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Exhibit 10(i)




CERNER CORPORATION

PERFORMANCE-BASED COMPENSATION PLAN

Amended December 11, 2006





	1.	 	Name. The name of the Plan is the Cerner Corporation Performance Plan (the “Plan”).
	 
	2.	 	Basic Function. The Plan provides for payment of quarterly and annual bonuses to
select key associates of Cerner Corporation (the “Company”) and its subsidiaries, depending
upon the financial performance of the Company or certain subsidiaries or business units and/or
the job performance of the individual associates in question. Bonuses, if paid, may be paid
on a quarterly or annual basis and determined based on the actual performance of the Company
or its subsidiaries or business units or on one or more pre-established financial or
operational goals or targets. Payments of awards to certain executives are made pursuant to
the “Executive Award Feature” (see Section 10). All bonuses will be calculated as soon as
administratively practicable following the end of the quarter or year for which the bonus is
based. All quarterly and annual bonuses will be paid out no later than March 15th
of the calendar year following the year in which such bonus determination is made.
	 
	3.	 	Purpose. The purpose of the Plan is to provide a meaningful incentive on both a
quarterly and annual basis to key associates and officers of the Company and to motivate them
to assist the Company in achieving ambitious and attainable short-term goals. Individual
payments made under the Plan will vary, depending upon individual performance and, in some
cases, business unit operational achievements.
	 
	4.	 	Termination; Amendment. The Plan shall continue to be in effect, unless and until
terminated by the Compensation Committee of the Board of Directors of the Company. The
Executive Award Feature of the Plan is subject to the approval of the shareholders of the
Company, every five (5) years in accordance with Section 162(m) of the Internal Revenue Code,
as amended (the “Code”) by the affirmative vote of the holders of a majority of the shares
present in person or represented by proxy, and entitled to vote thereon, at a meeting of the
shareholders at which a quorum is present or represented. The Plan may be further amended
from time to time by the Compensation Committee provided that any amendment which, if effected
without the approval of the shareholders of the Company, would result in the loss of an
exemption from federal income tax deduction limitations under Section 162(m) of the Code, for
amounts payable thereunder but would not result in such loss if approved by the shareholders,
shall become effective only upon approval thereof by the shareholders of the Company within
the meaning of Section 162(m).
	 
	5.	 	Administration. The Plan is administered by the Compensation Committee, which has
the sole authority to make all discretionary determinations under the Plan. In suitable
circumstances, the Compensation Committee may evaluate and use the Company’s management’s
input as well as input and other relevant information from any outside parties it deems
appropriate.
	 
	6.	 	Participation. Key associates and officers eligible for participation in the Plan
will be determined by the Compensation Committee on an annual basis. Executive officers
eligible to receive awards under the Executive Award Feature of the Plan will be identified
each year by the Compensation Committee as described in Section 10 below.
	 
	7.	 	General Feature; Determination of Annual Targets. The Compensation Committee will
determine the measure or measures of financial performance and/or the target levels of
performance, the attainment of which in any quarter or year will result in the payment of
awards to all eligible participants except for those executives covered by the Executive Award
Feature. Such determinations on financial or operational performance measures or target
levels may be made,




 









 











Exhibit 10(i)





	 	 	and under appropriate circumstances may subsequently be modified, by the Compensation
Committee at any time during the calendar year. Alternative performance measures or
targets may be established and different target levels may be selected with different
general bonus amounts established for each participant. Following the initial
determination of performance targets, the Compensation Committee will monitor corporate
performance throughout each fiscal quarter, and may decide at any time before final quarter
or year-end determinations are reached to adjust the earlier target levels as appropriate,
for example, to take into account unusual or unanticipated corporate or industry-wide
developments. Final determinations of the amounts to be paid to a participant under the
general feature of the plan may also be adjusted upward or downward depending upon
subjective evaluations by an associate’s executive or manager.
	 
	8.	 	Performance Measures. Measures of financial performance selected by the
Compensation Committee on a quarterly or annual basis for determination of payments of awards
under the general feature of the Plan may include but are not limited to one or more of the
following: stock price, earnings per share (with or without extraordinary items), net income
(with or without extraordinary items), return on equity, return on assets, profit margins on
contract-by-contract basis, collection of certain accounts receivable, client satisfaction
results, or achievement of subsidiary business unit operating plans. Target performance may be
expressed as absolute or average dollar amounts, percentages, changes in dollar amounts or
changes in percentages, and may be considered on an institution-alone basis or measured
against specified peer groups or companies. Notwithstanding the foregoing, the measures of
financial or operational performance for determination of awards payable under the Plan to
those executive officers covered under the Executive Award Feature and the calculation of the
maximum amount payable and amounts actually paid to such executive officers under the Plan
shall be as set forth in the Executive Award Feature of the Plan (see Section 10).
	 
	9.	 	Individual Factors. The Compensation Committee, in exercising discretion under the
Plan on determinations of cash bonuses payable to individuals, may consider particular
individual goals as well as subjective factors, including any unique contributions.
	 
