT TO COMPLETION


April 15, 20137, 2020
Dear Shareholder:
You are cordially invitedCerner shareholders:

I am pleased to invite you to attend the 2020 Annual Shareholders' Meeting of Cerner Corporation to be held on May 22, 2020 at 10:00 a.m., local time, on May 24, 2013, at (CDT). The Cerner Round Auditorium insituation with COVID-19 is continuing to rapidly evolve, as is Cerner's response to help protect the Cerner Vision Center, locatedhealth of our associates, clients and their patients, shareholders, and our communities. Based on the Cerner campus at 2850 Rockcreek Parkway, North Kansas City, Missouri 64117.
Detailsunfolding information, we have elected to hold our first virtual meeting of the business to be conducted at the Annual Shareholders' Meeting are provided in the attached Notice of Annual Shareholders' Meeting and Proxy Statement. We will also report on matters of current interest to our shareholders.

We hope youstockholders. You will be able to attend the meeting. However, even if you plan to attend in person, please2020 Annual Meeting online, vote your shares, promptlyand submit questions during the meeting by visiting www.virtualshareholdermeeting.com/CERN2020.

Three directors will stand for re-election at this year's Annual Shareholders' Meeting. We also will vote to ensure they are representedratify the appointment of KMPG LLP as our independent accounting firm and approve the compensation of our Named Executive Officers. Additionally, after carefully considering the advantages and disadvantages of the classification of our Board, the current views of our shareholders, and a growing sentiment among institutional investors and their advisory services in favor of annual elections, Cerner's Board recommends that you approve the proposed amendments to our charter that would declassify our Board of Directors and more clearly align the advance notice provisions for director nominations with those in our bylaws.

Health information technology remains a dynamic industry that is an integral component in the delivery of global health care. For more than 40 years, Cerner has been at the meeting. You may submitforefront of digitizing health care - an important step toward improving the standard of living of the world's population. Since the beginning, we've had a vision for what comes next. With nearly three million health care professionals accessing Cerner's systems every day, we manage the data of nearly 250 million lives around the world. As we enter the cognitive era of health care, alongside our clients, Cerner is leading health care's ever-quickening evolution. The opportunities are massive. We expect the foundational work from digitization to enable health care's true potential; bring a heightened focus on preventative care, improved safety, and reduced costs; and to help us all be more connected and thrive.

Since our last meeting, we have taken steps to realize operational efficiencies across the enterprise and implement transformative structure and process improvements that should enable future growth for Cerner. Other 2019 highlights include the following:

•
As part of our agreements with Amazon and Amazon Web Services, we have migrated eligible HealtheIntent® clients to AWS, scheduled to migrate Cerner-hosted CareAware® clients by year's end and are making progress to cloud-enable our Cerner Millennium® platform.

Organizationally, we added a new Chief Human Resources Officer and Chief Marketing Officer. We also added to the roles of Don Trigg, who was named President with responsibility for all Cerner business units, and John Peterzalek, who as Chief Client and Services Officer is now responsible for all aspects of the client experience. Also in 2019, and prior to last year's shareholder meeting, we expanded Cerner's Board by adding four new directors: John Greisch, Melinda Mount, George Riedel and Halsey Wise. These new members have collaborated with existing board members to provide valuable counsel and make significant contributions.

We are also gaining momentum with many of our strategic growth initiatives. We have positioned HealtheIntent as a core enabler of provider network strategies, created an enhanced data commercialization service and



extended Cerner's reach to non-provider segments of health care by expanding our consumer and employer capabilities.

We've made good progress on our work to modernize the health records for the U.S. Departments of Defense and Veterans Affairs. In an important step, we migrated 78 billion health records of 23.5 million Veterans to Cerner's data center. Additionally, the implementation of several federal sites is scheduled to occur this year.

We delivered financial results in line with expectations and returned $1.4 billion of capital in 2019 through share buybacks and dividend payments, reflecting our continued commitment of delivering value to shareholders.

These actions demonstrate our focus on delivering world-class client experiences, operational improvements, improved governance and attractive shareholder value. As such, we ask for your proxy vote by telephone or Internet as describedsupport (FOR) each of the proposals included in the following materials or by completing and signing the enclosed Proxy Card and returning it in the envelope provided. If you decide to attend the meeting and wish to change your proxy vote for shares held in your name, you may do so automatically by voting in person at the meeting.statement.

Promptly voting by telephone or Internet or returningOn behalf of the entire Board of Directors, thank you for your Proxy Cardcontinued interest in the enclosed postage prepaid envelope will help ensure that as many shares as possible are represented.Cerner.
Very truly yours,
CERNER CORPORATIONbrentsignaturea02.jpg

Neal L. PattersonBrent Shafer
Chairman of the Board of Directors
and Chief Executive Officer and President






PRELIMINARY PROXY STATEMENT - SUBJECT TO COMPLETION


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CERNER CORPORATION
2800 ROCKCREEK PARKWAY
NORTH KANSAS CITY, MISSOURI 64117

NOTICE OF 2020 ANNUAL SHAREHOLDERS' MEETING
MAY 24, 201322, 2020

Virtual Annual Meeting of Shareholders-Online Meeting Only - No Physical Meeting Location


TO OUR SHAREHOLDERS:

The 2020 Annual Shareholders' Meeting of Cerner Corporation will be held virtually on Friday, May 24, 2013,22, 2020, at 10:00 a.m. local time, in The Cerner Round Auditorium in(CDT). You can attend the Cerner Vision Center, located2020 Annual Meeting online, vote your shares, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/CERN2020. Be sure to have the Control Number we have provided to you to join the meeting.

At the meeting, shareholders will be asked to vote on the Cerner campus at 2850 Rockcreek Parkway, North Kansas City, Missouri 64117, for the following purposes:following:

1.
To elect three Class IIII Directors: Gerald E. Bisbee, Jr.Julie L. Gerberding, M.D., Ph.D.M.P.H., Denis A. Cortese, M.D.Brent Shafer and Linda M. DillmanWilliam D. Zollars, each to serve for a three yearthree-year term (see Proposal #1);

2.
The ratification ofTo ratify the appointment of KPMG LLP as the independent registered public accounting firm of Cerner Corporation for 20132020 (see Proposal #2);

3.
To conduct ana non-binding advisory vote to approve the compensation of our Named Executive Officers (see Proposal #3);

4.
To consider an amendment to our SecondThird Restated Certificate of Incorporation repealing the classification ofto declassify our Board of Directors (see Proposal #4);

5.
To consider an amendment to our SecondThird Restated Certificate of Incorporation to increaseamend the number of authorized shares of Common Stock (see advance notice provisions for director nominations (Proposal #5); and

6.Any other business that may properly come before the 2020 Annual Shareholders' Meeting or any postponement or adjournment thereof.

These items are more fully described in the following pages, which are made part of this notice.
The holder
Holders of record as of each share of our Common Stock at the close of business on Friday, April 5, 2013 isTuesday, March 24, 2020 (the "Record Date"), are entitled to receive notice of and to vote at the 2020 Annual Shareholders' Meeting or any adjournment or postponement of the meeting. SharesA list of Common Stock canall shareholders as of the Record Date will be made available during the meeting at www.virtualshareholdermeeting.com/CERN2020.

It is important that your shares be voted at the 2020 Annual Shareholders' Meeting. Even if you plan to attend the 2020 Annual Shareholders' Meeting only ifonline, the holder is present in person or by valid proxy. The Board of Directors of Cerner Corporation solicitsrequests that you to sign, datesubmit your



proxy in advance by telephone or the Internet or, if you have requested a paper copy of these materials, by marking, signing, dating and promptly mailmailing the Proxy Card or voting instruction form in the enclosed postage prepaid envelope or to vote your shares by telephone or the Internet, regardless of whether you intend to be present at the Annual Shareholders' Meeting. You are urged, however, to attend the Annual Shareholders' Meeting.envelope.










A copy of our 2019 Annual Report to Shareholders, which includes audited consolidated financial statements, is available at both www.cerner.com and www.proxyvote.com or, if you have requested a paper copy of these materials, is enclosed. The Annual Report is not part of our proxy soliciting material.
   BY ORDER OF THE BOARD OF DIRECTORS,
   
randysig2018a02.jpg
   
   Randy D. Sims 
   Secretary 


You may vote your shares in advance by telephone, via the Internet or, if you requested to receive printed proxy materials, by mail by following the instructions oncompleting, signing, dating and mailing your Proxy Card. If you vote by telephone or via the Internet, you should not return your Proxy Card. If you choose to vote by mail, please sign, date and return the Proxy Card in the envelope provided. The Proxyproxy may be revoked at any time before your shares are voted at the meeting by submitting written notice of revocation to the Secretary of Cerner Corporation or by submitting another timely proxy by telephone, Internet or mail.before the applicable deadlines. If you are present atattend the meeting online, you may choose to vote your shares in person,at www.virtualshareholdermeeting.com/CERN2020 and following the Proxyinstructions, and any previously submitted proxy will not be used. If you hold shares through a broker, bank or other custodian,nominee, please check the voting instructions used by that broker, bank or custodian.nominee.

Important Notice Regarding the Availability of Proxy Materials for the 2020 Annual Shareholders' Meeting to be Heldheld on May 24, 2013:22, 2020: The 20132020 Proxy Statement and 20122019 Annual Report to Shareholders are available at www.proxyvote.com and on www.cerner.com under "About Cerner, Investor"Investor Relations, Financial Information,Financials, Proxy Materials."






PROXY STATEMENT
TABLE OF CONTENTS

 Page
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
1
  
INFORMATION CONCERNING DIRECTORS AND NOMINEES
78
  
MEETINGS OF THE BOARD AND COMMITTEES
1315
  
COMMITTEES OF THE BOARD
1415
  
DIRECTOR COMPENSATION
1718
  
AUDIT COMMITTEE REPORT
1921
  
Guidelines of Cerner Corporation's Audit Committee for Pre-Approval of Independent Auditor ServicesGUIDELINES OF CERNER CORPORATION'S AUDIT COMMITTEE FOR PRE-APPROVAL OF INDEPENDENT AUDITOR SERVICES
2022
  
COMPENSATION COMMITTEE REPORT
2122
  
COMPENSATION DISCUSSION AND ANALYSIS
2223
PAY RATIO
50
  
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
4751
  
CORPORATE GOVERNANCE
4852
  
CONSIDERATION OF DIRECTOR NOMINEES
5053
  
CERTAIN TRANSACTIONS
52
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
5556
  
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
5658
  
PROPOSAL #1 ELECTION OF DIRECTORS
5860
  
RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
59
Audit and Non-Audit Fees
5961
  
PROPOSAL #2 RATIFICATION OF THE APPOINTMENT OF KPMG AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
6062
  
PROPOSAL #3 ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
6163
  
PROPOSAL #4 APPROVAL OF THE PROPOSED AMENDMENT TO SECONDTHE THIRD RESTATED CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS
6264
  
PROPOSAL #5 APPROVAL OF THE PROPOSED AMENDMENT TO SECONDTHE THIRD RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCKAMEND ADVANCE NOTICE PROVISIONS FOR DIRECTOR ELECTIONS
6466
  
SHAREHOLDER PROPOSALS
6667
  
HOUSEHOLDING OF PROXY MATERIALS
6768
  
OTHER MATTERS
68
RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTSAPPENDIX I
PROPOSED AMENDMENT TO THIRD RESTATED CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARDAPPENDIX II
PROPOSED AMENDMENT TO THIRD RESTATED CERTIFICATE OF INCORPORATION TO AMEND ADVANCE NOTICE PROVISIONS FOR DIRECTOR ELECTIONSAPPENDIX III







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CERNER CORPORATION
2800 ROCKCREEK PARKWAY
NORTH KANSAS CITY, MISSOURI 64117
PROXY STATEMENT

20132020 ANNUAL SHAREHOLDERS' MEETING
MAY 24, 201322, 2020

This Proxy Statement, which is being mailedfirst made available on or about April 15, 2013,7, 2020, is furnished to you in connection with the solicitation of proxies by the Board of Directors (the "Board") of Cerner Corporation, a Delaware corporation ("Cerner," the "Company," "us," "our" or "we"), for use at the 2020 Annual Shareholders' Meeting of the Company to be held on May 24, 2013,22, 2020, commencing at 10:00 a.m. (CDT) (the "2020 Annual Shareholders' Meeting"). As part of our precautions regarding the coronavirus (COVID-19), local time, at The Cerner Round Auditoriumand in an effort to protect the Cerner Vision Center, located onhealth and safety of our shareholders, associates (employees) and other stakeholders, we are holding our annual meeting solely by means of remote communication. You can attend the Cerner campus at 2850 Rockcreek Parkway, North Kansas City, Missouri 64117,2020 Annual Shareholders' Meeting online, vote your shares, and any adjournment thereof.submit questions during the meeting by visiting www.virtualshareholdermeeting.com/CERN2020. Your vote is very important. For this reason, the Board is requesting that you allow your shares of common stock, par value $0.01 per share, of the Company ("Common StockStock") to be represented at the 2020 Annual Shareholders' Meeting by the persons named as proxies on the Proxy Card.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

Who can vote?

 You are entitled to vote your outstanding shares of common stock, par value $0.01 per share, of the Company ("Common Stock")Stock if our records show that you held your shares as of the close of business on Friday, April 5, 2013,Tuesday, March 24, 2020, the record dateRecord Date for our meeting. At the close of business on that date, [_______]March 24, 2020, 304,245,692 shares of Common Stock were outstanding and entitled to vote. Each share of Common Stock is entitled to one vote. TheYour Proxy Card shows the number of shares that you are entitled to vote. Your individual vote is confidential and will not be disclosed to third parties.
   
What is the difference between a shareholder of record and a "street name" holder?
If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered the shareholder of record with respect to those shares.

If your shares are held in a stock brokerage account or by a broker, bank or other nominee, then the broker, bank or other nominee is considered to be the shareholder of record with respect to those shares. However, you still are considered the beneficial owner of those shares and your shares are said to be held in "street name." Street name holders generally cannot vote their shares directly and must instead instruct the broker, bank or other nominee how to vote their shares using the voting instruction form provided by such broker, bank or other nominee.

1



How do I vote?vote prior to the meeting?

 
If your Common Stock is held by a broker, bank or other nominee (i.e., in street name)name or through the Cerner Corporation Foundations Retirement Plan), you will receive instructions from the broker, bank or other nominee that you must follow in order to have your shares voted. The Proxy Card containsThese instructions should indicate if Internet or telephone voting is available and, if so, provide details regarding how to use those systems to submit your voting instructions.

If you hold your shares in your own name (i.e., as a holder of record), and even if you mayplan to attend our virtual 2020 Annual Shareholders' Meeting, please vote your sharesin advance of the meeting by mail, by telephone, overone of the Internet or in person.following methods. PLEASE CHOOSE ONLY ONE OF THE FOLLOWING:

1.    By Mail: Internet:To votesubmit your proxy by mail, youInternet, go to www.proxyvote.com. You may instructsubmit your proxy via the persons named as proxies how to vote your Common Stock by signing, dating and mailing the Proxy Card in the envelope provided. If you mail your Proxy Card, we must receive it before 10:00 a.m. (CT) on Friday, MayInternet 24 2013, thehours a day, of the Annual Shareholders' Meeting.

If you are returning your Proxy Card to Broadridge Financial Solutions, Inc., they must receive it before 10:00 a.m. (ET)7 days a week until 11:59 p.m. (EDT) on Thursday, May 23, 2013, the day before the Annual Shareholders' Meeting.21, 2020.

2.    By Telephone: You may votesubmit your proxy by telephone 24 hours a day, 7 days a week until 11:59 p.m. (ET)(EDT) on Thursday, May 23, 2013.21, 2020. If you are in the United States or Canada, you may call toll-free 1 (800) 690-6903.

3.    By Mail: If you received your proxy materials by mail, you may instruct the persons named as proxies how to vote your Common Stock by completing, signing, dating and mailing the Proxy Card in the envelope provided. If you mail your Proxy Card, Broadridge Financial Solutions, Inc. must receive it before 10:00 a.m. (EDT) on Thursday, May 21, 2020, the last business day before the 2020 Annual Shareholders' Meeting.

In order to vote, by telephone, you will need the control number included on your Proxy Card. Card, voting instruction form or Notice of Internet Availability of Proxy Materials. Each shareholder has a unique control number so we can ensure all voting instructions are genuine and prevent duplicate voting. If you use the telephone voting system, you do not need to return your Proxy Card.

3.    By Internet:  The website for voting is at http://www.ProxyVote.com. You may vote via the Internet 24 hours a day, 7 days a week until 11:59 p.m. (ET) on May 23, 2013.

In order to vote on the Internet, you need the control number on your Proxy Card. Each shareholder has a unique control number so we can ensure all voting instructions are genuine and prevent duplicate voting. If you use the Internet voting system, you do not need to return your Proxy Card.
4.    In Person:  Of course, you can always come to the meeting and vote your shares in person. You can vote by any of the three methods above prior to the meeting and still attend the Annual Shareholders' Meeting. In all cases, a vote at the Annual Shareholders' Meeting will revoke any prior votes.

Depending on the number of accounts in which you hold Common Stock, you may receive and need to vote more than one control number. If you submit your proxy by Internet or telephone, you do not need to return a Proxy Card. You can vote by any of the methods above prior to the meeting and still attend the virtual 2020 Annual Shareholders' Meeting.
   
How do I vote during the meeting?
Except for any shares you hold in the Cerner Corporation Foundations Retirement Plan (the "401(k) Plan") which may only be voted in advance as provided below, you may also vote during the virtual 2020 Annual Shareholders' Meeting by visiting www.virtualshareholdermeeting.com/CERN2020 and following the instructions. You will need the control number included on your Proxy Card, voting instruction form or Notice of Internet Availability of Proxy Materials. A vote at the 2020 Annual Shareholders' Meeting will revoke any prior votes (except for votes by 401(k) Plan participants, which must be cast prior to the meeting).
How do I vote if my shares are held in the Cerner Corporation Foundations Retirement Plan?If you hold any shares in the 401(k) Plan, you are receiving, or are being provided access to, the same proxy materials as any other shareholder of record. However, your proxy vote will serve as voting instructions to the 401(k) Plan trustee. Your voting instructions must be received at least three business days prior to the 2020 Annual Shareholders' Meeting in order to count. In accordance with the terms of the 401(k) Plan, the trustee will vote all of the shares held in the 401(k) Plan in the same proportion as the actual proxy votes submitted by 401(k) Plan participants as of 11:59 p.m. (EDT) on May 18, 2020. We encourage you to provide instructions to the trustee regarding the voting of your shares. Due to the structure of the virtual meeting site, plan participants will technically have the ability to submit votes for 401(k) Plan shares during the meeting, but votes submitted by plan participants during the meeting will not be counted or revoke their prior instructions; in order for your vote to be counted, you must provide instructions to the Trustee by 11:59 p.m. (EDT) on May 18, 2020.

2



How may I revoke or change my proxy instructions?

 
If you voteare a shareholder of record and you submit a proxy with your shares,voting instructions, and later desire to revoke or change your votevoting instructions (prior to the final vote at the 2020 Annual Shareholders' Meeting), you may revoke and then change your initial proxy instructions by any of the following procedures:

1. Send us another signed proxy with a later date that we receive before 10:00 a.m. (CT) on Friday, May 24, 2013;

2. FollowFollowing the telephone or Internet voting instructions on how to revoke or change your votevoting instructions by telephone or logging in and resubmitting your vote;vote prior to 11:59 p.m. (EDT) on Thursday, May 21, 2020;

3. Send2. Completing, signing and returning another signed Proxy Card with a letter revoking your proxy to our Corporate Secretarylater date that is receivedBroadridge Financial Solutions, Inc. receives before 10:00 a.m. (CT)(EDT) on Friday,Thursday, May 24, 2013;21, 2020; or

4. Attend3. Attending the virtual 2020 Annual Shareholders' Meeting and votevoting your shares by visiting www.virtualshareholdermeeting.com/CERN2020 and following the instructions.

Your attendance at the 2020 Annual Shareholders' Meeting will not automatically revoke your proxy unless you vote again at or before the 2020 Annual Shareholders' Meeting or specifically request that your prior proxy be revoked by delivering to the Corporate Secretary a written notice of revocation that is received prior to 10:00 a.m. (CDT) on May 21, 2020.

If your shares are held in person."street name" through a broker, bank or other nominee, you must contact your broker, bank or nominee to receive instructions as to how to revoke your proxy if such instructions have not already been provided to you. In any case, your last properly-received and timely voted proxy or ballot will be the vote that is counted.
   
How are votes counted? 
The 2020 Annual Shareholders' Meeting will be held if a quorum represented by a majority of our outstanding shares entitled to vote is represented at the meeting. If you have returned valid proxy instructions or attend the meeting, either in person youror by properly executed proxy. Your shares will be counted fortowards the purpose of determining whether there is a quorum if you vote by mail, by telephone, or through the Internet by the deadlines described above or vote at the virtual 2020 Annual Shareholders' Meeting, even if you wish to abstain from voting on some or all matters introduced at the meeting. Broker non-votes (which are discussed below) will also be counted for the purpose of determining whether there is a quorum. If a quorum is not present or represented by proxy, the 2020 Annual Shareholders' Meeting may be adjourned from time to time until a quorum is obtained.
obtained, without notice other than announcement at the meeting. However, if the adjournment is for more than thirty (30) days, or if after adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting will be given to each shareholder of record entitled to vote at the meeting.

If you give us a proxy without giving specific voting instructions, your shares will be voted by the persons named as proxies as recommended by the Board. We are not aware of any other matters to be presented at the 2020 Annual Shareholders' Meeting except for those described in this Proxy Statement. However, if any other matters not described in this Proxy Statement are properly presented at the meeting, the persons named as proxies will use their own judgment to determine how to vote your shares. If the meeting is postponed or adjourned, your shares may be voted by the persons named as proxies on the new meeting date as well, unless you have revoked your proxy instructions prior to that time. All votes will be tabulated by twoone or more Inspectors of Election appointed by the Board.
   

3



What is a broker non-vote?

 
A "broker non-vote" occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker, bank or other nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner. Broker non-votes are counted as present or represented for purposes of determining the presence or absence of a quorum for the 2020 Annual Shareholders' Meeting, if such shares are otherwise properly represented at the meeting in person or by proxy. Broker non-votes are not counted for purposes of determining the number of shares entitled to vote on any proposal for which the broker or other nominee lacks discretionary authority.meeting.

If you are a beneficial shareholder and your broker, bank or other nominee holds your shares in its name, the broker, bank or other nominee is permitted to vote your shares on the ratification of the appointment of KPMG LLP (Proposal #2) as the Company's independent registered public accounting firm, even if the broker, bank or other nominee does not receive voting instructions from you.

Brokers, banks and other nominees do not have discretionary voting rights with respect to all other voting items: the election of Directors (Proposal #1), the advisory vote to approve the compensation of our Named Executive Officers (Proposal #3), the consideration of theproposed amendment to our SecondThird Restated Certificate of Incorporation (the "Restated Certificate") to repeal our classifieddeclassify the Board of Directors (Proposal #4),and or the proposalproposed amendment to our Third Restated Certificate of Incorporation to amend our Restated Certificate to increase the number of authorized shares of Common Stockadvance notice provisions for director nominations (Proposal #5). Therefore, if you do not instruct your broker, onbank or other nominee how you would like your shares voted with respect to the individuals nominated for election this year or the otherthese proposals, referenced above, your shares will not be voted.voted on such proposals.
   
MayHow do I attend the 2020 Annual Shareholders' Meeting? If
Cerner will be hosting the 2020 Annual Shareholders' Meeting online. A summary of the information you were aneed to attend online is provided below.

–
Any holder of record as of the close of business on the record date, Friday, April 5, 2013, youTuesday, March 24, 2020, may attend and vote at the 2020 Annual Shareholders' Meeting.Meeting by visiting www.virtualshareholdermeeting.com/CERN2020. If you want to vote in personduring the 2020 Annual Shareholders' Meeting any shares you hold in street name, you must get a proxy in your nameobtain instructions from your broker, bank or broker.other nominee.
–
The live audio webcast of the 2020 Annual Shareholders' Meeting will begin promptly at 10:00 a.m. (CDT). Online access to the audio webcast will open five minutes prior to the start of the 2020 Annual Shareholders' Meeting to allow time for you to log-in and test your device's audio system. We encourage you to access the meeting in advance of the designated start time.
–
Any person may access the 2020 Annual Shareholders' Meeting online, but only shareholders may vote electronically and submit questions online while attending the 2020 Annual Shareholders' Meeting.
–
Please have the control number we have provided to you to join the 2020 Annual Shareholder's Meeting.
–
Instructions on how to attend and participate in the 2020 Annual Shareholders' Meeting, including how to demonstrate proof of stock ownership, are available at www.virtualshareholdermeeting.com/CERN2020.
–
A replay of the 2020 Annual Shareholders' Meeting will be available shortly after the meeting on www.cerner.com under Investor Relations (Presentations and Webcasts) through May 21, 2021.


   
What if I have technical difficulties or trouble accessing the virtual meeting website?

We will have support available to assist shareholders with any technical difficulties they may have accessing or hearing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log in page.

4



Can I listen to the 2020 Annual Shareholders' Meeting by telephone if I am unable to attend online?

Yes. If you are unable to access the 2020 Annual Shareholders' Meeting online, you will be able to call 1-877-328-2502 and listen to the 2020 Annual Shareholders' Meeting. Although shareholders accessing the 2020 Annual Shareholders' Meeting by telephone will be able to listen to the 2020 Annual Shareholders' Meeting, you will not be considered present at the 2020 Annual Shareholders' Meeting and will not be able to vote or ask questions during the 2020 Annual Shareholders' Meeting unless you also attend the 2020 Annual Shareholders' Meeting online. If you choose to listen in via telephone only, please be sure to vote your shares in advance of the 2020 Annual Shareholders' Meeting via one of the methods noted above.
Why did I receive a Notice in the mail regarding the Internet Availability of Proxy Materials instead of a full set of printed proxy materials?


Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials via the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials to our shareholders. All shareholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, shareholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. We encourage shareholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of our annual meetings.
What vote is required?

 
With respect to Proposal #1 (the election of Directors), you may vote "For" or "Against" each of the nominees for Director, or you may "Abstain" from voting for one or more nominees. In an uncontested Director election, such as this one, the favorableaffirmative vote of a majority of the votes cast, in person or by proxy, is required for the election of Directors(Proposal #1)meaning the number of shares voted "For" a nominee must exceed the number of shares voted "Against" a nominee). Therefore, if you elect to "Abstain" from voting forIf any nominee for Director receives a greater number of votes "Against" his or her election than votes "For" such actionelection, our Amended and Restated Bylaws (effective as of March 20, 2020) (the "Bylaws") require that such person tender his or her resignation to the Board following certification of the vote as further discussed below under "Consideration of Director Nominees - Majority Voting for Directors." Abstentions and broker non-votes are not considered votes cast for the foregoing purpose and will be counted as a vote against the nominee; however, if you do not a) vote for a nomineehave no effect on your Proxy Card, or b) instruct your broker how to vote for the election of Directors, then your vote will not count for or against such nominee.nominees. No shareholder may vote in person or by proxy for more than three nominees at the 2020 Annual Shareholders' Meeting. Shareholders do not have cumulative voting rights in the election of Directors.

The favorableaffirmative vote ("For") of a majority of the shares present in person or by proxy and entitled to vote at the meeting will be required for:for the approval of the following:

• the ratification of the appointment of KPMG LLP as our independent registered publicaccounting firm (Proposal #2)for 2020 (Proposal #2);
• the approval, on an advisory basis, of the compensation of our Named ExecutiveOfficers (Proposal #3)(Proposal #3); and
• any other proposal that might properly come before the meeting.

With respect to Proposal #4 (consideration of an amendment to our Third Restated Certificate to declassify our Board of Directors) and Proposal #5 (consideration of an amendment to our Third Restated Certificate to amend the advance notice provisions for director elections), such amendments will not become effective unless approved by 80% of the shares of our Common Stock outstanding and entitled to vote thereon.


With respect to Proposal #s 2,3, 4 and 5, you may vote "For," "Against" or "Abstain." Abstentions and broker non-votes are considered to be "present" and "entitled to" vote at the meeting with respect to Proposal #s 2, 3, 4 and 5, and as a result, abstentions and broker non-votes will have the same effect as a vote "Against" these proposals. However, as discussed above, brokers, banks and other nominees may use their discretionary voting authority with respect to the ratification of our independent registered public accounting firm (Proposal #2), so no broker non-votes are expected for this proposal.

The results of the vote on Proposal #3 (the advisory say-on-pay vote on executive compensation), the resultscompensation of this vote areour Named Executive Officers) is not binding on the Board, whether or not any resolutionthe proposal is passedapproved at the 2020 Annual Shareholders' Meeting. In evaluating the shareholder vote on this advisory resolution, the Board will consider the voting results in their entirety.

With respect to Proposal #4 (consideration of an amendment to our Second Restated Certificate of Incorporation to repeal the classification of our Board of Directors), such amendment will not become effective unless it is approved by 80% of the shares of our Common Stock outstanding.

The favorable vote of a majority of the shares of our Common Stock outstanding will be required for the approval of an increase in the authorized shares of Common Stock under the Company's Restated Certificate (Proposal #5).

Abstentions and broker non-votes are counted as present and entitled to vote for purposes of determining whether a quorum exists. Abstentions are treated as votes "Against" Proposal #s 1, 3, 4 and 5. Brokers may use their discretionary voting authority only with respect to the ratification of our independent registered public accounting firm (Proposal #2), but not with respect to the remaining items.
   
How does the Board recommend that I vote? 
The Board recommends a vote:

vote in favor of:
• For all nomineeseach nominee included in this Proxy Statement for Director (Proposal #1);
• For the ratification of the appointment of KMPGKPMG LLP as the independent registered publicaccounting firm of the Company for 20132020 (Proposal #2);
• For the approval, on an advisory basis, of the compensation of our Named ExecutiveOfficers (Proposal #3);
• For the amendmentsapproval of the proposed amendment to our Third Restated Certificate of Incorporation to declassify ourthe Board of Directors (Proposal #4); and
• For the approval of anthe proposed amendment to our Third Restated Certificate increasingof Incorporation to amend the number of authorized shares of Common Stockadvance notice provisions for director elections (Proposal #5).
   

5


Who pays the cost of this proxy solicitation? 
This Proxy Statement and the accompanying Proxy Card are being furnished to shareholders in connection with the solicitation of proxies by the Board of the Company. We will bear all costs of solicitation of such proxies. We will solicit

In addition to solicitation of proxies by mail, except for any incidental personal solicitation made by our Directors, officers and associates, (employees), for which they will not be paid.at no additional compensation, may solicit proxies from shareholders by telephone, email, Internet or in person. We will request brokers, banks, custodians, fiduciaries and other fiduciariesnominees to forward proxy soliciting materials to the beneficial owners of stock they hold of record. We will reimburse them for their reasonable out-of-pocket expenses incurred in connection with the distribution of the proxy materials.
What does it mean if I receive more than one proxy card or voting instruction form?It generally means your shares are registered differently or are in more than one account. Please provide voting instructions for each proxy card or voting instruction form or, if you vote via the Internet or by telephone, vote once for each proxy card or voting instruction form you receive to ensure that all of your shares are voted.
How can I receive my proxy materials by e-mail in the future?
If you have previously elected to receive your proxy materials by e-mail, there is no need to opt in again, and you will receive future copies of proxy materials by e-mail. For those who have not yet opted to receive your proxy materials by e-mail but would like to do so for future annual shareholders' meetings, you can elect to receive an e-mail with links to these documents, your control number and instructions for voting over the Internet. Opting to receive your proxy materials by e-mail will save the cost of producing and mailing documents to you and will also help conserve resources. Your e-mail address will be kept separate from any other company operations and will be used for no other purpose.



If we mailed you our proxy materials and you would like to sign up to receive them by e-mail in the future, you can choose this option by:

• following the instructions on your Proxy Card or voting instruction form; or
• following the instructions provided when you submit your proxy over the Internet.

Your election to receive proxy materials by email will remain in effect until you terminate it.
How can I examine a list of shareholders?
Shareholders at the close of business on the Record Date may examine a list of all shareholders as of the Record Date for any purpose germane to the 2020 Annual Shareholders' Meeting for 10 days preceding the meeting, at our offices at 2800 Rockcreek Parkway, North Kansas City, Missouri 64117, and electronically during the meeting at www.virtualshareholdermeeting.com/CERN2020 when you enter the control number included on your Proxy Card, voting instruction form or Notice of Internet Availability of Proxy Materials.
   
Who should I call if I have questions? If you have questions about the 2020 Annual Shareholders' Meeting or voting, please call our Corporate Secretary, Randy D. Sims, at (816) 201-1024.221-1024.

Important Notice Regarding the Availability of Proxy Materials for the 2020 Annual Shareholders' Meeting to be Heldheld on May 24, 2013:22, 2020: The 20132020 Proxy Statement and 20122019 Annual Report to Shareholders are available at www.proxyvote.com and www.cerner.com under "About Cerner, Investor"Investor Relations, Financial Information,Financials, Proxy Materials & Annual Reports.Materials."


6



INFORMATION CONCERNING DIRECTORS AND NOMINEES

Our BylawsBoard is currently provide for a Board consistingcomprised of eight persons,ten Directors and is divided into three classes, with each of the classes serving staggered terms of three years.

The terms of our three Class IIII Directors will expire at this year's 2020 Annual Shareholders' Meeting. Each of the current Class III Directors has been recommended by our Nominating, Governance & Public Policy ("NG&PP") Committee for re-election and has been nominated by our Board. Those elected as Class IIII Directors this year will serve as Directors until the 2016 annual meeting.2023 Annual Shareholders' Meeting. The terms of the Class III and Class IIIII Directors will expire at the 20142021 and 2015 annual meetings,2022 Annual Shareholders' Meetings, respectively. Proxies cannot be voted for a greater number of persons than the number of nominees named for Class I.

The Board has determined that all sixnine current non-employee membersDirectors of the Board are independent Directors as required by the rules of the Securities and Exchange Commission ("SEC") and The NASDAQNasdaq Stock Market.Market LLC ("Nasdaq"). The names and biographies of the Company's current Directors including those individuals nominatedand nominees for re-electionelection as Class IIII Directors are set forth below. Ages provided are as of the date of our 2020 Annual Shareholders' Meeting.

If elected, each of the nominees named for Class I will hold office for a three-year term expiring at the 2023 Annual Meeting of Shareholders and until his or her successor is elected and qualified or until his or her earlier resignation or removal. The Board is proposing to declassify the Board in Proposal #4. If the shareholders approve Proposal #4, all of the continuing Directors and all of the nominees for Class I Directors named in this Proxy Statement, if elected, will serve out their remaining terms, and all directors elected at the 2021 Annual Shareholders' Meeting and future annual meetings will be elected to serve one-year terms.
CLASS I (Serving for a Term to Expire at the 2020 Annual Shareholders' Meeting and Nominated for a Term to Expire at the 2023 Annual Shareholders' Meeting)
gerberdingjulie04.jpg

Dr. Gerberding has been a member of the Board of Directors of the Company since March 2017. She has been the Executive Vice President and Chief Patient Officer, Strategic Communications, Global Public Policy and Population Health of Merck & Co., Inc. ("Merck") (NYSE: MRK) since July 2016. Merck is a global health care company that delivers innovative health solutions through its prescription medicines, vaccines, biologic therapies and animal health products, which it markets directly and through its joint ventures. In this position, Dr. Gerberding is responsible for Merck's global public policy, corporate responsibility and communications functions, as well as the Merck Foundation and the Merck for Mothers program. Dr. Gerberding also leads new partnership initiatives that accelerate Merck's ability to contribute to improved population health, a measure of impact that is increasingly valued by governments and other global health organizations.

Dr. Gerberding joined Merck as President of Merck Vaccines in January 2010 and was promoted to Executive Vice President for Strategic Communications, Global Public Policy and Population Health in December 2015. Prior to joining Merck, Dr. Gerberding served as Director of the U.S. Centers for Disease Control and Prevention ("CDC") from 2002-2009 and before that served as Director of the Division of Healthcare Quality Promotion. Before joining the CDC, Dr. Gerberding was a tenured faculty member in Infectious Diseases at the University of California at San Francisco ("UCSF"). She continues as an Adjunct Associate Clinical Professor of Medicine at UCSF.

The following experience, qualifications, attributes and/or skills led the Board to conclude that Dr. Gerberding should serve and be nominated as a Director: her medical and science-based professional background and experience, current and previously held senior-executive level leadership positions at a global public company, her knowledge of and experience with global public policy, health care
Julie L. Gerberding, M.D., M.P.H.
(Age 64)
Member of the:
• Compensation Committee
• Nominating, Governance &
  Public Policy Committee



CLASS Ileadership and population health, her information protection (data privacy and cybersecurity) expertise, and her independence from the Company.
  
John C. Danforth
(Age 76)
Member of the:
• Compensation Committee
• Nominating, Governance & Public Policy Committee

shaferbrenta02.jpg
 

Mr. Danforth was a DirectorShafer joined the Company as Chairman of the Board and Chief Executive Officer in February 2018. Prior to joining the Company, he served as Chief Executive Officer of Philips North America, a health technology company and the North American division of Koninklijke Philips N.V. ("Philips") (NYSE: PHG), since February 2014. In that position, Mr. Shafer led an organization of 17,000 employees and oversaw a health technology portfolio that included a broad range of solutions and services covering patient monitoring, imaging, clinical informatics, sleep and respiratory care as well as a group of market-leading consumer-oriented brands. For 12 years, Mr. Shafer played a key role in helping Philips develop and strengthen its health care focus, increase its profitability and grow its market share. Prior to his most recent position, Mr. Shafer served as Chief Executive Officer of the global Philips' Home Healthcare Solutions business, a home healthcare services provider with 6,000 employees, from May 1996 through June 2004 when he resigned to serve2010 until May 2014, as Ambassador to the United Nations. Mr. Danforth served as an Ambassador to the United Nations from July 2004 through January 2005. Mr. Danforth was re-appointed by the Board as a DirectorChief Executive Officer of the CompanyNorth America region for Royal Philips Electronics from January 2009 until May 2010, and as President and Chief Executive Officer of the Healthcare Sales and Service business for Philips North America from May 2005 until May 2010. Prior to joining Philips, Mr. Shafer served in February 2005. Mr. Danforth represented the State of Missouri in the U.S. Senate for 18 years until 1995various senior leadership positions with other companies, including Hill-Rom (NYSE: HRC), GE Medical Systems (NYSE: GE) and served as a Director of The Dow Chemical Company and MetLife, Inc. until June 2004. Mr. Danforth is presently a partner in the law firm of Bryan Cave LLP, serves on the Commission on Presidential Debates and is a Director of Greenhill & Co.Hewlett-Packard (NYSE: HPE).

The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. DanforthShafer should serve and be nominated as a Director: his governmentappointment as CEO of the Company, his significant experience in senior-executive level leadership positions of the health care technology division of a large, publicly traded company, his leadership in the growth and public policy professional backgroundstrategies of a complex, multinational organization over a number of years, his experience in global business, his commitment to innovation, and his knowledge of and experience currentfrom the provider and previously held leadership positions, his service on other public and private company boards, Cerner board experience, board attendance and participation, and his extensive experience withsupplier side of the health care related companies and policies.industry.
Brent Shafer
(Age 62)






   
Neal L. Patterson
(Age 63)
Mr. Patterson has been a Director of the Company since 1980 and is a co-founder of the Company. Mr. Patterson has been Chairman of the Board of Directors and Chief Executive Officer of the Company for more than five years. Mr. Patterson has served as President of the Company since July 2010, a position he also held from March 1999 until August 1999.

The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Patterson should serve as a Director: his entrepreneurial and leadership skills and proven visionary leadership while serving as the Company's Chief Executive Officer and Chairman, his information technology expertise and his extensive knowledge and understanding of the Company's business, operations, solutions and services.

7


William D. Zollars
(Age 65)
Member of the:
• Audit Committee
• Compensation Committee
• Nominating, Governance & Public Policy Committeezollarsbilla04.jpg
 
Mr. Zollars has been a Directormember of the Board of Directors of the Company since May 2005.2005, and has been Lead Independent Director since April 2019. He is the former Chairman, President and Chief Executive Officer of YRC Worldwide (now known as YRC Freight) (Nasdaq: YRCW), which positionpositions he held from November 1999 to July 2011. YRC Worldwide provides transportation and global logistics services.Prior to that, Mr. Zollars served as President of Yellow Transportation, Inc. from September 1996 through November 1999. From 1994 to 1996, Mr. Zollars was Senior Vice President of Ryder Integrated Logistics, and prior to that, Mr. Zollars held various executive positions with Eastman Kodak. Mr. Zollars serves on the boards of CIGNA Corporation and Prologis, Inc. Mr. Zollars also serves on the boardsboard of United Waydirectors of Greater Kansas CityPrologis, Inc. (NYSE: PLD) and The Carlson Schoolserved on the board of Management at the Universitydirectors of Minnesota.CIGNA Corporation (NYSE: CI) until November 2019.

The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Zollars should serve and be nominated as a Director: his professional background and experience in senior-executive leadership positions at public companies, his service on other public and private company boards, Cerner board experience, board attendance and participation, and his extensive experience with large employers, industry usage of information technology and
William D. Zollars
(Age 72)
Member of the:
• Audit Committee
• Compensation Committee
• Nominating, Governance &
  Public Policy Committee
• Finance & Strategy
  Committee




his extensive understanding of strategic planning, tactical business decision making,decision-making, risk management and corporate financial statements.
CLASS II (Serving for a Term to Expire at the 2021 Annual Shareholders' Meeting)
   
CLASS II
Clifford W. Illig
(Age 62)danielsmichella04.jpg
 

Mr. IlligDaniels has been a Director of the Company since 1980 and is a co-founder of the Company. He was appointed Vice Chairman of the Board of Directors in March 1999. Mr. Illig previously served as Chief Operating Officer of the Company until October 1998 and as President of the Company until March 1999. Mr. Illig is also a member of the Board of Directors of The Stowersthe Company since December 2013. Mr. Daniels is the 12th President of Purdue University, a post he assumed in January 2013, at the conclusion of his term as Governor of Indiana. He was elected Indiana's 49th governor in 2004 in his first bid for any elected office. He was re-elected in 2008 to a second and final term, receiving more votes than any candidate for any public office in the state's history. As governor, Mr. Daniels spearheaded a host of reforms aimed at strengthening the Indiana economy, and improving the ethical standards, fiscal condition and performance of state government. Mr. Daniels came from a successful career in business and government, holding numerous top management positions in both the private and public sectors. He served as the Chief Executive Officer of the Hudson Institute and as President of Eli Lilly & Company's North American Pharmaceutical Operations (NYSE: LLY). He also served as Chief of Staff to Senator Richard Lugar, a senior advisor to President Ronald Reagan, and Director of the Office of Management and Budget under President George W. Bush. Mr. Daniels currently serves as a member of the boards of directors of Energy Systems Network, Norfolk Southern Corporation (NYSE: NSC) and Urban Institute. He served on the board of directors of Interactive Intelligence Group, Inc. (formerly Nasdaq: ININ) from 2015 to 2016.

