April 17, 2000
Dear Shareholder:
The Annual Meeting of Shareholders of Cerner Corporation (the "Company")
will be held at 10:00 a.m., local time, on May 26, 2000, at the Cerner
Associate Center, located on the Cerner campus at 2901 Rockcreek Parkway,
North Kansas City, Missouri 64117. The enclosed notice of the meeting and
proxy statement contains detailed information about the business to be
transacted at the meeting.
The Board of Directors has nominated Clifford W. Illig, a present Class II
Director, to stand for election as a Class II Director for a term ending at
the 2003 Annual Meeting of Shareholders. The Board recommends that you
vote for this nominee.
In addition to the election of the Board of Directors, you are being asked
to approve the appointment of KPMG LLP as independent public accountants of
the Company for 2000. The Board of Directors recommends that you vote for
the approval of KPMG LLP.
On behalf of the Board of Directors and Management, I cordially invite you
to attend the Annual Meeting of Shareholders.
The prompt return of your Proxy in the enclosed postage prepaid envelope
will help ensure that as many shares as possible are represented.
Very truly yours,
CERNER CORPORATION
___/s/Neal L. Patterson___
Neal L. Patterson
Chairman of the Board of Directors and
Chief Executive Officer
Enclosures
<PAGE>
CERNER CORPORATION
2800 Rockcreek Parkway
North Kansas City, Missouri 64117
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 26, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Cerner Corporation, a Delaware corporation (the "Company"), will be held at
the Cerner Associate Center, located on the Cerner campus at 2901 Rockcreek
Parkway, North Kansas City, Missouri 64117, on May 26, 2000, at 10:00 a.m.,
local time, and thereafter as it may from time to time be adjourned, for
the following purposes:
a. to elect one Class II Director to serve for a three year term until
the 2003 Annual Meeting of Shareholders and until his successor is duly
elected and qualified;
b. to consider and act upon ratification and approval of the
selection of KPMG LLP as the Company's independent auditors for the
fiscal year ending December 30, 2000; and
c. to consider and act upon any other matters which may properly
come before the Annual Meeting of Shareholders or any adjournment
thereof.
The foregoing matters are more fully described in the accompanying
Proxy Statement.
In accordance with the provisions of the Bylaws of the Company, the
Board of Directors has fixed the close of business on April 7, 2000 as the
record date for the determination of the holders of Common Stock entitled
to notice of, and to vote at, the Annual Meeting of Shareholders.
The Board of Directors of the Company solicits you to sign, date and
promptly mail the Proxy in the enclosed postage prepaid envelope,
regardless of whether or not you intend to be present at the Annual Meeting
of Shareholders. You are urged, however, to attend the Annual Meeting of
Shareholders.
BY ORDER OF THE BOARD OF DIRECTORS,
___/s/Randy D. Sims_______________
Randy D. Sims
Secretary
North Kansas City, Missouri
April 17, 2000
<PAGE>
CERNER CORPORATION
2800 Rockcreek Parkway
North Kansas City, Missouri 64117
--------------
PROXY STATEMENT
--------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Cerner Corporation, a Delaware
corporation (the "Company"), for use at the Annual Meeting of Shareholders
of the Company to be held on May 26, 2000, commencing at 10:00 a.m., local
time, at the Cerner Associate Center, located on the Cerner campus at 2901
Rockcreek Parkway, North Kansas City, Missouri 64117, and any adjournment
thereof (the "Annual Meeting"). The Company anticipates mailing this Proxy
Statement, the accompanying form of Proxy and the Notice of Annual Meeting
of Shareholders to the holders of record of outstanding shares of common
stock, par value $.01 per share, of the Company (the "Common Stock") as of
April 7, 2000, on or about April 17, 2000.
Only the holders of record of shares of Common Stock as of the close
of business on April 7, 2000 are entitled to vote on the matters to be
presented at the meeting, either in person or by proxy. Holders of shares
of Common Stock are entitled to one vote per share outstanding in their
names on the record date with respect to such matters. At the close of
business on April 7, 2000, there were outstanding and entitled to vote a
total of 33,802,421 shares of Common Stock, constituting all of the
outstanding voting securities of the Company.