	10.	 	Executive Award Feature. Notwithstanding any other provision of the Plan to the
contrary, any awards granted under the Plan to those individuals identified by the
Compensation Committee as Section 16 “insiders” of the Company, within the meaning of Security
Exchange Commission Regulations (the “Covered Executives”), for purposes of this Plan, shall
be governed by the provisions of this Section 10 while such associate is a Covered Executive.






     (i) On or before the ninetieth (90th) day of each calendar year (in the
case of annual-based awards or combination of annual and quarterly based awards), or on or
before the twenty-second (22nd) day of each fiscal quarter (in the case of
awards based solely on performance in such fiscal quarter) while the Plan is in effect, the
Compensation Committee will (a) identify those individuals who it reasonably believes to be
Covered Executives for such calendar year or fiscal quarter, (b) establish in writing the
Earnings Per Share Target (as defined below) for such calendar year, (c) establish in
writing the Company Operating Margin Target (as defined below) for such quarter or year,
(d) establish in writing the Agreement Margin Targets (as defined below) for such quarter
or year, and (e) establish in writing any other targets for the Covered Executives as
specifically set forth below and as determined by the Compensation Committee and set forth
in the Compensation Committee minutes (“Other Targets”) (the Earnings Per Share Target, the
Company Operating Margin Target, the Agreement Margin Target, and all Other Targets to be
referred to collectively as the “Executive Targets”). The Compensation Committee may elect
to establish any combination of the above Executive Targets in a given quarter or year
provided that any established Executive Target(s) be established on or before the end of
the ninety day or twenty-second day period set forth above. Due to the Compensation
Committee’s belief that the disclosure of the Executive Targets would adversely affect the
Company, the Compensation Committee, the Covered Executives and all other directors,
officers and associates who become aware of such targets shall and will treat such
Executive Targets for any year or fiscal quarter as confidential. Executive Targets based
on recognized accounting principles shall be determined



 









 





Exhibit 10(i)





and deemed satisfied by using the same accounting principles in effect and relied upon
when such Executive Target was established.




     (ii) The Earnings Per Share Target shall be expressed as a specific target earnings
per share for the Company’s common stock on a fully diluted basis, before the after-tax
effect of any extraordinary items, the cumulative effect of accounting changes, or other
nonrecurring items of income or expense including restructuring charges.




     (iii) The Company Operating Margin Target shall be expressed as a target percentage
reflecting the leverage of the Company’s revenue relative to the expense associated with
that revenue.




     (iv) The Agreement Margin Targets shall be expressed as a dollar amount of booking
margins on specified types of sales, adjusted for the costs associated with delivery of the
solutions.




     (v) The Other Targets shall be determined based solely on the following list of
targets:




     (a) Total shareholder return




     (b) Stock price increase




     (c) Return on equity




     (d) Return on capital




     (e) Cash flow, including collection of cash, operating cash flows, free cash
flow, discounted cash flow return on investment, and cash flow in excess of cost of
capital




     (f) Economic value added




     (g) Market share




     (h) Client/associate satisfaction




     (i) Revenue levels




     (j) Employee retention




     (k) Productivity measures




     (l) Diversification of business opportunities




     (m) Price to earnings ratio




     (n) Expense ratios




     (o) Total expenditures




     (p) Completion of key projects




     (q) Operating margin




     (vi) If at the end of each fiscal quarter (in the case of quarterly-based performance
targets) or at the end of the fiscal year (in the case of annual-based or combination of
annual and quarterly based performance targets) any of the Executive Targets established by
the Compensation Committee have been met, the maximum amount payable to the Covered
Executives in any calendar year shall be as follows: (a) for the Chief Executive Officer,
200% of the Chief Executive Officer’s base salary at the time the Executive Targets are
established, and (b) for all other executive officers, 175% of such individual’s base
salary at the time the Executive Targets are established. The Compensation Committee has
discretion to reduce the amount of the bonus payable; provided, however, under no
circumstances may the Compensation Committee increase the amount of the bonus payment
beyond its maximum limit. The amount of the bonus reduction, if any, will depend upon a
subjective bonus reduction factor, formally known as an Annual Performance Evaluation (APE)
Factor, which will be determined at the Covered Executive’s end-of-the-year evaluation.
This factor will range from 100% of the maximum bonus amount for demonstrated distinguished
performance to 40% if performance does not satisfy the required standard.



 









 





Exhibit 10(i)





	11.	 	Certification. Prior to any payment to any Covered Executive of any amount accrued
under Section 10 of this Plan, the Compensation Committee (or its delegated subcommittee)
shall certify in writing that an Executive Target has been satisfied. For purposes of this
certification, approved minutes of the Compensation Committee meeting in which the
certification is made shall satisfy this Plan certification requirement.
	 
	12.	 	Code Section 409A. In the event that any provision of this Plan shall be determined
to contravene Code section 409A, the regulations promulgated thereunder, regulatory
interpretations or announcements with respect to section 409A or applicable judicial decisions
construing section 409A, any such provision shall be void and have no effect. Moreover, this
Plan shall be interpreted at all times in such a manner that the terms and provisions of the
Plan comply with Code section 409A, the regulations promulgated thereunder, regulatory
interpretations or announcements with respect to section 409A and applicable judicial
decisions construing section 409A.