The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. IlligDaniels should serve and be nominated as a Director: his government and public policy professional background and experience, his current and previously held leadership skills acquired while serving as the Company's Vice Chairmanpositions, his service on other public and private company boards, Cerner board experience, board attendance and participation, his health care business and operations experience, his extensive understanding of financial statements, and his experience with global business.
Mitchell E. Daniels, Jr., J.D.
(Age 71)
Member of the:
•
 Audit Committee
• Nominating, Governance &
  Public Policy Committee
  (Chairperson)

greischa02.jpg

Mr. Greisch has been a member of the Board of Directors of the Company since April 2019. He is the former President & Chief Executive Officer of Hill-Rom Holdings, Inc. ("Hill-Rom") (NYSE: HRC), a global medical technology company, a position he held from January 2010 until his retirement in May 2018. Prior to Hill-Rom, Mr. Greisch was President International Operations for Baxter International, Inc. ("Baxter") (NYSE: BAX), a position he held from 2006 until 2009. During his tenure with Baxter, he also served as Baxter's Chief Financial Officer and formeras President of its BioScience division. Before his time with Baxter, he was President and Chief OperatingExecutive Officer his information technology expertisefor FleetPride Corporation. Prior to that, he held various positions at The Interlake Corporation, including serving as President of its Materials Handling Group. Mr. Greisch currently serves on the Board of Directors of Catalent, Inc. (NYSE: CTLT), Carrier Corporation, a spin-off from United Technologies Corp. (NYSE: UTX), and his extensive knowledgeIdorsia Pharmaceuticals Ltd. (SIX Swiss Exchange: IDIA) and understandingpreviously served on the boards of the Company's business, operations, solutionsHill-Rom (NYSE: HRC), Actelion Ltd, TomoTherapy, Inc. (formerly Nasdaq: TOMO), and services.The Advanced Medical Technology Association (AdvaMed). Additionally, he serves as a senior advisor to TPG Capital and is on
John J. Greisch, M.B.A.
(Age 64)
Member of the:
• Audit Committee
• Finance & Strategy
  Committee (Chairperson)

 

8



William B. Neaves, Ph.D.
(Age 69)
Member of the:
• Audit Committee
• Compensation Committee
• Nominating, Governance & Public Policy Committee (Chairperson)

 
Dr. Neaves has been a Directorthe board of directors for the Company since March 2001. From June 2000 through June 2010, Dr. Neaves served as the Chief Executive Officer and as a memberAnn & Robert H. Lurie Children's Hospital of the Board of Directors of The Stowers Institute for Medical Research, which conducts basic research on genes and proteins that control fundamental processes in living cells in the hope of unlocking the mysteries of disease and finding keys to their cause, treatment and prevention. Dr. Neaves continues as a member of the Board of Directors of The Stowers Institute in his current position as President Emeritus. He also served as President of The Stowers Institute from June 2000 through July 2009. For twenty years prior to joining The Stowers Institute in 2000, he served in various leadership positions at the University of Texas Southwestern Medical Center in Dallas, Texas. He served in succession as Dean of the University of Texas Southwestern Graduate School, Dean of the University of Texas Southwestern Medical School, and Chief Academic Officer and holder of the Wildenthal Distinguished Chair in Biomedical Science at the University of Texas Southwestern Medical Center. Dr. Neaves is presently a member of the Board of Trustees of Washington University in St. Louis and the National Council of the Washington University School of Medicine and a Fellow of the American Academy of Arts & Sciences.Chicago.

The following experience, qualifications, attributes and/or skills led the Board to conclude that Dr. NeavesMr. Greisch should serve and be nominated as a Director: his medicalexperience in multiple roles in global public health care companies, including serving as Chief Executive Officer and science-based professional backgroundChief Financial Officer, his health care business and operations experience, currentexperience in preparing and previouslyanalyzing complex public company financial statements, experience on the board of directors of private and public companies, and independence.
mount02.jpg
Ms. Mount has been a member of the Board of Directors of the Company since April 2019. Ms. Mount most recently served as President of AliphCom, Inc. (d/b/a Jawbone), a consumer technology and wearable products company, which position she held from June 2013 until February 2014. Previously, she held various senior level positions at Microsoft Corporation ("Microsoft") (Nasdaq: MSFT), including Corporate Vice President and Chief Financial Officer of the Online Services Division, from 2010 until May 2013, and Corporate Vice President of Operations and Finance and Chief Financial Officer of the Entertainment and Device Division, from 2006 until 2010. Prior to joining Microsoft, Ms. Mount served as the Vice President of Strategy and Development at Time Warner, Inc. ("Time Warner") (formerly NYSE: TWX), from 1995 until 2001, and then as Executive Vice President and Co-Managing Director of the United Kingdom Division of AOL Inc. (formerly NYSE: AOL), a web portal and online service provider and a subsidiary of Time Warner, from 2001 until 2003. Prior to that, she served as Vice President of Mergers and Acquisitions at Morgan Stanley (NYSE: MS) from 1987 until 1995. Ms. Mount has served as a member of the board of directors of Technicolor S.A. (TCH: FP) since April 2016, and currently serves as Vice Chairman of the board, and has served as a member of the board of the directors of the Learning Care Group, Inc. since December 2014.

The following experience, qualifications, attributes and/or skills led the Board to conclude that Ms. Mount should serve as a Director: her extensive financial and operations experience developing innovative solutions for driving growth and profit in both the start-up and Fortune 100 company settings, and her experience in senior leadership positions at privately funded research institutionsof global private and academic institutions, his service on other research-related and academic boards, Cerner board experience, board attendance and participation, and his extensive experience with genomics, health care research and corporate financial statements.public companies.
Melinda J. Mount, M.B.A.
(Age 60)
Member of the:
• Audit Committee
• Finance & Strategy
  Committee



























9


CLASS III(Serving for a Term to Expire at the 2022 Annual Shareholders' Meeting)
  
Gerald E. Bisbee, Jr., Ph.D.
(Age 70)
Member of the:
• Audit Committee (Chairperson)
• Compensation Committee
• Nominating, Governance & Public Policy Committee

bisbeegeralda04.jpg
 
Dr. Bisbee has been a Directormember of the Board of Directors of the Company since February 1988. Dr. BisbeeHe is the co-founder Chairman and Chief Executive OfficerChairman of The Health Management Academy which provides an open environment for("The Academy"), a network of executives from the senior executives of the country'snation's largest integrated health systems and corporationsthe industry's most innovative companies striving to shape the future of health care. The Academy facilitates the exchange of best practices and benchmarking data, focused on increasing the quality, appropriateness and efficiency of care. FromPrior to assuming the role of Executive Chairman in September 2018, Dr. Bisbee served as Chairman and Chief Executive Officer of The Academy for more than five years. Dr. Bisbee was Chairman of the Board of Directors, Chief Executive Officer and President of ReGen Biologics, Inc. ("ReGen") (OTCMKTS: RGBOQ) from 1998 to September 2011,2011. Dr. Bisbee was President, Chief Executive Officer and Chairman of the Board of Directors of ReGen Biologics, Inc. ("ReGen"), which develops, manufactures and markets orthopedic tissue repair products worldwide. Dr. Bisbee was a Director of Aros Corporation (formerly known as APACHE Medical Systems, Inc.) commencing in December 1989, serving as Chairman of the Board from December 1989 to November 1997 and from December 2000 to June 2002, when ReGen and Aros Corporation merged. ReGen filed for protection under Chapter 11 of the United States Bankruptcy Code in April 2011 and substantially all of the business and assets of ReGen were purchased by Sports Medicine Holdings Company, LLC in June 2011. Prior to 1989, Dr. Bisbee was Director of the Healthcare Group at Kidder, Peabody & Co.,; President of the Hospital Research and Educational Trust (the research and also wasdevelopment arm of the American Hospital Association); and a faculty member of the Department of Epidemiologyin graduate management programs at Yale University and Public Health at YaleNorthwestern University.

The following experience, qualifications, attributes and/or skills led the Board to conclude that Dr. Bisbee should serve as a Director: his medical, financial and health care-based professional background and experience, current and previously held leadership positions in medical and health care-related entities, his service on other research-related and academic boards, Cerner board experience, board attendance and participation, his extensive experience with health care research and specialized expertise in public company accounting and mergers and acquisitions.

10


Denis A. Cortese, M.D.Gerald E. Bisbee, Jr., Ph.D., M.B.A.
(Age 69)77)
Member of the:
• Audit Committee (Chairperson)
• Compensation Committee
•• Nominating, Governance &
  Public Policy Committee

 
Dr. Cortesedillmanlindaa04.jpg

Ms. Dillman has been a Director of the Company since May 2011. Dr. Cortese is currently the Emeritus President and Chief Executive Officer of Mayo Clinic, which is a not-for-profit medical practice and medical research group specializing in treating difficult medical issues. From 2002 through November 2009, Dr. Cortese was the President, Chief Executive Officer and Chairman of the Board of Governors and a Member of the Board of Trustees of Mayo Clinic. Dr. Cortese was also the Chief Executive Officer of Mayo Clinic in Jacksonville, Florida from 1999 through 2002 and worked as a physician for the Mayo Clinic from 1976 through 1999. Since January 2010, Dr. Cortese has been a Foundation Professor at Arizona State University ("ASU") in the School of Health Management and Policy, W.P. Carey School of Business and the Department of Biomedical Informatics, Ira A. Fulton School of Engineering, as well as the Director of ASU's Health Care Delivery and Policy Program. He is also the President of the Healthcare Transformation Institute based in Phoenix, Arizona. Dr. Cortese is currently a board member of the Essence Group, Pinnacle West Capital Corporation and Dartmouth-Hitchcock Health System, and a member of the Institute of Medicine of the National Academy of Sciences (U.S.). Dr. Cortese was the chair of the Institute of Medicine's Roundtable on Evidence-Based Medicine from 2006 to 2009 and served as chair of the Roundtable on Value & Science-Driven Health Care from 2009 to 2010. He was a member of the Board of the Healthcare Leadership Council from 2003 to 2009, serving as board chair for two of those years. Dr. Cortese previously served as a member of the Harvard/Kennedy Health Policy Group and the Division of Engineering and Physical Sciences of the National Research Council and RAND Health. He is an honorary member of the Academia Nacional de Medicina (Mexico) and the Royal College of Physicians (London).

The following experience, qualifications, attributes and/or skills led the Board to conclude that Dr. Cortese should serve as a Director: his medical and science-based professional background and experience, his current and previously held senior-executive level leadership positions at academic institutions and at a world-renowned health care enterprise, his service on research-related and academic boards, his extensive knowledge of and experience with internal medicine and pulmonary diseases, health care leadership and health care information technology.

11


Linda M. Dillman
(Age 56)
Member of the:
• Audit Committee
• Compensation Committee (Chairperson)

Ms. Dillman has been a DirectorDirectors of the Company since May 2010. Since January 2012, she has beenShe is the former Chief Information Officer forof QVC, Inc. (NYSE: QVCD), a role she held from January 2012 until she retired in January 2017. QVC, Inc. is one of the largest multimedia retailers in the world, broadcasting live 24 hours a day, 364 days a year. Prior to joining QVC, Inc., Ms. Dillman was Senior Vice President of Enterprise Services/Global Functions IT for Hewlett-Packard Company a leading global provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses and large enterprises, including customers in the government, health and education sectors,(NYSE: HPQ) from August 2009 through January 2012. From April 2006 through July 2009, Ms. Dillman was Executive Vice President of Benefits and Risk Management for Wal-Mart Stores, Inc. (NYSE: WMT), and prior to that, from August 2002 to April 2006, she held the position of Executive Vice President and Chief Information Officer of Wal-Mart Stores, Inc. She held various positions within Wal-Mart Stores, Inc. from 1991-2002.

The following experience, qualifications, attributes and/or skills led the Board to conclude that Ms. Dillman should serve as a Director: her professional backgroundback-
Linda M. Dillman
(Age 63)
Member of the:
•
 Compensation Committee
  (Chairperson)



ground and experience, current and previously held senior-executive level leadership positions at public companies, Cerner board experience, board attendance and participation, and her extensive knowledge of information technology, information protection (data privacy and cybersecurity), human resources and health care insurance and health care plans for large employers.
riedela02.jpg

Mr. Riedel has been a member of the Board of Directors of the Company since April 2019.Mr. Riedel has served on the Board of Directors of Xperi Corporation (NASDAQ:XPER) (f/k/a Tessera Holding Corporation ("Tessera Holding")), a creator, developer and licensor of innovative audio, computational imaging, computer vision and semiconductor packaging and interconnect technologies, since December 2016 when Tessera Technologies, Inc. ("Tessera") and DTS, Inc. became wholly owned subsidiaries of Tessera Holding pursuant to a merger. Prior to the merger, he had served on the Board of Directors of Tessera (formerly NASDAQ:TSRA) since May 2013. Mr. Riedel is also a professor at Harvard Business School, a position he has held since January 2018. Mr. Riedel previously served as the Chairman of the Board of Directors of Accedian Networks Inc., a performance assurance solution specialist for mobile networks and enterprise-to-data center connectivity, from 2010 until March 2017, when it was sold to Bridge Growth Partners. He also served as the Chairman and Chief Executive Officer of Cloudmark, Inc., a leader in security, protecting traffic, data and infrastructure from network threats ("Cloudmark"), until January 2017. Mr. Riedel joined the Cloudmark Board in June 2013, became Chairman in January 2014 and CEO in December 2014. He also previously served on the Boards of Directors of NextDocs Corporation, a clinical trial and compliance management software company from July 2013 to April 2015, PeerApp Ltd, an optimized video content delivery service to network operators and providers, from 2011 to September 2015, and Blade Network Technologies, a top of rack switch vendor, from 2009 until its sale to IBM in 2010. Mr. Riedel's career has also included various senior management positions at Nortel Networks Corporation, a then publicly traded, global telecommunications equipment manufacturer ("Nortel"). In March 2006, Mr. Riedel joined Nortel as part of the turnaround team as the Chief Strategy Officer. His role changed after Nortel initiated creditor protection under the respective restructuring regimes of Canada under the Companies' Creditors Arrangement Act, the U.S. under the Bankruptcy Code, and the United Kingdom under the Insolvency Act 1986, on January 14, 2009, and subsequently, Israel, to lead the sale/restructuring of various carrier and enterprise business units through a series of transactions to leading industry players such as Ericsson, Avaya and Ciena. Mr. Riedel led the efforts to create standalone business units, carve out the relevant P&L and balance sheet elements and assign predominately used patents to enable sales of the assets. In 2010, Mr. Riedel's role changed to President of Business Units and Chief Strategy Officer as he took leadership of the effort to monetize the remaining 6,500 patents and applications patents as well as manage the P&L for several business units that were held for sale. The 2011 patent sale led to an unprecedented transaction of $4.5 billion to a consortium of Apple, Ericsson, RIM, Microsoft and EMC. Prior to Nortel, Mr. Riedel was the Vice President of Strategy and Corporate Development of Juniper Networks, Inc. (NYSE:JNPR), a designer, developer and manufacturer of networking products, from 2003 until 2006, where he led the acquisition of Netscreen Technologies. Mr. Riedel was also previously a Senior Partner at McKinsey & Company, a global management consulting firm, where he spent
George A. Riedel, M.B.A.
(Age 62)
Member of the:
• Compensation Committee
• Finance & Strategy
  Committee
• Nominating, Governance &
  Public Policy Committee




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15 years serving clients in the telecom and technology sectors in Asia and North America on a range of strategy and growth issues.

The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Riedel should serve as a Director: his extensive knowledge of the technology industry, both from a cloud and consumer perspective and an enterprise software perspective, and intellectual property licensing, his experience in senior leadership positions of global private and public companies, his independence, his service on public and private company boards, his extensive understanding of financial statements, and his knowledge of and experience in information protection (data privacy and cybersecurity).
wisea02.jpg

Mr. Wise has been a member of the Board of Directors of the Company since April 2019. Mr. Wise is the founder and chief executive of Lime Barrel Advisors, LLC, a private investment firm he founded in 2010. Since July 2016, Mr. Wise has served on the board of Aspen Technology, Inc. (Nasdaq: AZPN), a leading supplier of asset optimization software solutions. Since 2019, Mr. Wise has served on the board of WellSky Inc., a private health care information technology company advancing human wellness, and as a senior advisor to TPG Capital, a global private investment firm. He joined the board of MedAssets, Inc. (formerly Nasdaq: MDAS), a health care technology performance improvement company, in March 2014 and served as Chairman and Chief Executive Officer from February 2015 until the company was acquired by Pamplona Capital Management in January 2016. He served on the board of Cotiviti Holdings, Inc. (formerly NYSE: COTV), a provider of analytics-driven payment solutions focused on the health care sector, from December 2017 until the company was acquired by Verscend Technologies, Inc. in August 2018. From September 2006 to December 2011, Mr. Wise served on the board of Acxiom Corporation (formerly Nasdaq: ACXM), a provider of marketing technology and services. From 2003 through 2010, Mr. Wise was Chairman, President and Chief Executive Officer of Intergraph Corporation (formerly Nasdaq: INGR), a global provider of engineering and geospatial software. Prior to his service at Intergraph, Mr. Wise was President and Chief Executive Officer, North America of Solution 6 Holdings, Ltd., and President and Chief Operating Officer of Computer Management Sciences, Inc. (formerly Nasdaq: CMSX), a software and services company, which was acquired by Computer Associates International, Inc. (now named CA, Inc.). At Computer Associates, he served as the General Manager, North America, for Global Professional Services. Prior to that, Mr. Wise was engaged in investment banking at The Robinson-Humphrey Company (a division of Smith Barney), specializing in software and services.

The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Wise should serve as a Director: his 30 years of strategic leadership and value creation experience in leading, operating and advising software and HCIT companies, his experience in global business, his experience in government contracting, his financial expertise, his independence, his health care business and operations experience, his health care technology experience, his business transformation experience, his current and previously held leadership positions, and his service on other public company boards.
R. Halsey Wise, M.B.A.
(Age 55)
Member of the:
• Compensation Committee
• Finance & Strategy
  Committee





MEETINGS OF THE BOARD AND COMMITTEES

The Board has established Audit, Compensation, and Nominating, Governance & Public Policy ("NG&PP") and Finance & Strategy ("F&S") Committees. The Board has adopted a written charter for each of thesethe Audit, Compensation, NG&PP and F&S Committees. The full text of each charterthe charters for the Audit, Compensation and the Company's Corporate Governance GuidelinesNG&PP Committees are available on our website located at www.cerner.com under "About Cerner,Us, Leadership." The Board does not have an Executive Committee.

During 2012,2019, the Board held fournine regular meetings,meetings; the Audit Committee held eight meetings,regular meetings; the Compensation Committee held three meetings andtwo regular meetings; the NG&PP Committee held three meetings; and the F&S Committee held seven meetings. Each current Director attended at least 75% of the aggregate of the total meetings of the Board and the Board Committees on which the Director served during the past fiscal year.
The Board has determined that all of the current non-employee Directors on each of the Board's three standing Committees, including the non-employee Director nominees nominated as Class III Directors, are independent as defined under the rules of The NASDAQ Stock Market, including, in the case of all current and proposed members of the Audit Committee, the additional independence requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Under applicable NASDAQ rules,Nasdaq Marketplace Rules ("Nasdaq Rules"), a Director of the Company will only qualify as an "independent director" if, in the opinion of the Board, that person does not have a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director. The Board has determined that none of the current non-employee Directors (including the non-employee Directoror nominees nominated for election as a Class III Director) has a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director and that each of the following current Directors (including the non-employee Director nominees)and nominees are "independent" as defined under Rule 5605 (a)5605(a)(2) of The NASDAQ Stock Market Marketplacethe Nasdaq Rules: Gerald E. Bisbee, Jr., Ph.D.; Denis A. Cortese, M.D.; John C. Danforth;Bisbee; Mitchell E. Daniels; Linda M. Dillman; William B. Neaves, Ph.D.;Julie L. Gerberding; Melinda J. Mount; George A. Riedel; John J. Greisch; R. Halsey Wise; and William D. Zollars. In making this determination with respect to Mr. Daniels and Mr. Zollars, the Board considered their directorships on the boards of several companies that have either purchased solutions and services from us, or from which we have procured certain products and services, all in the ordinary course of business. Additionally, in making this determination with respect to Dr. Gerberding, the Board considered her executive position with Merck & Co., Inc., which has purchased certain solutions and services from us in the ordinary course of business. The Board concluded that none of the noted Directors had a direct or indirect material interest in the transactions referred to above. Additionally, all current and proposed members of the Audit Committee satisfy the additional independence requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Except with respect to any first-time nominees, whose independence would be considered at the time of nomination, the independence determination is made by the full Board each May based on all available facts and circumstances of each Director. The "independence" finding is also reviewed and confirmed by the Company's Chief Legal Officer, Chief Financial Officer and outside legal counsel.

Pursuant to the Company's Corporate Governance Guidelines, all individuals nominated for election as Class III Directors are expected to attend the 2020 Annual Shareholders' Meeting. All other Directors, barring unforeseen circumstances, are expected to attend the 2020 Annual Shareholders' Meeting as well. All of our current Directors includingwho were Directors at the Class III Directors nominated for re-election this year,time of the 2019 Annual Shareholders' Meeting attended the 20122019 Annual Shareholders' Meeting.


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COMMITTEES OF THE BOARD

Audit Committee
The Audit Committee assists the Board in fulfilling its responsibilities with respect to our accounting and financial reporting practices, and in addressing the scope and expense of audit and related services provided by our independent registered public accounting firm. The Audit Committee has the authority to obtain advice and assistance from and receive appropriate funding from the Company for outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties. Audit Committee membership is reviewed annually by the Company's NG&PP Committee, which then recommends the Audit Committee membership to the full Board. Audit Committee members are generally approved by the full Board each May. The Board has determined that the composition of the Audit Committee, the attributes of its members and the responsibilities of the Audit Committee, as reflected in its charter, are in accordance with applicable SEC rules and The NASDAQ Stock Market MarketplaceNasdaq Rules for audit committees. In particular, alleach member of the Audit Committee is an "independent director" as defined by Nasdaq Rules. All Audit Committee members possess the required level of financial literacy, and at least one member of the Audit Committee meets the current standard of requisite financial management expertise and theexpertise. The Board has determined that Gerald E. Bisbee, Jr., Ph.D., the Chairperson of the Audit Committee, is an "audit committee financial expert" as defined in Item 407(d)(5) of Regulation S-K of the Securities Act of 1933.1933, as amended.



Compensation Committee
The Compensation Committee's primary responsibilities are to review and approve our compensation policies and practices, establishreview and recommend compensation for non-employee Directors, evaluate our Chief Executive Officer's performance and establish compensation accordingly, review and approve the total compensation of our Section 16 Officers,officers, review and approve executive Performance-Based Compensation Planperformance-based compensation plan targets and earned payouts and equity stock grants to our Section 16 Officersofficers and adopt and approve major changes in our benefit plans and compensation philosophy. The Compensation Committee has the authority to obtain advice and assistance from and receive appropriate funding from the Company for outside compensation consultants, independent legal counsel and other consultants as the Compensation Committee deems necessary to carry out its duties.

The Compensation Committee of the Board is currently comprised of sixfive Directors. Each member of the Compensation Committee is an "independent director" as defined by The NASDAQ Stock Market Marketplace Rules applicable to issuers such as the Company that have shares listed on The NASDAQ Global Select Market.Nasdaq Rules. Compensation Committee membership is reviewed annually by the Company's NG&PP Committee, which then recommends the Compensation Committee membership to the full Board. Compensation Committee members are generally approved by the full Board each May.

The Compensation Committee meeting dates are reviewed and approved by the entire Compensation Committee in an effort to ensure attendance, and Compensation Committee agendas are reviewed and approved prior to distribution to the rest of the Compensation Committee by the Compensation Committee Chairperson.

The Compensation Committee has areviews its Charter that is available on our website located at: www.cerner.com under "About Cerner, Leadership, Compensation Committee." The Charter is reviewed by the Compensation Committee annually in March and any recommended amendments to the Charter are considered for approval by the full Board of Directors. The Compensation Committee's Charter was last reviewed and updated in March 2013.2019. The Compensation Committee's scope of authority is as set forth in its Charter. The Compensation Committee has delegated its authority as follows and as approved by the Board:follows:

Section 16 Insider Equity and Incentive Compensation Subcommittee - this subcommittee of the Compensation Committee is appointed annually and consists of "outside"non-employee directors" for purposes of Section 162(m) of the Internal Revenue Code and "non-employee directors" for purposes ofRule 16b-3 promulgated under the Exchange Act. It has authority to review recommendations and approve equity grants and incentive-based compensation (targets, metrics and payments) of our Section 16 officers;

Equity-based Grant Policy - Quarterly Administration Subcommittee - this subcommittee of the Compensation Committee consists of "outside"non-employee directors" for purposes of Section 162(m) of the Internal Revenue Code and "non-employee directors" for purposes ofRule 16b-3 promulgated under the Exchange Act and has authority to ensure timely administration of the Equity-based Grant Policy for matters that require action between regularly scheduled Compensation Committee meetings. The Equity-based Grant Policy -

14


Quarterly Administration Subcommittee reports to the full Compensation Committee at the next Compensation Committee meeting on any action approved by such subcommittee;

Incentive Compensation Plan - Quarterly Administration Subcommittee - this subcommittee of the Compensation Committee consists of "outside"non-employee directors" for purposes of Section 162(m) of the Internal Revenue Code and "non-employee directors" for purposes ofRule 16b-3 promulgated under the Exchange Act and has authority to ensure timely administration of the Performance-Based Compensation Planour performance-based compensation plan for matters that require action between regularly scheduled Compensation Committee meetings.meetings and to make decisions with regard to any discretionary second tier match contribution made by the Company under our 401(k) Plan. The Incentive Compensation Plan - Quarterly Administration Subcommittee reports to the full Compensation Committee at the next Compensation Committee meeting on any action approved by such subcommittee; and

Cerner Corporation Foundations Retirement Plan Administrative and Investment Committee - this committee currently consists of the Chief Financial Officer, Chief PeopleHuman Resources Officer, Vice President, Compensation & Benefits (or his successor) and one other corporate executive named by the first three members. The committee has authority to: i) select, monitor and manage our 401(k) retirement plan's (the "Plan")the third party administrator, record keeper,record-keeper, custodian and trustee of our 401(k) Plan; ii) monitor the 401(k) Plan's reporting to the IRS and Department of Labor, the 401(k) Plan's ERISA compliance, 401(k) Plan audits and the payment of 401(k) Plan expenses,expenses; iii) monitor the compensation received by the 401(k) Plan's service providers; iv) monitor and evaluate disclosures by the 401(k) Plan to participants and beneficiaries, iv)beneficiaries; v) ensure maintenance of fiduciary


liability insurance coverage and the ERISA fidelity bond coverage, v)coverage; vi) research and recommend 401(k) Plan amendments, vi)amendments; vii) adopt, review and carry-outcarry out investment policies and objectives for the Plan, vii)401(k) Plan; viii) review and select the investment options offered under the Plan, viii)401(k) Plan; ix) select and monitor the 401(k) Plan's investment managers and fund providers, ix)providers; x) supervise, monitor and evaluate on a semi-annual basis the performance of the investment options offered under the 401(k) Plan x)and periodically review the 401(k) Plan's investment performance as a whole,whole; xi) carry out any special assignments given by the Compensation Committee; and xi)xii) retain independent outside consultants.

Compensation Consultant
The Compensation Committee was advised in 20122019 by aan independent compensation consultant, Semler BrossyDeloitte Consulting Group, LLC, which has no other role with Cerner other than to adviseLLP, retained by the Compensation Committee. See "Compensation Discussion and Analysis - Compensation Strategy and Objectives.Structure."

Relationship between Compensation and Risk Management
In 2012, theThe Compensation Committee utilized Cerner's internal Enterprise Risk Management ("ERM") team to perform a review of the Company's 20122019 incentive compensation arrangements. More specifically, the ERM team reviewed and tested fifteen metrics, comprising over 54% of the policies and processes oftotal planned incentive compensation, arrangements for the following: segregation of duties between the associates assessedsetting the overall design ofmetric targets, providing the results, and execution by management of ten incentive compensation agreements from 2012,being compensated on the metric; and identified the risks posed from an associate behavior perspective.  The scopeaccuracy of the payout calculation. In addition, all metrics were evaluated for qualitative factors which may increase the risk of incenting unintended behaviors. Based on this evaluation, seven metrics were reviewed and tested for: appropriateness related to the roles compensated and existence of controls to prevent any unintended behaviors such metrics may incent. The ERM team also reviewed material plan changes for 2019. The most significant change was the redesign of the Section 16 and business incentive performance plans selected for review was basedto be more focused on alignment, accountability and simplicity. The ERM team reviewed the following factors: total overall target bonus payout, typephilosophy around the changes and considered the impact to individual plans as part of role and whether the arrangement was new or changed from 2011.review. The Compensation Committee assessed the ERM team summaryteam's report and concluded that our incentive compensation arrangements, coupled with internal controls and policies, do not encourage associates to: i) take excessive risks that are likely to cause material adverse harm to the Company, or ii) manipulate performance in order to increase incentive award payouts.

Specifically, the Compensation Committee noted a number ofthe following design features of our incentive compensation program that mitigate risk, including:risk:

stock ownership guidelines for executives may reduce the risk of executives making decisions that benefit them in the short-term at the expense of the Company's long-term performance;

the design of annual incentives provides for the taking of a reasonable amount of risk in order to provide upside incentive compensation opportunity, while a payout cap on the incentives reduces risk by limiting the amount of short-term compensation that may be earned;

incentive goals are established using a rigorous and time-tested process and are tied to the Company's annual budget;financial plan;

15


cash incentive plan metrics and goals for Section 16 officers arewere approved by the Compensation Committee within the first 90 days of eachthe year for the 2019 quarterly and annual metrics, and performance-based equity incentive plan goals are not altered duringfor Section 16 officers were approved by the performance cycle;Compensation Committee in April 2019, which were aligned to fourth quarter 2019, fourth quarter 2020 and full year 2021 metrics;

the Company has a rigorous verification and review process to calculate the performance of each incentive plan; and
the Company has a
performance-based cash and equity compensation recovery policy that appliesis subject to "claw back" for all associates receiving cash incentives.such incentive compensation.




Nominating, Governance & Public Policy Committee
The NG&PP Committee provides assistance and recommendations to the Board and the Chairman and Chief Executive Officer of the Company in the areas of: i) Board membership nomination,nomination; ii) committee membership selection and rotation practices,practices; iii) evaluation of the overall effectiveness of the Board,Board; iv) review and consideration of developments in corporate governance practices,practices; and v) review and consideration of current and emerging political, corporate citizenship and public policy issues that may affect our business operations, performance or public image. The Committee's goal is to ensure that the composition, practices and operation of the Board contribute to value creation and effective representation of the Company's shareholders and to foster Cerner's commitment to operate its business worldwide in a manner consistent with the rapidly changing demands of society.

The NG&PP Committee reviews its Charter annually and any recommended amendments to the Charter are considered for approval by the full Board of Directors. The NG&PP Committee's Charter was last updated in March 2014.

Finance & Strategy Committee
The F&S Committee coordinates and oversees management's review of our Company's operational efficiency and margin expansion efforts and capital deployment strategy, including taking into consideration recommendations from AlixPartners LLP, a leading outside consulting firm, the Company's risk profile and the potential impact of any recommended changes to the Company's business model, strategic plan and ability to meet commitments to clients. The F&S Committee is currently comprised of five Directors, with Mr. Greisch serving as the Chairperson of the NG&PP Committee presides at all executive session meetingsF&S Committee. Each member of the independent Directors.F&S Committee is an "independent director" as defined by Nasdaq Rules.


16


DIRECTOR COMPENSATION
For
Our non-employee Directors are paid commensurate with the 2012-2013time served during the Board year (May 2012 - May 2013)in quarterly installments. For each of the 2018-2019 Board year (from the 2018 Annual Shareholders' Meeting to the 2019 Annual Shareholders' Meeting) and the 2019-2020 Board year (from the 2019 Annual Shareholders' Meeting to the 2020 Annual Shareholders' Meeting), non-employee Directors received an annual cash retainer of $66,000. In addition,Each member of each Committee Chairperson receivedBoard committee receives an additional annual cash retainer as follows: $22,500$12,500 for the Audit Committee, $12,500 for the F&S Committee, $7,500 for the Compensation Committee and $5,000 for the NG&PP Committee. In addition, each Committee Chairperson receives an additional annual cash retainer that causes their aggregate compensation, inclusive of the committee member retainer, to be as follows: $30,000 for the Audit Committee Chairperson, $17,500$30,000 for the F&S Committee Chairperson, $20,000 for the Compensation Committee Chairperson and $12,500$15,000 for the NG&PP Committee Chairperson. Also, each member of the Committees (excluding the Chairperson) receivedThe Lead Independent Director also receives an additional $30,000 annual cash retainer as follows: $10,000 for the Audit Committee, $5,000 for the Compensation Committee and $2,500 for the NG&PP Committee.retainer. The Directors are not paid meeting fees. All cash retainers as disclosed above are paid in quarterly installments at each Board meeting. During the 2012-2013 Board year, the sole exception to the payments discussed above was with respect to Mr. Danforth, who was entitled to receive $73,500 cash compensation based on the above described annual cash retainer; however, in lieu of cash, Mr. Danforth is entitled to take his compensation in the form of personal use of aircraft owned or leased by the Company (collectively, the "Corporate Aircraft"), in accordance with our policies on personal use of such Corporate Aircraft.

Each non-employee Director also receives a grant of restricted stock of the Company for each year of service on the Board. The equity component of the Board compensation package is based on a target dollar amount, not a fixed share amount (in order to avoid unintended compensation fluctuations based on stock price fluctuations, stock-splits, combination or other changes in the number or type of the Company's shares outstanding). The target for the equity compensation component of the total annual Board compensation package for the May 2012 to May 20132019 - 2020 Board service periodyear was set at approximately $210,000.$250,000. In May 2012,2019, pursuant to the Board equity compensation program, 2,8003,556 shares of restricted stock of the Company were granted to each of the then-current non-employee Directors: Dr. Bisbee, Dr. Cortese, Mr. Danforth,Daniels, Ms. Dillman, Dr. NeavesGerberding, Mr. Greisch, Ms. Mount, Mr. Riedel, Mr. Wise and Mr. Zollars. These restricted stock grants will vest inon the earlier of May 2013 at21, 2020 or the completioncalendar day immediately preceding the date of each respective Director's one year of service to the Board.2020 Annual Shareholders' Meeting.

Additionally, under the Board equity compensation program, each non-employee Director that is newly appointed or elected to the Board receives an initial grant of shares of restricted stock of the Company with a value equal to the annual equity grant value as discussed above, with a ratable vesting over three years. Thereyears provided such Director continuously serves as a member of the Cerner Board of Directors through such vesting dates. Mr. Greisch, Ms. Mount, Mr. Riedel and Mr. Wise were no Directors eligible to receiveeach granted an initial appointment/election grant of 3,795 shares of restricted stock in 2012.of the Company on April 29, 2019, and each were entitled to receive compensation consistent with the compensation payable to the Company's other Directors, beginning as of the new Board term that commenced immediately following the 2019 Annual Shareholders' Meeting.



The independent compensation consultant retained by the Compensation Committee works with our human resources compensation team each year to review our current Board compensation package relative to our peer group. See discussion under "Compensation Discussion and Analysis - Compensation Structure" for more information on our 2019 peer group. Our Chief PeopleHuman Resources Officer reviews this work and makes compensation recommendations to our Compensation Committee and Board with respect to the non-employee Board members.Directors. The Compensation Committee (or one of its subcommittees), after review and discussion of the items set forth above, makes the ultimate decision as to the total compensation and compensation components of our non-employee Board members.Directors.

The Directors are subject to the same Stock Ownership Guidelines that apply to the Company's officers. The guidelines are further discussed in the Compensationunder "Compensation Discussion and Analysis sectionAnalysis" below. As of January 1, 2013,2020, at the annual measurement date, all non-employee Directors who were Directors on such date were in compliance with these guidelines.

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Under the Cerner Corporation 2011 Omnibus Equity Incentive Plan (as amended, the "Omnibus Plan"), the aggregate value of all compensation paid or granted to any individual for service as a non-employee Director (other than a non-employee Director who is also Chairman of the Board) with respect to any calendar year, including equity awards granted under the Omnibus Plan and cash fees paid by the Company to such non-employee Director outside of the Omnibus Plan, may not exceed six hundred thousand dollars ($600,000), calculating the value of any grants awarded during such calendar year based on the grant date fair value of such grants for financial reporting purposes, excluding special compensation paid to any non-employee Director when serving as a Committee Chair or as Lead Independent Director. For a non-employee director who is Chairman of the Board, the cap is nine hundred thousand dollars ($900,000). The foregoing limitations will not take into account any grant made in connection with the initial appointment of a non-employee Director; and any shares deferred pursuant to a nonqualified deferred compensation arrangement will count against the foregoing limitation only during the calendar year in which such grant is initially made and not in the calendar year in which the deferred shares are ultimately issued.

2012

2019 Director Compensation Table

The following table contains information regarding the compensation earned by non-employee Directors during 2012.our 2019 fiscal year.
Name Fees Earned or Paid in Cash ($) Stock Awards ($) (1) Option Awards ($) (2) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) 
All Other Compensation
($)
 Total ($)
Gerald E. Bisbee, Jr., Ph.D. 92,250
 214,144
 —
 —
 —
 —
 306,394
Denis A. Cortese, M.D. 78,500
 214,144
 —
 —
 —
 —
 292,644
John C. Danforth 69,750 (3)
 214,144
 —
 —
 —
 —
 283,894
Linda M. Dillman 91,000
 214,144
 —
 —
 —
 —
 305,144
William B. Neaves, Ph.D. 89,750
 214,144
 —
 —
 —
 —
 303,894
William D. Zollars 79,750
 214,144
 —
 —
 —
 —
 293,894
Name Fees Earned or Paid in Cash ($) Stock Awards ($) (1) Option Awards ($) (2) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) (3) Total ($)
               
Gerald E. Bisbee, Jr., Ph.D., M.B.A. 104,750
 250,058
 —
 —
 —
 1,920
 356,728
Denis A. Cortese, M.D. (4)
 39,250
 —
 —
 —
 —
 —
 39,250
Mitchell E. Daniels, Jr., J.D. 93,500
 250,058
 —
 —
 —
 1,920
 345,478
Linda M. Dillman 92,250
 250,058
 —
 —
 —
 1,920
 344,228
Julie L. Gerberding, M.D., M.P.H. 84,750
 250,058
 —
 —
 —
 2,730
 337,538
John J. Greisch, M.B.A. (5)
 81,375
 500,073
 —
 —
 —
 3,970
 585,418
Melinda J. Mount, M.B.A. (5)
 68,250
 500,073
 —
 —
 —
 3,970
 572,293
George A. Riedel, M.B.A. (5)
 68,250
 500,073
 —
 —
 —
 3,970
 572,293
R. Halsey Wise, M.B.A. (5)
 64,500
 500,073
 —
 —
 —
 3,970
 568,543
William D. Zollars (6)
 119,750
 250,058
 —
 —
 —
 1,920
 371,728

(1)These amounts reflect the aggregate grant date fair value of each award granted to the awardnon-employee Director computed in accordance with FASB ASC Topic 718. Refer to Note 16 in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the fiscal year ended December 28, 2019 for the relevant assumptions used to determine the grant date.date fair value of our stock awards. As of December 29, 2012,28, 2019, each then-current non-employee Director had the following number of restricted stock awards outstanding: Gerald E. Bisbee, Jr., Ph.D., 2,800; Denis A. Cortese, M.D., 4,934; John C. Danforth, 2,800;3,556; Mitchell E. Daniels, 3,556; Linda M. Dillman 4,134; William B. Neaves, Ph.D., 2,800;3,556; Julie L. Gerberding, 5,056; John J. Greisch, 7,351; Melinda J. Mount, 7,351; George A. Riedel, 7,351; R. Halsey Wise, 7,351; and William D. Zollars, 2,800.3,556.

(2)As of December 29, 2012,28, 2019, none of the non-employee Directors who were Directors on such date had any stock options outstanding.

(3)Amount reflects value of personal use of Corporate Aircraft (owned byAmounts include dividend equivalents on unvested restricted stock awards credited or under contract withpaid to the Company, in accordance with our policies on personal use of such aircraft) and unused amounts paid out in cash as of year-end.non-employee Directors.

(4)Dr. Cortese retired from the Board effective immediately prior to Cerner's 2019 Annual Meeting of Shareholders held on May 30, 2019.

(5)Mr. Greisch, Ms. Mount, Mr. Riedel and Mr. Wise were appointed to the Board on April 8, 2019.
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(6)Mr. Zollars was designated as the Lead Independent Director of the Directors of the Board on April 8, 2019.



AUDIT COMMITTEE REPORT

Notwithstanding anything to the contrary set forth in any of the Company's filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the following report of the Audit Committee shall not be incorporated by reference into any such filings and shall not otherwise be deemed to be soliciting material or filed under such Acts.acts.