You are requested to complete, date and sign the accompanying Proxy
and return it promptly in the enclosed postage prepaid envelope. Your
Proxy may be revoked at any time prior to its exercise by written notice of
revocation delivered to the Secretary of the Company. Attendance at the
Annual Meeting will not in and of itself constitute a revocation of a
Proxy, but your Proxy will not be used if you attend the Annual Meeting and
prefer to vote in person. The persons designated as proxies were selected
by the Board of Directors and are officers and directors of the Company.
Proxies duly executed and received in time for the Annual Meeting will be
voted in accordance with shareholders' instructions. If no instructions
are given, duly executed Proxies will be voted as follows:
a. to elect Clifford W. Illig as a Class II Director to serve for a
three year term until the 2003 Annual Meeting of Shareholders and until
his successor is duly elected and qualified;
b. to ratify and approve the selection of KPMG LLP as the Company's
independent auditors for the fiscal year ending December 30, 2000; and
c. in the discretion of the proxy holder as to any other matter
coming before the Annual Meeting.
<PAGE>
QUORUM REQUIREMENTS
The presence in person or by proxy of holders of record of a majority
of the outstanding shares of Common Stock is required for a quorum to
transact business at the Annual Meeting, but if a quorum should not be
present, the Annual Meeting may be adjourned from time to time until a
quorum is obtained.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The table below sets forth information, as of March 15, 2000 (unless
otherwise indicated below), with respect to the beneficial ownership of
shares of Common Stock by (i) each person known to the Company to own
beneficially more than 5 percent of the aggregate shares of Common Stock
outstanding, (ii) each director and nominee for election as a director,
(iii) each executive officer named in the Summary Compensation Table, and
(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 dispositive power as to all of the shares shown as
beneficially owned by them, except as otherwise indicated.
<TABLE>
Amount and Nature
of Beneficial Percent of Shares
Name and Address of Beneficial Owner Ownership Outstanding
- ------------------------------------ ----------------- -----------------
<S> <C> <C>
Neal L. Patterson....................... 3,579,079 (1) 10.55%
Clifford W. Illig....................... 3,414,387 (2) 10.08%
Waddell & Reed Financial, Inc........... 2,766,700 (3) 8.19%
The Vanguard Group...................... 2,006,600 (4) 5.94%
Wellington Management Company, LLP...... 2,006,600 (5) 5.94%
Michael E. Herman....................... 93,000 (6) *
Jack A. Newman, Jr...................... 84,930 *
Gerald E. Bisbee, Jr., Ph.D............. 81,400 *
Stephen D. Garver....................... 63,329 *
Thomas C. Tinstman, M.D................. 61,513 *
John C. Danforth........................ 37,300 *
Glenn P. Tobin, Ph.D.................... 32,990 *
Stanley M. Sword........................ 31,969 *
Jeff C. Goldsmith, Ph. D................ 6,250 *
All directors and executive officers,
as a group (21 persons)................. 7,806,840 22.65%
</TABLE>
____________________
* Less than one percent
(1)Includes 196,000 shares held in trust for minor children with Jeanne
Lillig-Patterson, wife of Neal L. Patterson, serving as trustee and
38,500 shares for which Mr. Patterson has shared voting and dispositive
power. Excludes 47,514 shares held by Jeanne Lillig-Patterson, wife of
Neal L. Patterson, as to which Mr. Patterson disclaims beneficial
ownership. The address for Mr. Patterson is Cerner Corporation, 2800
Rockcreek Parkway, Kansas City, Missouri 64117.
(2)Includes 195,667 shares held in trust for minor children with Bonne A.
Illig, wife of Clifford W. Illig, serving as trustee and 63,863 shares for
which Mr. Illig has shared voting and dispositive power. The address for
Mr. Illig is Cerner Corporation, 2800 Rockcreek Parkway, Kansas City,
Missouri 64117.
<PAGE> 2
(3)According to a Schedule 13G, dated January 28, 2000 and filed by
Waddell & Reed Financial, Inc., Waddell & Reed Investment Management
Company, registered under Section 203 of the Investment Advisor's Act of
1940, has sole dispositive and voting power with respect to 2,766,700
shares of Common Stock. The address for Waddell & Reed Financial, Inc. and
Waddell & Reed Investment Management Company is 6300 Lamar Avenue, P.O. Box
29217, Shawnee Mission, Kansas 66201-9217.
(4)According to a Schedule 13G, dated February 8, 2000 and filed by The
Vanguard Group, Vanguard Specialized Funds - Vanguard Health Care Funds has
sole voting and shared dispositive power with respect to 2,006,600 shares
of Common Stock. The address for The Vanguard Group and Vanguard
Specialized Funds - Vanguard Health Care Funds is Post Office Box 2600,
Valley Forge, Pennsylvania 19482-2600.
(5)According to a Schedule 13G, dated February 9, 2000 and filed by
Wellington Management Company, LLP, Wellington Management Company, LLP has
shared dispositive power with respect to 2,006,600 shares of Common Stock.
The address for Wellington Management Company, LLP is 75 State Street,
Boston, Massachusetts 02109.
(6)Excludes 865 shares owned by Mr. Herman's spouse as to which Mr.
Herman disclaims beneficial ownership.
ELECTION OF DIRECTORS
The Certificate of Incorporation of the Company provides that the
number of directors of the Company shall be fixed by, or in the manner
provided in, the Bylaws of the Company and divided into three classes, each
having a term of three years. Each year the term of office of one class of
directors expires. The Board of Directors currently consists of seven
members. Thomas C. Tinstman, M.D. is currently a Class II Director and has
served on the Board of Directors since 1989. Dr. Tinstman has notified the
Board of Directors that he does not wish to seek renomination to the Board
of Directors when his current term expires and that he will resign
effective at the 2000 Annual Meeting of Shareholders. The Board of
Directors does not wish to nominate a candidate for the position currently
held by Dr. Tinstman and has amended the Bylaws of the Company to reduce
the number of directors from seven members to six members, effective
immediately prior to the 2000 Annual Meeting of Shareholders.
The Board of Directors intends to present for action at the Annual
Meeting the election of Clifford W. Illig, whose term expires at the Annual
Meeting, as a Class II Director to serve for a three year term until the
2003 Annual Meeting of Shareholders, and until his successor is duly
elected and qualified.
The Directors in Class I (John C. Danforth, Neal L. Patterson and Jeff
C. Goldsmith, Ph.D.) and the Directors in Class III (Gerald E. Bisbee, Jr.,
Ph.D. and Michael E. Herman) have been elected to terms expiring at the
time of the Annual Meetings of Shareholders in 2002 and 2001, respectively.
No shareholder may vote in person or by proxy for greater than one nominee
at the Annual Meeting. Shareholders do not have cumulative voting rights
in the election of directors. Directors will be elected by the plurality
vote of the holders of shares of Common Stock entitled to vote at the
Annual Meeting and present in person or by proxy.
It is intended that shares represented by a Proxy given pursuant to
this solicitation will be voted in favor of the election of Clifford W.
Illig as a Class II Director, unless such authority is specifically
withheld. In the event that Mr. Illig should become unavailable for
election, it is intended that the shares of Common Stock represented by the
Proxy will be voted for such substitute nominee as may be nominated by the
Board of Directors. Mr. Illig has indicated willingness to serve if elected
and it is not anticipated that he will become unavailable for election.
The Certificate of Incorporation and Bylaws of the Company provide
that advance notice of shareholder nominations for an election of directors
must be given. Written notice of the shareholder's intent to make a
nomination at a meeting of shareholders must be received by the Secretary
of the Company not later than 120 days in advance of the date of such
meeting in the case of an annual meeting and, in the case of a special
meeting, not more than seven days following the date of notice of the
meeting. The notice must contain (i) the name and address of the
shareholder who intends to make the nomination and of the person to be
nominated, (ii) a representation that the shareholder is a holder of record
of stock of the Company entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the person
specified in the notice, (iii) the names and addresses, as they appear in
the Company's books, of such shareholder, (iv) the class and number of
shares beneficially owned by such nominating shareholder and
<PAGE> 3
each nominee proposed by such shareholder, (v) a description of all
arrangements or understandings between the nominating shareholder and each
nominee and any other person or persons (naming such person or persons),
pursuant to which the nomination or nominations are to be made, (vi) such
other information regarding each nominee proposed by such shareholder as
would have been required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, as
then in effect, if the Company were soliciting proxies for the election
of such nominees, and (vii) the consent of the nominee to serve as a
director of the Company if so elected. No such notice has been received,
and the chairman of the Annual Meeting is entitled to refuse to acknowledge
the nomination of any person which is not made in compliance with the
foregoing procedure. In any event, the Board of Directors has no reason to
believe that anyone will attempt to nominate another candidate for
director.