The Audit Committee of the Company is currently composed of five independent members of the Board of Directors (all of whom have been determined by the Board to meet the independence requirements of the SEC and The NASDAQ Stock Market)Nasdaq) and operates under a written charter adopted by the Board of Directors that is available on ourat the Company's website, www.cerner.com at "About Cerner, Leadership, Audit Committee."www.cerner.com. The Audit Committee appoints and retains the Company's independent registered public accounting firm. The selection is subsequently submitted to the shareholders of the Company for ratification.

Management is responsible for the Company's internal controls and the financial reporting process. The Company's independent registered public accounting firm, KPMG LLP, is responsible for performing an independent audit of the Company's consolidated financial statements and issuing an opinion on the conformity of those audited consolidated financial statements with U.S. generally accepted accounting principles and on the effectiveness of the Company's internal control over financial reporting. The Audit Committee's responsibility is to monitor and oversee these processes and to report to the Board of Directors on its findings.

In this context, the Audit Committee has met and held discussions with management and the Company's independent registered public accounting firm. Management represented to the Audit Committee that the Company's consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee discussed with the Company's independent registered public accounting firm matters required to be discussed by Statement on Auditing Standards No. 61, as amended, supplemented or superseded (PCAOB Auditing Standard No. 16 Communications with Audit Committees), as adopted bythe applicable requirements of the Public Company Accounting Oversight Board in Rule 3200T.and the Securities and Exchange Commission.

The Company's independent registered public accounting firm also provided to the Audit Committee the written disclosures and letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant'sregistered public accounting firm's communications with the Audit Committee concerning independence, and the Audit Committee has discussed with the independent registered public accounting firm that firm's independence.

Based upon the Audit Committee's discussions with management and the independent registered public accounting firm and the Audit Committee's review of the audited financial statements, the representation of management and the report of the independent registered public accounting firm to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 29, 201228, 2019 for filing with the Securities and Exchange Commission.

Members of the Audit Committee:
Gerald E. Bisbee, Jr., Ph.D., M.B.A.
Denis A. Cortese, M.D.Mitchell E. Daniels, Jr., J.D.
Linda M. DillmanJohn J. Greisch, M.B.A.
William B. Neaves, Ph.D.Melinda J. Mount, M.B.A.
William D. Zollars

____________________


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Guidelines of Cerner Corporation's Audit CommitteeGUIDELINES OF CERNER CORPORATION'S AUDIT COMMITTEE
for Pre-Approval of Independent Auditor ServicesFOR PRE-APPROVAL OF INDEPENDENT AUDITOR SERVICES

The Audit Committee has adopted guidelines regarding the engagement of KPMG, LLP ("KPMG"), our independent registered public accounting firm, to perform services for the Company. For audit services, (including statutory audit engagements as required under local country laws)audit-related services and audit-relatedpermissible non-audit services, the independent auditor will provide the Audit Committee with an engagement letter during the first quarter of each year outlining the scope of audit and audit-related services proposed to be performed during the fiscal year. If agreed to by the Audit Committee, this engagement letter will be formally accepted by the Audit Committee at either its March or May meeting. Thefirst quarterly Audit Committee will approve, if necessary, any changes in the terms, conditions and fees resulting from changes in audit scope, Company structure or other matters.
The independent registered public accounting firm will submit to the Audit Committee for approval an audit services fee proposal with the engagement letter.
For any permissible non-audit services, the independent registered public accounting firm will provide the Audit Committee with a detailed scope of service description and fee range. Each non-audit service must be separately pre-approved by the Audit Committee. Our management and the independent registered public accounting firm will each confirm to the Audit Committee that any non-audit services for which pre-approval is requested are permissible under all applicable legal requirements.
To ensure prompt handling of unexpected matters, the Chairpersonmeeting of the Audit Committee is appointed to amend or modify the scope of pre-approved permissible audit, audit-related or non-audit services and the fees related thereto. year.

Upon receiving an unforeseen request for audit, audit-related or non-audit services or a change in the fee range, the independent registered public accounting firm will advise our management;provide our management willa detailed scope of service description and fee range. A request is then made for pre-approval forof such change in audit, audit-related or non-audit services or fees from the Chairperson of the Audit Committee. TheTo ensure prompt handling of unexpected matters, the Chairperson of the Audit Committee Chairperson will report on allhas been delegated authority from the Audit Committee to amend or modify the scope of pre-approved permissible audit, audit-related or non-audit services and the fees related thereto.

All action taken with respect to pre-approval of audit, audit-related or non-audit services and fees towill be included in the independent registered public accounting firm's materials shared with the Audit Committee atas part of their required communications with the next Audit Committee meeting.Committee. With respect to any such pre-approval of non-audit services, our management and the independent registered public accounting firm will each confirm to the Audit Committee Chairperson that such non-audit services are permissible under all applicable SEC independence requirements.   
With respect to each proposed pre-approved service,legal requirements and do not impair the independent registered public accounting firm will provide sufficient detail in the description to ensure that the Audit Committee (or Chairperson, as applicable) knows precisely what services it is being asked to pre-approve so that it can make a well-reasoned assessment of the impact of the service on the registered public accounting firm's independence.independence under applicable professional standards.

The independent registered public accounting firm must ensure that all audit, audit-related and non-audit services provided to the Company have been approved by the Audit Committee.Committee (or the Chairperson, as applicable).


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COMPENSATION COMMITTEE REPORT

Notwithstanding anything to the contrary set forth in any of the Company's filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the following report of the Compensation Committee shall not be incorporated by reference into any such filings and shall not otherwise be deemed to be soliciting material or filed under such Acts.acts.

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and set forth below, and, based upon that review and discussion, recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Members of the Compensation Committee:
Gerald E. Bisbee, Jr., Ph.D.
Denis A. Cortese, M.D.
John C. Danforth
Linda M. Dillman
William B. Neaves, Ph.D.Julie L. Gerberding, M.D., M.P.H.
George A. Riedel, M.B.A.
R. Halsey Wise, M.B.A.
William D. Zollars

____________________


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COMPENSATION DISCUSSION AND ANALYSIS

This section explains our executive compensation program and specifically describes the application of that program to the following Named Executive Officers ("NEOs") whose compensation information is presented in the tables and narrative discussion below in accordance with Securities and Exchange Commission rules.
Neal L. PattersonTitle at fiscal year-end (FYE) 2019
Brent Shafer Chairman of the Board and Chief Executive Officer and President(Principal Executive Officer)
Marc G. Naughton Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Michael R. Nill
Executive Vice President and Chief Operating Officer(1)
John T. Peterzalek
Executive Vice President and Chief Client Officer(2)
Jeffrey A. Townsend 
Former Executive Vice President and Chief of StaffInnovation(3)
Michael R. NillDonald D. Trigg 
Executive Vice President, Strategic Growth(4)

(1)Mr. Nill served as an executive officer until his departure from the Company on January 10, 2020.
(2)Mr. Peterzalek was promoted to Executive Vice President and Chief OperatingClient and Services Officer effective February 18, 2020.
Zane M. Burke(3)Mr. Townsend served as an executive officer until his retirement from the role of Executive Vice President - Client Organizationand Chief of Innovation effective November 1, 2019. On the same date, he transitioned to Executive Senior Advisor. He is included as a NEO for 2019 because disclosure would have been provided pursuant to Item 402 of Regulation S-K but for the fact that he was not serving as an executive officer at the end of 2019.
(4)Mr. Trigg was promoted to President effective February 18, 2020.

In addition, as discussed in Proposal #3 below, we are conducting our annual advisory "say-on-pay" vote requesting your non-binding advisory approval of the compensation to our NEOs as outlined in this Compensation Discussion and Analysis and the tables and narrative discussion that follow. In this discussion, we summarize our executive compensation programs and objectives and provide an overview of how and why the Compensation Committee of our Board of Directors (the "Compensation Committee") made specific compensation decisions regarding our NEOs.

References to the Compensation Committee in this Compensation Discussion and Analysis also refer to its subcommittees, where applicable.

This Compensation Discussion and Analysis includes discussion of the following non-GAAP financial measures: Adjusted Operating Margin, Adjusted Net Earnings, Adjusted Diluted Earnings Per Share, and Free Cash Flow. Definitions of, and further details regarding these non-GAAP financial measures, including reconciliations to their most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), can be found in Appendix I.

Executive Summary

20122019 Business Results. A significant portion of the total compensation of our NEOs is directly linked to our performance. The 2012 fiscal year was another excellent year for Cerner. We delivered strong levels of new business bookings, revenues, net earnings and cash flows in 2012.  Highlights of the year and fourth quarter 2019 include:

A 15%6% increase in our revenues to $5.69 billion in 2019 compared to $5.37 billion in 2018. The increase in revenues reflects ongoing demand from new businessand existing clients for Cerner's solutions and technology-enabled services driven by their needs to keep up with regulatory requirements, adapt to changing reimbursement models, and deliver safer and more efficient care.

An 11% decrease in bookings to $3.1$5.99 billion in 2019 compared to $2.7$6.72 billion in 2011. New business bookings reflect2018, with the decrease primarily reflecting a more selective approach to adding low-margin, long-term contracts that typically represent large booking values. Bookings represents the value of executed contracts for software, hardware, professional services and managed services.



A 21% increase in our revenues to $2.7 billionfourth quarter 2019 GAAP operating margin of 12.68% compared to $2.2 billion12.02% in 2011.the fourth quarter of 2018. On a non-GAAP basis, a fourth quarter 2019 Adjusted Operating Margin of 20.28% compared to 18.66% in the fourth quarter of 2018. The year-over-year increase in revenue reflects improved economic conditions,is primarily the result of our ongoing demand related to the HITECH Act and increased contributions from new initiatives, such as device resale, Cerner ITWorks and Cerner RevWorks.operational improvement initiatives.

A 30% increase16% decrease in our net earnings to $397.2 million compared to $306.6 million in 2011. Diluted earnings per share increased 28% to $2.26 compared to $1.76 in 2011. The growth inGAAP net earnings and a 13% decrease in GAAP diluted earnings per share was driven primarily by strong revenue growth and continued progress with our margin expansion initiatives, including efficiencies in our implementation and operational processes, leveraging R&D investments and controlling general and administrative expenses. Our full-year 2012 operating margin of 21.4% reflects an increase of 50 basis points2019 compared to 2011, which was driven by strong margin expansion2018. On a non-GAAP basis, our Adjusted Net Earnings and Adjusted Diluted Earnings per share increased 5% and 9%, respectively, in our core business that was somewhat offset by record levels of lower-margin technology resale.2019 compared to 2018.

Cash collections of receivables of $2.7$5.79 billion in 20122019 compared to $2.2$5.49 billion in 2011.2018. Days sales outstanding was 7472 days for the 20122019 fourth quarter compared to 7379 days for the 2012 third quarter and 83 days for the 20112018 fourth quarter.

Operating cash flows for 2012 were strong at $708.3 million$1.31 billion in 2019 compared to $546.3$1.45 billion in 2018. Free Cash Flow for financial reporting purposes was $568 million in 2011.2019 compared to $733 million in 2018.

As part of our company-wide transformation, we have undertaken a project to redesign our workforce architecture and to re-examine our employment practices to ensure best-in-class selection, advancement and rewards practices are utilized across our workforce. Cerner is also committed to pay equity as part of that work and will confirm parity in compensation across similar jobs in the new architecture.

CompensationRewards Strategy. Our compensationrewards strategy is designed to offer competitive, comprehensive recognition, compensation and benefits packages to attract, motivate, reward and reward qualified associatesretain individuals within talent segments of capabilities who contribute significant value to us and reward performance, such as attainment of business and individual associate goals, business results, leadership, and strong relationships with clients, and is not based on rewarding seniority. We received a 98% vote of support in favor of our executive compensation in our say-on-pay vote at the 2012 Annual Meeting of Shareholders. As a result, the Compensation

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Committee has determined that our approach to 2013 compensation policies and decisions will remain consistent with our 2012 approach.

Performance Management Philosophy. Our compensation strategy is linked to our performance management philosophy which is designed to identify and reward associate performance through compensation. We believe in pay for performance as represented by our NEO pay mix.  In 2012, 80% of the total compensation paid to our Chief Executive Officer ("CEO") was performance-based and 84% was performance-based for our other NEOs combined. Our performance-based compensation consists of the performance-based cash incentive plan, stock options and performance-based restricted stock grants. During 2012, our management team continued practices established to closely link pay to performance.  A quarterly performance review process was used to provide quarterly assessments of executives on their performance and attainment of our goals.

Other aspects of our compensation program are intended to further align our executives' interest with shareholders. These include:

An Equity-based Grant Policy, which outlines the grant practices with respect to equity-based grants awarded under our equity incentive plans, is designed to ensure grant dates for such programs will be outside of trading blackout periods except for new hires and as specifically approved by the Compensation Committee.
Performance-based compensation paid to our NEOs is subject to "claw back" pursuant to performance plan agreements with our NEOs.
Unlike typical ownership guidelines that are based on a multiple of salary or fixed number of shares, our guidelines require the retention of 45% to 80% of the equity awards made to our officers and outside Directors, except that the ownership guidelines apply in decreasing percentages based on tenure, upon retirement or upon hardship.  We believe this generally leads to higher stock ownership requirements than other companies.
Our internal pay equity guidelines provide that the CEO's total cash compensation shall not be more than three times that of the next highest executive officer's total cash compensation.

Compensation Structure. Compensation for our NEOs includes: i) base salary, ii) performance-based cash incentive compensation and iii) long-term incentive plan compensation, consisting of stock options and performance-based restricted shares.  To provide incentives to attain our business goals, a significant portion of executive compensation is at-risk and tied to individual and Company performance. We provide our NEOs with relatively limited perquisites and do not pay tax gross-ups on any of our perquisites, severance pay or change in control payments.

We also have medical, dental, vision, 401(k) and associate stock purchase plans in which contributions are made by us to the NEOs on the same basis as to all other associates.  The cost of these plans and opportunity for benefits thereunder are the same for the NEOs as for all other associates.

Compensation Strategy and Objectives
Our compensation strategy is designed to offer competitive compensation packages to attract, motivate and reward qualified associates who contribute significant value to us. Our compensation program is designed to reward performance, such as attainment of business and individual associate goals, business results, leadership, and strong relationships with clients, and is not solely based on rewarding seniority. We believe thisseniority but also enables cultural reinforcement. Our rewards strategy allows us to attract qualified candidates and maintain a reasonable business model. This compensation strategy is also linked to our performance management (both "what" and "how") philosophy, which is designed to identify and reward associate performance through compensation related levers. We received a greater than 90% vote of support from shares entitled to vote on the matter in favor of our executive compensation in our say-on-pay vote at the 2019 Annual Shareholders' Meeting. Given the say-on-pay vote and the results achieved with our compensation policies, the Compensation Committee has determined that our approach to compensation is appropriate and our 2020 compensation policies should generally remain consistent with our 2019 approach, except to the extent of any modifications deemed appropriate in connection with our pay equity analysis. We also believe in pay for performance and linking executive compensation with shareholder value, as represented by our NEO pay mix. For 2019, 91% of Mr. Shafer's total compensation mix was at-risk. In addition, for 2019, 86% of the total compensation mix for our other NEOs combined was at-risk. Our at-risk compensation consists of our performance-based cash incentive plan and equity award grants. In 2019, our NEOs' performance-based compensation consisted of performance-based cash incentive awards and performance-based restricted stock units ("PSUs"). The use of PSUs in our equity program is designed to encourage continued focus on long-term value and growth for our shareholders and provide meaningful alignment to our corporate imperatives and financial performance. During 2019, we continued practices established to link pay to performance, to more closely align our compensation practices with the market through the increased emphasis on performance-based awards, while balancing the need to ensure the retention value of our long-term incentive awards granted to our NEOs. We continued to use a quarterly performance review process to provide quarterly assessments of executives on their performance and attainment of our goals. During 2020, we intend to place continued emphasis on linking pay to performance by again granting equity with performance-based vesting conditions and utilizing multiple performance metric targets under our performance-based cash compensation plan.

Other aspects of our compensation program are intended to further align our executives' interests with shareholders. These include:

An Equity-based Grant Policy, which is designed to ensure equity award grant dates will be outside of trading blackout periods except for new hires and as specifically approved by the Compensation Committee.

Performance-based compensation paid to our NEOs is subject to "claw back" pursuant to performance plan agreements with our NEOs.



Stock ownership guidelines that require the retention of a percentage of the equity awards made to our executives and outside non-employee Directors, except that the ownership guidelines apply in decreasing percentages based on tenure, upon retirement or upon hardship.

Our internal pay equity guidelines provide that the total cash compensation for the CEO shall not be more than three times that of the next highest executive officer's total cash compensation.

A Hedging and Pledging Policy that prohibits our Section 16 officers (including our NEOs) and directors from (i) entering into hedging or monetization transactions with respect to Company stock, including, but not limited to, through the use of financial instruments such as exchange funds, prepaid variable forwards, equity swaps, puts, calls, collars, forwards and other derivative instruments, or through the establishment of a short position in, or engaging in any short sale of, the Company's securities, or (ii) pledging more than 50% of Company stock acquired pursuant to a bonus or benefit plan without prior approval from the Company's Securities Watch Team.

Compensation Structure. Compensation for our NEOs may include: i) base salary, ii) performance-based cash incentive compensation, iii) long-term incentive plan equity award compensation, which consisted of PSUs and time-based restricted stock units ("RSUs") for our NEOs in 2019, and iv) certain perquisites, as discussed below. To provide incentives to attain our business goals, a significant portion of executive compensation is at-risk and tied to individual and Company performance.

We also offer medical, dental, vision, 401(k) and associate stock purchase plans in which the NEOs may elect to participate. The cost of these plans and opportunity for benefits thereunder are the same for the NEOs as for all other eligible associates and any Company contributions are made to the NEOs on the same basis as all other eligible associates. We analyze the total compensation for our NEOs compared to the compensation of the corresponding NEOs in our peer group to ensuresupport alignment with our strategy of paying aggregate compensation atthat approximates the median (50th percentile) withinof our peer group, with top performers able to earn above the median. We believe this strategy keeps us competitive in the marketplace.

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The independent compensation consultant retained by the Compensation Committee works with our human resources compensation team each year to develop, analyze and compare peer group companies whose annual revenue, revenue growth, operating margin, total shareholder return (one year and three year), market capitalization, market capitalization as a multiple of revenue, and business model are similar to that of ours.Cerner's. The Compensation Committee then reviews and approves useour peer group for the upcoming year based upon one or more of the recommended peer group.factors above as selected by the Compensation Committee. The companies included in our 20122019 peer group for compensation comparison were selected based on standard industrial classifications ("SIC") and/or financial measures. The SICs used were computer programming and data processing, computer programming services, prepackaged software, computer integrated system design and computer processing and data preparation services. The financial measures used to obtain information for our 20122019 peer group were market capitalization of $3.1between $3.8 billion to $20.7and $37.9 billion, market capitalization to revenue multiple of at least 2two times and revenues of $1between $2.6 billion to $6.2and $15.6 billion. Our peer group for 2019 changed slightly from 2011 due2018 to additional financial measures used,more closely align the increased range of the financial measures we use each year to reflect the growth ofgroup with Cerner based on these factors; therefore, Adobe Systems, Inc. and also due to mergers and acquisitions withinSalesforce.com, Inc. were removed from the peer group. group as their market capitalizations exceeded our size parameters and Broadridge Financial Solutions, Inc., Square, Inc., SS&C Technologies Holdings, Inc. and Worldpay, Inc. were added to the peer group as their profiles fell within our parameters.
The 1920 companies included in our 20122019 peer group were:


20122019 Compensation Peer Group
Company Name Ticker
Adobe Systems, Inc.ADBE
Akamai Technologies, Inc. AKAM
Allscripts Healthcare Solutions, Inc.MDRX
Autodesk, Inc. ADSK
BMC Software,Broadridge Financial Solutions, Inc. BMCBR
Cadence Design Systems, Inc. CDNS
Citrix Systems, Inc. CTXS
Cognizant Technology Solutions Corporation CTSH
DST Systems,Equinix, Inc. DSTEQIX
F5 Networks,Fidelity National Information Services, Inc. FFIVFIS
Fiserv, Inc.FISV
Genpact Limited G
Global Payments, Inc.GPN
Intuit, Inc. INTU
MICROS Systems, Inc.Open Text Corporation MCRS
Nuance Communications, Inc.NUANOTEX
Red Hat, Inc. RHT
Salesforce.com,Square, Inc. CRMSQ
SS&C Technologies Holdings, Inc.SSNC
Symantec CorporationSYMC
Synopsys, Inc. SNPS
Teradata CorporationTDC
VMWare, Inc. VMW
Worldpay, Inc.WP

At the beginning of each fiscal year, the Compensation Committee reviews our peer group and the history of all the elements of each NEO's total compensation, including base salary, performance-based cash incentive compensation and long-term incentive plan compensation, over each of the past three years in relation to the total compensation and compensation elements of the corresponding NEOsexecutive officers of the companies in our peer group. Typically, our CEO, along with our Chief PeopleHuman Resources Officer, ("CPO"), makes compensation recommendations to the Compensation Committee with respect to the NEOs (excluding the CEO's compensation) who report to the CEO. The other NEOs do not participate in NEO compensation recommendations.. The Compensation Committee Chairperson reviews the peer group comparisons with the CPOChief Human Resources Officer and makes compensation recommendations to the Compensation Committee with respect to the CEO. The Compensation Committee (or an authorized subcommittee), after review and discussion of the items set forth above, makes the ultimate decision as to the total compensation and compensation components for our CEO and reviews and approves the total compensation and compensation components for the other NEOs.

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The Compensation Committee has authority to secure the services of advisers both internal and external to the Company, including the retention of outside consultants to review executive compensation, Board of DirectorDirectors compensation and to perform any other analysis the Compensation Committee deems appropriate. Historically, the Compensation Committee has worked with our internal resources, such as the CPOChief Human Resources Officer and the human resources compensation team, along with an outside consultant to help it carry outcarry-out its responsibilities. The Compensation Committee engaged Semler BrossyDeloitte Consulting Group, LLC (“Semler Brossy”LLP ("Deloitte Consulting"), an independent compensation consultant, to assist it in fulfilling its responsibility on an as-needed basis during 2012. Semler Brossy2019. Deloitte Consulting was retained directly by the Compensation Committee and has worked with usthe Compensation Committee for eleven years through 2011 and since the beginning of 2012.2015. During 2012, Semler Brossy2019, Deloitte Consulting was engaged to advise the Compensation Committee regarding executive and Board compensation matters, including an analysis of our executive compensation programs, competitive pay benchmarking, incentive plan design,analysis, peer group selection, stock ownership guidelines, updates on trends in executive and director compensation, performance metric plan design, and review of the Compensation Discussion and Analysis and related tables included in our 20122019 Proxy Statement. Semler Brossy performed no

The fees charged by Deloitte Consulting for compensation consulting services and resources during 2019 were $188,271. During 2019, affiliates of Deloitte Consulting provided other services to Cerner that were unrelated to executive compensation matters. The decision to engage affiliates of Deloitte Consulting for us or these other services was made by


our management. For these non-compensation related consulting services, we paid Deloitte Consulting and its affiliates in 2012.$216,148. The Compensation Committee and the Board have been informed of this ongoing work and the use of affiliates of Deloitte Consulting for services unrelated to executive compensation matters, but neither the Board nor the Compensation Committee specifically approved these services.

After considering the independence of Semler BrossyDeloitte Consulting by applying the factors required by the SEC and NASDAQNasdaq rules and determining that Semler Brossy's work has not raised ano conflict of interest exists, the Compensation Committee engaged Semler BrossyDeloitte Consulting as the Company'sits independent compensation consultant for 2013.2020.

Aligning Pay with Performance
During 2012, our management team2019, we continued practices established to closely link pay to performance and more closely align our compensation practices with those of our peers through the increased emphasis on performance-based awards, while balancing the need to ensure the retention value of our long-term incentive awards through the use of service-based awards. As a result, we incorporated PSUs in our long-term incentive plan mix in addition to RSUs, which we believe helped to encourage continued focus on long-term value and growth for our shareholders and provide meaningful alignment to our corporate imperatives and financial performance. AWe also added additional performance metric targets under our performance-based cash compensation plan to further align pay with performance. We continued to use a quarterly performance review process was used to provide quarterlyregular assessments of executives (including the NEOs) on their performance and attainment of Company goals. Under this program, any executive whose performance was evaluated as being in the bottom 20%10% of all executives werewas not generally eligible for pay increases or additional stock option or other equity grants. In addition, such executive's performance-based cash incentive compensation award, if earned, may be reduced or eliminated due to the individual's performance rating. During 2020, we intend to place continued emphasis on linking pay to performance by again granting equity with performance-based vesting conditions and utilizing multiple performance metric targets under our performance-based cash compensation plan. We believe that this approach will closely align compensation with our near and long-term performance objectives as discussed below.

Compensation Elements
Compensation for our NEOs includes: i) base salary, ii) performance-based cash incentive compensation, and iii) long-term incentive plan equity award compensation consistingand iv) certain perquisites as discussed below. In 2019, equity award compensation granted to our NEOs consisted of stock optionsPSUs and performance-based restricted shares.RSUs. To provide incentives to attain our business goals, a significant portion of executive compensation is at-risk and tied to individual and Company performance. Additionally, we provide our NEOs with relatively limited perquisites, which the Compensation Committee believes are reasonable. Our processgoal for allocating between short-term and long-term compensation is to ensure adequate base salarysalaries and cash bonus opportunityopportunities to attract and retain executives, while providing incentives to maximize long-term value for us and our shareholders. We determine the mix of base salary and performance-based cash incentive compensation by balancing the needs of providing adequate guaranteed cash compensation while at the same time providing a meaningful incentive to motivate the executive to achieve the established performance targets. In 2012, the2019, cash compensation package(i.e. base salary and annual bonus) approved for the NEOs ranged from 42% to 53%our CEO was 40% in base salary and 47% to 58%60% in targeted performance-based cash incentive compensation. OurIn 2019, cash compensation (i.e. base salary and annual bonus) approved for our other NEOs ranged from 43% to 48% in base salary and 52% to 57% in targeted performance-based cash incentive compensation. In 2019, 50% of approved targeted equity compensation for our CEO and our other NEOs, other than Mr. Trigg, was in the form of PSUs and 50% was in the form of RSUs. Mr. Trigg’s approved targeted equity compensation in 2019 consisted of 28% in PSUs and 72% in RSUs, due primarily to an additional RSU grant in connection with his promotion to Executive Vice President, Strategic Growth in January 2019. In 2019, our total approved targeted compensation package mix for the NEOs in 2012 ranged from 23% to 46%our CEO was 16% in cash compensation and 54% to 77%84% in equity compensation which includes equity-related awards. Theand for our other NEOs ranged from 20% to 33% in cash compensation mixand 67% to 80% in equity compensation. We granted PSUs and RSUs to all of our NEOs changed over the previous year duein order to an off-cycle adjustment mademore closely align our compensation practices to Zane M. Burke's compensation as discussed in Footnote 1those of the “Summary Compensation Table.” We believe this formula is competitive within the marketplace, appropriateour peer group, provide meaningful alignment to fulfill our corporate objectivesimperatives and addressesfinancial performance and improve the goals outlined below under "Long-Term Incentive Plan Compensation."retention value of our equity awards.

Base Salary. As set forth above, the Compensation Committee reviews peer group data and recommendations proposed by the CEO, CPOChief Human Resources Officer and human resources compensation team prior to approving the base salary of our NEOs during the first quarter of each calendar year. SalaryBase salary is based on the duties and responsibilities that each NEO is expected to discharge during the current year and on the NEO's performance during the prior year. We also perform external market comparisons for the NEOs, relative to industry-specific peers as disclosed above, based on individual job responsibility. This comparison data helps ensure that the proposed NEO's compensation


is within reasonable market comparison ranges and in line with our compensation strategy, detailed above. The Compensation Committee determined that for 2019, base salaries would not be increased for the NEOs, other than Mr. Trigg whose base salary was increased in connection with his promotion to Executive Vice President, Strategic Growth in January 2019.

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Performance-Based Cash Incentive Compensation. OurPerformance-Based Compensation Plan is performance-based cash incentive compensation plans are designed to provide a meaningful incentive on both a quarterly and annual basis to key associates, andincluding the NEOs, and to motivate them to assist in achieving short-term Company goals. Approximately 15%In March 2018, the Compensation Committee adopted the Cerner Corporation 2018 Performance Compensation Plan, effective as of January 1, 2018 (the "Performance Compensation Plan"), to provide for incentive awards granted in 2018 and beyond following passage of The Tax Cuts and Jobs Act, which eliminated the exception under Section 162(m) of the Internal Revenue Code for qualified performance-based compensation payable to "covered employees." The Performance Compensation Plan permits the Company to grant awards of incentive compensation to a participant upon satisfaction of specified performance goals for a particular performance period. Each of our associates areNEOs is eligible to participate in the Performance Compensation Plan. The Compensation Committee has discretion to increase or decrease any calculated performance metric payout under the Performance Compensation Plan based on a subjective performance factor rating for some formthe NEO; provided, however, that the maximum performance-based cash incentive opportunity for an NEO may not exceed 200% of performance-based compensation. These associates are typically sales or executive level associates. the NEO's annual target incentive amount.

Individual payments vary, depending on individual performance and, in some cases, business unit operational achievements. We grant such cash incentive bonuses pursuant to a shareholder approved Performance-Based Compensation Plan. Each of our NEOs is eligible to participate in this plan.
The Performance-Based Compensation Plan is administered by the Compensation Committee, which establishes performance metrics, eligibility and range of incentive amounts. Under the general feature of the plan, for which our NEOs are not eligible, the performance metrics may vary from participant to participant. Adjustments to the performance metrics may be made during the year as appropriate, for example, to take into account unusual or unanticipated Company or industry-wide developments. Final determination of amounts paid to a participant under the general feature of the plan may also be adjusted downward depending on subjective evaluations by the participant's executive or manager.
Performance targets for an upcoming year are initially developed and recommended by management throughin connection with our annual financial planning process during the last quarter of the year. The Compensation Committee reviews the performance targets proposed by management for the NEOs to ensure they reflect appropriate business growth and return to our shareholders.
All of
The Compensation Committee established the financial performance measures ("Performance Measures") for our NEOs are eligiblecash incentive awards granted to participate underour Section 16 officers within the executive featurefirst 90 days of the Performance-Based Compensation Plan. Payments made underyear for the executive feature qualify for deductibility under Section 162(m) of the Internal Revenue Code. The Section 16 Insider Equity2019 quarterly and Incentive Compensation Subcommittee, comprised solely of outside directors as defined under Section 162(m) of the Internal Revenue Code, of the Compensation Committee establishes the targets prior to or at the beginning of the performance period.annual metrics. The measurement of the achievement of such targets can be, andPerformance Measures is determined under pre-established objective formulas. The Section 16 Insider Equityformulas and Incentiveconfirmed by the Compensation Subcommittee may select metricsCommittee. Metrics such as earnings per share, operating margins, contract marginsmeasures, operating/profit margin, cash flow, agreement margin or other metrics specifically permitted by the executive feature ofplan, which may include GAAP and non-GAAP financial measures, may be selected as the plan.Performance Measures. The Section 16 Insider Equity and Incentive Compensation SubcommitteeCommittee selects metrics whichPerformance Measures that it believes will help drive business growth and return to our shareholders, while providing a meaningful incentive on both a quarterly and annual basis to the participants. Once established, the metrics or targets under the executive feature of the plan may not be changed. Bonuses awarded to NEOs under the executive feature of the plan may only be adjusted downward, based on a subjective analysis of the NEO's overall performance, from the maximum bonus amount available to such executive officer. The maximum bonus available is: i) 140% of the target incentive amount based on the pre-approved performance metric for the year, plus ii) 25% of the target incentive amount based on the NEO's individual performance rating as determined by management. Regardless of amounts earned under the performance metrics, the maximum possible payout under the Performance-Based Compensation Plan is capped at 200% of base salary at the time the performance targets are approved for our CEO and 175% of base salary at the time the performance targets are approved for the other NEOs, unless the administrator of the Performance-Based Compensation Plan expressly acknowledges that the availability of Internal Revenue Code Section 162(m)'s performance-based compensation exemption is not desired.

Between Compensation Committee meetings, the Incentive Compensation Plan - Quarterly Administration Subcommittee approves annualmay approve quarterly Performance Measures and quarterly executive targets, approves eligible NEOs for the plan, approves the payment metrics for each NEO and determinesdetermine whether one or more executive targetsPerformance Measures have been satisfied, prior to payment by us to any NEO.

During 2012,2019, the performance metric for our CEO and other NEOs consisted solely of earnings per share ("EPS"), which was chosen to help drive and ensure business growth and return to our shareholders while providing a meaningful incentive on both a quarterly and annual basis. We have used EPS as the sole performance metric for our CEO and other NEOs since 2007 (other than Mr. Burke, who became a NEO in 2011 and whose performance metrics for that year consisted of agreement margin (defined as bookings margin less internal costs) and EPS given that he oversaw our sales organization).

26


As a result of our 2012 performance relative to the attainment of these performance targets, we paid cash bonuses to our NEOs under the Performance-Based Compensation Plan. Aggregate incentives paid to our NEOs in the 2012 fiscal year averaged 140% of the target incentive amount and 92% of the maximum cash incentive opportunity available. Payouts were based solely on attainment of the performance target and no discretionary changes based on performance were made to the amounts earned. Additionally, cash bonus payments tied to the individual performance ratings for each NEO were not approved by the Compensation Committee in 2012 due to the over-attainment of the performance metric and therefore, individual performance ratings were not applied as a factor to the cash bonus payments for any of our NEOs in 2012. The following tables detail the payouts by performance plan metricPerformance Measures for our NEOs in 2012consisted of Adjusted Diluted Earnings Per Share ("adjusted EPS"), revenue and Free Cash Flow. We believe the related performance plan metric attainment by quarter.
NEOPerformance MetricPerformance Plan Target ($)Results Relative to Performance Plan Target ($) (1)Target Attainment %Target Incentive Amount ($)Actual Amount Earned ($) (2)% Earned Relative to Target Incentive AmountMaximum Cash Incentive Opportunity ($)% Earned of Maximum Cash Incentive Opportunity
Neal L. PattersonEarnings Per Share2.202.32105%1,350,000
1,890,000
140%2,050,000
92%
Marc G. NaughtonEarnings Per Share2.202.32105%387,500
542,500
140%639,375
85%
Jeffrey A. TownsendEarnings Per Share2.202.32105%575,000
805,000
140%875,000
92%
Michael R. NillEarnings Per Share2.202.32105%575,000
805,000
140%875,000
92%
Zane M. BurkeEarnings Per Share2.202.32105%397,500
556,500
140%565,250
98%
Totals of Named Executive Officers    3,285,000
4,599,000
140%5,004,625
92%
(1)The results relative to the performance plan target reflect adjustments compared to results reported on a Generally Accepted Accounting Principles ("GAAP") basis in our 2012 consolidated financial statements, included in the 2012 Annual Report on Form 10-K. These numbers have been adjusted by the Compensation Committee for bonus calculation purposes to exclude share-based compensation expense and the impact of certain items that were not originally contemplated in setting plan targets, including a lower tax rate than planned and an investment gain.
(2)Amounts earned were based solely on attainment of the performance metric and do not include any amounts related to individual performance ratings.

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Performance Metric Summary (EPS)
Measurement PeriodTarget (1)Results (2)Attainment %Payout %Quarterly Weighting (3)
Q1$0.48$0.52108%140%15%
Q2 YTD$1.01$1.07106%140%15%
Q3 YTD$1.58$1.67106%140%15%
Q4 YTD$2.20$2.32105%140%55%

(1)Target reflects the 100% performance payout level.
(2)The results relative to the performance plan target reflect adjustments compared to results reported on a GAAP basis. These numbers have been adjusted by the Compensation Committee for bonus calculation purposes to exclude share-based compensation expense and the impact of certain items that were not originally contemplated in setting plan targets, including a lower tax rate than planned and an investment gain.
(3)Quarterly weightings of the annual target incentive amounts, resulting in a weighted-average aggregate incentive payout of 140% by multiplying the payout percentage for each quarter by that quarter's weighting.

During 2012, the NEOs except for Mr. Patterson earned total cash compensation as follows:

Mr. Naughton earned $993,269, which included $450,769 in base salary and $542,500 in payments earned under our Performance-Based Compensation Plan.

Mr. Townsend earned $1,343,462, which included $538,462 in base salary and $805,000 in payments earned under our Performance-Based Compensation Plan.

Mr. Nill earned $1,343,462, which included $538,462 in base salary and $805,000 in payments earned under our Performance-Based Compensation Plan.

Mr. Burke earned $959,885, which included $403,385 in base salary and $556,500 in payments earned under our Performance-Based Compensation Plan.

In 2013, our human resources compensation team, together with executive management, reviewed and considered compensation alternatives related to base salary, performance-based cash incentive compensation and/or long-term incentive plan compensation. Based on this review, the Compensation Committee determined that our compensation approach under all three types of compensation meets the needs and serves the purposes as set forth in this Compensation Discussion and Analysis. For 2013, the Compensation Committee has approved the continued use of adjusted EPS as the sole performance metric for all NEOs. We continue to believe this metric aligns well with our internal financial imperatives to expand operating margin and grow bottom line earnings, and the Compensation Committee believes this is the best performance metric to helphelps drive and ensure business growth and return to our shareholders while providing a meaningful incentive on both a quarterly and annual basis to our NEOs. Adjusted EPS reflects how much value is being made for shareholders, while also taking into account the impact of certain items that we believe may not directly correlate to the underlying performance of our business operations, or that were not originally contemplated in setting plan targets. The 2012Compensation Committee believes the use of revenue and Free Cash Flow as Performance Measures are important to drive focus on growing the top-line and cash flow in addition to earnings. We believe Free Cash Flow is important to enable investors to better understand and evaluate our ongoing operating results and allows for greater transparency in the review and understanding of our overall financial, operational and economic performance, because Free Cash Flow takes into account certain capital expenditures necessary to operate our business. As a result, our calculations of adjusted EPS performanceand Free Cash Flow for incentive compensationcompensatory purposes represented a 25% growth overmay vary from year to year and be different from those used for financial reporting purposes.



The 2019 Performance Measure targets were derived from the prior year. The 2013 performance targets have been set based on the 20132019 financial plan approved by the Board of DirectorsDirectors. The 2019 adjusted EPS and reflect earningsrevenue performance targets for incentive compensation purposes were 7% growth between 16%over 2018 for both metrics. The 2019 Free Cash Flow performance target for incentive compensation purposes differed from that used for financial reporting purposes and 22%.represented a decrease of 18% compared to 2018. The 2013 bonus opportunityreason for the NEOs can range between 0%decreased Free Cash Flow target was because 2018 Free Cash Flow included a significant tax refund, which was not expected in 2019, and 140%lower capital expenditures than what was expected in 2019.

As a result of our aggregate 2019 performance relative to the attainment of the targeted bonus amount, depending onestablished Performance Measures, we made cash awards to our NEOs under the Performance Compensation Plan above the established target level for NEOs receiving awards for all four quarters of performance achieved2019. Aggregate incentives paid to our NEOs in 2013, plus 25%the 2019 fiscal year were 103% of the targeted bonustarget incentive amount (upand 52% of the maximum cash incentive opportunity. Payouts were based solely on attainment of the established targets and no discretionary changes based on individual performance were made to the maximum possibleamounts earned. The following tables detail the payouts by Performance Measure for our NEOs in 2019 and the related Performance Measure attainment by quarter.
NEOPerformance Metric (1)Performance Plan Target ($) (2)Results Relative to Performance Plan Target ($) (2)Target Attain-ment %Target Incentive Amount ($)Actual Amount Earned ($) (4)% Earned Relative to Target Incentive AmountMaximum Cash Incentive Oppor-tunity ($)% Earned of Maximum Cash Incentive Oppor-tunity
          
Brent ShaferAdjusted EPS2.622.68102%600,000
684,000
114%1,200,000
57%
 Revenue5,750,000,0005,692,598,00099%300,000
236,250
79%600,000
39%
 Free Cash Flow600,000,000720,874,000120%300,000
326,250
109%600,000
54%
 Total   1,200,000
1,246,500
104%2,400,000
52%
          
Marc G. NaughtonAdjusted EPS2.622.68102%385,000
438,900
114%770,000
57%
 Revenue5,750,000,0005,692,598,00099%192,500
151,594
79%385,000
39%
 Free Cash Flow600,000,000720,874,000120%192,500
209,344
109%385,000
54%
 Total   770,000
799,838
104%1,540,000
52%
     

 
 
Michael R. NillAdjusted EPS2.622.68102%455,500
519,270
114%911,000
57%
 Revenue5,750,000,0005,692,598,00099%227,750
179,353
79%455,500
39%
 Free Cash Flow600,000,000720,874,000120%227,750
247,678
109%455,500
54%
 Total   911,000
946,301
104%1,822,000
52%
          
John T. PeterzalekAdjusted EPS2.622.68102%350,000
399,000
114%700,000
57%
 Revenue5,750,000,0005,692,598,00099%175,000
137,813
79%350,000
39%
 Free Cash Flow600,000,000720,874,000120%175,000
190,312
109%350,000
54%
 Total   700,000
727,125
104%1,400,000
52%
          
Jeffrey A. Townsend(3)
Adjusted EPS2.622.68102%204,975
218,640
107%409,950
53%
Revenue5,750,000,0005,692,598,00099%102,488
85,406
83%204,975
42%
 Free Cash Flow600,000,000720,874,000120%170,812
167,966
98%341,625
49%
 Total   478,275
472,012
99%956,550
49%
          
Donald D. TriggAdjusted EPS2.622.68102%325,000
372,000
114%650,000
57%
 Revenue5,750,000,0005,692,598,00099%162,500
126,563
78%325,000
39%
 Free Cash Flow600,000,000720,874,000120%162,500
177,812
109%325,000
55%
 Total   650,000
676,375
104%1,300,000
52%
Totals of Named Executive Officers   4,709,275
4,868,151
103%9,418,550
52%



(1)The weighting for these Performance Measures against the total incentive amount available is 50% adjusted EPS, 25% revenue and 25% Free Cash Flow.