The following table sets forth certain information as to the persons
nominated by the Board of Directors for election as directors of the
Company and each director whose term of office will continue after the
Annual Meeting:
<TABLE>
Director Since/
Name Age Term Expires
---- --- ---------------
<S> <C> <C>
To Serve in Office Until 2000 (Class II)
Clifford W. Illig (1) 49 1980/2000
To Serve in Office Until 2001 (Class III)
Gerald E. Bisbee, Jr., Ph.D. (2)(3) 57 1988/2001
Michael E. Herman (1)(3) 58 1995/2001
To Serve in Office Until 2002 (Class I)
Neal L. Patterson (1) 50 1980/2002
Jeff C. Goldsmith, Ph.D. (3) 51 1999/2002
John C. Danforth (2)(3) 63 1996/2002
____________________
(1) Member of Executive Committee.
(2) Member of Audit Committee.
(3) Member of Compensation Committee.
Gerald E. Bisbee, Jr., Ph.D. has been a Director of the Company since
February 1988. Dr. Bisbee is Chairman and Chief Executive Officer of ReGen
Biologics, Inc., a company which designs, engineers and manufactures tissue
engineered products for orthopedic applications. He has been a director of
Apache Medical Systems, Inc. since December 1989. He was Chairman and
Chief Executive Officer of Apache Medical Systems from December 1989 to
December 1997. Apache Medical Systems, Inc. implements software decision
support systems for intensive care units. Dr. Bisbee also served as a
director of SG Pacific Funds from 1989 to 1999.
John C. Danforth has been a Director of the Company since May 1996.
He has been a partner in the law firm of Bryan Cave LLP since 1995. For
more than five years prior to 1995 he was a member of the United States
Senate. Mr. Danforth is a director of Dow Chemical Corporation, Time
Warner, Inc. and General American Life Insurance Company.
Jeff C. Goldsmith, Ph.D. has been a Director of the Company since
September 1999. He is a healthcare consultant and President of Health
Futures, Inc. Dr. Goldsmith served as National Advisor for Healthcare to
Ernst & Young for twelve years, and lectured for eleven years at the
Graduate School of Business at the University of Chicago. Dr. Goldsmith
also served as Director of Planning and Government Affairs at the
University of Chicago Medical Center and worked as a fiscal and policy
analyst in the Office of the Governor of Illinois.
Michael E. Herman has been a Director of the Company since May 1995.
He is President of the Kansas City Royals Baseball Club. He was Chairman
of the Finance and Investment Committee of the Kauffman Foundation from
1990 to 1999 and its President from 1985 to 1990. Mr. Herman was the
Executive Vice President and Chief Financial Officer of Marion
Laboratories, Inc. from 1974 to 1990. He is a director of Janus Capital
Corporation and Eloquent, Inc.
<PAGE> 4
Clifford W. Illig has been a Director of the Company for more than
five years. Mr. Illig served as Chief Operating Officer of the Company for
more than five years until October 1998 and as President of the Company for
more than five years until March 1999. Mr. Illig was appointed Vice
Chairman of the Board of Directors in March 1999.
Neal L. Patterson has been Chairman of the Board of Directors and
Chief Executive Officer of the Company for more than five years. Mr.
Patterson also served as President of the Company from March 1999 until
August 1999.
Meetings of the Board and Committees
The Board of Directors has established Executive, Audit, and
Compensation Committees of the Board of Directors, but does not have a
Nominating Committee. During 1999, the Board of Directors held three
meetings.
The Executive Committee acts in place of the Board of Directors when
the Board of Directors is not in session and may exercise all of the powers
of the Board of Directors, except with respect to certain corporate
matters, including mergers, dissolution, sale of property, issuance of
stock, declaring dividends or amending the Certificate of Incorporation or
Bylaws of the Company. The Executive Committee did not meet during 1999.
The Audit Committee assists the Board of Directors in fulfilling its
responsibilities with respect to the accounting and financial reporting
practices of the Company and in addressing the scope and expense of audit
and related services provided by the Company's independent accountants.
The Audit Committee met two times during 1999.
The Compensation Committee reviews and approves the Company's
compensation policies and practices, establishes compensation for directors
and Mr. Patterson, reviews and approves the compensation of the other
executive officers of the Company, and approves major changes in the
Company's benefit plans. The Compensation Committee met two times during
1999.
<PAGE> 5
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
Chief Executive Officer and the four most highly compensated executive
officers of the Company as to whom the total salary and bonuses for the
fiscal year ended January 1, 2000 exceeded $100,000:
Summary Compensation Table
</TABLE>
<TABLE>
Annual Compensation Long-Term Compensation
------------------- ---------------------- All Other
Compensation
Fiscal Number of Stock ------------
Name and Principal Position Year Salary($) Bonus($) Options Granted ($) (1)
- --------------------------- ------ --------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Neal L. Patterson 1999 390,000 --- --- 657
Chairman of the Board of Directors 1998 386,539 126,564 25,000 660
and Chief Executive Officer 1997 375,961 196,876 --- 660
Jack A. Newman, Jr. 1999 375,000 33,548 129,363 657
Executive Vice President 1998 369,230 131,094 --- 660
1997 350,520 198,631 25,000 660
Glenn P. Tobin, Ph.D. (2) 1999 317,692 --- 5,298 657
Executive Vice President 1998 214,615 51,718 105,500 640
and Chief Operating Officer 1997 --- --- --- ---
Stephen D. Garver 1999 212,308 85,112 9,769 657
Senior Vice President and 1998 160,769 73,286 20,600 660
Managing Partner 1997 126,538 96,396 --- 660
Stanley M. Sword (3) 1999 275,000 --- 5,127 657
Vice President and 1998 111,058 68,750 65,000 620
Chief People Officer 1997 --- --- --- ---
</TABLE>
____________________
(1)Consists of $600, being the Company's matching contribution to the
named individual's account in the Cerner Corporation Associate 401(k)
Retirement Plan, and $57, being the insurance premiums paid by the
Company with respect to term life insurance for each named individual.
(2)Dr. Tobin became an executive officer of the Company on April 27, 1998.
(3)Mr. Sword became an executive officer of the Company on August 10, 1998.
<PAGE> 6
Stock Option Plans
The following table reports information with respect to the award of
stock options during the year ended January 1, 2000 for each of the named
executive officers in the Summary Compensation Table:
Option Grants In Last Fiscal Year
<TABLE>
Number of Percent of
securities total options
underlying granted to Exercise
options employees price Expiration Grant date
Name granted(#) in fiscal year ($/Sh) date present value ($)
- ---- ---------- -------------- -------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Neal L. Patterson --- --- --- --- ---
Jack A. Newman, Jr. (1) (5) 1,863 .1 17.04 04/30/07 22,089
(2) (5) 127,500 8.8 20.50 06/20/21 1,224,194
Glenn P. Tobin, Ph.D. (3) (5) 5,000 .3 18.6875 06/14/11 64,525
(1) (5) 298 --- 17.04 04/30/07 3,533
Stephen D. Garver (3) (5) 5,000 .3 18.6875 06/14/11 64,525
(1) (5) 4,769 .3 17.04 04/30/07 57,619
Stanley M. Sword (3) (5) 2,500 .2 18.6875 06/14/11 32,263
(1) (5) 1,027 .1 17.04 04/30/07 12,177
(4) (5) 1,600 .1 19.00 05/27/09 22,102
</TABLE>
____________________
(1)These options were issued at a price that exceeded the fair market
value of the Company's Common Stock on the date of grant. The options
become exercisable seven years from the date of grant and can vest earlier
if the optionee holds a percentage of shares acquired through the Executive
Stock Purchase Plan, assuming the optionee remains an employee of the
Company.
(2)These options were issued at a price that exceeded the fair market
value of the Company's Common Stock on the date of grant and were
granted in conjunction with cancellation of previous grants made in
1996. The options become exercisable in varying amounts per year over
a period of three years from the date of grant, assuming the optionee
remains an employee of the Company.
(3)These options were issued at a price that was equal to the fair market
value of the Company's Common Stock on the date of grant. The options
become exercisable in varying amounts per year over a period of ten years
from the date of the grant, assuming the optionee remains an employee of
the Company.
(4)These options were issued at a price that was equal to the fair market
value of the Company's Common Stock on the date of grant. The options
become exercisable six years from the date of grant or upon the earlier of
attainment of certain long-term stock price goals, assuming the optionee
remains an employee of the Company.
(5)The grant date present value was calculated using the Black-Scholes
option pricing model with the following weighted average assumptions:
expected dividend yield of zero percent; expected stock volatility of
61.3%; risk-free interest rate of 6.9%; and expected years until exercise
of eight years for each option.