(2)The adjusted EPS and Free Cash Flow targets and results we use for our Performance Compensation Plan are non-GAAP financial measures. Our calculation of adjusted EPS and Free Cash Flow for purposes of determining executive compensation may differ from similarly-titled financial measures that we publicly disclose. The adjusted EPS and Free Cash Flow results have been adjusted for performance-based cash incentive calculation purposes as detailed and reconciled to GAAP in Appendix I.

(3)Mr. Townsend retired from his role of Executive Vice President and Chief of Innovation effective November 1, 2019 and transitioned to Executive Senior Advisor. Mr. Townsend was eligible to receive his performance-based cash compensation earned through Q3 2019.

(4)Amounts earned were based solely on attainment of the established Performance Measures and do not include any adjustments related to individual performance ratings. The following tables show 2019 quarterly targets and results by Performance Measure:
Performance Metric Summary (Adjusted EPS)
Measurement PeriodTarget (1)ResultsAttainment %Payout %Quarterly Weighting
      
Q1$0.61$0.61100%100%15%
Q2 YTD$1.25$1.27102%120%15%
Q3 YTD$1.92$1.93101%100%15%
Q4 YTD$2.62$2.68102%120%55%

(1) Target reflects the 100% performance payout underlevel.

Performance Metric Summary (Revenue)
Measurement PeriodTarget (1)ResultsAttainment %Payout %Quarterly Weighting
      
Q1$1,390,000,000$1,389,877,000100.0%100%15%
Q2 YTD$2,824,000,000$2,820,938,00099.9%75%15%
Q3 YTD$4,266,000,000$4,250,366,00099.6%75%15%
Q4 YTD$5,750,000,000$5,692,598,00099.0%75%55%

(1) Target reflects the Performance-Based Compensation Plan) based on100% performance payout level.

Performance Metric Summary (Free Cash Flow)
Measurement PeriodTarget (1)ResultsAttainment %Payout %Quarterly Weighting
      
Q1$117,000,000$123,454,000106%100%25%
Q2 YTD$170,000,000$164,273,00097%75%25%
Q3 YTD$376,000,000$404,108,000107%120%25%
Q4 YTD$600,000,000$720,874,000120%140%25%

(1) Target reflects the NEO's individual100% performance rating as determined by management,payout level.



During 2019, the NEOs, except for the CEO, whose individual performanceMr. Shafer who is evaluated by the Compensation Committee. The EPS target designated for each level of payout,discussed separately below, earned total cash compensation as a percentage of the performance target, is consistent with prior years.follows:

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NEOBase Salary Earned ($)Performance Compensation Plan Payments Earned ($)Total Cash Compensation Earned ($)
    
Marc G. Naughton600,000
799,838
1,399,838
Michael R. Nill690,000
946,301
1,636,301
John T. Peterzalek650,000
727,125
1,377,125
Jeffrey A. Townsend596,961
472,012
1,068,973
Donald D. Trigg609,615
676,375
1,285,990


Performance-based compensation paid to our NEOs for all years beginning with 2008 is subject to "claw back" provisions pursuant to performance plan agreements with our NEOs. These agreements have language stating that in the event we implement a Mandatory Restatement (as defined in the Performance-BasedPerformance Compensation Plan), which restatement relates to the respective fiscal year, some or all of any amounts paid as an incentive payment earned by the NEO under the Performance-Based Compensation Planparticipant and related to such restated period(s) will be recoverable and must be repaid as determined appropriate by our Board of Directors, in most cases within 90 days of such restatement(s). The amount to be repaid will be up to the amount by which the incentive 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(s). Additionally, since 2008,if the language in our incentive plan agreements has provided that all participants (including our NEOs) will be required to repay all earned incentive compensation payments if they areNEO is individually found by our Board of Directors to have engaged in fraud or misconduct that caused or partially caused the need for a Mandatory Restatement.Restatement, then all amounts paid as an incentive payment earned and related to the restated period(s) will be fully recoverable. And, commencing in 2016, all incentive compensation payments earned under our incentive compensation plans that are forfeitable or recoverable by Cerner pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank") and in accordance with any Cerner policies and procedures adopted by the Compensation Committee in order to comply with Dodd-Frank (even if such policies or procedures are adopted in the future), will also be forfeitable.

In 2020, our human resources compensation team, together with executive management, reviewed and considered with the Compensation Committee alternatives related to cash compensation, consisting of base salary and performance-based cash incentive compensation. Based on this review, the Compensation Committee determined that our framework for cash compensation generally meets the needs and serves the purposes as set forth in this Compensation Discussion and Analysis. As a result, the Compensation Committee approved the continued use of adjusted EPS, revenue and Free Cash Flow as Performance Measures for our NEOs under the Performance Compensation Plan.

Long-Term Incentive Plan Compensation. Awards under our Long-TermOur Cerner Corporation 2011 Omnibus Equity Incentive Plan may consist of stock options, restricted stock and performance shares, as well as other awards including stock appreciation rights, phantom stock and performance unit awards, which may be payable in(the "Long-Term Incentive Plan" or the form of Common Stock or cash at the Compensation Committee's discretion; however, the awards granted under the Long-Term Incentive Plan have been primarily in the form of stock options. In 2012, the Compensation Committee approved NEO awards in the form of stock options and performance-based restricted shares. The performance-based restricted shares made to our NEOs (except Mr. Patterson) in 2012 were intended to add additional long-term compensation incentive, increase focus and alignment to corporate strategies and goals and increase retention. In 2013, the Compensation Committee again approved NEO awards in the form of stock options and performance-based restricted shares.
Our equity incentive plan"Omnibus Plan") is designed to drive long-term shareholder value and retain valuable associates and executives by: i) positioning us competitively as an employer, ii) creating an incentive for associates to contribute to our sustained, long-term growth, iii) creating a mutuality of interest between our associates and shareholders, and iv) providing financial incentives for associates. The program encourages associate stock ownership in an effort to align associates' interests with the interests of shareholders.
Awards under our Omnibus Plan may consist of stock options, restricted stock, PSUs, RSUs and performance shares, as well as other awards including stock appreciation rights, phantom stock and performance unit awards, which may be payable in the form of Common Stock or cash at the Compensation Committee's discretion. The Compensation Committee annually approves an annual aggregate value target for all eligible associates excluding the NEOs, other executive officers and members of the Board. The Compensation Committee also approvesBoard, and specific grant levels for the NEOs, other executive officers and members of the Board on an annual basis. Stock optionBoard. Equity grants are typically made to an executive upon commencement of employment with us or upon an associate's promotion to an executive role. Executives are also eligible for additional Long-Term Incentive Plan grants on an annual basis as individual and Company performance warrants. Grants are also made to the top 20% performers below the executive level based upon individual achievements. After careful reviewThe type and size of the grant is based on the individual's level of responsibility; the individual's contributions to the achievement of our financial condition and stock performance duringstrategic objectives; anticipated future contributions to the recent


Company; market pay; and, continuing global economic conditions, the Compensation Committee has re-determined that stock option grants continue to provide the appropriate value and incentive for our associatesNEOs and executives given our historical stock performance, the familiarity of this type of compensation to associates and the fact that exercises have historically generated value to associates in excessother executive officers, consideration of the expense to us.individual's current Cerner equity wealth accumulation.

The Board of Directors has adopted an Equity-based Grant Policy, which outlines the grant practices with respect to equity-based grants awarded under our Long-Term Incentive Plan. This policy establishes grant dates for our equity grant programs to ensureawards that ensures grant dates for such programs will be outside of trading blackout periods except in the case of new hires and as approved by the Compensation Committee. Under the policy, the Board of Directors, the Compensation Committee or an authorized sub-committeesubcommittee of the Compensation Committee approves: i) the equity grant type, ii) the grant date and iii) the number of shares or an objective formula for calculation of the number of shares on the grant date of the annual performance review equity grants made to our NEOs and other executiveSection 16 officers. GrantsStock option grants are made at an exercise price that is equal to the closing market price of our Common Stock on the date of grant. Under the Equity-based Grant Policy, the date of grant of an annual performance review equity grant must be a date set at the time of grant approval, which date: a) shallwill be on or after the grant approval date, b) shallwill not be during a quarterly blackout period as defined in our trading policy, and c) if the Board of Directors or the Compensation Committee is aware of any material, non-public information at the time it approves the grant, shallwill be a date that is at least twoone full trading daysday after the public disclosure of such material, non-public information. Equity grants for new hires shallthat will be Section 16 officers will be the associate's first day of employment or a later equity grant program date. The type and sizedate or such other date after the associate's first day of the grant is based on the individual's level of responsibility, the individual's contributions to the achievement of our

29


financial and strategic objectives, anticipated future contributions to the Company, market pay and, for our NEOs and other executive officers, by reviewing the individual's current equity wealth accumulation. Stock option grants typically vest over a five-year term with 40% vesting at the end of the second year and 20% vesting each year thereafter (this vesting schedule has beenemployment as determined by the Board and is intended to promote long-term investment in our stock). These grants typically expire 10 years from the date of grant. Performance-based restricted shares vest based on performance metrics established at the date of grant. Time-based restricted shares typically vest over a three-year term.Directors or Compensation Committee.

In accordance with our overall compensation philosophy and to align the executives' focus on our long-term performance, we granted stock option awardsPSUs and RSUs to our NEOs including Mr. Patterson and performance-based restricted stock awardsin April 2019. As discussed above, the Compensation Committee sought to more closely align our compensation practices with the market, provide meaningful alignment to our NEOs (except Mr. Patterson), in March 2012. Additionally, individualcorporate imperatives and financial performance and improve the retention value of our long-term incentive awards granted to our NEOs. Individual grants for NEOs were based on job responsibilities, performance during 20112018 and contributions to the achievement of our financial and strategic objectives, anticipated future contributions to the Company, market pay and stock optionequity wealth accumulation - all factors the Compensation Committee believes help ensure we are awardingrewarding such executives competitively and fairly. The other considerations in determining the equity granted to each NEO included the value of the grants and the market position of our compensation within our peer group. Although the size of each NEO's equity grant is based on the factors described above, we do not weight these factors or use a formula to determine the current year's award. The decision is based on the judgment of our CEO (for the other NEOs' awards) and Compensation Committee members who have extensive experience in setting motivating and reasonable compensation arrangements for our NEOs. RSUs granted to our NEOs in 2019 vest ratably over a three-year period. PSUs granted to our NEOs in 2019 vest three years from the date of grant based on the achievement of performance targets.

On April 16, 2019, the Compensation Committee approved the performance target levels for the 2019 PSUs granted to our NEOs. The PSUs will be earned based on Adjusted Operating Margin performance targets established at the beginning of the three-year performance period. Adjusted Operating Margin is measured for each of the three years of the performance period and shares available to be earned are weighted equally at 33% for each of these periods. Each annual measurement period is calculated independently and shares earned will be banked until the vest date, which will occur on the third anniversary of the grant date, subject to continued employment through the vest date.



Performance Period 2019 Targets 2020 Targets 2021 Targets
 Q4 2019 Q4 2020 Full Year 2021
Performance Level Adjusted Operating Margin TargetsAward Earned (as a % of Target Adjusted Operating Margin TargetsAward Earned (as a % of Target Adjusted Operating Margin TargetsAward Earned (as a % of Target)
          
Threshold 19.0%50% 20.0%50% 20.5%50%
  19.5%75% 21.0%75% 21.5%75%
Target 20.0%100% 22.0%100% 22.5%100%
  21.0%150% 22.5%150% 23.0%150%
Maximum 22.0%200% 23.0%200% 24.0%200%

As a result of our Q4 2019 performance relative to the attainment of the established Adjusted Operating Margin performance targets, the following shares were earned and will be banked until the vest date, subject to continued employment through the vest date.

NEO(1)
Grant DateVest DateAvailable SharesPerformance Metric100% TargetActualAward Earned (as a % of Target)Shares Earned
         
Brent Shafer4/29/20194/29/202225,849
Q4 2019 Adjusted Operating Margin20.0%20.3%100%25,849
Marc G. Naughton4/29/20194/29/20226,968
Q4 2019 Adjusted Operating Margin20.0%20.3%100%6,968
John T. Peterzalek4/29/20194/29/20227,514
Q4 2019 Adjusted Operating Margin20.0%20.3%100%7,514
Donald D. Trigg4/29/20194/29/20227,514
Q4 2019 Adjusted Operating Margin20.0%20.3%100%7,514

(1)As discussed in "Potential Payments Upon Termination or Change in Control", all of Mr. Nill's outstanding PSUs were accelerated in connection with his departure. Mr. Townsend forfeited all outstanding PSUs upon his retirement from the role of Executive Vice President and Chief of Innovation effective November 1, 2019.

During 2020, the Compensation Committee intends to place continued emphasis on linking pay to performance and has approved equity grants in the form of PSUs and RSUs to our NEOs for 2020 to encourage continued focus on long-term value and growth for our shareholders, provide meaningful alignment to our corporate imperatives and financial performance and promote retention. For 2020, the Compensation Committee has approved similar stock option grantsthe continued use of Adjusted Operating Margin as the performance metric under the PSUs to be granted to our NEOs for 2013, along with performance-based restricted shares (except Mr. Patterson), to add additional long-term compensation incentive, increase focus and alignment to corporate strategies and goals and increase retention. The detailsNEOs. Details of these grants to NEOs are provided below.
Vesting of Performance-Based Restricted Stock Grants. The following discusses the determination of performance-based shares that will vestdiscussed in 2013 with respect to performance periods ending in 2012.
We granted performance-based restricted stock to each NEO (other than Mr. Patterson) per the following table. These grants vest based on the attainment"Compensation of the performance metric notedother NEOs" and continued employment through"Compensation of the vest date. The table reportsChief Executive Officer."

Perquisites. We offer certain perquisites to our NEOs to help them effectively use their limited personal time and in recognition that they are on call 24 hours a day, seven days a week.

We utilize Company aircraft (whether owned, leased or otherwise made available via fractional leasehold or ownership interest or charter, herein referred to as "Corporate Aircraft") to, among other things, increase the performance against the targetsnumber of client visits our key associates can make, respond quickly to clients (or partners) for meetings, client development or other business reasons, to permit efficiency and the shares that will vestproductivity in route to business meetings and to reduce costs of hotel rooms, rental cars and other expenses required when associates travel for each NEO (other than Mr. Patterson) in 2013.
NEOGrant DateVest DatePossible SharesPerformance MetricTargetActualSubject to Reduction Based on Individual Performance GoalsShares to Vest
Marc G. Naughton3/9/20126/1/2013500
2012 adjusted earnings growth over 20117%30%Yes450
         
Jeffrey A. Townsend6/1/20106/1/20139,000
2012 adjusted earnings growth over 200920%106%Yes8,100
 6/1/20106/1/201330,000
2012 adjusted earnings growth over 200920%106%No30,000
 3/11/20116/1/20134,000
2012 adjusted earnings growth over 201014%66%Yes3,600
 3/9/20126/1/20131,000
2012 adjusted earnings growth over 20117%30%Yes900
   44,000
    42,600
         
Michael R. Nill6/1/20106/1/20139,000
2012 adjusted earnings growth over 200920%106%Yes8,100
 6/1/20106/1/201330,000
2012 adjusted earnings growth over 200920%106%No30,000
 3/11/20116/1/20134,000
2012 adjusted earnings growth over 201014%66%Yes3,600
 3/9/20126/1/20131,000
2012 adjusted earnings growth over 20117%30%Yes900
   44,000
    42,600
         
Zane M. Burke3/9/20126/1/2013500
2012 adjusted earnings growth over 20117%30%Yes450

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Even though the objective performance metrics were attained, the sharesbusiness purposes. In certain circumstances, Corporate Aircraft are available to vest were reduced based on management review NEpoand Compensation Committee approval of each NEO's (other than Mr. Patterson) performance rating and individual performance goal attainment. Management andfor personal use by certain Cerner executives as approved by the Compensation Committee recognizedor executive management. During 2019, the Compensation Committee only approved a personal use value for Mr. Shafer (described below). Personal use of the Corporate Aircraft by the approved NEOs, other executive officers and Directors over or in lieu of any personal use value approved by the Compensation Committee is prohibited unless such use is pursuant to a written aircraft time sharing agreement with us. Notwithstanding the foregoing, however, if there is an empty seat on a business flight, personal use by an NEO, executive officer or Director may be permitted if there is zero


additional incremental cost to Cerner and such personal use is approved by a designated executive officer or the Compensation Committee. Business travel needs override all personal use requests.

In certain circumstances, we provide financial assistance to facilitate a move when we request an associate to relocate for Cerner business purposes. The Compensation Committee previously approved a relocation package for Mr. Townsend for his temporary relocation from Kansas City, Missouri to Salt Lake City, Utah. He received his final payments related to his relocation package in January 2020 for expenses incurred in 2019, consisting of $79,412 plus a reimbursement to cover the taxes on his return to origin package. This tax reimbursement is consistent with our broad-based relocation policy and market practice.

The Compensation Committee believes that whilethe perquisites provided to our performance and our NEOs' individual performance was outstanding in 2012, there was still opportunity for improvement. The sharesNEOs are reasonable. Except as specifically noted, we generally do not pay any tax gross-ups with regard to vest for each NEO (other than Mr. Patterson) as noted in the table are contingent upon each individual's continued employment through the June 1, 2013 vesting date.taxable income related to these perquisites.

Compensation of the Chief Executive Officer
The Compensation Committee generally determines compensation for the CEO using the same criteria it uses for other NEOs.NEOs; provided, that the Compensation Committee may deviate from this approach in certain situations, such as in connection with a CEO transition. The Compensation Committee meets each year in executive session to evaluate the performance of the CEO and determine his appropriate compensation package, including base salary, performance-based cash incentive compensation, long-term incentive compensation, benefits and perquisites, if any.

In March 2012,For 2019, the Compensation Committee determined that it would increase Mr. Patterson'sShafer's cash compensation would remain the same as explained in the following paragraph. Mr. Patterson was issued a stock option grant of 80,000 shares with an exercise price equal to the closing fair market value on March 9, 2012, the date of the grant. Mr. Patterson's total compensation2018 and approved his continued to approximate the median of our peer group, similar to 2011. In particular, the Compensation Committee noted that, under Mr. Patterson's leadership in 2011, we exceeded internal revenue, earnings and cash flow targets and implemented strategies for our solutions to qualify for participation in the economic stimulus package for our clients, which benefitted us by increasing demand for our solutions. The Compensation Committee also noted that under Mr. Patterson's leadership we continued to leverage our size, scale, existing intellectual property and business models to expand our boundaries and new market entry through innovation and development of new solutions and services. The Compensation Committee also recognized our solid execution in our global markets and that Mr. Patterson is recognized externally for his visionary leadership in the industry and history of innovation. The Compensation Committee also noted that Mr. Patterson successfully focused the organization on key strategies to compete effectively, including a focus on the physician experience. The Compensation Committee also noted that Mr. Patterson exceeded expectations in organizing and developing management teams and that our operating and financial performance in sustaining long-term growth in backlog, revenue and earnings with 10-year (2001 to 2011) compounded annual revenue and net earnings growth rates of 15% and 25%, respectively, and strong cash flow are notable achievements.

Specifically in 2012, the Compensation Committee and the Section 16 Insider Equity and Incentive Compensation Subcommittee of the Compensation Committee (with respect to equity and incentive compensation grants) approved a base salary of $1,025,000 effective March 25, 2012 (which is unchanged from Mr. Patterson's 2011 base salary)$800,000 and a performance-based cash incentive compensation target opportunity of $1,400,000 effective April 1, 2012 (with a$1,200,000. Mr. Shafer's maximum performance-based cash incentive opportunity of $2,050,000) for Mr. Patterson. During 2012, Mr. Patterson earned total cash compensation of $2,915,000 which included $1,025,000 in base salary and $1,890,000 in payments earned under our Performance-Based Compensation Plan. Mr. Patterson earned 140% of the target incentive amount and 92% of the maximum cash incentive opportunity available to him2019 under the Performance-Basedterms of our Performance Compensation Plan during 2012. Mr. Patterson also earned a total of $122,473 in other compensation from: i) private use of the corporate jet ($110,000), ii) Company provided life insurance ($244), iii) 401(k) match ($4,950), iv) the second tier 401(k) match ($5,862) and v) home/office security system ($1,417).
The Compensation Committee has determined that Mr. Patterson's base salary for 2013 shall remain at $1,025,000 and his performance-based cash incentive compensation target shall be increased to $1,550,000. The maximum performance-based cash incentive opportunity is $2,050,000was $2,400,000 (which represents the maximum possible payout opportunity for him under the Performance-BasedPerformance Compensation Plan pursuantPlan). As approved by the Compensation Committee, Mr. Shafer received a grant on April 29, 2019, of PSUs equivalent to 77,547 shares, with a grant date fair value of $5,108,796. These PSUs will vest on April 29, 2022, subject to meeting the limitationsAdjusted Operating Margin performance metrics approved by the Compensation Committee and continued employment through the vest date. Also as approved by the Compensation Committee, Mr. Shafer received a grant on April 29, 2019 of Section 162(m)RSUs equivalent to 77,547 shares, with a grant date fair value of $5,108,796. These RSUs will vest in equal portions on April 29, 2020, 2021 and 2022, subject to continued employment through the Internal Revenue Code). applicable vesting dates.

The Compensation Committee also approved Mr. Patterson'sShafer's personal use of the Corporate Aircraft in 20132019 up to a value of $110,000 (which is unchanged from Mr. Patterson's allotted personal use in 2012).$100,000. We convert the Compensation Committee approved value of personal use of Corporate Aircraft value into hours of flight time in accordance with corporate policies based on the incremental cost to use Cerner's Corporate Aircraft and excluding any deadhead hours. Any"deadhead" hours and any additional incremental cost incurred in connection with Cerner's decision to require an executive to use third party aircraft made available to Cerner under a fractional ownership or leasehold program or charter instead of Company leased aircraft when business needs dictate.

In 2019, Mr. Shafer earned total cash compensation of $2,046,585 which included i) $800,000 in base salary, ii) $1,246,500 in payments earned under our Performance Compensation Plan, and iii) an immaterial amount in payments relating to Mr. Shafer's Corporate Aircraft benefit discussed below. Mr. Shafer's earned Performance Compensation Plan payment equaled 104% of the target incentive amount and 52% of the maximum cash incentive opportunity available to him under the Performance Compensation Plan during 2019.

During 2019, Mr. Shafer's personal use of the Corporate Aircraft by Mr. Patterson exceedingwas below the Compensation Committee approved value, is permitted pursuant toand therefore we paid him an immaterial amount which was the termsdifference between the approved value and conditionsthe value of an Amended and Restated Time Sharing Agreement between Mr. Patterson and us, which requires Mr. Patterson to pay ushis personal use. However, for SEC reporting purposes, the actual incremental cost

31


for suchapproved value of $100,000 plus deadhead costs of $57,292 (which were not counted against his personal use (including any deadhead hours). Anylimit) must be aggregated and reported as a perquisite. Therefore, the incremental cost to us of Mr. Shafer's personal use of our Corporate Aircraft was $157,292.

For 2020, the Compensation Committee approved value for Mr. Shafer an increase in base salary to $850,000 effective March 29, 2020 and an increase in performance-based cash incentive compensation target to $1,275,000 effective April 1, 2020. His maximum performance-based cash incentive opportunity for 2020 under the terms of our Performance


Compensation Plan will be $2,512,500 (which represents the maximum possible payout opportunity for him under the Performance Compensation Plan). The Compensation Committee also approved Mr. Shafer's personal use of the Corporate Aircraft thatin 2020 up to a value of $100,000, calculated consistently with past practice (which is not used during the year is paid out tono change from Mr. Patterson at the end of the calendar year for which the compensation was awarded. On February 28, 2013, the Section 16 Insider Equity and Incentive Compensation Subcommittee of theShafer's allotted personal use in 2019). The Compensation Committee also approved a stock option grant to Mr. PattersonShafer of 80,000 sharesPSUs with a grant date fair value of $3,850,000 and RSUs with a grant date fair value of $3,850,000, both of which waswill be granted to Mr. Shafer on March 1, 2013. His 2013 base salary became effective March 24, 2013April 30, 2020. The RSUs will vest in equal portions on April 30, 2021, April 29, 2022 and his 2013 performance-based cash incentive compensation became effective March 31, 2013.April 28, 2023, subject to continued employment through such vesting dates. Mr. Shafer's PSUs will vest on April 28, 2023, subject to meeting the Adjusted Operating Margin performance metrics approved by the Compensation Committee and continued employment through the vesting date.

Compensation of the other NEOs
The Compensation Committee and the Section 16 Insider Equity and Incentive Compensation Subcommittee of the Compensation Committee (with respect to equity and incentive compensation grants) has approved the 20132019 compensation packages, effective March 24, 201331, 2019 for base salaries March 31, 2013 forand performance-based cash incentive compensation, and March 1, 2013April 29, 2019 for annual equity grants, for each of the NEOs, other than the CEO, as follows:
NEOBase Salary (US$)Performance-based Cash Incentive Target (US$)Maximum Performance-based Cash Incentive Opportunity (US$)Equity Grant (Shares)Base Salary ($)Performance-based Cash Incentive Target ($)Maximum Performance-based Cash Incentive Opportunity ($)Equity Grant (PSUs and RSUs) (#)
Equity
Grant ($) (2)
 
Marc G. Naughton475,000435,000703,313
25,000(2)
5,000(3)
600,000770,0001,540,000
20,906(3)
1,377,287
 
20,906(4)
1,377,287
Michael R. Nill690,000911,0001,822,000
27,773(3)
1,829,685
 
27,773(4)
1,829,685
John T. Peterzalek650,000700,0001,400,000
22,543(3)
1,485,133
 
22,543(4)
1,485,133
Jeffrey A. Townsend570,000650,000
962,500(1)
40,000(2)
10,000(3)
690,000(1)
911,000(1)
1,822,000(1)
27,773(3)
1,829,685
Michael R. Nill570,000650,000
962,500(1)
40,000(2)
10,000(3)
Zane M. Burke500,000
787,500(1)
40,000(2)
10,000(3)
 
27,773(4)
1,829,685
Donald D. Trigg650,000700,0001,300,000
22,543(3)
1,485,133
 
22,543(4)
1,485,133
 
36,068(5)
2,376,160

(1)RepresentsMr. Townsend served as an executive officer until his retirement from the role of Executive Vice President and Chief of Innovation of Cerner effective November 1, 2019, at which time he transitioned to an Executive Senior Advisor and his salary was reduced to $100,000 annually and his performance-based cash incentive was removed. His pro-rated maximum possible payout under the Performance-Based Compensation Plan pursuant to the limitations of Section 162(m) of the Internal Revenue Code. The amounts reflected represent 175% of base salary levels at the time the performance targets were approved.performance-based cash incentive opportunity for 2019 was $956,550.

(2)Non-qualified stock option.These amounts reflect the grant date fair value of the PSU or RSU awards granted under our Long-Term Incentive Plan as described under "Compensation Elements - Long-Term Incentive Plan Compensation." Refer to Note 16 in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for fiscal year ended December 28, 2019 for the relevant assumptions used to determine the valuation of these awards.

(3)Performance-based restricted shares.PSUs. The terms of these grants are set forth below.PSUs were granted on April 29, 2019 and will vest on April 29, 2022, subject to meeting the Adjusted Operating Margin performance metrics approved by the Compensation Committee and continued employment through the applicable vest date.


32


The performance-based restricted stock grants made
(4)RSUs. The RSUs were granted on April 29, 2019 and will vest in equal portions on April 29, 2020, April 29, 2021 and April 29, 2022, subject to four of our NEOs disclosed above will vest on the following schedule based on attainment of the related performance target noted and the NEO's continued employment through the vesting date.


10% of the shares shall vest on June 1, 2014 if our reported adjusted earnings for fiscal year 2013 are equal to or greater than a 7% increase over our reported adjusted earnings for fiscal year 2012
10% of the shares shall vest on June 1, 2015 if our reported adjusted earnings for fiscal year 2014 are equal to or greater than a 14% increase over our reported adjusted earnings for fiscal year 2012
80% of the shares shall vest on June 1, 2016 if our reported adjusted earnings for fiscal year 2015 are equal to or greater than a 20% increase over our reported adjusted earnings for fiscal year 2012
(5)RSUs. The RSUs were granted to Mr. Trigg on April 29, 2019 in connection with his promotion to Executive Vice President, Strategic Growth. The RSUs will vest in equal portions on April 29, 2021 and April 29, 2022, subject to continued employment through the applicable vesting date.

The numberCompensation Committee approved increases to the base salaries and performance-based cash incentive compensation targets for the NEOs for 2020. Base salary increases are effective March 29, 2020 and performance-based cash increases are effective April 1, 2020. Mr. Trigg and Mr. Peterzalek's increases are reflective of shares vesting is subjecttheir promotions to reduction downPresident and Executive Vice President and Chief Client and Services Officer, respectively. The following reflects the 2020 compensation for the NEOs who continue to zero based on each NEO's individual performance rating and performance goal attainment.be employed by the Company as executive officers as approved by the Compensation Committee:
NEOBase Salary ($)Performance-based Cash Incentive Target ($)Maximum Performance-based Cash Incentive Opportunity ($)
Equity
Grant ($)
     
Marc G. Naughton620,000785,0001,562,500
1,422,500(1)
    
1,422,500(2)
John T. Peterzalek675,000875,0001,662,500
2,000,000(1)
    
2,000,000(2)
Donald D. Trigg700,000750,0001,475,000
3,000,000(1)
    
3,000,000(2)

(1)PSUs. The PSUs will be granted to the NEOs on April 30, 2020 and will vest on April 28, 2023, subject to meeting the Adjusted Operating Margin performance metrics approved by the Compensation Committee and continued employment through the vesting date. The amounts reflect the grant date fair value of the PSU awards that will be granted under our Long-Term Incentive Plan as described under "Compensation Elements - Long-Term Incentive Plan Compensation."

(2)RSUs. The RSUs will be granted to the NEOs on April 30, 2020 and will vest in equal portions on April 30, 2021, April 29, 2022 and April 28, 2023, subject to continued employment through the applicable vesting date. The amounts reflect the grant date fair value of the RSU awards that will be granted under our Long-Term Incentive Plan as described under "Compensation Elements - Long-Term Incentive Plan Compensation."

Internal Pay Equity
Our internal pay equity guidelines provide that the CEO's total cash compensation shall not be more than three times that of the next highest executive officer's total cash compensation. Our Board must approve any exception to these guidelines. Compensation decisions for 2019 and 2020 were in line with these guidelines.

Stock Ownership Guidelines
Under our stock ownership guidelines, our non-employee Board membersDirectors and every associate that is a vice-presidentvice president or higher in rank, are required to have a certain level of sharestock ownership in our Company. Ownership in our Company demonstrates a long-term commitment and ensures strong alignment of interests of Directors and officersour leadership with the interests of shareholders. The stock ownership guidelines establish an annual measurement date of January 1st of each year. The Compensation Committee amended the stock ownership guidelines in June 2012 and reviewed the revised guidelines in March 20132020 to be sure they remain reasonable and meet the intended purpose.



Unlike typical ownership guidelines that are based on a multiple of salary or fixed number of shares, our guidelines (referred to as an "Ownership Percentage") require the retention of 45% to 80%75% of equity awards made to our officersexecutives and outsidenon-employee Directors. We believe this generally leads to significantly higher stock ownership requirements than other stock ownership policies.

Ownership Percentage Requirement  
Board of Directors (non-employees) 8075%
Chief Executive Officer 75%
President and Executive Vice President 65%
Senior Vice President 55%
Vice President 45%

Ownership Percentage Formula = Ownership Position (defined below) divided by the number of shares underlying stock options granted during the seven years immediately preceding the annual measurement date + 50% of restricted stock, PSU awards and RSU awards granted during the seven years immediately preceding the annual measurement datedate.

The “Ownership Position”"Ownership Position" includes any shares fully owned, including shares owned by a spouse, dependent children or a trust,trust; outstanding stock options (unexercised vested and non-vested),; fully vested shares held in our 401(k) plan,plan; shares held inpurchased through, and subject to restriction under, our Associate Stock Purchase Plan ("ASPP"),; 50% of non-vested restricted stock, PSU awards and RSU awards; and shares held in our deferred compensation plan.

33


For all Directors and officers subject to the guidelines, aA reduced ownership requirement scale will beis applied based on tenure. For non-employee Directors, a 10% per year reduced ownership requirement scale after the first year of service will be applied based on years of service with the Board, with a minimum ownership requirement of five times the annual cash retainer (as set for a given year), regardless of tenure. For officers,our management subject to the guidelines, a 2% per year reduced ownership requirement scale will be applied after ten years of service with a minimum ownership requirement of one-half of the Ownership Percentage Requirement noted above regardless of tenure. The guidelines also include hardship and retirement provisions in order to allow executives to diversify a portion of their stock holdings as they approach retirement.

At the annual measurement date on January 1, 2013,2020, all of the NEOs and non-employee Directors who were subject to the guidelines on that date were compliant with the applicable stock ownership guidelines. The guidelines allow any officer or Director who is not currently compliant to submit a plan to the CEO and CPOChief Human Resources Officer indicating how compliance will be achieved within a five-year timeframe.

Retirement
We have a 401(k) retirement plan in which contributions are made by us to the NEOs on the same basis as to all other associates. We offer this plan as part of our overall benefits and compensation package to remain competitive in the market and retain talent. We make matching contributions to the plan, on behalf of participants, in an amount equal to 33% of the first 6% of the participant's salary contribution. We also have the option to make a second tier discretionary match to participants' accounts deferring at least 2% of their base salary, based on attainment of established earnings per share targets forif approved by the year.Compensation Committee or its Incentive Compensation Plan - Quarterly Administration Subcommittee. The discretionary match is calculated as a percentage of paid base salary to plan participants based on performance against earnings per shareestablished financial metric targets, such as adjusted EPS targets used in our Performance-BasedPerformance Compensation Plan andPlan. A second tier match was paid at 2% of eligible paid base salary for 2012.2019.

Associate Stock Purchase Plan
We have an Associate Stock Purchase Plan under which participants may elect to contribute 1% to 20% of eligible compensation to the plan, subject to annual limitations determined byin accordance with the Internal Revenue Service.Code. Participants may purchase our Common Stock at a 15% discount on the last trading day of the purchase period. All associates that meet the eligibility requirements under the ASPP,Associate Stock Purchase Plan, including the NEOs, are allowed to participate with the exception of those who own an aggregate of 5% or more of the total outstanding shares of our stock.



Health and Welfare Benefits and Insurance
We havealso offer medical, dental, vision, group term life, accidental death and visiondismemberment and travel accident insurance plans in which contributions are made by usour NEOs may elect to the NEOs on the same basis as to all other associates. Also, theparticipate. The cost of these plans and opportunity for benefits thereunder are the same for the NEOs as for all other U.S. based associates and any Company contributions are made to the NEOs on the same basis as to all other U.S. based associates. We offer these plans as part of our overall benefits and compensation package to remain competitive in the market and retain talent.

PerquisitesEmployment Agreements
We consider offering perquisitesenter into employment agreements with all of our associates, including all of the NEOs. The material terms of the NEOs' employment agreements (and, as applicable, as supplemented and amended by a Cerner Executive Severance Agreement) provide:
i)for at-will employment;
ii)for Mr. Shafer, an annual base salary, a potential annual bonus and specified use of our Corporate Aircraft, all as determined annually by the Board;
iii)for severance payments and benefits upon certain termination events, as discussed in detail below under "Potential Payments Upon Termination or Change in Control";
iv)for assignment to us of all discoveries, inventions, improvements or other work product related to our business;
v)for a nondisclosure provision that survives in perpetuity;
vi)for each of the NEOs other than Mr. Townsend, non-competition and non-solicitation provisions that are effective during the term of the executive's employment and for two years following termination of employment for any reason; for Mr. Townsend, non-competition provisions that are effective during the term of Mr. Townsend's employment and for three years following the termination of employment for any reason; and
vii)for Mr. Shafer general mutual indemnification obligations with us.

Additionally, all of our NEOs have voluntarily executed a Cerner mutual arbitration supplement to help them effectively use their limited personal time andemployment agreements, the form of which is substantially similar to that executed by most of our U.S. based associates, whereby the associate voluntarily agrees to mutual arbitration in recognition that they are on call 24 hoursthe event of a day, seven days a week.dispute with Cerner.

To increase the number of client visits our key executives can make and to reduce the physical strain of their heavy travel schedules, we own and/or lease Corporate Aircrafts. In limited circumstances, the Corporate Aircraft is available for personal use by certain Cerner executives as approved by the Compensation Committee or executive management. Our NEOs, other executive officers and Directors may use the Corporate Aircraft for personal use only if such personal use is pre-approved (with a pre-approved value) by the Compensation Committee. At this time the Compensation Committee has only approved a personal use value for Mr. Patterson (described above) and Mr. Clifford W. Illig, our Vice Chairman. Personal use of the Corporate Aircraft by the approved NEOs, other executive officers and Directors over or in lieu of any personal use value approved by the Compensation Committee is prohibited unless such use is pursuant to a written aircraft time sharing agreement with us. Business travel needs override all personal use requests.
In 2013, the Compensation Committee approved Mr. Patterson's (and his family's) use of the Corporate Aircraft for personal use up to $110,000 in value (calculated at the incremental cost to use Cerner's Corporate Aircraft (including when using non-Cerner aircraft in accordance with corporate policies) excluding "deadhead" hours), which allows Mr. Patterson to use his limited personal time effectively. During 2012, Mr. Patterson's personal use of our

34


Corporate Aircraft was valued at $151,740 incremental cost to us, including deadhead hours. Any amounts approved by the Compensation Committee but not used by the end of the calendar year will be paid out directly to Mr. Patterson.
In December 2006, we entered into an Aircraft Time Sharing Agreement with Mr. Patterson. This Aircraft Time Sharing Agreement was amended and restated in February 2013. Mr. Patterson's Amended and Restated Aircraft Time Sharing Agreement governs any personal use flights on the Corporate Aircraft by Mr. Patterson that exceed the Compensation Committee approved value. Mr. Patterson will pay us for the actual expenses of each specific flight, including the actual expense items of any "deadhead" flights that exceed the Compensation Committee approved value. The Compensation Committee has not designated any other NEOs as eligible to use the Corporate Aircraft for personal use up to a pre-approved value, and no other NEOs have entered into an aircraft time sharing agreement with us for personal use of the Corporate Aircraft.
We do not pay any tax gross-ups with regard to the taxable income related to these perquisites.
Severance Arrangements
Because employment with Cerner is at-will, Cerner has no obligation to compensate any associate upon termination from his or her employment other than as may be provided in that associate's employment agreement (including as amended by a Cerner Associate Employment AgreementExecutive Severance Agreement) or as specifically set forth in our Enhanced Severance Pay Plan, which was first approved in 2005. All of our NEOs have entered into and have the benefit of the contractual severance set forth in their employment agreements, and, as applicable, their Cerner Executive Severance Agreements, which supersede any benefits that may have otherwise been available to the NEOs under the Enhanced Severance Pay Plan. We provide the enhanced contractual severance benefits to promote the retention of our NEOs and to ensure continuity and stability in Cerner's business.

Our Enhanced Severance Pay Plan applies to all of our U.S.-based permanent, full-time associates (other than those associates who we have granted contractual severance benefits) and offers severance pay upon certain termination without cause events or qualifying terminations or resignations for good reason following a change in control. We recognize that business needs, an associate's work performance or other reasons may require termination of employment. Because we value the contributions of our associates, we promote compensation tools that will create and maintain a productive and fulfilling work environment, which tools also help with our recruiting and retention efforts. Our Enhanced Severance Pay Plan, is usedas well as our limited contractual severance arrangements, are intended to: show that we value our associates and that we are interested in helping to mitigate the financial hardship caused by business conditions or other factors necessitating a termination;associates; help recruit and assure retention of valuable associate experience, skills, knowledge and background; and, reinforceretain qualified associates; and encourage continued attention and dedication to duties without distraction arising from the possibility of a change in control of the Company. We do not pay tax gross-ups on any severance payments.

Our Enhanced Severance Pay Plan is discussed in more detail below underMr. Townsend served as an executive officer until his retirement from the heading "Employment Agreements & Potentialrole of Executive Vice President and Chief of Innovation effective November 1, 2019. On the same date, he transitioned to Executive Senior Advisor. Mr. Nill served as an executive officer until his departure from the Company on January 10, 2020. Refer to "Potential Payments UnderUpon Termination or Change in Control."
Employment Agreements
We enter into employment agreements with all of our associates, including all of the NEOs. Refer to "Employment Agreements & Potential Payments Under Termination or Change In Control" for further details.



Deductibility of Executive Compensation
Prior to January 1, 2018, any amounts that qualified under the "performance-based compensation" exception under Section 162(m) ofwere excluded from the Internal Revenue Code generally disallows a federal income tax deduction to a public company for compensation over $1 million per fiscal year deduction limit for qualifying compensation paid to "covered employees". Pursuant to the tax reform legislation passed in December 2017, commonly referred to as The Tax Cuts and Jobs Act, this "performance-based compensation" exception was eliminated, effective for taxable years beginning after December 31, 2017, such that compensation paid to a public company's chief executive officer"covered employees" in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017 (the "Section 162(m) Grandfather"). We intend to administer outstanding arrangements and its three other most highly compensated NEOs serving at the end of that year. Not subjectplans to the deductibility limit, however, is compensationextent compatible with business needs to preserve potential deductions that qualifies as "performance-based" compensation. Our objective is to maximizemay be available under the Section 162(m) Grandfather.

Although deductibility of compensation is preferred, tax deductibility is not the primary objective of our compensation programs. The Compensation Committee considers the impacts of all relevant tax provisions in developing, implementing, and administering our compensation programs. However, the Compensation Committee balances this consideration with our primary goal of structuring compensation programs to attract, motivate, reward and retain qualified associates. In addition, there can be no assurance that compensation intended to satisfy the requirements for deductibility under the Section 162(m) Grandfather will in fact be deductible. Further, the Compensation Committee reserves the right to modify compensation that was initially intended to be exempt under the extent doing so is reasonable andSection 162(m) Grandfather if it determines that such modifications are consistent with our strategies and goals. Gains on exercises of stock options awarded under our shareholder approved Long-Term Incentive Plan and payments under our shareholder approved Performance-Based Compensation Plan are considered to be "performance-based" compensation not subject to the Section 162(m) deductibility limit. The Compensation Committee may from time to time approve compensation that is not deductible under Section 162(m).