<PAGE> 7
The following table reports information with respect to the January 1,
2000 option values for each of the named executive officers in the Summary
Compensation Table:
<TABLE>
Aggregated Option Exercises In Last Fiscal Year and January 1, 2000 Option Values
Number of
Securities
Underlying
Unexercised
Options at Value of Unexercised
January 1,2000 In-the-Money Options at
(#) January 1, 2000 ($)
Shares -------------- -----------------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable (1) Unexercisable (1)
- ---- ------------ ------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Neal L. Patterson - - 144,000/241,000 0/0
Jack A. Newman, Jr. - - 67,500/86,863 23,438/98,682
Glenn P. Tobin, Ph.D. - - 15,000/95,798 0/5,789
Stephen D. Garver - - 5,860/32,509 27,075/47,551
Stanley M. Sword - - 15,000/55,127 0/6,319
</TABLE>
____________________
(1)The numbers in the column headed Number of Securities Underlying
Unexercised Options at January 1, 2000 and the dollar amounts in the
column headed Value of Unexercised In-the-Money Options at January 1,
2000 reflect (i) the number of shares of the Company's Common Stock
into which options are exercisable and unexercisable and (ii) the
difference between the fair market value on January 1, 2000 of such
shares of Common Stock and the exercise price of the options.
Director Compensation
Nonemployee directors of the Company receive compensation of $2,500
for each meeting of the Board of Directors attended and an additional $500
for each committee meeting attended, plus reimbursement for expenses
incurred in connection with attendance at Board of Directors meetings.
During 1999, payments, excluding expense reimbursements, were $9,000 to Dr.
Bisbee, $6,000 to Mr. Herman, $2,500 to Dr. Goldsmith, and $9,000 to Mr.
Danforth.
In conjunction with becoming a director of the Company in 1999, Dr.
Goldsmith was granted options to purchase 40,000 shares of the Company's
Common Stock. These options were issued at a price that was equal to the
fair market value of the Company's Common Stock on the date of grant. The
options become exercisable in equal amounts per year over a period of five
years from the date of grant, assuming Dr. Goldsmith remains a director of
the Company.
Report of the Compensation Committee
The Compensation Committee of the Board of Directors (the
"Compensation Committee") is composed of the individuals listed below. All
of the members of the Compensation Committee are outside directors. The
Compensation Committee reviews and approves the Company's compensation
policies and practices, establishes compensation for directors and Mr.
Patterson, reviews and approves the compensation of the other executive
officers of the Company, and approves major changes in the Company's
benefit plans.
The compensation policies of the Company have been designed to enable
the Company to attract, motivate and retain experienced and qualified
executives. The Company seeks to provide competitive salaries based upon
individual performance, together with quarterly cash bonuses awarded for
the achievement of goals established by the Compensation Committee. In
addition, it has been the policy of the Company to grant stock options to
executives upon their commencement of employment with the Company or their
becoming such executive officers in an effort to strengthen the mutuality
of interests between such executives and the Company's shareholders.
<PAGE> 8
Annual Compensation
Total annual cash compensation for executive officers of the Company
consists of base salary and a potential annual cash bonus (in some
instances payable by the award of restricted stock of the Company) based
upon incentive plans adopted each year by the Compensation Committee.
Total annual cash compensation varies each year based on changes in base
salary and in the cash bonus. The incentive plans for executive officers
other than Mr. Patterson consists of various objective goals, both related
to areas for which such executive officer has responsibility and for
company wide performance. Attainment of each goal is objective, but the
amount of the bonus is also affected, in some instances, by a subjective
analysis of the executive's overall performance. For Mr. Patterson the
sole goal during the 1999 plan year consisted of earnings per share.
Attainment by Mr. Patterson of this goal is done on an objective basis
without any subjective analysis of his overall performance. Under the
incentive plans, each executive may earn up to a maximum amount approved by
the Compensation Committee on a subjective basis designed to create a
significant incentive in relation to such executive's salary. During 1999,
the Company's executive officers, as a group, earned approximately 20
percent of the targeted incentives available.
The salary of each executive officer is approved on a subjective basis
by the Compensation Committee at a level believed to be sufficient to
attract and retain qualified individuals. In making this determination,
the Compensation Committee considers the executive's performance, salary
levels at other competing businesses and the Company's performance. In
approving salaries and incentive plan payments for 1999, the Compensation
Committee considered, among other matters, the Company's performance during
1998 and the compensation levels for 1997 and 1998 of the Company's
principle competitors for which information was available, although the
Compensation Committee did not target compensation to any particular group
of these companies. The factors impacting base salary levels are not
independently assigned specific weights but are subjectively considered by
the Compensation Committee.
Mr. Patterson's compensation during the year ended January 1, 2000
consisted of $390,000 in salary. Mr. Patterson did not earn any payments
under the Company's incentive plans during 1999. In determining Mr.
Patterson's salary and potential incentive plan payments for 1999, the
Compensation Committee considered, among other matters, the Company's
performance during 1998 and the compensation of the chief executive officer
for 1997 and 1998 of the Company's principle competitors for which
information was available, although the Compensation Committee did not
target his compensation to any particular group of these companies.
Long-Term Incentive Compensation
The long-term incentive compensation for executive officers consists
of awards of stock options granted under the Company's stock option plans
typically upon their commencement of employment with the Company or
promotion to executive officer and stock options granted during the
employment as executive officers. The Compensation Committee believes stock
options create an incentive for executive officers to contribute to
sustained, long-term growth in the Company's performance. The Compensation
Committee believes that stock options create a mutuality of interest
between the Company's executive officers and shareholders. Stock option
grants provide the right to purchase shares of Common Stock at a specified
exercise price. All stock options issued to executive officers to date
have exercisable prices equal to or greater than the fair market value of
the Common Stock on the date of the grant of the stock option.
Members of the Compensation Committee:
Gerald E. Bisbee, Jr., Ph.D.
John C. Danforth
Jeff C. Goldsmith, Ph.D.
Michael E. Herman
<PAGE> 9
Company Performance
The following graph presents a comparison for the five-year period
ended December 31, 1999 of the performance of the Common Stock of the
Company with the Nasdaq Composite Index (as calculated by The Center for
Research in Security Prices) and the Nasdaq Computer/Data Processing Group
(as calculated by The Center for Research in Security Prices):
<TABLE>
Comparison of 5 year Cumulative Total Return
<CAPTION>
Measurement Period Nasdaq Computer and Nasdaq Stock Market
(Fiscal Year Covered) Cerner Corporation Data Processing Index (US Companies)
--------------------- ------------------ --------------------- -------------------
<S> <C> <C> <C>
Measurement Pt-12/30/94 $100.00 $100.00 $100.00
Measurement Pt-12/29/95 $ 93.00 $152.00 $141.00
Measurement Pt-12/31/96 $ 70.00 $188.00 $174.00
Measurement Pt-12/31/97 $ 96.00 $231.00 $213.00
Measurement Pt-12/31/98 $121.00 $412.00 $300.00
Measurement Pt-12/31/99 $ 89.00 $905.00 $556.00
</TABLE>
The above comparison assumes $100 was invested on December 30, 1994 in
Common Stock of the Company and in each of the foregoing indices and
assumes reinvestment of dividends. The results of each component issuer of
each group are weighted according to such issuer's stock market
capitalization at the beginning of each year.
<PAGE> 10
RATIFICATION OF THE SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected the firm of KPMG LLP as the
Company's independent certified public accountants to audit the financial
statements of the Company for the fiscal year ending December 30, 2000.
KPMG LLP has served as auditors for the Company since 1983. It is expected
that representatives of KPMG LLP will be present at the Annual Meeting.
They will have the opportunity to make a statement, if they desire to do
so, and also will be available to respond to appropriate questions.
The affirmative vote of a majority of the shares of Common Stock
present or represented at the Annual Meeting is required for the
ratification of the selection of KPMG LLP as independent public
accountants.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL AND
RATIFICATION OF THE SELECTION OF KPMG LLP.
CERTAIN TRANSACTIONS
The Company leases an airplane from a company owned by Mr. Neal L.
Patterson and Mr. Clifford W. Illig. The airplane is leased on a per mile
basis with no minimum usage guarantee. The lease rate is believed to
approximate fair market value for this type of aircraft. During 1998 and
1999, respectively, the Company paid an aggregate of $457,206 and
$511,853 for rental of the airplane. The airplane is used principally by
Mr. Patterson to increase the number of client visits he can make and to
reduce the physical strain of his heavy travel schedule. The Company
intends to continue the use of the airplane in 2000.