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SUMMARY COMPENSATION TABLE

The following table sets forth information regarding compensation earned by our Chief Executive Officer, our Chief Financial Officer and the three other most highly compensated NEOs for the Company's last three fiscal year ended December 29, 2012.years.
Name and Principal PositionYear (1)Salary ($)Bonus ($)Stock Awards ($)(2)Option Awards ($)(3)Non-Equity Incentive Plan Compensation ($)(4)
Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)
All Other Compensation ($)(5)Total ($)
Neal L. Patterson
Chairman of the Board, Chief Executive Officer and President
20121,025,000
—
—
2,804,440
1,890,000
—
164,213
5,883,653
20111,025,000
—
—
2,829,228
1,618,750
—
148,772
5,621,750
20101,005,385
—
—
2,693,424
1,263,450
—
129,427
5,091,686
          
Marc G. Naughton
Executive Vice President and Chief Financial Officer
2012450,769
—
384,300
876,388
542,500
—
11,031
2,264,988
2011413,077
—
—
720,167
472,500
—
11,154
1,616,898
2010386,538
—
—
673,356
351,600
—
10,562
1,422,056
          
Jeffrey A. Townsend
Executive Vice President and Chief of Staff
2012538,462
—
768,600
1,402,220
805,000
—
11,056
3,525,338
2011489,615
—
2,064,000
—
665,000
—
11,213
3,229,828
2010451,538
—
2,047,500
—
494,100
—
10,612
3,003,750
          
Michael R. Nill
Executive Vice President and Chief Operating Officer
2012538,462
—
768,600
1,402,220
805,000
—
11,056
3,525,338
2011476,923
—
2,064,000
—
647,500
—
11,202
3,199,625
2010394,231
—
2,047,500
—
424,500
—
10,567
2,876,798
   
   
  
Zane M. Burke
Executive Vice President-Client Organization
2012403,385
—
1,123,500
1,903,848
556,500
—
15,863
4,003,096
2011321,154
—
—
873,851
459,848
—
14,847
1,669,700
Name and Principal Position at 2019 FYE (1)YearSalary ($)Bonus ($)Stock Awards ($) (2)Option Awards ($) (3)Non-Equity Incentive Plan Compensation ($) (4)Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)
All Other Compen-
sation
($) (5)
Total ($)
          
Brent Shafer
Chairman of the Board and Chief Executive Officer
2019800,000
—
10,217,593
—
1,246,500
—
274,704(6)

12,538,797
2018729,231
—
3,700,014
4,000,014
895,055
—
308,687
9,633,001
          
Marc G. Naughton
Executive Vice President and Chief Financial Officer
2019600,000
—
2,754,575
—
799,838
—
45,971(7)

4,200,384
2018582,500
—
550,725
1,621,772
586,875
—
7,508
3,349,380
2017530,000
—
2,937,714
1,606,137
431,513
—
5,346
5,510,710
          
Michael R. Nill
Executive Vice President and Chief Operating Officer
2019690,000
—
3,659,370
—
946,301
—
60,118(8)

5,355,789
2018683,750
—
735,139
2,165,320
740,100
—
7,508
4,331,817
2017665,000
—
4,923,966
2,569,819
668,650
—
5,346
8,832,781
          
John T. Peterzalek
Executive Vice President and Chief Client Officer
2019650,000
—
2,970,266
—
727,125
—
65,614(9)

4,413,005
2018516,183
—
2,409,038
1,204,616
447,077
—
7,508
4,584,422
          
Jeffrey A. Townsend
Former Executive Vice President and Chief of Innovation
2019596,961
—
3,659,370
—
472,012
—
146,082(10)

4,874,425
2018683,750
—
735,139
2,165,320
740,100
—
61,100
4,385,409
2017665,000
—
4,923,966
2,569,819
668,650
—
43,046
8,870,481
   
   
 

Donald D. Trigg
Executive Vice President, Strategic Growth
2019609,615
—
5,346,426
—
676,375
—
70,271(11)

6,702,687
        

(1)Only 2012Mr. Shafer joined the Company as Chairman of the Board and 2011 information is reported forChief Executive Officer in February 2018. Mr. Burke since he was notNill departed the Company on January 10, 2020. Mr. Townsend served as an NEO or executive officer in 2010. Mr. Burke received an off-cycle compensation increase during 2012 to alignuntil his compensation opportunity with those in the top quartile relative to scope of responsibility and value created. Specifically, Mr. Burke's base salary increased to $450,000 effective July 29, 2012 and his performance-based cash incentive increased to $450,000 effective July 1, 2012. He also received additional equity grants as disclosed in Footnote 6 of the “2012 Grants of Plan-Based Awards” table.


retirement from the role of Executive Vice President and Chief of Innovation of Cerner effective November 1, 2019, at which time he transitioned to Executive Senior Advisor. Mr. Trigg was promoted to President and Mr. Peterzalek was promoted to Executive Vice President and Chief Client and Services Officer on February 18, 2020.

(2)In 2012, restricted stock awards wereThese amounts reflect the grant date fair value of the PSUs and RSUs granted pursuant to a three-year performance vesting timeframe under our Long-Term Incentive Plan.  The amounts above reflectPlan as described under "Compensation Elements - Long-Term Incentive Plan Compensation" and "Compensation of the aggregate grant date fair valueChief Executive Officer" in our Compensation Discussion and Analysis, computed in accordance with FASB ASC Topic 718718. Refer to Note 16 in relationthe Notes to Consolidated Financial Statements included in the 2012 three-year performance vesting timeframe atAnnual Report on Form 10-K for the fiscal year ended December 28, 2019 for the relevant assumptions used to determine the grant date fair value of our stock awards. The PSU grant date fair value included in the table above reflects the probable outcome of the performance metrics being achieved at 100% target as of the date of grant. The actual amounts that will be earned under the 2012 restricted stock grants during the three-year vesting timeframe are dependent upon the achievement of pre-established performance goals and potential reduction of vesting amounts based on subjective performance evaluations.goals. The above numbers assumePSU grant date fair value at the maximumhighest level of performance againstachievement of the performance metrics (200%) would equal the following amounts: Mr. Shafer, $10,217,593; Mr. Naughton, $2,754,575; Mr. Nill, $3,659,370; Mr. Peterzalek, $2,970,266; Mr. Townsend, $3,659,370; and no reductionMr. Trigg, $2,970,266. Mr. Townsend forfeited the PSUs and RSUs granted to him in vesting amounts related to2019 upon his retirement from the subjective performance evaluations.role of Executive Vice President and Chief of Innovation effective November 1, 2019.

(3)These amounts reflect the grant date fair value of the option awards granted.granted under our Long-Term Incentive Plan as described under "Compensation Elements - Long-Term Incentive Plan Compensation" and "Compensation of the Chief Executive Officer" in our Compensation Discussion and Analysis, computed in accordance with FASB ASC Topic 718. Refer to Note 16 in the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the fiscal year ended December 29, 201228, 2019 for the relevant assumptions used to determine the valuationgrant date fair value of our option awards.

(4)Reflects payments madeearned under our Performance-BasedPerformance Compensation Plan as described above under "Compensation Elements - Performance-Based Cash Incentive Compensation."Compensation" and "Compensation of the Chief Executive Officer" in our Compensation Discussion and Analysis.

36


(5)This column includes the aggregate incremental cost to us of providing perquisites and other personal benefits to the NEOs. It includesNEOs, as well as our matching contributions (both fixed and discretionary) to the NEOs' accounts pursuant to our 401(k) retirement plan premiumsand dividend equivalents on unvested PSUs and RSUs credited in 2019 that will be paid by us on group term life insuranceout upon vest.

(6)This amount includes perquisites and the expense associated with the discount on Common Stock purchases under our ASPP. Theother personal benefits in this column that represent at least $25,000 or 10%for Mr. Shafer consisting of the total amount of All Other Compensation for the NEOs include personal use of our Corporate Aircraft by Mr. Patterson,Shafer, which had an incremental cost to us in the amount of $151,740, $136,360 and $117,650$157,292 in 2012, 2011 and 2010, respectively.2019. The incremental cost to us of Mr. Patterson'sShafer's personal use of Corporate Aircraft was calculated by combining the variable operating costs of such travel, including the cost of fuel and oil, engine reserves, auxiliary power unit reserves, on-board catering and deicing fluids when applicable, and the costs of deadhead hours.hours, and the amount of $85 in cash paid to Mr. Shafer because his personal use did not exceed the Compensation Committee approved value. This amount also includes: $760 of expense incurred by the Company for Mr. Shafer's wife to accompany him to business functions; and $11,144 in matching contributions (both fixed and discretionary) to Mr. Shafer's account pursuant to our 401(k) retirement plan as well as $105,508 in dividend equivalents on unvested PSUs and RSUs credited to Mr. Shafer in 2019.

(7)This amount includes $11,144 in matching contributions (both fixed and discretionary) to Mr. Naughton's account pursuant to our 401(k) retirement plan, as well as $34,827 in dividend equivalents on unvested PSUs and RSUs credited to Mr. Naughton in 2019.

(8)This amount includes $11,144 in matching contributions (both fixed and discretionary) to Mr. Nill's account pursuant to our 401(k) retirement plan, as well as $48,974 in dividend equivalents on unvested PSUs and RSUs credited to Mr. Nill in 2019. Refer to "Potential Payments Upon Termination or Change in Control" for information about severance payable to Mr. Nill in connection with his departure.

2012

(9)This amount includes $11,144 in matching contributions (both fixed and discretionary) to Mr. Peterzalek's account pursuant to our 401(k) retirement plan, as well as $54,470 in dividend equivalents on unvested PSUs and RSUs credited to Mr. Peterzalek in 2019 and personal use of the Corporate Aircraft with no incremental cost.

(10)This amount includes $11,144 in matching contributions (both fixed and discretionary) to Mr. Townsend's account pursuant to our 401(k) retirement plan, as well as $12,672 in dividend equivalents on unvested RSUs credited to Mr. Townsend in 2019. It also includes perquisites and other personal benefits to Mr. Townsend consisting of (i) $79,412 owed to Mr. Townsend pursuant to his final payment under his relocation package approved by the Compensation Committee for Mr. Townsend's return to Kansas City, Missouri from a short term assignment to Salt Lake City, Utah to lead our partnership with Intermountain Healthcare, and (ii) $42,854 in tax gross ups related to such relocation package. Refer to "Potential Payments Upon Termination or Change in Control" for information about compensation payable to Mr. Townsend in connection with his retirement and transition to Executive Senior Advisor.

(11)This amount includes $11,144 in matching contributions (both fixed and discretionary) to Mr. Trigg's account pursuant to our 401(k) retirement plan, as well as $59,127 in dividend equivalents on unvested RSUs credited to Mr. Trigg in 2019.



2019 GRANTS OF PLAN-BASED AWARDS

The following table reflectsprovides information about grants of plan-based awards to the NEOs in 2019, including the estimated possible payouts under non-equity and equity incentive plan awards and the number, exercise price and grant date fair value of option and performance-based restricted stock awards made to the NEOs in 2012. Ourawards. During 2019, our non-equity incentive awards arewere granted to participants of our Performance-BasedPerformance Compensation Plan based upon pre-established performance targets set annually by the Compensation Committee and approved by the Compensation Committee or its Incentive Compensation Plan - Quarterly Administration Subcommittee. For more detailed information regarding our Performance-BasedPerformance Compensation Plan, see "Compensation Elements - Performance-Based Cash Incentive Compensation."Compensation" in our Compensation Discussion and Analysis. Our equity incentive awards, areconsisting of PSUs and RSUs, were granted under our shareholder approved 2011 Omnibus EquityLong-Term Incentive Plan. For more detailed information regarding our 2011 Omnibus EquityLong-Term Incentive Plan, see “Compensation"Compensation Elements - Long-Term Incentive Plan Compensation.”

Compensation" in our Compensation Discussion and Analysis.
NameGrant DateEstimated Future Payouts Under Non-Equity Incentive Plan Awards Estimated Future Payouts Under Equity Incentive Plan AwardsAll Other Stock Awards: Number of Shares of Stock or Units (#)All Other Option Awards: Number of Securities Underlying Options (#)Exercise or Base Price of Option Awards ($/Sh) (4)Grant Date Fair Value of Stock and Option Awards ($) (5)Grant DateEstimated Possible Payouts Under Non-Equity Incentive Plan Awards Estimated Possible Payouts Under Equity Incentive Plan AwardsAll Other Stock Awards: Number of Shares of Stock or Units (#) (5)All Other Option Awards: Number of Securities Underlying Options (#)Exercise or Base Price of Option Awards ($/Sh)Grant Date Fair Value of Stock and Option Awards ($) (6)
Threshold ($) (1)Target ($)Maximum ($) (2) ThresholdTarget (#) (3)MaximumThreshold ($) (1)Target ($)Maximum ($) (2) Threshold (#) (3)Target (#)Maximum (#) (4)
Neal L. Patterson3/9/20121,012,500
1,350,000
2,050,000
 —
—
—
—
80,000
76.86
2,804,440
    
Brent Shafer4/29/2019600,000
1,200,000
2,400,000
 38,774
77,547
155,094
—
—
—
5,108,796
4/29/2019—
—
—
 —
—
—
77,547
—
—
5,108,796
    
Marc G. Naughton3/9/2012290,625
387,500
639,375
 —
5,000
—
—
25,000
76.86
1,260,688
4/29/2019385,000
770,000
1,540,000
 10,453
20,906
41,812
—
—
—
1,377,287
Marc G. Naughton4/29/2019—
—
—
 —
—
—
20,906
—
—
1,377,287
    
Michael R. Nill4/29/2019455,500
911,000
1,822,000
 13,887
27,773
55,546
—
—
—
1,829,685
4/29/2019—
—
—
 —
—
—
27,773
—
—
1,829,685
    
John T. Peterzalek4/29/2019350,000
700,000
1,400,000
 11,272
22,543
45,086
—
—
—
1,485,133
4/29/2019—
—
—
 —
—
—
22,543
—
—
1,485,133
    
Jeffrey A. Townsend3/9/2012431,250
575,000
875,000
 —
10,000
—
—
40,000
76.86
2,170,820
4/29/2019239,138
478,275
956,550
 13,887
27,773
55,546
—
—
—
1,829,685
Michael R. Nill3/9/2012431,250
575,000
875,000
 —
10,000
—
—
40,000
76.86
2,170,820
Zane M. Burke (6)3/9/2012298,125
397,500
565,250
 —
5,000
—
—
30,000
76.86
1,435,965
Jeffrey A. Townsend4/29/2019—
—
—
 —
—
—
27,773
—
—
1,829,685
7/31/2012   10,000
 25,000
73.92
1,591,383
    
Donald D. Trigg4/29/2019325,000
650,000
1,300,000
 11,272
22,543
45,086
—
—
—
1,485,133
4/29/2019—
—
—
 —
—
—
58,611
—
—
3,861,293

(1)These amounts represent the lowest level of payouts,payout, if any payout is triggered, for each metric under the Performance-BasedPerformance Compensation Plan.

(2)These amounts reflectrepresent the maximum available payout under the Performance-BasedPerformance Compensation Plan. There is a further limit onActual fiscal year 2019 amounts earned under the maximum payout relative to Section 162(m) ofPerformance Compensation Plan are included in the Internal Revenue Code. This maximum is set at 200% of base salary for our CEO and 175% of base salary for the other NEOs.Summary Compensation Table.

(3)These amounts reflectrepresent the lowest number of sharesPSUs available to be earned, subject to meeting performance metrics as discussed in "Vesting of Performance-Based Restricted Stock Grants."metrics.

(4)The exercise price is equalThese amounts represent the highest number of PSUs available to the closing fair market value of our Common Stock on the date of grant.be earned, subject to meeting performance metrics.

(5)These amounts reflect the number of shares underlying RSUs subject to time-based vesting.

(6)These amounts reflect the grant date fair value of the awards granted. Refer to the Notes to the Consolidated Financial StatementsPSUs and RSUs granted computed in accordance with FASB ASC Topic 718. The PSU grant date fair value included in the table above reflects the probable outcome of the performance metrics being achieved at 100% target as of the date of grant. Refer to Note 16 in the Notes


to Consolidated Financial Statements included in the Annual Report on Form 10-K for fiscal year ended December 29, 2012 for the relevant assumptions used to determine the valuation of our option awards.
(6)Mr. Burke received additional equity grants on July 31, 2012 as discussed in Footnote 1 of the “Summary Compensation Table”. The performance-based restricted stock grant will vest on the following schedule based on attainment of the related performance target noted and Mr. Burke's continued employment

37


through the vesting date. 1,000 shares shall vest on August 31, 2013 if our reported adjusted earnings for the period July 1, 2012 to June 29, 2013 are equal to or greater than a 7% increase over our reported adjusted earnings for the period July 3, 2011 to June 30, 2012; 1,000 shares shall vest on June 1, 2014 if our reported adjusted earnings for fiscal year 2013 are equalended December 28, 2019 for the relevant assumptions used to or greater than a 14% increase overdetermine the valuation of our reported adjusted earnings for fiscal year 2011; and 8,000 shares shall vest on June 1, 2015 if our reported adjusted earnings for fiscal year 2014 are equal to or greater than 20% increase over our reported adjusted earnings for fiscal year 2011. The number of shares vesting is subject to reduction down to zero based on Mr. Burke's individual performance rating and performance goal attainment.equity awards.

OUTSTANDING EQUITY AWARDS AT 20122019 FISCAL YEAR-END

The following table provides information regarding outstanding awards to the NEOs that have been granted but not vested or exercised as of December 29, 2012.28, 2019.
 Option Awards Stock Awards
NameGrant Date (1)Number of Securities Underlying Unexercised OptionsOption Exercise Price ($)Option Expiration Date  Number of Shares/ Units That Have Not Vested (#) (2)Market Value at December 28, 2019 of Shares/Units That Have Not Vested ($)Equity Incentive Plan Awards
Exercisable (#)Unexercisable (#)  Number of Unearned Shares/Units That Have Not Vested (#) (3)Market Value at December 28, 2019 of Unearned Shares/Units That Have Not Vested ($)
            
Brent Shafer2/8/2018—
182,006
61.22
2/8/2028
(5) —
—
—
—
 2/8/2018—
—
—
—
  40,292
2,952,598
—
—
 4/29/2019—
—
—
—
  77,547
5,682,644
—
—
 4/29/2019—
—
—
—
  —
—
77,547
5,682,644
            
Marc G. Naughton3/11/201156,000
—
25.80
3/11/2021
(5) —
—
—
—
2/24/199770,000
—
1.88
2/24/2022
(6) —
—
—
—
 3/9/201250,000
—
38.43
3/9/2022
(5) —
—
—
—
 3/1/201350,000
—
44.62
3/1/2023
(5) —
—
—
—
 3/7/201444,000
—
60.37
3/7/2024
(5) —
—
—
—
 3/12/201535,200
8,800
70.91
3/12/2025
(5) —
—
—
—
 3/11/201652,500
35,000
54.01
3/11/2026
(5) —
—
—
—
 3/3/201735,000
52,500
55.74
3/3/2027
(5) —
—
—
—
 3/2/2018—
73,100
62.94
3/2/2028
(5) —
—
—
—
 3/2/2018—
—
—
—
  8,750
641,200
—
—
 4/29/2019—
—
—
—
  20,906
1,531,992
—
—
 4/29/2019—
—
—
—
  —
—
20,906
1,531,992
            
Michael R. Nill3/7/201473,000
—
60.37
3/7/2024
(5) —
—
—
—
 3/12/201558,400
14,600(4)

70.91
3/12/2025
(5) —
—
—
—
 3/11/2016—
56,000(4)

54.01
3/11/2026
(5) —
—
—
—
 3/3/2017—
84,000(4)

55.74
3/3/2027
(5) —
—
—
—
 3/2/2018—
97,600(4)

62.94
3/2/2028
(5) —
—
—
—
 3/2/2018—
—
—
—
  
11,680(4)

855,910
—
—
 4/29/2019—
—
—
—
  
27,773(4)

2,035,205
—
—
 4/29/2019—
—
—
—
  —
—
27,773(4)

2,035,205


 Option Awards Stock Awards
NameGrant DateNumber of Securities Underlying Unexercised OptionsOption Exercise Price ($)Option Expiration Date  Number of Shares of Stock That Have Not Vested (#)Market Value of Shares of Stock That Have Not Vested ($)Equity Incentive Plan Awards
Exercisable (#)Unexercisable (#)  Number of Unearned Shares That Have Not Vested (#) (3)Market Value at December 28, 2012 of Unearned Shares That Have Not Vested ($)
Neal L. Patterson6/3/2004120,000
—
10.50
6/3/2014
(1)
—
—
—
—
 6/3/2005160,000
—
15.70
6/3/2015
(1) —
—
—
—
 9/16/2005168,000
—
20.56
9/16/2015
(1) —
—
—
—
 3/9/2006200,000
—
21.76
3/9/2016
(1) —
—
—
—
 3/9/2007160,000
—
26.91
3/9/2017
(1) —
—
—
—
 3/14/2008115,200
28,800
20.11
3/14/2018
(1) —
—
—
—
 3/6/200984,000
56,000
18.36
3/6/2019
(1) —
—
—
—
 3/12/201048,000
72,000
42.60
3/12/2020
(1) —
—
—
—
 3/11/2011—
110,000
51.60
3/11/2021
(1) —
—
—
—
 6/28/19951,180,000
—
7.41
6/28/2020
(2) —
—
—
—
 3/9/2012—
80,000
76.86
3/9/2022
(1) —
—
—
—
            
Marc G. Naughton6/3/200525,000
—
15.70
6/3/2015
(1) —
—
—
—
 3/9/200640,000
—
21.76
3/9/2016
(1) —
—
—
—
 3/9/200740,000
—
26.91
3/9/2017
(1) —
—
—
—
 3/14/200836,000
9,000
20.11
3/14/2018
(1) —
—
—
—
 3/6/200918,000
12,000
18.36
3/6/2019
(1) —
—
—
—
 3/12/201012,000
18,000
42.60
3/12/2020
(1) —
—
—
—
 3/11/2011—
28,000
51.60
3/11/2021
(1) —
—
—
—
 2/24/199735,000
—
3.75
2/24/2022
(2) —
—
—
—
 3/9/2012—
25,000
76.86
3/9/2022
(1) —
—
5,000
380,400
            
Jeffrey A. Townsend6/12/200320,000
—
5.65
6/12/2013
(1) —
—
—
—
 9/4/200320,000
—
9.02
9/4/2013
(1) —
—
—
—

38


 6/3/200448,000
—
10.50
6/3/2014
(1) —
—
—
—
 6/3/200560,000
—
15.70
6/3/2015
(1) —
—
—
—
 3/9/200650,000
—
21.76
3/9/2016
(1) —
—
—
—
 3/9/200750,000
—
26.91
3/9/2017
(1) —
—
—
—
 3/14/200848,000
12,000
20.11
3/14/2018
(1) —
—
—
—
 3/6/200933,000
22,000
18.36
3/6/2019
(1) —
—
—
—
 2/24/19979,832
—
3.75
2/24/2022
(2) —
—
—
—
 3/9/2012—
40,000
76.86
3/9/2022
(1) —
—
10,000
760,800
 6/1/2010—
—
—
—
— —
—
39,000
2,967,120
 3/11/2011—
—
—
—
— —
—
36,000
2,738,880
            
Michael R. Nill6/3/20055,000
—
15.70
6/3/2015
(1) —
—
—
—
 4/25/200640,000
—
20.42
4/25/2016
(1) —
—
—
—
 4/24/200750,000
—
27.31
4/24/2017
(1) —
—
—
—
 4/25/200840,000
10,000
23.16
4/25/2018
(1) —
—
—
—
 3/6/200933,000
22,000
18.36
3/6/2019
(1) —
—
—
—
 11/8/19962,600
—
3.50
11/8/2021
(2) —
—
—
—
 11/10/19971,560
—
7.00
11/1/2022
(2) —
—
—
—
 3/9/2012—
40,000
76.86
3/9/2022
(1) —
—
10,000
760,800
 6/1/2010—
—
—
—
— —
—
39,000
2,967,120
 3/11/2011—
—
—
—
— —
—
36,000
2,738,880
            
Zane M. Burke4/24/200710,000
—
27.31
4/24/2017
(1) —
—
—
—
 4/25/2008—
8,000
23.16
4/25/2018
(1) —
—
—
—
 5/1/200918,000
12,000
26.34
5/1/2019
(1) —
—
—
—
 5/3/20106,000
9,000
43.35
5/3/2020
(1) —
—
—
—
 5/16/2011—
30,000
59.12
5/16/2021
(1) —
—
—
—
 3/9/2012—
30,000
76.86
3/9/2022
(1) —
—
5,000
380,400
 7/31/2012—
25,000
73.92
7/31/2022
(1) —
—
10,000
760,800
 10/10/1997440
—
6.50
10/10/2022
(2) —
—
—
—
 10/5/1998800
—
5.50
10/1/2023
(2) —
—
—
—
            
John T. Peterzalek5/12/201540,000
10,000
67.24
5/12/2025
(5) —
—
—
—
5/10/2016—
32,800
55.24
5/10/2026
(5) —
—
—
—
 5/1/201732,800
49,200
65.27
5/1/2027
(5) —
—
—
—
 5/4/2018—
61,247
57.24
5/4/2028
(5) —
—
—
—
 5/4/2018—
—
—
—
  7,145
523,586
—
—
 9/7/2018—
—
—
—
  31,139
2,281,866
—
—
 4/29/2019—
—
—
—
 ��22,543
1,651,951
—
—
 4/29/2019—
—
—
—
  —
—
22,543
1,651,951
            
Jeffrey A. Townsend3/12/201558,400
—
70.91
3/12/2025
(5) —
—
—
—
            
Donald D. Trigg5/12/201514,760
3,690
67.24
5/12/2025
(5) —
—
—
—
 5/10/201617,400
11,600
55.24
5/10/2026
(5) —
—
—
—
 5/1/201720,000
30,000
65.27
5/1/2027
(5) —
—
—
—
 5/1/2017—
—
—
—
  —
—
6,250
458,000
 5/4/2018—
79,926
57.24
5/4/2028
(5) —
—
—
—
 5/4/2018—
—
—
—
  9,091
666,188
—
—
 4/29/2019—
—
—
—
  58,611
4,295,014
—
—
 4/29/2019—
—
—
—
  —
—
22,543
1,651,951

(1)Option vests overEquity awards granted in 1997 were made from Plan D; grants on March 11, 2011 were made from Plan G; grants in 2012 to 2019 were made from the Long-Term Incentive Plan. We no longer make grants from Plans D or G.

(2)Includes RSUs subject to continued employment through the vesting dates. These awards are scheduled to vest (or have vested) as follows:
Brent ShaferŸ20,146 shares on March 1, 2020
Ÿ25,849 shares on April 29, 2020
Ÿ20,146 shares on March 1, 2021
Ÿ25,849 shares on April 29, 2021
Ÿ25,849 shares on April 29, 2022
Marc G. NaughtonŸ6,968 shares on April 29, 2020
Ÿ8,750 shares on March 2, 2021
Ÿ6,969 shares on April 29, 2021
Ÿ6,969 shares on April 29, 2022
John T. PeterzalekŸ7,514 shares on April 29, 2020
Ÿ15,569 shares on September 7, 2020
Ÿ7,514 shares on April 29, 2021
Ÿ7,145 shares on May 4, 2021
Ÿ15,570 shares on September 7, 2021
Ÿ7,515 shares on April 29, 2022


Donald D. TriggŸ7,514 shares on April 29, 2020
Ÿ25,548 shares on April 29, 2021
Ÿ9,091 shares on May 4, 2021
Ÿ25,549 shares on April 29, 2022

(3)Includes PSUs subject to meeting performance metrics and continued employment through the vesting dates. Assuming vesting at 100% target, these awards are scheduled to vest as follows:
Brent ShaferŸ77,547 shares on April 29, 2022
Marc G. NaughtonŸ20,906 shares on April 29, 2022
John T. PeterzalekŸ22,543 shares on April 29, 2022
Donald D. TriggŸ6,250 shares on May 1, 2020
Ÿ22,543 shares on April 29, 2022

(4)As discussed in "Potential Payments Upon Termination or Change in Control", in connection with his departure, all of Mr. Nill's unvested stock options, unvested RSUs and unvested PSUs fully vested, assuming a five-year period with a 40% vest increment two years from date100% of grant and 20% vest incrementstarget level of achievement for each of the next three years. his unvested PSUs, on January 18, 2020.

(5)Option expires 10 years from the date of grant. As discussed in "Potential Payments Upon Termination or Change in Control", all of Mr. Townsend's unvested stock options, unvested RSUs and unvested PSUs were forfeited in connection with his retirement. He has a period of 12 months from the date that his employment and role as Executive Senior Advisor terminates to exercise any outstanding vested options as of November 1, 2019 in accordance with the terms of each specific option agreement.

(2)(6)Option vests over a 10-year period with 10% vest increments for each of the 10 years from the date of grant. Option expires 25 years from the date of grant.
(3)Restricted stock awards that are subject to performance metrics. These awards are scheduled to vest as follows assuming attainment of the performance metrics. Mr. Naughton: 500 shares on June 1, 2013, 500 shares on June 1, 2014 and 4,000 shares on June 1, 2015; Mr. Townsend and Mr. Nill: 44,000 shares on June 1, 2013; 33,000 shares on June 1, 2014; and 8,000 shares on June 1, 2015; Mr. Burke: 500 shares on June 1, 2013, 1,000 shares on August 31, 2013, 1,500 shares on June 1, 2014 and 12,000 shares on June 1, 2015.


39


20122019 OPTION EXERCISES AND STOCK VESTED

The following table provides information regarding option exercises by our NEOs and the vesting of restricted stock and RSUs held by our NEOs during 2012.2019.
Option Awards Stock AwardsOption Awards Stock Awards
NameNumber of Shares Acquired on Exercise (#)
Value Realized on Exercise ($) (1)
 Number of Shares Acquired on Vesting (#)Value Realized on Vesting ($) (2)Number of Shares Acquired on Exercise (#)
Value Realized on Exercise ($) (1)
 Number of Shares Acquired on Vesting (#)Value Realized on Vesting ($) (2)
Neal L. Patterson100,000
7,137,250
 —
—
   
Brent Shafer—
—
 —
—
Marc G. Naughton54,168
3,430,150
 —
—
—
—
 41,800
2,816,902
Michael R. Nill300,000
6,454,534
 70,400
4,744,256
John T. Peterzalek81,627
1,325,414
 26,251
1,907,660
Jeffrey A. Townsend—
—
 10,000
763,700
373,000
6,250,723
 70,400
4,744,256
Michael R. Nill45,000
2,640,421
 10,000
763,700
Zane M. Burke70,000
3,838,619
 —
—
Donald D. Trigg7,100
125,466
 40,250
2,711,585

(1)Represents the difference between the exercise price and the fair market value of our Common Stock on the date of exercise.



(2)Represents the aggregate dollar amount realized, which is calculated by multiplying the number of shares of restricted stock and RSUs by the fair market value of our Common Stock on the vesting date.

EMPLOYMENT AGREEMENTS &
POTENTIAL PAYMENTS UNDER TERMINATION OR CHANGE IN CONTROL
Employment Agreements
Employment agreements entered into with our associates primarily serve to: i) create an "at-will" employment relationship, ii) assign to us any intellectual property rights the associate may otherwise have to any discoveries, inventions or improvements related to our business made while in our employ or within one year thereafter and iii) provide for restrictive covenants of the associate in favor of Cerner during and after employment with Cerner, including: confidentiality, non-compete and non-solicit obligations. Such employment agreements help ensure protection of our intellectual property, client-base/relationships and associates. We enter into such employment agreements with all of our associates, including all of the NEOs.
Effective January 1, 2008, we entered into an updated employment agreement with Mr. Patterson, replacing his prior employment agreement. The material terms of Mr. Patterson's employment agreement provide for: a) at-will employment, b) an annual base salary, specified use of our Corporate Aircraft and a potential bonus as determined annually by the Board, c) severance payments and benefits upon certain termination events, as discussed in detail below, d) an assignment provision wherein Mr. Patterson will assign all discoveries, inventions or improvements related to our business to us, e) a nondisclosure provision that survives in perpetuity, f) noncompetition and non-solicitation provisions that are effective during the term of Mr. Patterson's employment and for two years following termination of employment, for any reason, with us, and g) a general mutual indemnification provision by Mr. Patterson and us.
We have entered into at-will employment agreements with each of our other NEOs. Under these agreements, each executive agrees not to compete with us during the executive's employment with us and for at least two years thereafter; to protect our confidential business information; and, to assign to us any intellectual property rights the executive may otherwise have to any discoveries, inventions or improvements related to our business made while in our employ or within one year thereafter.
Our Enhanced Severance Pay Plan applies to all of our U.S. based permanent, full-time salaried associates other than Mr. Patterson (whose severance benefits are set forth in his Employment Agreement) and offers severance pay upon: i) certain termination without cause events (the severance benefits for our NEOs other than Mr. Patterson

40


currently range from 16 weeks to 52 weeks - and are contingent upon the NEO satisfying certain conditions, including without limitation the execution of a severance and release agreement with us providing for a complete release of all employment related claims), or ii) qualifying terminations or resignations for Good Reason following a Change in Control, which severance benefits will be paid at 1.5 times the calculated severance (based on role and tenure) as set forth below in the Severance Matrix, and will include both base salary and average cash bonus.
  Severance Matrix - Determined by Years of Service
Associates Less Than 2 Years Severance Weeks>2, Less Than 5 Years Severance Weeks>5, Less Than 10 Years Severance Weeks>10 Years Severance Weeks
NEOs other than the CEO 16243652
The amount of any severance benefit paid out under the Enhanced Severance Pay Plan is in lieu of, and not in addition to, any other severance an eligible associate may otherwise be entitled to receive from us, including under a Cerner Associate Employment Agreement or other document.
Potential Payments Upon Termination or Change in Control
The following summaries set forth the actual or potential payments payable to our NEOs upon termination of employment or a Change in Control inof the Company under (and as defined in) their current employment agreements and our other compensation programs, including our EnhancedCerner Executive Severance Pay Plan.Agreements, as amended or supplemented. The Compensation Committee may atin its discretion revise, amend or add to the benefits if it deems such action advisable.

Neal L. PattersonBrent Shafer, Marc G. Naughton, Michael R. Nill, John T. Peterzalek and Donald D. Trigg

Termination by us withoutfor Cause (prior toor on account of death or Disability or resignation by the NEO other than in the event of a Constructive Termination (before a Change in Control) or for Good Reason (after a Change in Control):If Mr. Patterson'sone of the above noted NEO's employment is terminated by us withoutfor Cause (as defined in his Employment Agreement)or on account of the NEO's death or Disability (each an "Ineligible Severance Event"), Mr. Pattersonthe NEO will be entitled to: i) any accrued but unpaid base salary; ii) any owed reimbursements for unreimbursed business expenses; and iii) such employee benefits (including equity compensation or cash bonuses earned as of the termination date but not yet paid), if any, to which the NEO may be entitled under Cerner's employee benefit plans as of the NEO's termination date (the foregoing amounts described in clause i), ii) and iii) are collectively referred to as the "Accrued Amounts"). If an NEO resigns other than on account of a Constructive Termination (before a Change in Control) or for Good Reason (after a Change in Control), the NEO will be entitled to the Accrued Amounts; provided, that if the NEO resigns with fewer than 30 days' notice, or leaves employment prior to the 30-day notice period without Cerner's permission, the NEO will only be entitled to the Accrued Amounts through the date the NEO submits a notice of resignation.

Termination by us for other than an Ineligible Severance Event or resignation following Constructive Termination (in each case, prior to a Change in Control or more than 12 months after a Change in Control): Subject to the NEO executing and delivering a customary severance agreement and release, if, prior to a Change in Control or at any time after 12 months following a Change in Control, an NEO's employment is terminated by Cerner for any reason other than an Ineligible Severance Event or the NEO resigns following a Constructive Termination, the NEO will be entitled to the Accrued Amounts and the following severance payments and benefits (less normal tax and payroll deductions):

Severance Pay: i) threetwo years' base salary (based on hissuch NEO's annual base salary at the time of the termination) (less normal tax and payroll deductions)termination or resignation), and ii) threetwo times the average annual cash bonus received during the prior three yearthree-year period (less normal tax and payroll deductions) (which severance amounts will be reduced pursuant to his employment agreement toimmediately preceding the extent any amounts are classified as a "parachute payment" under Section 280G of the Internal Revenue Code, unless, even with the imposition of the 20% excise tax on Mr. Patterson, he would receive a larger benefit than he would if his "parachute payments" were reduced (the "Reduced Amount")).termination. These severance payments will generally be payable pro rata during the three-yeara 24-month severance term on Cerner's regular paydays, other than amounts during the first six months that qualify as "excess severance payments" as defined under Section 409A (which amounts will be paid at a later date in accordance with the Employment Agreement).paydays.

Benefits: payments having an aggregate value equal to 24 times the difference between the monthly COBRA continuation premium cost to cover the NEO and the NEO's dependents (to the extent covered under Cerner's health, benefitsvision and dental plans on the date of the NEO's termination or resignation) and the monthly amount the NEO was paying for a three-year period followingsuch coverage at the effective date of the NEO's termination of employment.or resignation, payable pro rata during the 24-month severance term.

Equity Awards: except for Messrs. Peterzalek and Trigg, whose employment agreements, as amended, provide for immediate vesting of all equity incentiveunvested outstanding equity-based compensation awards, grantedall other NEOs' employment agreements provide for immediate vesting of all stock options or stock appreciation rights and any other outstanding equity-based compensation awards not intended to Mr. Pattersonqualify as "performance-based compensation" under Section 162(m) of the Internal Revenue Code, and for all outstanding equity-based compensation awards that are intended to the extentconstitute "performance-based compensation" (excluding stock options and stock appreciation rights), such grants would have vested based on the passage of time during the three year period following the date of Mr. Patterson's termination without Cause had he not been terminated. Upon termination by us without Cause, Mr. Pattersonawards will forfeit any equity awards granted prior to the date of his Employment Agreement, unless otherwise provided in the equity award agreement entered into with Mr. Patterson at the time of grant, except that he will generally have a period of time following termination of employment to exercise any vested optionsvest or be forfeited in accordance with the terms of each specific option agreement.the award agreements if the applicable performance goals are satisfied. For Messrs. Peterzalek and Trigg, any outstanding equity awards with performance-based vesting will become vested as if an “at-target” level of goal achievement had been obtained.



Termination by us without Causefor other than an Ineligible Severance Event or Resignationresignation by Mr. Pattersonan NEO for Good Reason (both upon or(in each case, within 12 months following a Change in Control)::If Subject to the NEO executing and delivering a customary severance agreement and release, if there is a Change in Control of the Company (as defined in Mr. Patterson's Employment Agreement),Cerner and either: a) Mr. Patterson's employment with us is terminated without Cause within 12 months

41


following the effective date of the Change in Control becomes effective,an NEO's employment is terminated by us for any reason other than for an Ineligible Severance Event or b) Mr. Pattersonthe NEO resigns his employment withfor Good Reason, (as defined in his Employment Agreement) within 12 months after the Change in Control becomes effective, then Mr. PattersonNEO will be entitled to:to the Accrued Amounts and the following severance payments and benefits (less normal tax and payroll deductions):

Severance PayPay:: i) threetwo years' base salary (based on hissuch NEO's annual base salary at the time of the termination or resignation) (less normal tax and payroll deductions), and ii) threetwo times the average annual cash bonus received during the prior three-year period (less normal tax and payroll deductions and less any Reduced Amount).immediately preceding the termination or resignation. These severance payments will be payable either pro rata or in a lump sum payment dependingpayment.

Benefits: payments having an aggregate value equal to 24 times the difference between the monthly COBRA continuation premium cost to cover the NEO and the NEO's dependents (to the extent covered under Cerner's health, vision and dental plans on whether the Change in Control event meetsdate of the definitionNEO's termination or resignation) and the monthly amount the NEO was paying for such coverage at the effective date of change in control under Section 409A.
Benefits:health benefits for a three-year periodthe NEO's termination or resignation, payable pro rata during the 24-months following the termination or resignation.

Equity AwardsAwards:: following the if there is a Change in Control, our equity grant agreements provide for accelerated vesting of 50% of eachany outstanding and unvested equity incentive award granted to Mr. Patterson under any of our equity incentive plans that has not yet vested will become vestedawards held by an NEO on the date that the Change in Control becomes effective. The remaining 50% of eachany unvested equity incentive award that has not yet vested will continue to vest according to its vesting schedule, unless Mr. Patterson's employment is terminated without Cause or he resigns with Good Reason within 12 months following the date the Change in Control becomes effective, in which case 100% of all equity incentive awards will become fully vested upon the effective date of such termination or resignation. The Compensation Committee or Board, however, may decide to accelerate theOutstanding equity awards with performance-based vesting will become vested as if an "at-target" level of any of Mr. Patterson's options.
Termination by us for Cause or Resignation by Mr. Patterson (other than for Good Reason upon a Change in Control): In the event we terminate Mr. Patterson's employment for Cause or if Mr. Patterson resigns his employment (other than for Good Reason within 12 months following a Change in Control), Mr. Patterson will be entitled to no further compensation or benefits under his Employment Agreement other than: unpaid salary earned through the termination date and earned but unpaid incentive pay in accordance with our policies.goal achievement had been obtained.

Equity Awards: unless otherwise provided inAny of the above-described severance payments, equity award agreement entered into with Mr. Patterson atacceleration benefits or other benefits that are subject to the timemodified Section 280G carve back may be reduced if i) any portion of grant, upon termination for Cause (as defined insuch payments or benefits become subject to the award agreements)golden parachute penalty provisions under Section 280G or resignationSection 4999 of the Internal Revenue Code, and ii) by Mr. Patterson (other than for Good Reason within 12 months followingreducing such payments or benefits the NEO is able to receive a Change in Control), Mr. Patterson will forfeit any outstanding unvested awards on the termination date, and he will generally have a periodlarger portion of time following termination of employment to exercise any vested options in accordance with the terms of each specific option award agreement.

Termination upon Death or Disability:In the event Mr. Patterson's employment is terminated as a result of a Disability (as defined in his Employment Agreement) or in the event of Mr. Patterson's death, we will owe Mr. Patterson no further compensation under his Employment Agreement other than: unpaid salary earned through the termination date and earned but unpaid incentive pay in accordance with our policies.

Benefits: if Mr. Patterson's employment is terminated as a result of his death, his estate is entitled to life insurance benefits under our group life insurance program equal to $500,000. In the event of accidental death, Mr. Patterson's estate wouldreceive an additional $500,000. In the event Mr. Patterson died in a travel accident while on Cerner business, his estate would receive an additional $200,000.

Equity Awards: unless otherwise provided in the award agreement entered into with Mr. Patterson at the time of grant, upon termination due to Disability or death, Mr. Patterson will forfeit any outstanding awards, except that he or his estate will generally have a period of time following termination of employment to exercise any vested options in accordance with the terms of each specific option agreement. The Compensation Committee or Board, however, may decide to accelerate the vesting of any of Mr. Patterson's options.


42


Assuming Mr. Patterson's employment was terminated under each of these circumstances on December 29, 2012, such payments and benefits would have an estimated value of:
Name Payment/BenefitTermination Without Cause (prior to a CIC) ($)Termination Without Cause or Resignation for Good Reason (following a CIC) (1) ($)For Cause Termination or Resignation (without Good Reason following a CIC) ($)Death (2) ($)Disability ($)
Neal L. Patterson Cash Severance (3)7,847,200
7,847,200
—
—
—
  Benefits(4)51,808
51,808
—
500,000
—
  Value of Accelerated Equity(5)9,409,056
9,947,616 (6)
—
—
—
(1)Assumes an effective Change in Control date of December 29, 2012.
(2)
The value of death benefits includes the value of basic life insurance. In the event of accidental death, Mr. Patterson's estate would receive anadditional $500,000. In the event Mr. Patterson died in a travel accident while on Cerner business, his estate would receive an additional $200,000.
(3)Cash severance payments could be made in a lump sum or as salary continuation on regularly scheduled paydays for the applicable severance period as determined by us.
(4)In the case of a termination without Cause or Resignation for Good Reason, this includes the cost of premiums for health, vision and dental benefits over a three year period, based on the rates in effect on January 1, 2013.
(5)
The payments relating to equity represent the value of unvested, accelerated stock options as of December 29, 2012, calculated by multiplying the number of accelerated options by the difference between the exercise price and the closing price of our Common Stock on December 28, 2012. Does not include the value of Mr. Patterson's vestedoptions of $139,528,770 as of December 29, 2012.
(6)50% of this amount relates to options that would vest automatically upon a Change in Control even if Mr. Patterson's employment continued and 50% represents options that would vest upon his termination of employment without Cause or he resigns with Good Reason within 12 months following the date the Change in Control becomes effective.

Marc G. Naughton, Jeffrey A. Townsend, Michael R. Nill and Zane M. Burke

Termination by us without Cause (with or without a Change in Control event) or Resignation (for Good Reason following a Change in Control event): If we terminate any one of the above NEO's employment without Cause (as defined in eachbeing able to avoid such NEO's employment agreement), each of Mr. Naughton, Mr. Townsend, Mr. Nill and Mr. Burke will be entitled to the following (except where otherwise stated):

Severance Pay: the equivalent of two weeks' base salary (exclusive of commissions, advances against commissions, bonus and other non-salary compensation and benefits), except Mr. Townsend (who does not have a severance pay provision in his employment agreement). In addition, if we terminate any one of the above NEO's employment without Cause (as defined in our Enhanced Severance Pay Plan, see discussion above), with or without a Change in Control event, each one may be entitled to certain additional severance pay under our Enhanced Severance Pay Plan if he is found to be an Eligible Associate (as defined in the Enhanced Severance Pay Plan), which eligibility would entitle him to both non-Change in Control Severance and Change in Control Severance (both defined in the Enhanced Severance Play Plan) and such amounts would be in lieu of and not in addition to the severance, if any, set forth in their employment agreement.


43


If any one of the above resigns for Good Reason upon a Change in Control event, he may be entitled to certain additional severance pay under our Enhanced Severance Pay Plan if he is found to be an Eligible Associate, which eligibility would entitle him to Change in Control Severance in such amounts as set forth in the Enhanced Severance Pay Plan.

Equity Awards: unless otherwise provided in the award agreement at the time of grant, upon termination by us without cause, the above NEOs will forfeit any outstanding unvested awards except that they will generally have a period of time following termination of employment to exercise any vested options in accordance with the terms of each specific option agreement. Additionally, stock options issued after June 1, 2005 provide that upon termination of the NEO by us other than for Cause (as defined in the option agreement) or upon resignation for Good Reason (as defined in the option agreement) within 12 months following a Change in Control, all remaining unvested options shall vest immediately (at the time of the Change in Control; 50% of such unvested options would have vested upon the Change in Control under the terms of such option agreements). The restricted stock issued in 2010, 2011 and 2012 was performance-based and therefore did not contain any change in control provisions.

Termination by us for Cause or upon Resignation (other than for Good Reason following a Change in Control event):If we terminate one of the above NEO's employment for Cause (as defined in their employment agreements) or if one of the above NEOs resigns his employment (other than for Good Reason following a Change in Control event), he will be entitled to no further compensation or benefits under his employment agreement other than: unpaid salary earned through the termination date and earned but unpaid incentive pay in accordance with our policies.

Equity Awards: unless otherwise provided in the award agreement at the time of grant, upon termination for Cause (as defined in the award agreements) or resignation (other than for Good Reason if addressed and defined in the award agreement), the above NEO will forfeit any outstanding unvested awards on the termination date, and he will generally have a period of time following termination of employment to exercise any vested options in accordance with the terms of each specific option agreement. The restricted stock issued in 2010, 2011 and 2012 was performance-based and therefore did not contain any change in control provisions.

Termination upon Death or Disability:In the event one of the above NEO's employment is terminated as a result of his disability or in the event of death, we will owe no further compensation under the employment agreement with such NEO other than: unpaid salary earned through the termination date and earned but unpaid incentive pay in accordance with our policies.

Benefits: if employment is terminated as a result of death, the NEO's estate is entitled to life insurance benefits under our group life insurance program equal to one year's salary, with a cap of $500,000, based upon his base salary at the time of death. In the event of accidental death, the NEO's estate wouldreceive an additional one year's salary, with a cap of $500,000, based on his base salary at the time of death. If a NEO were to die in a travel accident while on Cerner business, his estate would receive an additional $200,000.

Equity Awards: unless otherwise provided in the award agreement at the time of grant, upon termination due to Disability or death, the above NEO will forfeit any outstanding unvested awards except that he or his estate will generally have a period of time following termination of employment to exercise any vested options in accordance with the terms of each specific option agreement.golden parachute penalties.

Non-compete Payments: If any of the above NEOs (other than Mr. Patterson and Mr. Townsend)Messrs. Naughton, Nill, or Peterzalek is unable to obtain employment within three months after termination of his employment due solely to the non-compete restrictions set forth in his employment agreement, the non-compete provisions will continue to be enforceable only so long as we make to him monthly payments, during the remaining non-compete period, equivalent on an annualized basis, to his average annual cash earnings during the last three years of his employment. Neither Mr. Townsend'sShafer's nor Mr. Trigg's employment agreement while containingprovides for non-compete payments (even though they each contain a non-compete provision, does not address severance pay or non-compete payments.provision).


44



Assuming employment was terminated on December 29, 201228, 2019 for each of the four NEOs (excluding Mr. Patterson, see table above)Messrs. Shafer, Naughton, Nill, Peterzalek, and Trigg under each set of circumstances set forth above, the following table provides information regarding the estimated value of all such payments and benefits:
Name(1)Payment/BenefitTermination Without Cause (prior to a CIC) ($)Termination Without Cause or Resignation for Good Reason (following a CIC) ($) (1)For Cause Termination or Resignation (without Good Reason following a CIC) ($)Death ($) (2)Disability ($)Payment/BenefitTermination Without Cause or Resignation after Constructive Termination (prior to a CIC) ($)Termination Without Cause or Resignation for Good Reason (following a CIC) ($) (2)For Cause Termination or Resignation (other than due to a Constructive Termination prior to a CIC or for Good Reason following a CIC) ($)Death ($) (3)Disability ($)
Marc G. NaughtonCash Severance (3)460,000
1,373,300
—
—
—
  
Brent Shafer
Cash Severance(4)
3,741,555
3,741,555
—
—
—
Benefits—
—
—
460,000
—
Benefits(5)
24,103
24,103
—
500,000
—
Value of Accelerated Equity(4)—
2,484,450 (5)
—
—
—
Value of Accelerated Equity(6)
10,830,234
16,512,878(7)

—
—
—
Non-compete Payments (6)1,526,574
1,526,574
—
—
—
Non-compete Payments(8)
—
—
—
—
—
    
Jeffrey A. TownsendCash Severance(3)550,000
1,807,050
—
—
—
Marc G. Naughton
Cash Severance(4)
2,412,150
2,412,150
—
—
—
Benefits—
—
—
500,000
—
Benefits(5)
24,103
24,103
—
500,000
—
Value of Accelerated Equity(4)—
1,941,480 (5)
—
—
—
Value of Accelerated Equity(6)
4,545,202
6,077,193(7)

—
—
—
Non-compete Payments(6)—
—
—
—
—
Non-compete Payments(8)
2,059,589
2,059,589
—
—
—
    
Michael R. NillCash Severance(3)550,000
1,763,500
—
—
—
Cash Severance(4)
2,950,034
2,950,034
—
—
—
Benefits—
—
—
500,000
—
Benefits(5)
33,742
33,742
—
500,000
—
Value of Accelerated Equity(4)—
1,799,040 (5)
—
—
—
Value of Accelerated Equity(6)
6,487,382
8,522,587(7)

—
—
—
Non-compete Payments(6)1,917,192
1,917,192
—
—
—
Non-compete Payments(8)
2,563,051
2,563,051
—
—
—
    
Zane M. BurkeCash Severance(3)450,000
1,427,604
—
—
—
John T. Peterzalek
Cash Severance(4)
2,348,152
2,348,152
—
—
—
Benefits—
—
—
450,000
—
Benefits(5)
28,382
28,382
—
500,000
—
Value of Accelerated Equity(4)—
1,877,610 (5)
—
—
—
Value of Accelerated Equity(6)
8,137,959
8,137,959(7)

—
—
—
Non-compete Payments(6)1,483,762
1,483,762
—
—
—
Non-compete Payments(8)
1,855,531
1,855,531
—
—
—
  
Donald D. Trigg
Cash Severance(4)
2,218,250
2,218,250
—
—
—
Benefits(5)
38,029
38,029
—
500,000
—
Value of Accelerated Equity(6)
8,825,018
8,825,018(7)

—
—
—
Non-compete Payments(8)
—
—
—
—
—

(1)Mr. Townsend retired effective November 1, 2019, prior to the end of the 2019 fiscal year. For a discussion of payments actually received by, or payable to, Mr. Townsend in connection with his retirement, see "Retirement of Jeffrey A. Townsend" below. Mr. Nill departed the Company on January 10, 2020, subsequent to the end of the 2019 fiscal year. For a discussion of payments actually received by, or payable to, Mr. Nill in connection with his departure, see "Departure of Michael R. Nill" below.

(2)Assumes an effective Change in Control date of December 29, 2012.28, 2019.

(2)(3)The value of death benefits includes the value of basic life insurance. In the event of accidental death, each NEO's estate would receive the value of one additional year's salary based upon his salary at the time of death, with a cap of $500,000. In the event an NEO died in a travel accident while on Cerner business his estate would receive an additional $200,000.



(3)(4)Cash severance payments could be made in a lump sum or as salary continuation on regularly scheduled paydays for the applicable severance period as determined by us.

(4)(5)In the case of a termination for other than an Ineligible Severance Event or resignation by the NEO following a Constructive Termination or for Good Reason, this amount includes the difference between the monthly COBRA continuation premium cost to cover the NEO and the NEOs' dependents (to the extent covered under Cerner's health, vision and dental plans on the date of the NEO's termination or resignation) and the monthly amount the NEO was paying for such coverage at the effective date of the NEO's termination or resignation over a 24-month period, based on the rates in effect on January 1, 2020.

(6)The payments relating to equity represent the value of all unvested, accelerated stock options, restricted stock and RSUs, and additionally for Messrs. Peterzalek and Trigg whose Executive Severance Agreements provide for immediate vesting of all unvested outstanding equity-based compensation awards, all unvested PSUs, as of December 29, 2012,28, 2019, calculated by multiplying the number of accelerated options, restricted stock, PSUs and RSUs by the difference between the exercise price and the closing price of our Common Stock on December 28, 2012. Does27, 2019 (the last trading day in fiscal year 2019). It does not include the value of the NEO'sNEOs' vested options as of December 29, 2012,28, 2019, which would equal the following amounts: Mr. Shafer, $0; Mr. Naughton, $11,636,628; Mr. Townsend, $19,998,049;$13,110,019; Mr. Nill, $9,285,070$1,080,838; Mr. Peterzalek, $504,328; and Mr. Burke, $1,666,529.Trigg, $563,246.

(5)(7)50% of this amount relates to options, restricted stock, PSUs and RSUs that would vest automatically upon a Change in Control even if eachsuch NEO's employment continued and 50% represents options, restricted stock, PSUs and RSUs that would vest upon eachsuch NEO's termination of

45


employment without Cause or each resigns with employment for any reason other than an Ineligible Severance Event or such NEO's resignation for Good Reason within 12 months following the date the Change in Control becomes effective.

(6)(8)Non-compete payments represent payments for months four to 2124 per the terms of theMessrs. Naughton's, Nill's and Peterzalek's employment agreement,agreements, assuming the executive officerNEO is unable to obtain employment within three months after termination of his employment due solely to the non-compete restrictions set forth in his employment agreement. Neither Mr. Townsend'sShafer's nor Mr. Trigg's employment agreement does not addressprovides for non-compete payments.


46Retirement of Jeffrey A. Townsend

Mr. Townsend retired from his role of Executive Vice President and Chief of Innovation of Cerner effective November 1, 2019 and transitioned to Executive Senior Advisor. On October 30, 2019, Mr. Townsend and Cerner entered into a letter agreement setting forth the terms of his new employment arrangement as Executive Senior Advisor, effective as of November 1, 2019, under which Mr. Townsend is providing Cerner with transition services in connection with his retirement. The letter agreement is effective through June 30, 2020, subject to extension upon the mutual agreement of the parties. Under the terms of the letter agreement, his new base salary was reduced to $100,000 per year, effective November 1, 2019, to reflect his modified level and scope of responsibility. Mr. Townsend is entitled to continued participation in Cerner's group health, dental and vision plans during his service as Executive Senior Advisor. As Executive Senior Advisor, Mr. Townsend is not eligible to participate under our performance-based cash compensation plan beyond the third quarter of 2019 nor to receive future stock option or other equity grants. As of November 1, 2019, he was entitled to performance-based cash compensation earned through the third quarter of 2019 (but not yet paid) in the amount of $162,272. This amount was paid in a lump sum. Upon his retirement, Mr. Townsend forfeited any outstanding unvested equity awards. He has a period of 12 months from the date that his employment and role as Executive Senior Advisor terminates to exercise any outstanding vested options as of November 1, 2019 in accordance with the terms of each specific option agreement. The letter agreement amended and supplemented Mr. Townsend's existing employment agreement and terminated his Executive Severance Agreement. Mr. Townsend will continue to be obligated to comply with certain restrictive covenants, including covenants with respect to non-competition, non-solicitation and confidentiality.



Departure of Michael R. Nill

Mr. Nill departed from Cerner effective January 10, 2020. In connection with his departure, and as contemplated by his Executive Severance Agreement, Mr. Nill and Cerner entered into a Separation Agreement governing the terms of his departure. Under the terms of his Separation Agreement, Mr. Nill is entitled to receive an aggregate cash separation payment of $3,234,841, less applicable deductions required by law, payable in equal installments on a biweekly basis on Cerner’s regular pay days during the twenty-four (24) month period that commenced on January 24, 2020. The cash separation payment was calculated based upon: (i) Mr. Nill's annual base salary effective March 31, 2019 ($690,000); (ii) Mr. Nill's annual target cash bonus effective March 31, 2019 ($911,000); and (iii) the difference between Mr. Nill's monthly COBRA continuation premium under Cerner’s health, vision and dental plans in effect as of his departure date and the monthly amount he was paying for such coverage as of his departure date ($1,368). Additionally, on January 18, 2020 pursuant to the Separation Agreement: (x) all of Mr. Nill’s unvested stock options were vested fully (valued at $4,234,332 based on the difference between the exercise price and the closing price of our Common Stock on the date of vesting); (y) all of Mr. Nill's unvested RSUs were fully vested (valued at $2,990,932 based on the closing price of our Common Stock on the date of vesting); and (z) all of his unvested PSUs were fully vested, assuming a 100% of target level of achievement (valued at $2,105,471 based on the closing price of our Common Stock on the date of vesting). Under the Separation Agreement, the parties agreed to a mutual release of claims. In addition, Mr. Nill will remain subject to, and the separation payments will be conditioned upon compliance with, the restrictive covenants contained in his employment agreement and his Separation Agreement, including covenants with respect to non-competition, non-solicitation and confidentiality. If Mr. Nill were to breach any of the restrictive covenants during the twenty-four (24) month separation payment period, Cerner would be entitled to stop any payments due after the date of breach and claw back all separation payments made prior to the date of breach, as well as any of Mr. Nill's outstanding equity awards or shares of common stock underlying such equity awards at the time of breach or, if sold prior to the date of the breach, the proceeds thereof.

PAY RATIO

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our associates and the annual total compensation of Mr. Shafer, our CEO, on December 28, 2019, the last day of our 2019 fiscal year (the "Measurement Date"):

For 2019, our last completed fiscal year:

(1)the annual total compensation of the median employee as identified using the steps below was $69,830; and

(2)the annual total compensation of our CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $12,538,797.

Based on this information, for 2019 the ratio of the annual total compensation of Mr. Shafer, our CEO as of the Measurement Date, to the median employee was 179.6 to 1. Our CEO pay ratio has increased over the prior year, due primarily to the following two factors:1) the increase in Mr. Shafer's annual cash incentive compensation attributable to our stronger financial performance in 2019 as compared to 2018, and (2) the increase in Mr. Shafer's equity compensation granted in 2019 as compared to 2018. We believe that the value of the annual cash incentive and equity awards granted to him in 2019 were aligned with market practice.

To identify the median employee, as well as to determine the annual total compensation of the median employee, the methodology and the material assumptions, adjustments, and estimates that we used were as follows:

(1)We determined that as of the Measurement Date, our associate population (according to the methodology set forth under the Fair Labor Standards Act) for purposes of calculating our pay ratio consisted of approximately 27,500 individuals, with approximately 72% of our associate population located in the United States and 28% located outside of the United States.



(2)
Our associate population, after taking into consideration the adjustments permitted by SEC rules, consisted of approximately 26,200 individuals as of the Measurement Date. As the majority of our associates are located in the United States, we applied the de minimis exemption.

a.We excluded approximately 5% or 1,300 associates from our associate population employed by us in the following countries:
AustraliaFinlandNorwaySpain
AustriaFrancePortugalSweden
BelgiumIrelandQatarUnited Arab Emirates
BrazilMalaysiaRomania
CanadaMexicoSaudi Arabia
EgyptNetherlandsSingapore

b.The remaining 95% of our associate population included in our calculation (which consists of approximately 26,200 associates) are employed by us in the following countries:
United States of America
India
Germany
United Kingdom

(3)We determined that the same median employee used for the year ended December 29, 2018 can be used again for the 2019 pay ratio calculation because there have not been changes in our employee population or employee compensation programs that we reasonably believe would result in a significant change in the pay ratio disclosure. The methodology and the material assumptions and estimates that we used to identify our “median employee” during 2018 were as described below:

a.To identify the median employee from our associate population we compared the base pay of our associates on the Measurement Date, as base pay is the primary compensation element for most of our associates. We define "base pay" as the annual salary level for salaried associates and annual base hourly rate multiplied by scheduled hours for hourly workers, as reported in our centralized human resource system. We did not make any cost-of-living adjustments in identifying the median employee.

b.Using this methodology, we determined that the median employee was a full-time salaried associate located in the United States.

(4)With respect to the annual total compensation of the median employee, we identified and calculated the elements of such associate's compensation for 2019 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in an annual total compensation of $69,830.


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of our Directors is an executive officer of a public companyan entity of which a Company executive officer is a director. Dr. Bisbee has an interest in a certain reportable transaction as set forth under the section of this Proxy Statement titled "Certain Transactions," which was approved or ratified by a majority of the disinterested Directors. Other than Dr. Bisbee, none of our non-employee Directors has an interest in a reportableany transaction that would be required to be disclosed under the section in this Proxy Statement titled "Certain Transactions." BothItem 404 of our non-independent directors, Mr. Patterson and Mr. Illig, have an interest in certain reportable transactions set forth under the section of this Proxy Statement titled "Certain Transactions." All such reportable transactions have been approved by the disinterested Directors.Regulation S-K.

During the last fiscal year, none

None of the Company's current Compensation Committee members (Gerald E. Bisbee, Jr., Ph.D., Denis A. Cortese, M.D., John C. Danforth, Linda(Linda M. Dillman, William B. Neaves, Ph.D.Julie L. Gerberding, George A. Riedel, R. Halsey Wise, and William D. Zollars) is or during the last fiscal year was: i)(i) an officer or employee of the Company, or ii)(ii) a former officer of the Company.


47


CORPORATE GOVERNANCE

Code of Business Conduct and Ethics and Other Governance Documents
We have adopted a Global Code of Conduct for all Cerner associates and Directors (including our Chief Executive Officer, Chief Financial Officer and corporate controller)Chief Accounting Officer). Any amendments to or waivers of the Global Code of Conduct applicable to our Directors, executive officers, including our Chief Executive Officer and Chief Financial Officer, or corporate controllerour Chief Accounting Officer will be posted on www.cerner.com.

We have also adopted Corporate Governance DocumentsGuidelines, which together with charters of the Board Committees, provide the framework for the governance of Cerner.

Our Corporate Governance Guidelines the charters of the Audit, Compensation, and Nominating, Governance & Public Policy Committees of the Board, and theour Global Code of Conduct can be found on our website at www.cerner.com under "About Cerner, Leadership.Us, Corporate Governance." Shareholders may also request a free copy of these governance documents from: Cerner Corporation, c/o Corporate Secretary, 2800 Rockcreek Parkway, North Kansas City, Missouri 64117.

Board Leadership Structure
Our Board is currently comprised of six independent Directors, plus Mr. Patterson, the Chairman of the Board, and Mr. Illig, Vice Chairman. Messrs. Patterson and Illig are both associates of the Company. Additionally, as prescribed by our Corporate Governance Guidelines (the "Guidelines"), the Board has designated the Chairperson of the NG&PP Committee to preside over all executive sessions of the Board (the "Lead Director"). The Lead Director's responsibilities include acting as chairperson for all meetings of the independent Directors, convening meetings of the independent Directors at the request of any of them, and establishing the agenda and approving the materials for those meetings, and acting as a liaison between the Chairperson and the independent Directors. The independent Directors generally meet in executive sessions at each regularly scheduled Board meeting and may hold additional executive sessions as they determine necessary or appropriate. As discussed above, the Board has established three standing Committees - i) Audit, ii) Compensation and iii) Nominating, Governance & Public Policy. Each of the Board Committees is composed solely of independent Directors, each with a different independent Director serving as Committee chair. The Board may also establish other committees as it deems appropriate and delegate to those committees any authority permitted by applicable law and Cerner's Bylaws as the Board deems reasonable and appropriate. We believe that the mix of experienced independent and management Directors that make up our Board, along with the independent role of Dr. Neaves, our current Lead Director, and our independent Board Committees, benefits the Company and its shareholders.
The NG&PP Committee oversees an annual self-evaluation by the Board and each Committee, part of which focuses on the governance structure of the Board and its Committees, and seeks recommendations with respect to the structures and practices best suited for us and our shareholders.
With respect to the roles of Chairman and CEO, the Guidelines reserve the right to the Board to vest the responsibilities of Chairman of the Board and CEO in the same individual, and the Board has exercised its discretion in combining these positions and appointing Neal L. Patterson, one of the founders of the Company,Mr. Shafer to serve as Chairman and CEO. The Board believes that it is in Cerner's best interests for the CEOand benefits our shareholders to serve as the Chairmancombine these positions because Mr. Shafer has deep experience in and knowledge of the Board in light of Mr. Patterson's vision as a co-founder of the Company and his unique knowledge, experience and relationship with the Board, the health care and health care IT industryindustries and his serving in both capacities will ensure a direct connection between the Board and the Company's management.leadership team and increase efficiency. The Board believes that the combination or separation of these positions should continue to be considered as part of the succession planning process and that it is important to retain the flexibility to allocate the responsibilities of the offices of Chairman of the Board and CEO in any manner that it determines to be in the best interests of the Company and our shareholders.

William D. Zollars was appointed to serve as our Lead Independent Director in April 2019. The Company believes that having a Lead Independent Director helps to ensure sufficient independence in its leadership and provides effective independent functioning of our Board in its oversight and governance responsibilities. The Lead Independent Director performs such functions and duties provided in the Lead Independent Director Guidelines and as otherwise may be requested by our Board. The authorities, duties, and responsibilities of the Lead Independent Director include, among other things, assisting the Chairman and management in developing Board meeting agendas and meeting schedules, presiding at executive sessions of the independent Directors, serving as a liaison between the Chairman and management and the independent directors, and providing the Chairman with feedback and counsel concerning the Chairman's interactions with our Board. The Lead Independent Director Guidelines can be found on our website at www.cerner.com under "About Us, Leadership."

Each of the four Board Committees - Audit, Compensation, NG&PP and F&S - is composed solely of independent Directors, each with a different independent Director serving as Committee chair. The Board may establish other committees as it deems appropriate and delegate to those committees any authority permitted by applicable law and Cerner's Bylaws. We believe that the mix of experienced independent and management Directors that make up our Board, along with the independent role of Mr. Zollars, our current Lead Independent Director, and our independent Board Committees, benefits the Company and its shareholders.

The NG&PP Committee oversees an annual self-evaluation by the Board and each Committee, part of which focuses on the governance structure of the Board and its Committees, and seeks recommendations with respect to the structures and practices best suited for us and our shareholders.



Board Oversight of Enterprise Risk
Much attention continues to be given to the subject of corporate risk and how companies identify and manage corporate risk. We believe that carefully taken risks can lead to innovation and business success. We also recognize that reckless acceptance of risk or the failure to appropriately identify and mitigate risks couldcan be destructive to achieving our overall healthobjectives and optimizing shareholder value.

Our Enterprise Risk Management team conducts an annual survey of our executive leadership team to identify risks, and together with our other compliance focused teams (such as Regulatory Affairs,Affairs/Compliance, Human Resources and Legal) and executive management, is

48


responsible for assessing and managing our various exposures to riskrisks on a day-to-day basis, including the creation of appropriate risk management programs and policies. The risk assessment process is global in nature and has been developed to identify, assess and assessmitigate our risks, including the nature, likelihood, magnitude and control of and ability to control the risk, as well as to identify steps to mitigate and manage each risk. Our executive management team and other managers are surveyed and/or interviewed to develop this information.risks.

While risk oversight is a full Board responsibility, responsibility for overseeingthe management oversight of our ERM team has been delegated to the Audit Committee. The Audit Committee also periodically reviews and explores with management our majorsignificant risk exposures, including without limitation financial, risk exposuresoperational, data privacy, cybersecurity, business continuity, reputational, legal and regulatory risks, and the steps management has taken to monitor, mitigate and control such exposures, including our risk assessment and riskpolicies that have been adopted in connection with the management policies.of such risks. Due to the dynamic nature of risk, the overall status of our significant risks are updated and significant risks are reviewed and updated at each quarterly Audit Committee meeting and adjustments are made to Board and Committee agendas throughout the year so that risks are reviewed at relevant times. This process facilitates the Board's ability to fulfill its oversight responsibilities of risk management.

Protecting enterprise information - both data privacy and cybersecurity - is a key focus of the Board, and specifically the Audit Committee. As part of the Board's oversight of risk management, the Audit Committee receives regular reports at Board meetings from the Company's Senior Vice President and Chief Information Officer and the Vice President and Chief Security Officer, covering the evolving cybersecurity threat landscape, our risks.information protection security program, and the Company's key cybersecurity risk mitigation activities and controls.

In addition, an overall review of risk is inherent in the Board's consideration of our long-term strategies, and in the transactions and other matters presented to the Board, including significant capital expenditures, acquisitions and divestitures and other financial matters. The Board's role in risk oversight is consistent with our leadership structure, with the CEO and other members of senior management having responsibility for assessing and managing our risk exposure, and the Board and its Committees providing oversight in connection with those efforts.

49


CONSIDERATION OF DIRECTOR NOMINEES

Director Qualifications
The Board's NG&PP Committee considers candidatesworks with our Board to determine the characteristics, skills, and experiences for Board membership suggested by its members and other Board members, as well as management and shareholders. The NG&PP Committee has the ability to retain third-party executive search firms to identify candidates as well, but has not traditionally relied upon this resource. Upon screening and recommendation by the NG&PP Committee, the Board has the responsibility for nominating candidates for election to the Board and for filling vacancies on the Board as they arise. In identifyinga whole and evaluating potential candidates, regardlessits individual members with the objective of the source of the nomination, thehaving a Board considers the qualifications listed in our Corporate Governance Guidelineswith diverse background, experience, ethnicity, gender, race and the NG&PP Committee Charter, including without limitation, the requirement that nomineesskills. Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of theour shareholders. We endeavor to have a diverse Board representing diversevaried and in depthin-depth experience in business, health care, information technology, government and in areas that are relevant to our global activities.activities (as more specifically described below). The NG&PP Committee also considers the composition of the Board as a whole, looking to achieve a balance of the above noted experience across the full Board and a blend of management and independent Directors, while also covering the need for specific skill-sets such as Audit Committee and Compensation Committee expertise. Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serve on the Board for an extended period of time.

In evaluating the suitability of individual Board members, our Board considers many factors, including independence; expertise in cloud and consumer information technology; expertise in enterprise software; expertise in the clinical, business and/or policy aspects of healthcare; an understanding of financial statements; experience in management or governance of publicly traded companies; experience in global business; government or public policy experience; information protection (data privacy and cybersecurity) experience; and gender, race, ethnicity or other diversity. The


NG&PP Committee and the Board believe that a diverse board leads to improved Company performance by encouraging new ideas, expanding the knowledge base available to management and fostering a boardroom culture that promotes innovation and vigorous deliberation. Thus, our Director nomination process is designed to consider diversity among the many factors that the Board considers in evaluating prospective nominees. Diversity, as considered by the NG&PP Committee, can encompass many attributes, from business experience, to substantive expertise, to education, to background, to age, gender, race and race.ethnicity. The NG&PP Committee will seek qualified Board candidates from, among other areas, the traditional corporate environment, government, academia, private enterprise, non-profit organizations and professions such as accounting, human resources and legal services. The NG&PP Committee is committed to seeking out qualified and diverse director candidates, including women and individuals from minority groups, to include in the pool from which nominees are chosen. The goal of this process is to assemble a group of Board members with deep, varied experience, sound judgment and commitment to our success.

ForThe Board does not believe that Directors should expect to be re-nominated following the expiration of their terms. Directors up for re-nomination must meet the same standards and requirements and go through the same review process for consideration for re-nomination as those being considered as a discussion ofnewly appointed/elected candidate.

The NG&PP Committee works with the individual experiencefull Board to regularly evaluate Board composition to assess the skills and qualifications of our Board members, please refercapabilities that are relevant to the section entitled,Board's work and the Company's strategy and the number of directors needed to fulfill the Board's responsibilities under our Corporate Governance Guidelines and committee charters.

The table below summarizes the key qualifications, skills, and attributes that each Director and nominee brings to the Board. Each Director and nominee possesses numerous other skills and competencies not identified below. A mark indicates a specific area of focus or expertise which the Board considers the person to contribute significantly to the overall Board skill set. Not having a mark does not mean the Director or nominee does not possess that qualification or skill. Director and nominee biographies above under "Information Concerning Directors" above.Our Directors and Nominees" describe each person's background and relevant experience in more detail. 
 Gerald E. BisbeeMitchell E. DanielsLinda M. DillmanJulie L. GerberdingJohn J. GreischMelinda J. MountGeorge A. RiedelBrent ShaferR. Halsey WiseWilliam D. Zollars
Age77716364646062625572
Independenceüüüüüüü üü
Cloud and consumer information technology  ü  üüü  
Enterprise software expertise  ü  üüüü 
Clinical healthcare experienceü  ü   ü  
Healthcare business or operations experienceüü üü  üüü
Policy aspects of healthcareüüüü   ü  
Financial statement expertiseüüüüüüüüüü
Management or governance of publicly traded companiesüüüüüüüüüü
Global businessüüüüüüüüüü
Government and public policy experienceüü ü   üü 
Information protection (data privacy and cybersecurity)  üü üü   
Gender, race, ethnicity or other diversity  üü ü    



Nomination Process
The Board's NG&PP Committee considers candidates for Board membership suggested by its members and Shareholder Accessother Board members, as well as management and shareholders. The NG&PP Committee retains a third-party executive search and director recruitment firm from time to Directors
As stated above,time to identify and assist in evaluating candidates, and the NG&PP Committee will consider recommendationsalso identifies potential candidates on its own. Upon screening and recommendation by the NG&PP Committee, the Board has the responsibility for directorships submitted by shareholders. nominating candidates for election to the Board and for filling vacancies on the Board as they arise.

Shareholders who wish the NG&PP Committee to consider their recommendations for Director nominees for the position of Director should submit their recommendations in writing to the NG&PP Committee in care of our Corporate Secretary, Cerner Corporation, 2800 Rockcreek Parkway, North Kansas City, Missouri 64117 in accordance with64117. Any such recommendations should include the procedures described below in "Shareholder Proposals."nominee's name and qualifications for Board membership. Generally, such proposed candidates are considered by the NG&PP Committee at its regularly scheduled meetings and, if recommended by the NG&PP Committee, presented for consideration by the Board at its regularly scheduled meeting during the first quarter of the year prior to the annual shareholders' meeting. Recommendations by shareholders that are made in accordance with these procedures will receive the same consideration given to other potential nominees considered by the NG&PP Committee.
The Director nominees nominated
In addition, the Company's Bylaws permit shareholders to nominate Directors for election at an annual shareholders' meeting. To nominate a Director, the 2013 Annual Shareholders' Meeting, as set forthshareholder must deliver the information required by the Company's Bylaws in accordance with the procedures described below in Proposal #1, were"Shareholder Proposals."

Each of the Board's nominees for this year's election, Julie L. Gerberding, Brent Shafer and William D. Zollars, has been recommended by theour NG&PP Committee and nominated for re-electionelection by the full Board. Additionally, each of our Class II and Class III Directors was recommended by our NG&PP Committee and nominated for election by the full Board. Mr. Wise was initially introduced to the NG&PP Committee by the Company's financial adviser. Mr. Greisch was initially introduced to the NG&PP Committee by the Company's CEO. Ms. Mount and Mr. Riedel were initially introduced to the NG&PP Committee by representatives of Starboard Value LP and its affiliates.

Shareholder Access to Directors
The Board provides a process for shareholders and other interested parties to send communications to the Board or any of the individual Directors. Shareholders may send written communications to the Board or any of the individual Directors c/o Corporate Secretary, Cerner Corporation, 2800 Rockcreek Parkway, North Kansas City, Missouri 64117. All communicationsCommunications will be compiled by our Corporate Secretary and submitted to the Board or the individual Directors, as applicable, on a periodic basis. In general, communications relating to corporate governance and Board matters are more likely to be forwarded than communications relating to ordinary business affairs or commercial solicitations.

50


Majority Voting for Directors
Cerner's Bylaws provide that, in the case of an uncontested Director election (i.e., where the number of nominees is the same as the number of Directors to be elected), Directors are elected by the affirmative vote of a majority of the votes cast, in person or by proxy, by the holders of outstanding shares of stock entitled to vote for the election of Directors. Any incumbent nominee for Director who fails to receive the requisite majority vote at an annual or special meeting held for the purpose of electing Directors, where the election is uncontested, must promptly - following certification of the shareholder vote - tender his or her resignation to the Board. The independent Directors (excluding the Director who tendered the resignation) will evaluate any such resignation in light of the best interests of Cerner and its shareholders in determining whether to accept or reject the resignation, or whether other action should be taken. In reaching its decision, the Board may consider any factors it deems relevant, including the Director's qualifications, the Director's past and expected future contributions to Cerner, the overall composition of the Board, and whether accepting the tendered resignation would cause Cerner to fail to meet any applicable rule or regulation (including NASDAQ Stock Market MarketplaceNasdaq Rules and federal securities laws). The Board will act on the tendered resignation, and publicly disclose its decision and rationale, within 90 days following certification of the shareholder vote.


51



CERTAIN TRANSACTIONS

The Company participates in the Health Management Academy, an industry-wide education forum, together with over 160 competitors, clientsa network of executives from the nation's largest integrated health systems and potential clientsthe industry's most innovative companies striving to shape the future of health care. The Academy facilitates the Company.exchange of best practices and benchmarking data, focused on increasing the quality, appropriateness and efficiency of care. Dr. Bisbee, a member of our Board, ownsis the Executive Chairman of and owner of approximately 50%24.5% of the common stock of the Health ManagementThe Academy. The total amount of membership fees paid by the Company in 20122019 to the Health ManagementThe Academy was $183,570. The Company intends$200,000. We intend to continue itsour participation in the Health ManagementThe Academy in 2013.2020 and expect to incur total fees of the same amount in 2020.

As previously disclosed, during 2009, as part of our long-term space planning analysis,In 2019, we determined that we would require additional office spacepaid approximately $136,800 to OnGoal, LLC ("OnGoal") for associates to accommodate our anticipated growth. We evaluated various sitesSporting Kansas City season tickets and meetings or events held at other venues directly or indirectly owned or managed by OnGoal. OnGoal owns the Sporting Kansas City professional soccer team and is a minority owner in several venues utilized by the Company for meetings and other events in the Kansas City metropolitan area and negotiated with several different governmental entities regarding available incentives. Upon completionordinary course of this review,business. In addition, we decided to proceed with an office development in Wyandotte County, Kansas, which is part of the "Village West" development. In order to maximize available incentives, we agreed to pursue the Village West office development in conjunction with the development of the Village West stadium complex, an 18,000 seat, multi-sport stadium, andhave entered into a series of agreements to implement this development.

The Village West stadium complex was developed by Kansas Unified Development, LLC (the "Developer"), an entity controlled by Mr. Patterson and Mr. Illig.five-year agreement with OnGoal that permits Sporting Kansas City ("to utilize parking spots for OnGoal's staff on game days at our Continuous Campus at no rental cost to Sporting KC")Kansas City/Major League Soccer. When OnGoal is the principal tenant ofusing our parking lot, Sporting Kansas City will provide shuttles to and from the stadium, complex.provide their own clean-up and insurance and pay us for security for the parking lots during OnGoal's usage. OnGoal LLC ("OnGoal"), the owner of the Sporting KC professional soccer club, is also controlled by Messrs. Patterson and Illig. In 2012, we incurred $176,603 of cost for a corporate suite and other events at Sporting Park, Sporting KC season and event/group tickets and related expenses.

In the second quarter of 2012, vertical construction began on the Village West office development.paid us approximately $5,000 in security services expenses during 2019. The total construction and development cost of our office complex has been estimatedamounts receivable under the agreement for security services expenses through 2022 are expected to be approximately $170.0 million. We now believe we will receive incentives totaling approximately $82.0 million$25,000. OnGoal is owned 78.1% by an entity that is indirectly owned 50% by Clifford W. Illig, the former Vice Chairman of the Company who retired from the Developer, the Unified Government of Wyandotte County/Kansas City, Kansas (the "Unified Government") and the State of Kansas. Incentives from the State of Kansas will include cash grants, tax exemptions and tax credits. The value of some of these incentives may ultimately increase or decrease depending upon the final capital invested and the number of new jobs created. We now expect our net investmentBoard in the Village West office complex, after applying expected government incentives and payments from the Developer, to be approximately $88.0 million. We believe that the amount of government incentives that the Developer and OnGoal received, as well as the government incentives received by us, were materially increased due to the fact that we agreed to build our office complex in close proximity to the Village West stadium complex.

Effective January 20, 2012, we entered into a Construction Coordinator Agreement, as amended by Amendment No. 1 to the Construction Coordinator Agreement dated May 31, 2012, with GRAND Construction, LLC (the "Coordinator"), an entity controlled by Mr. Patterson and Mr. Illig, to coordinate, supervise, schedule and assist with managing the development, design and construction of the Phase 1 and 2 buildings and site at the Village West office development. Under the agreement, we will pay the Coordinator 2% of the total cost of the project (as specified in the agreement). We paid the Coordinator $1,399,118 in 2012. Based on management's projected scope of services, it is anticipated that the fees will be approximately $3.2 million and paid through April 2014.

We entered into a lease agreement with Trails Properties II, Inc., which is controlled by Mr. Patterson's revocable trust and Mr. Illig's revocable trust, for the right to use and access ground in the Three Trails development at Bannister Road in Kansas City, Missouri. The lease provides us with use and access of the ground at $100 per year rental rate for a three year term. In conjunction with this ground lease, we entered into an agreement with the Coordinator to develop the leased ground into a parking lot to accommodate our growing associate population at our Innovation Campus. $349,946 was paid to the Coordinator in 2012 for the development of the parking lot.2019.

Certain current and former executive officers and Board members have immediate family members who are or were employed by the Company.Company during the last fiscal year. The regular compensation of each such family member was established by the Company in accordance with the Company's employment and compensation practices applicable to employees with equivalent qualifications, experience, responsibilities and holding similar positions. Dr. David Nill, is the brother of Julia M. Wilson Sr. Vice President

52


and Chief People Officer, and Michael R. Nill, Executive Vice President and Chief Operating Officer, both former executive officers of the Company. Dr. NillCompany, is employed by Cerner Health Connections, Inc. (a wholly-owned subsidiary of the Company) as Chief Medical Officer. Dr. Nill's aggregate cash compensation for fiscal year 20122019 was $331,681. Dr. Nill's compensation is not subject to approval by the Board of Directors.$480,510. On May 1, 2012,April 29, 2019, Dr. Nill was awarded (i) options under our 2011the Company's Omnibus Equity Incentive Plan (the "Omnibus Plan") to purchase 15,0003,221 shares of the Company's Common Stock at an exercise price of $82.80$65.88 per share, which was the closing price of our Common Stock on the date thesuch options were granted. The options granted to Dr. Nill vest at various amountsevenly over a period of fivefour years, and (ii) 3,382 RSUs to vest evenly over a period of three years. Ms. Wilson'sJeffrey Naughton, the son of Marc Naughton, the Company's Chief Financial Officer, is employed by the Company as a Market General Manager. Jeffrey Naughton's aggregate cash compensation for the fiscal year 20122019 was $682,289. As a Section 16 Officer, her compensation was approved by the Board of Directors.$138,788. On March 9, 2012, Ms. WilsonApril 29, 2019, Jeffrey Naughton was awarded (i) options under ourthe Company's Omnibus Plan to purchase 25,000129 shares of ourthe Company's Common Stock at an exercise price of $76.86$65.88 per share, which was the closing price of our Common Stock on the date thesuch options were granted. The options granted to Ms. Wilson vest at various amountsevenly over a period of five years. Ms. Wilson was also awarded 5,000 performance-based restricted shares under our Omnibus Plan on March 9, 2012. These shares had a grant date value of $76.86 per sharefour years, and (ii) 136 RSUs to vest at various amountsevenly over a period of three years based on attainmentyears. On September 6, 2019, Jeffrey Naughton was awarded 1,567 RSUs to vest evenly over a period of performance targets. Clay Patterson,two years. Kyle Peterzalek, the son of Neal L. Patterson, an executive officer ofJohn Peterzalek, the Company,Company's Executive Vice President and Chief Client and Services Officer, is employed by the Company as Managing Director, Cerner Capital, Inc. Mr. C. Patterson'sa Client Accountable Executive. Kyle Peterzalek's aggregate cash compensation for fiscal year 20122019 was $269,325. Mr. C. Patterson's compensation$154,466. Dana Peterzalek, the daughter-in-law of John Peterzalek is not subject to approvalemployed by the Board of Directors.Company as a Lead Operations Manager. Mrs. Peterzalek's aggregate compensation for fiscal year 2019 was $133,477. On May 1, 2012, Mr. C. PattersonApril 29, 2019, Mrs. Peterzalek was awarded (i) options under ourthe Company's Omnibus Plan to purchase 10,000129 shares of ourthe Company's Common Stock at an exercise price of $82.80$65.88 per share, which was the closing price of our Common Stock on the date thesuch options were granted. The options granted to Mr. C. Patterson vest at various amountsevenly over a period of fivefour years, and (ii) 136 RSUs to vest evenly over a period of three years.

Julia M. Wilson, a former executive officer of the Company (Executive Vice President and Chief People Officer) and the sister of Michael R. Nill, was employed by the Company until October 1, 2019. In 2010, we entered intoconnection with her departure as contemplated in her severance agreement with the Company, and her execution and non-revocation of a Non-Exclusive Aircraft Dry LeaseSeparation Agreement containing a general release of claims, Ms. Wilson is receiving cash payments, less applicable deductions required by law, on Cerner's regular pay days during the 24 month period commencing on October 18, 2019, calculated based upon the following formula (per annum): (i) her annual base salary effective April 1, 2019; (ii) her annual target cash bonus effective April 1, 2019; plus (iii) the difference between her monthly COBRA continuation premium under Cerner's health, vision and dental plans in effect as of her departure date and the monthly amount she was paying for such coverage as of her departure date. Additionally, on the Effective Date of the Separation Agreement (as defined


therein), Cerner fully vested Ms. Wilson's outstanding equity awards. Ms. Wilson will remain subject to, and the separation payments will be conditioned upon compliance with, Maple Holdings, LLC ("Maple Holdings"), an entity controlled by Mr. Illig. Thethe restrictive covenants contained in her employment agreement gives usand the rightSeparation Agreement, including covenants with respect to lease an aircraft for business needs, which aircraft is privately owned by Maple Holdings. The aircraft is used by usnon-competition, non-solicitation and confidentiality. If Ms. Wilson were to meet our business needs and to provide air travel to Directors and executivesbreach any of the restrictive covenants during the 24 month separation payment period, Cerner would be entitled to air travel pursuantstop any payments due after the date of breach and claw back all separation payments made prior to the date of breach, as well as any of Ms. Wilson's outstanding equity awards or shares of common stock underlying such equity awards at the time of breach or, if sold prior to the date of the breach, the proceeds thereof. Ms. Wilson received her then current salary, benefits and any earned incentive plan bonus through the date of her departure. Ms. Wilson's aggregate compensation, packages. Payments by usincluding separation compensation, during 2019 was $840,712. Ms. Wilson is entitled to Maple Holdingsreceive $1,526,734 in 2012additional cash compensation under this lease totaled $193,759. In 2012, we paid TiFEC, LLC, an entity 99% owned by Mr. Illig's trust, the amountterms of approximately $184,579her Separation Agreement after the 2019 fiscal year, subject to cover the costclaw back provision described above. On the Effective Date of fuelthe Separation Agreement (as defined therein), Ms. Wilson became fully vested with respect to fly144,700 shares underlying option awards with a fair market value of $1,367,668 (based upon the aircraft owned by Maple Holdingsexcess of the fair market value of the shares over the exercise price of the options on the date of vesting) and 38,086 shares underlying RSUs with a fair market value of $2,603,940 (based upon the fair market value of the shares on the date of vesting), in each case, subject to the claw back provision described above.

See the 2019 Summary Compensation Table and Compensation Discussion and Analysis for Company business.a discussion of NEO compensation.

We believe that these various relationships and transactions were reasonable and in the best interests of the Company.

Policies and Procedures for Review and Approval of Transactions with Related Persons

We have established a written conflict of interest policy to address instances in which an associate's or Director's private interests may conflict with the interests of the Company. We have established an ad hoc management committee, consisting of members from our Legal Department, to help administer our conflicts of interest policy and to render objective determinations regarding whether any associate's or Director's private interests may interfere with the interests of the Company. Once a transaction or relationship is identified, it is analyzed by the ad hoc management committee and outside counsel, as necessary, to determine if the transaction is a related party transaction within the meaning of Item 404(a) of the SEC's Regulation S-K (a "Related Party Transaction").

Conflicts of interest are also addressed in our Code of Conduct, which is published on our website at www.cerner.com under "About Cerner, Investor Relations, Corporate Governance." Any waiver of any provision of our Code of Conductfor executive officers or Directors may be made only by the Board, and will be promptly disclosed as required by law or NASDAQ rule.

We solicit information annually from our Directors and executive officers in connection with the preparation of disclosures in our annual report on Form 10-K and our annual Proxy Statement. We specifically seek information in writing pertaining to any Related Party Transaction. Additionally, management informs the Board and/or its Committees regarding any potential Related Party Transaction of which management is aware. All Related Party Transactions, as well as other transactions with related persons which are not Related Party Transactions, are submitted for review and ratification by the Audit Committee on an annual basis.


53


Our Board of Directors has adopted a written policy governing the approval of Relatedtransactions with related parties that are reasonably expected to be disclosable under Item 404(a) of Regulation S-K (a "Related Party Transactions.Transaction"). Under the policy, the Audit Committee (or the Chairperson or certain members of management via delegation under the policy) will review the material facts of all Related Party Transactions that require the Audit Committee's approval and either approve or disapprove of the entry into the Related Party Transaction. If advance Audit Committee approval of a Related Party Transaction is not feasible, then the Related Party Transaction will be considered and, if the Audit Committee determines it to be appropriate, ratified at the Audit Committee's next regularly scheduled meeting. In determining whether to approve or ratify a Related Party Transaction, the Audit Committee will take into account, among other factors it deems appropriate, whether the Related Party Transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related person's interest in the transaction.

Related PersonParty Transactions entered into without the Audit Committee's pre-approval will not violate our policy, or be invalid or unenforceable, so long as the transaction is brought to the Audit Committee or the ChairChairperson of the Audit Committee as promptly as reasonably practical after it is entered into or after it becomes reasonably apparent that the transaction is covered by our policy.


54


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a)Our Related Party Transaction Policy is in addition to our written conflict of the Exchange Act requires our Directors, executive officersinterest policy and persons who own more than 10%Global Code of a registered class of our equity securities to fileConduct that addresses instances in which an associate's or Director's private interests may conflict with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securitiesinterests of the Company. ExecutiveWe have established an ad hoc management committee, consisting of members from our Legal Group, to help administer our conflicts of interest policy and to render objective determinations regarding whether any associate's or Director's private interests may interfere with the interests of the Company. Once a transaction or relationship is identified, it is analyzed by the ad hoc management committee and outside counsel, as necessary, to determine if the transaction is a Related Party Transaction. Any waiver of any provision of our Global Code of Conductfor executive officers or Directors may be made only by the Board and will be promptly disclosed as required by law or Nasdaq Rules.

We solicit information annually from our Directors and holders of 10% or more of our equity securities are required to furnish us with copies of all Section 16(a) reports they file.
Based solely on review of the copies of such reports furnished to us or written representations that no other reports were required, we believe that during the fiscal year ended December 29, 2012 all Section 16(a) filing requirements applicable to our executive officers Directorsin connection with the preparation of disclosures in our annual report on Form 10-K and holdersour annual Proxy Statement. We specifically seek information in writing pertaining to any transactions with related parties. Additionally, management informs the Board and/or its Committees regarding any potential Related Party Transaction of 10% or more of our equity securities were appropriately satisfied.which management is aware. All Related Party


55

Transactions, as well as other transactions with related persons which are not Related Party Transactions, are submitted for review and ratification by the Audit Committee on an annual basis.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The table below sets forth information, as of March 22, 2013February 20, 2020 (unless otherwise indicated below), with respect to the beneficial ownership of shares of Common Stock by: i)(i) each person known to us to own beneficially more than 5% of the aggregate shares of Common Stock outstanding, ii)(ii) each Director and nominee for election as a Director, iii)(iii) each Named Executive Officer included in the Summary Compensation Table, and iv)(iv) the executive officers and Directors of the Company as a group. Each of the persons, or group of persons, in the table below has sole voting power and sole dispositiveinvestment power as to all of the shares shown as beneficially owned by them, except as otherwise indicated.

Name and Address of Beneficial Owner Amount and Nature of Beneficial OwnershipPercent of Shares Outstanding
Neal L. Patterson (1)14,346,748
8.35%
FMR LLC (2)12,652,176
7.36%
The Vanguard Group (3)8,609,866
5.01%
Clifford W. Illig (4)7,988,562
4.65%
Jeffrey A. Townsend388,854
*
Marc G. Naughton (5)275,538
*
John C. Danforth (6)198,358
*
Michael R. Nill182,724
*
Zane M. Burke52,867
*
William D. Zollars45,550
*
William B. Neaves (7)18,200
*
Gerald E. Bisbee, Jr.18,200
*
Linda M. Dillman9,866
*
Denis A. Cortese4,266
*
All Directors and executive officers, as a group (12 persons)23,529,733
13.70%
Name and Address of Beneficial Owner Amount and Nature of Beneficial OwnershipPercent of Shares Outstanding
   
The Vanguard Group, Inc.(1)
33,451,876
10.72%
BlackRock, Inc.(2)
23,516,312
7.53%
Marc G. Naughton(3)
389,809
*
Jeffrey A. Townsend(4)
96,505
*
John T. Peterzalek(5)
96,036
*
Brent Shafer(6)
93,155
*
Gerald E. Bisbee54,900
*
Donald D. Trigg(7)
36,488
*
Mitchell E. Daniels27,000
*
William D. Zollars25,572
*
Linda M. Dillman22,204
*
John J. Greisch9,183
*
R. Halsey Wise7,600
*
Julie L. Gerberding(8)
4,572
*
George A. Riedel320
*
Melinda J. Mount270
*
Michael R. Nill(9)
—
*
All Directors and executive officers, as a group (15 persons)996,854
*
*Less than one percent.

(1)Mr. Patterson reportsSchedule 13G/A, filed by The Vanguard Group, Inc. on February 12, 2020, reported sole voting and dispositive power with respect to 2,727,559484,541 shares of Common Stock, shared voting power with respect to 98,704 shares of Common Stock, sole investment power with respect to 32,892,905 shares of Common Stock and shared voting and dispositiveinvestment power with respect to 11,619,189558,971 shares of Common Stock. The address for Mr. Patterson is Cerner Corporation, 2800 Rockcreek Parkway, North Kansas City, Missouri 64117.
Such number of shares includes 1,609,346 held by Jeanne Lillig-Patterson, wife of Mr. Patterson, as trustee for their children. Such number of shares excludes 69,276 shares beneficially owned by Jeanne Lillig-Patterson. Mr. Patterson disclaims beneficial ownership of such shares.
(2)Schedule 13G/A, dated February 14, 2013 and filed by FMR LLC, reported sole voting power with respect to 78,618 shares of Common Stock and sole dispositive power with respect to 12,652,176 shares of Common Stock. The address for FMR LLC is 82 Devonshire Street, Boston, Massachusetts 02109.
(3)Schedule 13G, dated February 13, 2013 and filed by Vanguard Group, Inc., reported sole voting power with respect to 253,302 shares of Common Stock, sole dispositive power with respect to 8,366,864 shares of Common Stock and shared dispositive power with respect to 243,002 shares of Common Stock. The address for Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

(4)(2)Mr. Illig reports
Schedule 13G/A, filed by BlackRock, Inc. on February 5, 2020, reported sole voting and dispositive power with respect to 3,806,65620,369,062 shares of Common Stock and sole investment power with respect to 23,516,312 shares of Common Stock. The address for BlackRock, Inc. is 55 East 52nd St., New York, New York 10055.

(3)Mr. Naughton has sole voting and investment power with respect to 310,041 shares of Common Stock and shared voting and dispositiveinvestment power with respect to 4,181,90679,768 shares of Common Stock. The address for Mr. Illig is Cerner Corporation, 2800 Rockcreek Parkway, North Kansas City, Missouri 64117.This amount includes

56


289,740 shares of Common Stock issuable upon exercise of options that are vested or will vest within 60 days.

Such number of shares includes 782,66879,768 shares held in trust by Bonne A. Illig,jointly with Janise Naughton, wife of Mr. Illig, serving as trustee for their children.Naughton. Such number of shares excludes 2,600 shares beneficially owned by Janise Naughton. Mr. Naughton disclaims beneficial ownership of such shares.

(4)Mr. Townsend has sole voting and investment power with respect to 96,505 shares of Common Stock. This amount includes 58,400 shares of Common Stock issuable upon exercise of options that are vested. Mr. Townsend served as an executive officer until his retirement from the role of Executive Vice President and Chief of Innovation of Cerner effective November 1, 2019, at which time he transitioned to Executive Senior Advisor.

(5)Includes 27,736Mr. Peterzalek has sole voting and investment power with respect to 81,531 shares held jointlyof Common Stock and shared voting and investment power with Janise Naughton, wiferespect to 14,505 shares of Marc G. Naughton.Common Stock. This amount includes 72,800 shares of Common Stock issuable upon exercise of options that are vested.

(6)Includes 1,720Mr. Shafer has sole voting and investment power with respect to 93,155 shares held by Sally Danforth, wife of John C. Danforth.Common Stock. This amount includes 72,802 shares of Common Stock issuable upon exercise of options that are vested and 20,146 shares of Common Stock issuable from RSUs that will vest within 60 days.

(7)Includes 18,200Mr. Trigg has sole voting and investment power with respect to 36,488 shares heldof Common Stock. This amount includes 34,760 shares of Common Stock issuable upon exercise of options that are vested.

(8)Dr. Gerberding has sole voting and investment power with Priscilla Neaves, wiferespect to 4,572 shares of William B. Neaves, Ph.D., in Joint Tenancy with RightCommon Stock. This amount includes 1,500 shares of Survivorship.Common Stock issuable from RSUs that will vest within 60 days.

(9)Mr. Nill departed the Company on January 10, 2020.
57




PROPOSAL #1

ELECTION OF DIRECTORS
There are three Director nominees for election to the Board of Directors (the "Board") this year.
The Board has nominated Gerald E. Bisbee, Jr.Julie L. Gerberding, M.D., Ph.D.M.P.H., Denis A. Cortese, M.D.Brent Shafer and Linda M. Dillman,William D. Zollars for election as Class IIII Directors. Dr. Gerberding, Mr. Shafer and Mr. Zollars are Class I Directors who have served continuously on our Board since 1988, 20112017, 2018 and 2010,2005, respectively. Unless otherwise instructed, the persons named as proxies will vote for the election of Dr. Bisbee, Dr. CorteseGerberding, Mr. Shafer and Ms. Dillman.Mr. Zollars. Each of the Director nominees has agreed to be named in this Proxy Statement and to serve if elected.

If elected, each of the nominees will hold office for a three-year term expiring at the 2023 Annual Meeting of Shareholders and until his or her successor is elected and qualified or until his or her earlier resignation or removal. We know of no reason why any of the nominees would not be able to serve. However, in the event a nominee is unable or declines to serve as a Director, or if a vacancy occurs before election (which events are not anticipated), the persons named as proxies will vote for the election of such other person or persons as are nominated by the Board.

Information concerning each Director nominee is set forth above under "Information Concerning Directors and Nominees," along with information about other members of our Board.

Vote Required

The favorableaffirmative vote of a majority of the votes cast, in person or by proxy, is required byfor the election of Directors (meaning the number of shares voted "For" a nominee must exceed the number of shares voted "Against" a nominee). If any nominee for Director receives a greater number of votes "Against" his or her election than votes "For" such election, our Bylaws require that such person tender his or her resignation to the Board following certification of the vote as further discussed above under "Consideration of Director Nominees - Majority Voting for Directors." Our Board recommends a vote for"For" the election of each of the nominees.




58



RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our independent registered public accounting firm during the year ended December 29, 201228, 2019 was KPMG LLP ("KPMG").KPMG. KPMG has audited our financial statements since 1983.

Annual Evaluation and Selection of Independent Auditors

The Audit Committee annually reviews KPMG's independence and performance in deciding whether to retain KPMG or engage a different independent auditor. In the course of these reviews, the Audit Committee considers, among other things:

KPMG's historical and recent performance on our audit.
KPMG's capability, knowledge of and expertise in handling the complexity of our global operations and industry.
Appropriateness of KPMG's fees for audit and non-audit services (see below).
KPMG's independence and established internal controls to ensure that KPMG is proactively addressing any independence or quality concerns.
The quality and candor of KPMG's communications with the Audit Committee and management.
KPMG's tenure as our independent auditor. We believe the benefits of a longer tenured audit firm are considerable and include the following: (i) institutional knowledge can result in higher audit quality; (ii) eliminating the learning curve related to our business can increase efficiency and keep costs competitive; and (iii) management time and resources can be focused on our business rather than onboarding and educating a new auditor.


Audit and Non-Audit Fees

The aggregate fees billed by KPMG for professional services rendered for the fiscal years ended December 28, 2019 and December 29, 2018 were as follows:
 2019 2018
    
Audit Fees$2,566,146
 $2,584,170
Audit-Related Fees1,400,646
 916,656
Tax Fees—
 —
Other Fees162,091
 162,031
Total$4,128,883
 $3,662,857

Audit Fees. KPMG billed us an aggregate of: $1,337,020 and $1,307,326Audit fees include fees for professional services rendered for the audit of our consolidated financial statements included in our annual report on Form 10-K, for the years ended December 29, 2012 and December 31, 2011, its review of our consolidated financial statements included in our quarterly reports on Form 10-Q, and for routine consultation on accounting and reporting matters that directly affected the consolidated financial statements, for the years ended December 29, 2012 and December 31, 2011, respectively.issuance of consents. Additionally, KPMG billed us an aggregate of $107,855 and $115,587audit fees include fees for professional services rendered for audits of certain foreign subsidiaries in support of statutory reporting requirements for the years ended December 29, 2012 and December 31, 2011, respectively.requirements.

Audit-Related Fees. Audit related fees include services in the form of attestation reports over internal controls in the form of System and Organization Controls (SOC) 1, 2 and 3 reports and HITRUST attestation services related to the Company's ISO 27001 certifications, and other services related to vendor due diligence.

Tax Fees. There were no audit-relatedtax fees billed to us by KPMG for the fiscal years ended December 29, 201228, 2019 and December 31, 2011.

Tax Fees. KPMG billed us an aggregate of $62,882 and $102,959 for tax services for the years ended December 29, 2012 and December 31, 2011, respectively, including fees for services relating to expatriate return services for associates who are not in a financial reporting oversight role and tax consultation and tax compliance services.2018.

All Other Fees. KPMG billed us an aggregate of $42,211 for consulting services for the year ended December 29, 2012. There were noAll other fees billedinclude services associated with providing observations and recommendations relative to us by KPMG for the year ended December 31, 2011.nonfinancial systems and internal controls pertinent to expected SOC 1 engagements.



The Audit Committee has determined that the provision of services by KPMG described in the preceding paragraphs is compatible with maintaining KPMG's independence. All permissible non-audit services provided by KPMG in 20122019 were pre-approved by the Audit Committee. In addition, audit engagement hours were performed by KPMG's full-time, permanent employees and/or affiliated employees in non-U.S. offices.

Pursuant to Section 202 of the Sarbanes-Oxley Act of 2002, our Audit Committee has approved all audit and non-audit services performed to date and currently planned to be provided by KPMG related to the fiscal year 2013 by our independent registered public accounting firm, KPMG.2020. The planned services include the annual audit, quarterly reviews and issuances of consents related to SEC filingsfilings. Additionally, KPMG has been engaged in 2020 to provide audit related services in the form of attestation reports over internal controls in the form of System and certain tax compliance services.Organization Controls (SOC) 1, 2 and 3 reports and HITRUST attestation, and other non-audit services related to the Company's ISO 27001 certifications.


59



PROPOSAL #2

RATIFICATION OF THE APPOINTMENT OF KPMG
AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our
Based on its evaluation and the Audit Committee's determination that KPMG is independent, our Audit Committee has retained the firm of KPMG LLP as our independent registered public accounting firm for fiscal year 2013,2020, and we are asking shareholders to ratify that appointment. In the event the shareholders fail to ratify the appointment, the Audit Committee will reconsider this appointment but will not necessarily select another firm. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and our shareholders. Representatives of KPMG will be present at the 2020 Annual Shareholders' Meeting, and will have the opportunity to make a statement and be available to answer questions.

Vote Required

The favorableaffirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote at the annual meeting is necessaryrequired for approval of this proposal. Our Board recommends a vote "For" the ratification of the appointment of KPMG LLP as our independent registered public accounting firm. Our Board recommends a vote in favor of the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 2013.2020.



60



PROPOSAL #3

ADVISORY VOTE TO APPROVE THE COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and
Pursuant to Section 14A of the Exchange Act, enablewe are providing our shareholders with a vote to approve, on an advisory or non-binding basis, the compensation of our Named Executive Officers as disclosed in this Proxy Statement in accordance with SEC rules.

Our compensation strategy is to offer competitive compensation packages to attract, motivate and reward qualified associates who contribute significant value to the Company and to reward performance, such as attainment of business and individual associate goals, business results, leadership, and strong relationships with clients, and is not based on rewarding seniority. This pay-for-performance compensation strategy is linked to our performance management philosophy that is designed to identify and reward associate performance through compensation. This approach which has been used consistently over the years, has resulted in our ability to attract and retain thekey executive talent necessary to lead us during a period of tremendous growthtransition and transformation. Please refer to "Compensation Discussion and Analysis-Executive Summary"Analysis" for an overview of the compensation of our NEOs.

We are asking our shareholders to indicate their support for our NEOs' compensation as described in this Proxy Statement. This proposal, commonly known as a "say-on-pay" proposal, gives our shareholders the opportunity to express their views on the compensation of our NEOs. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we are asking our shareholders to approve, on an advisory basis, the following resolution:

"RESOLVED, that the compensation paid to the Company's Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED."

This vote is advisory and therefore not binding on the Company, the Compensation Committee or the Board of Directors. The Board and the Compensation Committee value the opinions of Cerner shareholders and to the extent there is any significant vote against the compensation of our NEOs as disclosed in this Proxy Statement, we will consider those shareholders' concerns, and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

The Company conducts the shareholder advisory votes on executive compensation on an annual basis and therefore, the next such shareholder vote is expected to occur at the Company's 2021 Annual Shareholders' Meeting.

Vote Required

The affirmative vote of a majority of the shares of Cerner Common Stock present in person or represented by proxy and entitled to be voted on the proposalvote at the annual meeting is required for advisory approval of this proposal. Our Board recommends a vote in favor of the approval of the compensation of the Company's NEOs as disclosed in this Proxy Statement.




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PROPOSAL #4

AMENDMENT TO SECONDTHE THIRD RESTATED CERTIFICATE
OF INCORPORATION
TO DECLASSIFY THE BOARD OF DIRECTORS
The Company's Second
After careful consideration and upon the recommendation of the NG&PP Committee, the Board has unanimously determined that it would be in the best interests of the Company and our shareholders to amend Article SIXTH of our Third Restated Certificate of Incorporation (as amended to date, the "Restated Certificate"), to declassify the Board and provide for the annual election of all directors, as described below (the "Declassification Amendment"). The Board is now asking our shareholders to approve the Declassification Amendment, the text of which is set forth in Appendix II to this Proxy Statement. The following discussion is qualified in its entirety by the full text of the proposed Declassification Amendment in Appendix II.

Background and Reasons for the Proposal

The Company's Restated Certificate provides that the Board is divided into three classes of Directors, with each class elected every three years. The Company's shareholders approved the election of Directors by classes in 1986. We believe that our shareholders have benefited from the classified Board structure by protecting long-term shareholder interests against abusive takeover tactics; permitting our Directors to develop a deeper knowledge of our business, especially in light of the opportunities and challenges arising from health care reform; encouraging the Board to govern with a long-term, strategic perspective to promote positive long-term financial performance by the Company and long-term value to shareholders; and ensuring continuity and stability of the Company's Directors and policies, so that a majority of Directors at any given time have prior experience as Directors of the Company.

In responseA proposal to a vote bydeclassify the Board was submitted to our shareholders at our 2012the 2013 Annual Meeting, of Shareholders approving, by a majority ofbut the outstanding shares, a non-bindingproposal failed to receive sufficient shareholder proposal to eliminate the classification of the Board, theapproval for passage. The NG&PP Committee, as well as the full Board, againhas continually considered the advantages and disadvantages of maintaining the classified Board structure and the implications of declassification. ThereWe recognize and respect that there are two sides to the argument.different viewpoints and perspectives. On the one hand, some shareholders believe that annual elections may increase accountability of directors because shareholders may evaluate and elect all directors on an annual basis, and the election of directors may be the primary means for shareholders to influence corporate governance policies of the Company. On the other hand, a classified structure may allow directors to exercise greater independence on behalf of all shareholders if they do not face annual reelection campaigns, as well as provide continuity and stability in the management of the business and affairs of the Company. In addition, classified boards may enhance shareholder value by forcing an entity seeking control of the Company to initiate discussions at arm's-length with the Board of the Company, because the entity seeking control cannot replace the entire Board in a single election.

After carefully considering the advantages and disadvantages of the classification of the Board, the current views of our shareholders as expressed in the non-binding vote on this issue at the 2012 Annual Shareholder Meeting,during our ongoing shareholder engagement, a growing sentiment among institutional investors and their advisory services in favor of annual elections, and the recommendation of the NG&PP Committee, the Board has once again adopted a resolution setting forth the proposed amendments to the Company's Restated CertificateDeclassification Amendment to eliminate the classification of the Board of Directors over a three-year period, declared its advisability and directed that the proposed amendmentsDeclassification Amendment be considered at the 20132020 Annual Meeting of Shareholders.

Proposed Declassification Amendment

The proposed amendments to the Restated CertificateDeclassification Amendment would eliminate the classification of the Board over a three-year period and provide for the annual election of all Directors beginning at the 20162023 Annual Meeting of Shareholders. If approved, the proposed amendments to the Restated CertificateDeclassification Amendment would become effective upon the filing of a Certificate of Amendment with the Secretary of State of the State of Delaware, which the Company wouldwill do promptly if shareholder approval is obtained for the proposed amendments.Declassification Amendment. Board declassification would be phased-in over a three-year period, beginning at the 20142021 Annual Meeting of Shareholders as follows:Shareholders.
Until

The directors whose terms of office expire at Annual Meetings subsequent to the election of Directors at the 2014 Annual Meeting, the Board shall continue to be divided into three classes of Directors, Class I, Class II and Class III, with the Directors in Class I having a term expiring at the 2014 Annual Meeting, the Directors in Class II having a term expiring at the 20152020 Annual Meeting, and any successors to such directors, will be elected to hold office until the Directors in Class III having a term expiring at the 2016 Annual Meeting.
Commencing with the election of Directors at the 2014next Annual Meeting following their election instead of the Board shall be divided into two classes of Directors, Class I and Class II, with the Directors in Class I having a term that expires at the 2015third-succeeding Annual Meeting, and until their successors are elected and qualify. If the Directors in Class II having a term that expires atshareholders approve the 2016 Annual Meeting. The successors of the Directors who, immediatelyDeclassification Amendment, any newly created directorships prior to the 20142023 Annual Meeting were memberswill generally be apportioned among the classes of Class I (and whose terms expire atdirectors so that the 2014 Annual Meeting) shall beclasses are as nearly equal in number as the then total number of directors permits. A director elected to Class I;fill a vacancy other than a newly created directorship will have the Directors who, immediatelysame remaining term as that of his or her predecessor.

The Declassification Amendment is not intended to, and will not, abrogate, shorten or otherwise affect the term of any current director elected prior to the 20142021 Annual Meeting, were members of Class II and whose terms were scheduled

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to expire at the 2015 Annual Meeting shall become members of Class I; and the Directorsincluding those directors who immediately prior to the 2014 Annual Meeting, were members of Class III and whose terms were scheduled to expire at the 2016 Annual Meeting shall become members of Class II with a term expiring at the 2016 Annual Meeting.
Commencing with thecurrently are candidates for election of Directors at the 2015 Annual Meeting, there shall be a single class of Directors, Class I, with all Directors of such class having a term that expires at the 2016 Annual Meeting. The successors of the Directors who, immediately prior to the 2015 Annual Meeting, were members of Class I (and whose terms expire at the 2015 Annual Meeting) shall be elected to Class I for a term that expires at the 2016 Annual Meeting, and the Directors who, immediately prior to the 2015 Annual Meeting, were members of Class II and whose terms were scheduled to expire at the 2016 Annual Meeting shall become members of Class I with a term expiring at the 2016 Annual Meeting.
as set forth in Proposal #1. From and after the election of Directors at the 20162023 Annual Meeting, the Board shall cease to be classified and the Directors elected at the 20162023 Annual Meeting (and each meeting thereafter) shall be elected for a term expiring at the next Annual Meeting of Shareholders.

The proposed amendments would not affect the election of the class of Directors at this 2013 Annual Meeting. Beginning with the 2016 Annual Meeting, all Directors will stand for election at each Annual Meeting for one year terms. The proposed amendmentsDeclassification Amendment would not change the present number of Directors or the Board's authority to change that number and to fill any vacancies or newly created directorships.

Under Delaware corporate law, provides, unlessdirectors serving on a classified board may only be removed by shareholders for cause (unless otherwise provided in the certificate of incorporation, that members ofincorporation), while directors serving on a non-classified board that is classified may be removed only for cause.with or without cause by a vote of the holders of a majority of the shares then entitled to vote at an election of directors. At present, because the Board is classified, the Restated Certificate provides that the members of the Board are removable only for cause.cause by the affirmative vote of the holders of 80% of the outstanding number of shares of voting stock of the Company entitled to vote thereon. The proposed amendments provideDeclassification Amendment provides that, once the Board has become declassified in 2016,2023, Directors may be removed with or without cause.cause by a vote of the holders of a majority of the shares then entitled to vote at an election of directors.

The proposed Certificate of Amendment to the Restated Certificate is attached to this Proxy Statement as Annex I. Corresponding Bylaw Amendments

If the proposed amendments to the Restated Certificate areDeclassification Amendment is approved by the shareholders, the Board will make certain conforming changes to the Company's Second Amended and Restated Bylaws. The conforming amendments to the Bylaws do not require shareholder approval.

Vote Required

The affirmative vote of the holders of at least 80% of the outstanding shares of voting stock of the Company entitled to vote thereon is required to approve the amendments to the Restated Certificate.Declassification Amendment. If the shareholders do not approve the proposed amendment,Declassification Amendment, then the Board will remain classified and all Directors will continue to be elected to three-year terms. Our Board recommends a vote in favor of the proposed amendments to the Restated Certificate.Declassification Amendment.



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PROPOSAL #5
AMENDMENT TO SECOND RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOcK
Currently, our Second Restated Certificate of Incorporation) authorizes the issuance of 250,000,000 shares of our Common Stock, par value $0.01. On March 1, 2013, our Board adopted a proposal to amend the Restated Certificate to increase the number of shares of Common Stock we are authorized to issue from 250,000,000 to 500,000,000, subject to shareholder approval of the amendment.

Our Board has declared the proposed amendment to be advisable and in the best interest of the Company and its shareholders, and has submitted the proposed amendment to be voted on by the shareholders at the 2013 Annual Shareholders' Meeting. On April 5, 2013, there were [________] shares of Common Stock outstanding. A total of [_________] shares of Common Stock were reserved for issuance upon the exercise of stock based awards and for potential stock issuances under existing approved equity incentive plans. Based upon the number of issued and reserved shares of Common Stock, we currently have approximately [______] shares of Common Stock remaining available for other purposes.

In addition, we currently have 1,000,000 authorized but unissued shares of Preferred Stock available for issuance under our Restated Certificate. The proposed amendment does not increase the number of shares of Preferred Stock that we are authorized to issue. There are currently no shares of any series of our Preferred Stock outstanding and there are no immediate plans, arrangements, commitments or understandings with respect to the issuance of any shares of our Preferred Stock.

Form of Amendment

We propose to amend our Restated Certificate so that the Fourth Article of the Restated Certificate will read as follows:

FOURTH. The total number of shares of stock which the corporation shall have authority to issue is five hundred and one million (501,000,000) shares, consisting of:

(1)500,000,000 shares of Common Stock, par value $.01 per share (the "Common Stock"); and
(2)1,000,000 shares of Preferred Stock, par value $.01 per share (the "Preferred Stock").

The proposed form of Certificate of Amendment is set forth in Annex II to this Proxy Statement. If the proposed amendment is adopted, it will become effective upon the filing of a certificate of amendment to our Restated Certificate with the Secretary of State of the State of Delaware.

Purpose of Amendment

Our Board is recommending this increase in authorized shares of Common Stock primarily to give the Company appropriate flexibility to issue shares for future corporate needs. The shares may be issued by the Board at its discretion, subject to any further shareholder action required in the case of any particular issuance by applicable law, regulatory agency or under the rules of NASDAQ or any stock exchange on which the Company's Common Stock may then be listed. Although there is no present agreement to issue any shares, the newly authorized shares of Common Stock would be issuable for any proper corporate purpose, including without limitation, future acquisitions, investment opportunities, capital raising transactions of equity or convertible debt securities, stock splits, stock dividends, issuance under current or future stock equity plans or for other corporate purposes. There are no immediate plans, arrangements, commitments or understandings with respect to issuance of any of the additional shares of Common Stock which would be authorized by the proposed amendment. However, the Board believes that

64


the currently available number of unissued and unreserved shares does not provide sufficient flexibility for corporate action in the future.

Rights of Additional Authorized Shares

The additional authorized shares of Common Stock, if and when issued, would be part of the existing class of Common Stock and would have the same rights and privileges as the shares of Common Stock presently outstanding. Our shareholders do not have preemptive rights with respect to our Common Stock. Accordingly, should the Board elect to issue additional shares of our Common Stock, existing shareholders would not have any preferential rights to purchase the shares.

Potential Adverse Effects of Amendment

Future issuance of Common Stock or securities convertible into our Common Stock could have a dilutive effect on the earnings per share, book value per share, voting power and percentage interest of holdings of current shareholders. Such dilution may be substantial depending upon the amount of shares issued. In addition, the availability of additional shares of our Common Stock for issuance could, under certain circumstances, discourage or make more difficult efforts to obtain control of the Company. The Board is not aware of any attempt or contemplated attempt to acquire control of the Company. This proposal is not being presented with the intent that it be used to prevent or discourage any acquisition attempt but nothing would prevent the Board from taking any appropriate actions not inconsistent with its fiduciary duties.

Vote Required

The amendment of the Fourth Article of the Restated Certificate requires the affirmative vote of a majority of the shares of our Common Stock outstanding and entitled to vote at the 2013 Annual Shareholders' Meeting. Our Board recommends a vote for the approval of the amendment to the Fourth Article of the Restated Certificate increasing the number of authorized shares of Common Stock.

PROPOSAL #5

AMENDMENT TO ADVANCE NOTICE PROVISIONS OF
THE THIRD RESTATED CERTIFICATE OF INCORPORATION

After careful consideration and upon the recommendation of the NG&PP Committee, the Board has unanimously determined that it would be in the best interests of the Company and our shareholders to amend our Restated Certificate to eliminate the specific advance notice provisions in the Restated Certificate related to shareholder nominations of directors at a meeting and replace them with a provision that requires shareholders desiring to nominate one or more persons for election as directors at a meeting to comply with the advance notice and proxy access procedures set forth in the Company's Bylaws (the "Advance Notice Amendment"). The Board is now asking our shareholders to approve the Advance Notice Amendment, the text of which is set forth in Appendix III to this Proxy Statement. The following discussion is qualified in its entirety by the full text of the proposed Advance Notice Amendment in Appendix III.

Background and Reasons for the Proposal

Currently, both the Restated Certificate and the Bylaws of the Company contain advance notice provisions that impose certain requirements on the ability of shareholders to nominate one or more persons for election as directors at a meeting of the shareholders called for such purpose. The advance notice provisions for shareholder nominations in the Restated Certificate are largely duplicative of the provisions in the Bylaws and in some cases are more restrictive than those contained in the Bylaws.

In addition, the Bylaws contain a proxy access provision that allows a single shareholder or group of up to 20 shareholders who have held at least 3% of the Company's common stock for at least three years to submit director nominees (up to 20% of the Board) for inclusion in our Proxy Statement if the shareholder(s) and nominee(s) satisfy the requirements specified in our Bylaws.

The advance notice provisions in the Restated Certificate can only be amended by the affirmative vote of the holders of at least 80% of the outstanding shares of voting stock of the Company entitled to vote thereon, whereas the advance notice and proxy access provisions in the Bylaws can be amended by the same shareholder vote or by the Board, which allows the Board the flexibility to amend the advance notice and proxy access provisions in the Bylaws to address developments in the Delaware General Corporation Law or evolving practices in corporate governance.

In order to eliminate any potential inconsistencies between the advance notice nomination provisions in the Restated Certificate and the Bylaws, upon the recommendation of the NG&PP Committee, the Board adopted a resolution setting forth the proposed Advance Notice Amendment.

Proposed Advance Notice Amendment

The proposed Advance Notice Amendment would eliminate the specific advance notice provisions in the Restated Certificate related to shareholder nominations of directors at a meeting and replace it with a provision that requires shareholders desiring to nominate one or more persons for election as directors at a meeting to comply with the advance notice and proxy access procedures set forth in the Company's Bylaws.

Vote Required

The affirmative vote of the holders of at least 80% of the outstanding shares of voting stock of the Company entitled to vote thereon is required to approve the Advance Notice Amendment. If the shareholders do not approve the proposed Advance Notice Amendment, then the current advance notice provisions in the Restated Certificate will remain and shareholders of the Company will continue to be subject to such requirements. Our Board recommends a vote in favor of the proposed Advanced Notice Amendment.
65




SHAREHOLDER PROPOSALS
You may submit proposals
Submitting a Shareholder Proposal for consideration at future shareholder meetings. the 2021 Annual Shareholders' Meeting
For a shareholder proposal to be considered for inclusion in the Company's proxy statementour Proxy Statement for the annual meeting next year,2021 Annual Shareholders' Meeting, the Corporate Secretary must receive the written proposal at our principal executive offices no later thanon or before December 13, 2013.8, 2020. Such proposals also must comply with SEC regulations under Rule 14a-8 regarding the inclusion of shareholder proposals in company-sponsored proxy materials. Proposals should be addressed to:

Corporate Secretary
Cerner Corporation
2800 Rockcreek Parkway
North Kansas City, Missouri 64117

ForIf a shareholder intends to present a proposal for consideration at the 2020 Annual Shareholders' Meeting that iswill not intended to be included in our proxy statement pursuant to the procedures contemplated in the Company's proxy statement underAmended & Restated Bylaws as of March 2, 2018 (as amended, the "Bylaws"), outside the processes of SEC Rule 14a-8, the shareholder must provide the information required by the Company's Bylaws and give timely notice to the Corporate Secretary in accordance with the Company's Bylaws. In general, the Bylaws which, in general, require that the notice be received by the Corporate Secretary between:

the close of business onbetween January 13, 2014;22, 2021 and

the close of business on February 21, 2014,2021, unless

the date of the shareholder meeting is moved more than 30 days before or after May 13, 2014 (the second Tuesday22, 2021, in May as set forth in the Bylaws), thenwhich case notice of a shareholder proposal that is not intended to be included in the Company's proxy statement under Rule 14a-8 must be received not later than the close of business on the later of 120 calendar days in advance of such annual meeting or ten10 calendar days following the date on which public announcement of the date of the meeting is first made. Notice received outside of these dates is considered untimely.

You may proposeDirector Nominations
Proxy Access Nominees
Our Bylaws allow a single shareholder or group of up to 20 shareholders who have held at least 3% of our common stock for at least three years to submit director candidatesnominees (up to 20% of the Board) for considerationinclusion in our Proxy Statement if the shareholder(s) and nominee(s) satisfy the requirements specified in our Bylaws. To nominate an individual for election at our 2021 Annual Shareholders' Meeting and inclusion in our Proxy Statement, notice must be received by the Board's NG&PP Committee. Any such recommendations should include the nominee's name and qualifications for Board membership and should be directed to theour Corporate Secretary at the address of our principal executive offices set forth above.

In addition,no earlier than November 8, 2020 and no later than December 8, 2020 to be timely. The notice must contain the Company's Bylaws permit shareholders to nominate directors for election at an annual shareholder meeting. To nominate a director, the shareholder must deliver thespecific information required by the Company'sour Bylaws.
A shareholder may send a proposed director candidate's name and information to the Board at any time. Generally, such proposed candidates are considered at the Board meeting prior to the annual meeting.

Non-Proxy Access Nominations (Advance Notice Provisions)
To nominate an individual for election at an annual shareholder meeting,the 2021 Annual Shareholders' Meeting outside of the proxy access (i.e. that will not be included in our proxy statement) process, the shareholder must give timely notice to the Corporate Secretary in accordance with the Company's Bylaws, which, in general, require that the notice be received by the Corporate Secretary between the close of business on January 13, 201422, 2021 and the close of business on February 21, 2014,2021, unless the date of the shareholder meeting is moved more than 30 days before or after May 13, 2014 (the second Tuesday22, 2021, in May as set forth in the Bylaws), thenwhich case the nomination must be received not later than the close of business on the later of 120 calendar days in advance of such annual meeting or ten10 calendar days following the date on which public announcement of the date of the meeting is first made. The notice must contain the specific information required by our Bylaws.

General Information Relating to Shareholder Proposals and Nominations
Any shareholder who wishes to submit a shareholder proposal or to nominate a Director nominee should send such proposal or nomination to our principal executive offices at Cerner Corporation, Attention: Corporate Secretary, 2800 Rockcreek Parkway, North Kansas City, Missouri 64117. You may contact the Corporate Secretary at our principal executive offices for a copy of the relevant Bylaw provisions regarding the requirements for making shareholder proposals and nominating director candidates. The Company's Bylaws also are available on our website at www.cerner.com under "About Cerner, Investor Relations,Us, Corporate Governance."

The chairman of the annual meeting has the sole authority to determine whether any nomination or other proposal has been properly brought before the meeting in accordance with our Bylaws. If we receive a proposal other than pursuant to Rule 14a-8 or a nomination for the 2021 Annual Shareholders' Meeting, and such nomination or other proposal is not delivered within the time frame specified in our Bylaws, then the person(s) appointed by the Board and named in the proxies for the 2021 Annual Shareholders' Meeting may exercise discretionary voting power if a vote is taken with respect to that nomination or other proposal.

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HOUSEHOLDING OF PROXY MATERIALS

In an effort to reduce printing costs and postage fees, we have adopted a practice approved by the SEC called "householding." Under this practice, shareholders who have the same address and last name will receive only one paper copy of our Notice of Internet Availability of Proxy Materials or, if paper copies have been requested, Annual Report and Proxy Statement, unless one or more of these shareholders notifies us that he or she wishes to receive individual copies. Upon such notice, by written or oral request, we will promptly deliver a separate copy of the Notice of Internet Availability of Proxy Materials or, if paper copies have been requested, then the Annual Report and Proxy Statement to a shareholder at a shared address.

If: (1) you share an address with another shareholder and received only one copy of our Notice of Internet Availability of Proxy Materials or Annual Report and Proxy Statement if paper copies were requested, and would like to request separate paper copies; or (2) you share an address with another shareholder and together you would in the future like to receive only a single paper copy of the Notice of Internet Availability of Proxy Materials or, if paper copies have been requested, Annual Report and Proxy Statement, please notify our Corporate Secretary by mail at 2800 Rockcreek Parkway, North Kansas City, Missouri 64117 or by telephone at (816) 201-1024.221-1024.


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OTHER MATTERS

We know of no other matters to be brought before the 2020 Annual Shareholders' Meeting. If any other matter properly comes before the 2020 Annual Shareholders' Meeting, it is the intention of the persons named as proxies in the enclosed Proxy Card to vote the shares represented by the proxies as the Board may recommend.in their discretion.

   BY ORDER OF THE BOARD OF DIRECTORS,
   
randysig2018a02.jpg
   
   Randy D. Sims 
   Secretary 
North Kansas City, Missouri    
April 15, 20137, 2020    



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AnnexAPPENDIX I
PROPOSED
CERTIFICATECERNER CORPORATION AND SUBSIDIARIES
RECONCILIATION OF AMENDMENTGAAP RESULTS TO NON-GAAP RESULTS
(unaudited)

ADJUSTED OPERATING EARNINGS AND ADJUSTED OPERATING MARGIN
(In thousands)Fourth Fiscal Quarter
 20192018
   
Operating earnings (GAAP)$182,831
$164,127
   
Share-based compensation expense31,183
22,799
Acquisition-related amortization22,356
20,650
Organizational restructuring and other expense46,663
1,944
Charge related to client dispute9,500
—
Allowance on non-current asset—
45,320
   
Adjusted Operating Earnings (non-GAAP)$292,533
$254,840
   
Operating Margin (GAAP)12.68%12.02%
   
Adjusted Operating Margin (non-GAAP)20.28%18.66%

ADJUSTED NET EARNINGS AND ADJUSTED DILUTED EARNINGS PER SHARE
(In thousands, except per share data)2019 Fiscal Year-to-date Periods Ended Fiscal Years Ended
 March 2019June 2019Sept. 2019 20192018
       
Net earnings (GAAP)$166,219
$293,188
$375,123
 $529,454
$630,059
       
Pre-tax adjustments for Adjusted Net Earnings:      
Share-based compensation expense21,589
45,869
77,651
 108,834
102,419
Acquisition-related amortization21,097
41,959
62,571
 84,927
83,483
Organizational restructuring and other expense2,392
56,993
174,396
 221,059
4,868
Charge related to client dispute—
20,000
20,000
 29,500
—
Vendor settlement—
6,791
6,791
 6,791
—
Allowance on non-current asset—
—
—
 —
45,320
Investment gains—
(15,509)(24,231) (29,621)—
       
After-tax adjustments for Adjusted Net Earnings:      
Income tax effect of pre-tax adjustments(8,771)(28,332)(60,411) (80,746)(45,911)
Share-based compensation permanent tax items(3,997)(7,688)(6,961) (8,090)(1,696)
       
Adjusted Net Earnings (non-GAAP)$198,529
$413,271
$624,929
 $862,108
$818,542
       
Diluted weighted average shares outstanding327,003
325,498
323,361
 321,235
333,572
       
Adjusted Diluted Earnings Per Share (non-GAAP)$0.61
$1.27
$1.93
 $2.68
$2.45



FREE CASH FLOW
(In thousands)Fiscal Years Ended
 20192018
   
Cash flows from operating activities (GAAP)$1,313,099
$1,454,009
Capital purchases(471,518)(446,928)
Capitalized software development costs(273,871)(273,693)
Free Cash Flow (non-GAAP)$567,710
$733,388
   
Cash flows from investing activities (GAAP)$(640,408)$(828,937)
   
Cash flows from financing activities (GAAP)$(601,380)$(609,787)

FREE CASH FLOW FOR PERFORMANCE-BASED COMPENSATION
(In thousands)2019 Fiscal Year-to-date Periods Ended
 March 2019June 2019Sept. 2019Dec. 2019
     
Cash flows from operating activities (GAAP)$317,266
$524,076
$875,524
$1,313,099
     
Pre-tax expense-based adjustments:    
Organizational restructuring and other expense2,392
56,993
174,396
221,059
Charge related to client dispute—
20,000
20,000
29,500
Vendor settlement—
6,791
6,791
6,791
Interest expense on revolving credit loans—
1,581
6,273
10,965
     
Income tax effect of expense-based adjustments(465)(15,084)(39,399)(51,262)
     
Non-cash charges included in pre-tax expense-based adjustments—
—
(32,639)(42,130)
     
Timing differences between expense recognition and cash flow(1,927)(7,308)(6,966)(21,759)
     
Capital purchases(119,261)(277,874)(388,588)(471,518)
     
Capitalized software development costs(74,551)(144,902)(211,284)(273,871)
     
Free Cash Flow for Performance-based Compensation (non-GAAP)$123,454
$164,273
$404,108
$720,874
     
Cash flows from investing activities (GAAP)$(183,655)$(291,287)$(436,387)$(640,408)
     
Cash flows from financing activities (GAAP)$(6,991)$95,148
$(312,805)$(601,380)

Explanation of Non-GAAP Financial Measures

We report our financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"). However, we supplement our GAAP results with certain non-GAAP financial measures, which we believe enable investors to better understand and evaluate our ongoing operating results and allows for greater transparency in the review and understanding of our overall financial, operational and economic performance. These non-GAAP financial measures are not meant to be considered in isolation, as a substitute for, or superior to GAAP results and investors should be aware that non-GAAP measures have inherent limitations and should be read only in conjunction with Cerner's consolidated financial statements prepared in accordance with GAAP. These non-GAAP measures may also be different from similar non-GAAP financial measures used by other companies and may not be comparable to similarly titled captions of other companies due to potential inconsistencies in the method of calculations. We provide the measures of Adjusted Operating Earnings, Adjusted Operating Margin, Adjusted Net Earnings and Adjusted Diluted Earnings Per Share as such measures are used by management, along with GAAP results, to analyze Cerner's business, make strategic decisions, assess long-term trends on a comparable basis, and for management


compensation purposes. We provide the measure of Free Cash Flow as such measure takes into account certain capital expenditures necessary to operate our business. Free Cash Flow is used by management, along with GAAP results, to analyze our earnings quality and overall cash generation of the business. We provide a separate measure of Free Cash Flow for performance-based compensation purposes as such measure takes into account certain capital expenditures necessary to operate our business, and excludes the impact of certain items that were not originally contemplated in setting compensation plan targets. Free Cash Flow for performance-based compensation purposes is used by management for compensation purposes only.

We calculate each of our non-GAAP financial measures as follows:

Adjusted Operating Earnings - Consists of GAAP operating earnings adjusted for: (i) share-based compensation expense, (ii) acquisition-related amortization, (iii) organizational restructuring and other expense, (iv) a charge related to a client dispute, and (v) an allowance on non-current asset.

Adjusted Operating Margin - Consists of Adjusted Operating Earnings, as defined above, divided by revenues, in the applicable period; the result presented as a percentage.

Adjusted Net Earnings - Consists of GAAP net earnings adjusted for: (i) share-based compensation expense, (ii) acquisition-related amortization, (iii) organizational restructuring and other expense, (iv) a charge related to a client dispute, (v) a vendor settlement, (vi) an allowance on non-current asset, (vii) investment gains, (viii) the income tax effect of the aforementioned items, and (ix) share-based compensation permanent tax items.

Adjusted Diluted Earnings Per Share - Consists of Adjusted Net Earnings, as defined above, divided by diluted weighted average shares outstanding, in the applicable period.

Free Cash Flow - Consists of GAAP cash flows from operating activities, less capital purchases and capitalized software development costs.

Free Cash Flow for Performance-based Compensation - Consists of GAAP cash flows from operating activities adjusted for: (i) organizational restructuring and other expense, (ii) a charge related to a client dispute, (iii) a vendor settlement, (iv) interest expense on revolving credit loans, (v) the income tax effect of the aforementioned items, (vi) non-cash charges included in the aforementioned items, (vii) timing difference between expense recognition and cash flow for the aforementioned items, (viii) capital purchases, and (ix) capitalized software development costs.

Adjustments included in the calculations above are described below:

Share-based compensation expense - Non-cash expense arising from our equity compensation and stock purchase plans available to our associates and directors. We exclude share-based compensation expense as we believe the amount of such non-cash expenses in any specific period may not directly correlate to the underlying performance of our business operations. Share-based compensation expense is included in our Consolidated Statements of Operations as follows:
(In thousands)2019 Fiscal Year-to-date Periods Ended Fourth Fiscal Quarter Fiscal Years Ended
 March 2019June 2019Sept. 2019 20192018 20192018
          
Sales and client service$10,671
$23,348
$39,019
 $13,810
$10,322
 $52,829
$46,239
Software development5,156
8,578
12,769
 4,941
5,101
 17,710
21,468
General and administrative5,762
12,943
25,863
 12,432
7,376
 38,295
34,712
          
Total$21,589
$44,869
$77,651
 $31,183
$22,799
 $108,834
$102,419

Acquisition-related amortization - Non-cash expense consisting of the amortization of customer relationships, acquired technology, and trade name intangible assets recorded in connection with our acquisitions of the Health Services business in February 2015 and AbleVets in October 2019. We exclude acquisition-related amortization as we believe the amount of such non-cash expenses in any specific period may not directly correlate to the underlying performance of our


business operations. Such amount is included in our Consolidated Statements of Operations in the caption "Amortization of acquisition-related intangibles."

Organizational restructuring and other expense - Consists of certain charges incurred in connection with our operational improvement initiatives. Expenses in connection with these efforts may include, but are not limited to, consultant and other professional services fees, employee separation costs, contract termination costs, and other such related expenses. We exclude organizational restructuring and other expense as we believe the amount of such expense in any specific period may not directly correlate to the underlying performance of our business operations. Organizational restructuring and other expense is included in our Consolidated Statements of Operations as follows:
(In thousands)2019 Fiscal Year-to-date Periods Ended Fourth Fiscal Quarter Fiscal Years Ended
 March 2019June 2019Sept. 2019 20192018 20192018
          
Sales and client service$—
$—
$59,602
 $12,727
$—
 $72,329
$—
General and administrative2,392
56,993
114,794
 33,936
1,944
 148,730
4,868
          
Total$2,392
$56,993
$174,396
 $46,663
$1,944
 $221,059
$4,868

Charge related to client dispute - Consists of pre-tax charges related to a dispute with a current client. We have excluded these charges as we believe the amount of such charges does not directly correlate to the underlying performance of our business operations in the periods they were recorded. Such charges are included in our Consolidated Statements of Operations in the caption "Sales and client service" expense.

Vendor settlement - Consists of a pre-tax charge to settle disputes with a former vendor. We have excluded this charge as we believe the amount of such charge does not directly correlate to the underlying performance of our business operations in the period it was recorded. Such charge is included in our Consolidated Statements of Operations in the caption "General and administrative" expense.

Allowance on non-current asset- Consists of a pre-tax charge to provide an allowance against certain disputed client receivables with a specific former client. Such disputed receivables are included in our Consolidated Balance Sheets in the caption "Other assets," as the process for resolution has been on-going for approximately 10 years. We have excluded this charge as we believe the amount of such charge does not directly correlate to the underlying performance of our business operations in the period it was recorded. Such charge is included in our Consolidated Statements of Operations in the caption "Sales and client service" expense.

Investment gains - Consists of a $16 million gain recognized on the disposition of one of our equity investments in the second quarter of 2019, and unrealized gains of $9 million and $5 million recognized in the third and fourth quarters of 2019, respectively, on another one of our equity investments, all of which were accounted for in accordance with Accounting Standards Codification Topic 321, Investments-Equity Securities. We have excluded these gains as we believe the amounts of such gains do not directly correlate to the underlying performance of our business operations in the periods they were recorded. Such gains are included in our Consolidated Statements of Operations in the caption "Other income, net."

Income tax effect of pre-tax adjustments - The GAAP effective income tax rate for the applicable quarterly period is applied to pre-tax adjustments for Adjusted Net Earnings and Free Cash Flow for performance-based compensation.

Share-based compensation permanent tax items - Consists of permanent items impacting the Company's income tax provision related to our share-based compensation arrangements, including net excess tax benefits recognized upon the exercise of stock options. We exclude such items as we believe the amount of such items in any specific period may not directly correlate to the underlying performance of our business operations. Such amount is included in our Consolidated Statements of Operations in the caption "Income taxes."

Interest expense on revolving credit loans - Consists of interest expense recognized on revolving credit loans outstanding under our Third Amended and Restated Credit Agreement. We exclude interest expense on revolving credit loans from


the calculation of Free Cash Flow for performance-based compensation as such amount was not originally contemplated in setting plan targets. Such amount is included in our Consolidated Statements of Operations in the caption "Other income, net."



APPENDIX II


PROPOSED DECLASSIFICATION AMENDMENT TO THE
SECONDTHIRD RESTATED CERTIFICATE OF INCORPORATION
OF
CERNER CORPORATION(Marked to Show the Amendment)

Cerner Corporation,The following is a corporation existing under the lawsmarked version of the Stateproposed amendments to Article SIXTH of Delaware (the "Corporation"), for the purpose of amending its SecondThird Restated Certificate of Incorporation, ofwith deletions indicated by strikethrough and additions indicated by underlining (with such marks against the Corporation, in accordance with Section 242 of the General Corporation Law of the State of Delaware (the "DGCL"), does hereby make and execute this Certificate of Amendment to the Second Restated Certificate of Incorporation and does hereby certify that:existing provisions):

1.    The provisions of the present Article SIXTH of the SecondThird Restated Certificate of Incorporation of the Corporation are amended by deleting subparagraph (c) in its entirety and substituting in lieu thereof the following new subparagraph (c) of Article SIXTH:

(c)    Subject to the rights of holders of any series of Preferred Stock to elect directors, each person elected as a director of the Corporation at any annual meeting of stockholders (each annual meeting of stockholders, an "Annual Meeting") after the 2020 Annual Meeting to succeed a person whose term of office as a director has expired, shall be elected for a term expiring at the next Annual Meeting. Each director elected at or prior to the 2020 Annual Meeting of stockholders shall be deemed to serve as a member of the class of directors to which he or she was so elected for the term elected. At and after the 2023 Annual Meeting, the directors shall no longer be classified with respect to the time for which they hold office. Notwithstanding the foregoing, each director shall hold office until a successor has been elected or qualified or until his or her earlier death, retirement, resignation or removal.The members of the board of directors other than those who may be elected by the holders of any Preferred Stock, or series thereof, shall be divided into three classes (to be designated as class I, class II and class III), as nearly equal in number as the then total number of directors constituting the whole board of directors permits, with the terms of office of one class expiring each year. Class I directors shall hold office until the annual meeting of stockholders of the corporation in 1987 and until their respective successors shall have been duly elected and qualified or until their respective earlier resignation or removal, class II directors shall hold office until the annual meeting of stockholders of the corporation in 1988 and until their respective successors shall have been duly elected and qualified or until their respective earlier resignation or removal, and class III directors shall hold office until the annual meeting of stockholders of the corporation in 1989 and until their respective successors shall have been duly elected and qualified or until their respective earlier resignation or removal. Notwithstanding the foregoing, and except as otherwise required by law, whenever the holders of any one or more series of Preferred Stock shall have the right, voting separately as a class, to elect directors:
i.
From the effectiveness of this Article SIXTH filed with the Secretary of the State of Delaware until the election of directors at the 2014 annual meeting of stockholders (each annual meeting of stockholders, an "Annual Meeting"), pursuant to Section 141(d) of the DGCL, the Boardone or more directors of the corporation, the terms of the director or directors elected by such holders shall be divided into three classes of directors (to be designated as Class I, Class II and Class III), as nearly equal in number as the then total number of directors constituting the whole board of directors permits, with the directors in Class I having a term expiring at the 2014 Annual Meeting, the directors in Class II having a term expiring at the 2015 Annual Meeting and the directors in Class III having a term expiring at the 2016 Annual Meeting. Directors in each class may be removed only with cause pursuant to subparagraph (e) of this Article SIXTH.
ii.
Commencing with the election of directors at the 2014 Annual Meeting, pursuant to Section 141(d) of the DGCL, the Board shall be divided into two classes of directors, Class I and Class II, with the directors in Class I having a term that expires at the 2015 Annual Meeting and the directors in Class II having a term that expires at the 2016 Annual Meeting. Directors in each class may be removed only with cause pursuant to subparagraph (e) of this Article SIXTH. The successors of the directors who, immediately prior to the 2014 Annual Meeting, were members of Class I (and whose terms expire at the 2014 Annual Meeting) shall be elected to Class I; the directors who, immediately prior to the 2014 Annual Meeting, were members of Class II and whose terms were scheduled to expire at the 2015 Annual Meeting shall become members of Class I; and the directors who, immediately prior to the 2014 Annual Meeting, were members of Class III and whose terms were scheduled to expire at the 2016 Annual Meeting shall become members of Class II with a term expiring at the 2016 Annual Meeting.
iii.Commencing with the election of directors at the 2015 Annual Meeting, pursuant to Section 141(d) of the DGCL, there shall be a single class of directors, Class I, with all directors of such class having a term that expires at the 2016 Annual Meeting. All such directors may be removed only with cause pursuant to subparagraph (e) of this Article SIXTH. The successors of the directors who, immediately prior to the 2015 Annual Meeting, were members of Class I (and whose terms expire at the 2015 Annual Meeting) shall be elected to Class I for a term that expires at the 2016 Annual Meeting, and the directors who, immediately prior to the 2015 Annual Meeting, were members of Class




II and whose terms were scheduled to expire at the 2016 Annual Meetingnext succeeding annual meeting of stockholders. Subject to the foregoing, at each annual meeting of stockholders the successors to the class of directors whose term shall become members of Class I withthen expire shall be elected to hold office for a term expiring at the 2016 Annual Meeting.third succeeding annual meeting and until their respective successors shall be duly elected and qualified or until their respective earlier resignation or removal.
iv.From and after the election of directors at the 2016 Annual Meeting, the Board shall cease to be classified as provided in Section 141(d) of the DGCL, and the directors elected at the 2016 Annual Meeting (and each Annual Meeting thereafter) shall be elected for a term expiring at the next Annual Meeting. Such directors may be removed with or without cause pursuant to subparagraph (e) of this Article SIXTH.

2.    The provisions of the present Article SIXTH of the SecondThird Restated Certificate of Incorporation of the Corporation are amended by addingdeleting subparagraph (d) in its entirety and substituting in lieu thereof the following paragraph to the end of the presentnew subparagraph (d) of Article SIXTH:

(d)    Except for directorships created pursuant to paragraph FOURTH hereof relating to the rights of holders of Preferred Stock or any series thereof, and except for vacancies in such directorships, any vacancies in the board of directors for any reason, and


any newly created directorships resulting from any increase in the number of directors, may be filled by the board of directors, acting by a majority of the directors then in office, although less than a quorum, or by a sole remaining director, and from and after the 2023 Annual Meeting any directors so chosen shall hold office until the next election of the class for which such directors shall have been chosen and until their respective successors are duly elected and qualified or until their earlier death, retirement, resignation or removal. No decrease in the number of directors shall shorten the term of any incumbent director. In the event of any increase or decrease in the authorized number of directors at any time during whichprior to the Board is divided into a class or classes:2023 Annual Meeting: (a) each director then serving shall nevertheless continue as a director of the class of which he or she is a member until the expiration of his or her term or his or her prior death, retirement, resignation or removal; and (b) except to the extent that an increase or decrease in the authorized number of directors occurs in connection with the rights of holders of Preferred Stock to elect additional directors, the newly created or eliminated directorships resulting from any increase or decrease shall be apportioned by the Boardboard of directors among the class or classes as nearly equal in number as the then total number of directors constituting the whole board of directors permits. A director who fills a vacancy not resulting from an increase in the authorized number of directors shall have the same remaining term as that of his or her predecessor.

3.    The provisions of the present Article SIXTH subparagraph (d) of the Second Restated Certificate of Incorporation of the Corporation are further amended by deleting "of the class" in line 7 of the first sentence of Article SIXTH, subparagraph (d).
4.    The provisions of the present Article SIXTH of the SecondThird Restated Certificate of Incorporation of the Corporation are amended by deleting subparagraph (e) in its entirety and substituting in lieu thereof the following new subparagraph (e) of Article SIXTH:

(e)    Notwithstanding any other provisions of this Certificate of Incorporation or the bylaws of the Corporationcorporation (and notwithstanding the fact that some lesser percentage may be specified by law, this Certificate of Incorporation or the bylaws of the corporation), prior to the election of directors at the 20162023 Annual Meeting when the Boardboard of directors shall cease to be classified, any director or the entire board of directors of the corporation may be removed at any time, but only for cause and only by the affirmative vote of the holders of eighty percent (80%) or more of the Total Voting Power of the then outstanding shares of Voting Stock, considered for this purpose as one class (for purposes of this paragraph SIXTH, section (e), each share of the Voting Stock shall have the number of votes granted to it pursuant to paragraph FOURTH of this Certificate of Incorporation). From and after the election of directors at the 20162023 Annual Meeting when the Boardboard of directors shall cease to be classified, any director or the entire board of directors of the corporation may be removed at any time, with or without cause, by the affirmative vote of the holders of a majority of the Total Voting Powershares then entitled to vote at an election of the then outstanding shares of Voting Stock.directors. For the purposes of this paragraph SIXTH, section (e): (i) the term "Total Voting Power" shall mean the aggregate of all votes of all outstanding shares of Voting Stock; and (ii) the term "Voting Stock" shall mean the shares of all classes of capital stock of the Corporationcorporation entitled to vote on removal of any director or the entire board of directors in the manner provided in this paragraph SIXTH, section (e) (except that if the next succeeding sentence is operative, then the outstanding shares of Preferred Stock shall not be considered "Voting Stock" for purposes of this paragraph SIXTH, section (e)). Notwithstanding the foregoing, and except as otherwise required by law, whenever the holders of any one or more series of Preferred Stock shall have the right, voting separately as a class, to elect one or more directors of the corporation, the provisions of this paragraph SIXTH shall not apply with respect to the director or directors elected by such holders of Preferred Stock.


4.    The provisions of the present Article SIXTH of the Third Restated Certificate of Incorporation of the Corporation are amended by deleting subparagraph (f) in its entirety and substituting in lieu thereof the following:
(f)    [Omitted]As used in this Certificate of Incorporation, the term "for cause" is hereby exclusively defined and limited to mean conviction of a felony by a court of


competent jurisdiction where such conviction is no longer subject to direct appeal, or an adjudication by a court of competent jurisdiction of liability for negligence, or misconduct, in the performance of the director's duty to the corporation in a matter of substantial importance to the corporation, where such adjudication is no longer subject to direct appeal.

5.     The provisions of the present Article SIXTH, subparagraph (i) of the SecondThird Restated Certificate of Incorporation of the Corporation are amended by deleting "or class of directors" in line 3 of the first sentence of Article SIXTH, subparagraph (i).
6.    


APPENDIX III

PROPOSED ADVANCE NOTICE AMENDMENT TO THE
THIRD RESTATED CERTIFICATE OF INCORPORATION
(Marked to Show the Amendment)

The following is a marked version of the proposed amendments to Article SIXTH of the SecondThird Restated Certificate of Incorporation, ofwith deletions indicated by strikethrough and additions indicated by underlining (with such marks against the Corporation set forth above were duly adopted at a meeting of the Board of Directors of the Corporation and subsequently approved by the necessary number of shares as required by statute at an annual meeting of shareholders of the Corporation in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, Cerner Corporation has caused this Certificate of Amendment to be executed on its behalf by its Chief Executive Officer and President, and attested by its Secretary, on ___________ __, 2013, and each of them does hereby affirm and acknowledge that this Certificate of Amendment is the act and deed of the Corporation and that the facts stated herein are true.

CERNER CORPORATION
By:
Neal L. Patterson
Chief Executive Officer & President
(CORPORATE SEAL)
ATTEST:
Randy D. Sims
Secretary





Annex II
PROPOSED
CERTIFICATE OF AMENDMENT
TO THE
SECOND RESTATED CERTIFICATE OF INCORPORATION
OF
CERNER CORPORATION

Cerner Corporation, a corporation existing under the laws of the State of Delaware (the "Corporation"), for the purpose of amending its Second Restated Certificate of Incorporation of the Corporation, in accordance with Section 242 of the General Corporation Law of the State of Delaware (the "DGCL"), does hereby make and execute this Certificate of Amendment to the Second Restated Certificate of Incorporation and does hereby certify that:provisions):

1.     The provisions of the present Article FOURTHSIXTH of the SecondThird Restated Certificate of Incorporation of the Corporation are amended by deleting the first sentence of Article FOURTHsubparagraph (h) in its entirety and substituting in lieu thereof the following new first sentencesubparagraph (h) of Article FOURTH, with no changes to be madeSIXTH:

Subject to the subsequent sentences and provisionsrights of Article FOURTH:
FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is five hundred and one million (501,000,000) shares, consisting of:
(1)500,000,000 shares of Common Stock, par value $0.01 per share (the "Common Stock"); and
(2)1,000,000 sharesholders of Preferred Stock, par value $0.01 per share (the "Preferred Stock").

2.    The Amendmentnominations for the election of directors may be made by the board of directors or a proxy committee appointed by the board of directors or by any stockholder entitled to vote in the Second Restated Certificateelection of Incorporationdirectors generally. However, any stockholder entitled to vote in the election of the Corporation set forth above was duly adopteddirectors generally may nominate one or more persons for election as directors at a meeting only if written notice of such stockholder's intent to make such nomination or nominations has been given in accordance with the advance notice and proxy access procedures set forth in the Corporation’s bylaws, as amended from time to time, either by personal delivery or by United States mail, postage prepaid, to the secretary of the Board of Directors of the Corporation and subsequently approvedcorporation not later than (i) with respect to an election to be held at an annual meeting of shareholdersstockholders, one hundred twenty (120) days in advance of the Corporation bydate of such meeting (as set forth in the affirmative votecorporation's bylaws), and (ii) with respect to an election to be held at a special meeting of a majoritystockholders for the election of directors, the close of business on the seventh day following the date on which notice of such meeting is first given to stockholders. Each such notice shall set forth: (a) the name and address of the outstanding sharesstockholder who intends to make the nomination and of the Corporation's Common Stock, par value $0.01 per share,person or persons to be nominated; (b) a representation that the stockholder is a holder of record of stock of the corporation entitled to vote thereonat such meeting and intends to appear in accordance withperson or by proxy at the provisionsmeeting to nominate the person or persons specified in the notice; (c) the name and address, as they appear on the corporation's books, of Section 242such stockholder; (d) the class and number of the General Corporation Lawshares beneficially owned (as defined in paragraph NINTH of the State of Delaware.
IN WITNESS WHEREOF, Cerner Corporation has caused this Certificate of AmendmentIncorporation) by such nominating stockholder and each nominee proposed by such stockholder; (e) a description of all arrangements or understandings between the nominating stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be executed on its behalfmade by its Chief Executive Officerthe stockholder; (f) such other information regarding each nominee proposed by such stockholder as would have been required to be included in a proxy statement filed pursuant to Regulation 14A (17 CFR 240.14a-1 et seq.) as then in effect under the Securities Exchange Act of 1934, as amended, had the nominee been nominated, or intended to be nominated, by the board of directors; and President, and attested by its Secretary, on ___________ __, 2013, and(g) the consent of each of them does hereby affirm and acknowledge that this Certificate of Amendment is the act and deednominee to serve as a director of the Corporation and thatcorporation if so elected. The chairman of the facts stated herein are true.meeting may refuse to acknowledge the nomination of any person not made in compliance with such procedures.
CERNER CORPORATION
By:
Neal L. Patterson
Chief Executive Officer & President
(CORPORATE SEAL)
ATTEST:
Randy D. Sims
Secretary





  
From:SPECIMEN [id@ProxyVote.com]
Sent:Friday,Tuesday, April 15, 20137, 2020 8:12 AM
To:Associate
Subject:#CERNER12# CERNER CORPORATION Annual Meeting %P21033_0_012345678901_0000001%


PRELIMINARY PROXY MATERIALS - SUBJECT TO COMPLETION

TO: Cerner Corporation 401(k) Associate Participants
SUBJECT: Cerner 20132020 Annual Shareholders' Meeting: Electronic Voting Instructions

The 2020 Annual Shareholders' Meeting of Cerner Corporation (the “Company”"Company") will be held virtually on Friday, May 22, 2020, at 10:00 a.m., local time, (CDT). You can attend the 2020 Annual Meeting online and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/CERN2020. Due to the structure of the virtual meeting site, plan participants will technically have the ability to submit votes for 401(k) Plan shares during the meeting, but votes submitted by plan participants during the meeting will not be counted or revoke their prior instructions; in order for your vote to be counted, you must provide instructions to the Trustee by 11:59 p.m. (EDT) on May 24, 2013.18, 2020. You have been enrolled to receive shareholder communications and to submit voting instructions via the Internet.

Please read the following information carefully.

As a participant in the Cerner Corporation Foundations Retirement Plan (the "Plan"), you are entitled to instruct Fidelity (the “Trustee”"Trustee") to vote the shares of Common Stock of the Company held by you under the Plan as of April 5, 2013.March 24, 2020 (the "Record Date"). As of Aril 5, 2013the Record Date, your Plan account reflected 123,456,789,012.000000[123,456,789,012.000000] shares of Common Stock.

The number of shares of Common Stock shown includes any shares of Common Stock purchased as either an Associateassociate contribution or Company contribution. Therefore, you may not be vested in the total number of shares of Common Stock indicated.

There are five items for which you may vote:
Proposal #1:The election of three director nominees.
Proposal #2:Ratification of the appointment of KPMG LLP as the independent registered public accounting firm of the Company for 2013.
2020.
Proposal #3:Approval, on an advisory basis, of the compensation of our named executive officers.
Named Executive Officers.
Proposal #4:Amendment
Approval of the proposed amendment to the Company's Secondour Third Restated Certificate of Incorporation repealingto declassify the Company's classified board of directors.
Board.
.
Proposal #5:AmendmentApproval of the proposed amendment to the Company's Secondour Third Restated Certificate of Incorporation increasingto amend the number of authorized shares of Common Stock.advance notice provisions for director nominations.

Details about each of these items are provided in the 2013our 2020 Proxy Statement.

The Board of Directors recommends that you vote forFOR the election of director nominees Gerald E. Bisbee, Jr.Julie L. Gerberding, M.D., Ph.D.M.P.H., Denis A. Cortese, M.D.Brent Shafer and Linda DillmanWilliam D. Zollars; and forFOR Proposals 2, 3, 4 and 5.

CONTROL NUMBER: 012345678901[012345678901]

You can enter your voting instructions and view the shareholder material at the following Internet site. If your browser supports secure transactions, you will automatically be automatically directed to a secure site.

http://www.proxyvote.com/0012345678901[0012345678901]

To access Proxy Vote, you will need the above CONTROL NUMBER and a four digitfour-digit PIN. The PIN number you will need is the last four digits of your social security number. Internet voting is accepted up to 11:59 p.m. EDT,(EDT), May 23, 2013.18, 2020. In accordance with the terms of the Plan, the Trustee will vote all of the shares held in the plan in the same proportion as the actual proxy votes submitted by plan participants by 11:59 p.m. (EDT) on May 18, 2020.




Important Notice Regarding the Availability of Proxy Materials for the 2020 Annual Shareholders' Meeting to be held on May 22, 2020: This communication is not a form for voting and presents only an overview of the more complete proxy materials. The 2019 Annual Report and 2020 Proxy Statement are available at www.proxyvote.com and on www.cerner.com under "Investor Relations, Financials, Proxy Materials" or by following this link: https://investors.cerner.com/financial-information/proxy-materials. We encourage you to access and review the proxy materials before voting.

The 2012 Annual Report and 2013 Proxy Statement can be found at the following Internet site:
http://www.cerner.com/About_Cerner/Investor_Relations/Proxy_Materials/
The Company's 20122019 Annual Report and its 20132020 Proxy Statement may also be provided, at the participant's request, in hard copy form. To receive a paper copy of the Company's 20122019 Annual Report and 20132020 Proxy Statement, please contact Rheana PapekBrittney McCullough at (816) 201-2884.221-1024.

Once you submit your votes, the process is complete and your votes will remain confidential.



+

PRELIMINARY FORM OF PROXY
cernerlogoblackandwhitea03.jpg
  VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com
 Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on May 23, 2013.21, 2020 for shares held of record or in street name and by 11:59 P.M. Eastern Time on May 18, 2020 for shares held in the Cerner Corporation Foundations Retirement (401k) Plan (the "Plan"). Have your Proxy Card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
CERNER CORPORATION
2800 ROCKCREEK PARKWAY
NORTH KANSAS CITY, MO 64117
  
During The Meeting - Go to www.virtualshareholdermeeting.com/CERN2020
 
  ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduceAll shareholders of record as of March 24, 2020 (or holders in street name who have obtained a valid proxy) may attend the costs incurredmeeting by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cardsInternet at www.virtualshareholdermeeting.com/CERN2020 and annual reports electronically via e-mail orvote during the Internet. To sign up for electronic delivery, please follow the instructions above to vote2020 Annual Shareholders' Meeting using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.control number below.
    
   VOTE BY PHONE - 1-800-690-6903
   Use any touch-tone telephone to transmit your voting instructions up untilinstructions. Vote by 11:59 P.M. Eastern Time on May 23, 2013.21, 2020 for shares held of record or in street name and by 11:59 P.M. Eastern Time on May 18, 2020 for shares held in the Plan. Have your Proxy Card in hand when you call and then follow the instructions.
    
   VOTE BY MAIL
   Mark, sign and date your proxy cardProxy Card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If you vote by mail, it must be received by Broadridge before 10:00 A.M. Eastern Time on May 21, 2020.















TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: 
M55837-P35362D04322-P36699 KEEP THIS PORTION FOR YOUR RECORDS 
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
DETACH AND RETURN THIS PORTION ONLY 
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
CERNER CORPORATION     
       
 EachThe Board of Directors recommends you vote FOR the followingnominees listed in Proposal 1 and FOR Proposals have been proposed by the Company:2, 3, 4 and 5:           
 1. Election of Class I Directors           
 NomineesNominees:ForAgainstAbstain        
 1a. Gerald E. Bisbee, Jr.Julie L. Gerberding, M.D., Ph.D.M.P.H.ooo        
 1b. Denis A. Cortese, M.D.Brent Shaferooo        
 1c. Linda M. DillmanWilliam D. Zollarsooo
   ForAgainstAbstain  
       
 2. Ratification of the appointment of KPMG LLP as the independent registered public accounting firm of Cerner Corporation for 2013.2020. ooo  
        
 3. Approval, on an advisory basis, of the compensation of our named executive officers.Named Executive Officers. ooo  
        
 4. AmendmentApproval of the proposed amendment to our SecondThird Restated Certificate of Incorporation repealingto declassify the classification of our Board of Directors. ooo  
        
 5. AmendmentApproval of the proposed amendment to our SecondThird Restated Certificate of Incorporation increasingto amend the number of authorized shares of Common Stock.advance notice provisions for director nominations. ooo
6. To act upon such other matters as may properly come before the meeting or any adjournment or postponement thereof.  
             
 
NOTE: This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder(s). If no direction is made, this Proxy will be voted FOR each nominee in Proposal 1; and FOR Proposals 1, 2, 3, 4 and 5 .5. In their discretion, the appointed proxies are authorized to vote uponon such other business as may properly come before the meeting which the Board of Directors does not have knowledge of a reasonable period of time before the solicitation of this Proxy.and any adjournment or postponement thereof.
     
       
 Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.     
             
             
 Signature [PLEASE SIGN WITHIN BOX]    Date   Signature (Joint Owners)    Date     












If you are a registered shareholder possessing a physical stock certificate and you need to update the address on

your stock certificate, please contact our transfer agent, Computershare Trust Company N.A., to make this change. Computershare's
contact information is as follows:

Internet:www.computershare.com/investor

Phone:(800) 884-4225









Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of 2020 Annual Meeting and Proxy Statement and 2019 Annual Report are available at www.proxyvote.com.










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M55837-P35362D04323-P36699 
   
 CERNER CORPORATION 
   
 This proxy is solicited by the Board of Directors of Cerner Corporation 
   
 
This Proxy is solicited by the Board of Directors for the 20132020 Annual Shareholders' Meeting of Cerner Corporation, a Delaware corporation, to be held by Internet at www.virtualshareholdermeeting.com/CERN2020 on May 24, 2013,22, 2020, at 10:00 a.m. (CDT), local time, at The Cerner Round auditorium in the Cerner Vision Center, located on the Cerner Campus at 2850 Rockcreek Parkway, North Kansas City, Missouri 64117.or any postponement or adjournment thereof.

The undersigned hereby appoints Clifford W. Illig and Neal L. Patterson,Brent Shafer or Marc G. Naughton, and each of them, jointly and severally, with full power of substitution, as attorneys-in-fact, to vote all the shares of Common Stockcommon stock of Cerner Corporation which the undersigned is entitled to vote at the 20132020 Annual Shareholders' Meeting of Cerner Corporation to be held on May 24, 2013,22, 2020, and at any postponement or adjournment thereof, on the transaction of any and all business which may come before said meeting, as fully and with the same effect as the undersigned might or could do if personally present for the purposes set forth. The undersigned hereby acknowledges receipt of the Notice of Annual Shareholders' Meeting and Proxy Statement, dated April 15, 2013, and the 2012 Annual Report to Shareholders.

This Proxy Card will be voted "FOR" the election of director nominees: Gerald E. Bisbee, Jr.Julie L. Gerberding, M.D., Ph.D.M.P.H., Denis A. Cortese, M.D.Brent Shafer and Linda M. Dillman,William D. Zollars, and FOR Proposal"FOR" Proposals #2, Proposal #3, Proposal #4 and Proposal #5 if no choice ischoices are selected for any such proposal.proposals.

If shares of Cerner Corporation common stock are issued to or held for the account of the undersigned under employee plans and voting rights attach to such shares, then the undersigned hereby directs the respective fiduciary of each applicable employee plan to vote all shares of Cerner Corporation common stock in accordance with the instructions given herein, at the 2020 Annual Shareholders' Meeting and at any postponements or adjournments thereof, on all matters properly coming before the 2020 Annual Shareholders' Meeting, including but not limited to the matters set forth on the reverse side.
  
If you want to vote in accordance with the recommendation of the Board of Directors, simply sign where indicated on the other side and return this card.


 
 PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY IN THE ENVELOPE PROVIDED. 
   
 Continued and to be signed and dated on reverse side