During 1998, the Company engaged Gerald E. Bisbee, Jr. to provide
consulting services in connection with the operations of a newly acquired
subsidiary of the Company. Dr. Bisbee was paid $118,500 and was reimbursed
$60,606 for his travel and living expenses while performing these services.
The Company loaned to Earl H. Devanny, III, Stephen M. Garver, Steven
M. Goodrich, Jack A. Newman, Jr., and Glenn P. Tobin, Ph. D., executive
officers of the Company, $225,000, $270,000, $168,750, $205,468.75, and
$116,875 respectively. Such loans remain outstanding but are not due. The
loan to Mr. Devanny in the amount of $200,000 is interest-free for the
first two (2) years and thereafter bears interest at the rate of five
percent (5%) per annum. The loan to Mr. Newman in the amount of $100,000
is interest free. The loan to Dr. Tobin in the amount of $100,000 bears
interest at the rate of three percent (3%) per annum. The loans to Mr.
Devanny, Mr. Newman and Dr. Tobin in the amount of $25,000, $105,468.75,
and $16,875 respectively and the loans to Mr. Garver and Mr. Goodrich were
made pursuant to an Executive Stock Purchase Plan and bear interest at a
rate of five and one-half percent (5.5%) per annum.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than
ten percent of a registered class of the Company's equity securities, to
file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Executive officers, directors and
holders of ten percent or more of the Company's equity securities are
required to furnish the Company with copies of all Section 16(a) reports
they file.
Based solely on review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that during the fiscal year ended January 1, 2000 all
Section 16(a) filing requirements applicable to its executive officers,
directors and holders of ten percent or more of the Company's equity
securities were complied with.
FINANCIAL STATEMENTS
The Annual Report to Shareholders of the Company for the fiscal year
ended January 1, 2000 is enclosed with this Proxy Statement.
<PAGE> 11
GENERAL INFORMATION
Other Matters
The Bylaws of the Company require that for business to be properly
brought before an annual shareholders' meeting, the Company must have
received prior written notice of such business not later than 120 days in
advance of the date of such meeting. The notice must describe the proposed
business, the shareholders' name and address, a description of the class
and number of shares of stock of the Company which are beneficially owned
(as that term is defined in the Certificate of Incorporation of the
Company) by the shareholder, any material interest of the shareholder in
such business and all other information regarding the proposal which the
Company would be required to provide in a proxy statement filed pursuant to
the proxy rules of the Securities and Exchange Commission if proxies for
the proposal were being solicited by the Company. Because no such notice
has been received in a timely manner, the only business which may be
properly brought before the Annual Meeting are the matters set forth herein
or those brought before the meeting by or at the direction of the Board of
Directors.
The Board of Directors does not intend to present any matter for
action at the annual meeting other than the matters referred to in this
Proxy Statement. If any other matters properly come before the Annual
Meeting, it is intended that the holders of the proxies hereby solicited
will act in respect of such matters in accordance with their best judgment.
Deadline for Shareholder Proposals
Proposals by holders of the shares of Common Stock which are intended
to be presented at the 2001 Annual Meeting of Shareholders must be received
by the Company no later than December 20, 2000 to be eligible for inclusion
in the Company's Proxy Statement and form of proxy relating to that
meeting. Such proposals must also comply in full with the requirements of
Rule 14a-8 under the Securities Act of 1934 and must comply with the
advance notice and information requirement described under the heading
"GENERAL INFORMATION -- Other Matters" above to be presented at that
meeting.
Voting Matters
In accordance with Delaware law, a shareholder entitled to vote in the
election of directors can withhold authority to vote for all nominees for
directors or can withhold authority to vote for certain nominees for
directors. Abstentions from the proposal to approve and ratify the
selection of the Company's independent auditors are treated as votes
against the particular proposal. Broker non-votes on the election of
directors or the proposal to approve and ratify the selection of the
Company's independent auditors are treated as shares of Common Stock as to
which voting power has been withheld by the respective beneficial holders
and, therefore, as shares not entitled to vote on the proposal as to which
there is the broker non-vote.
<PAGE> 12
Expenses of Solicitation
All costs of this solicitation will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or telegraph by some of the regular employees of the Company.
The Company has engaged Morrow & Co., Inc. ("Morrow") as paid solicitors in
connection with the Annual Meeting. Morrow will be paid to solicit proxies
and distribute proxy materials to nominees, brokers and institutions. The
anticipated cost of such services is $4,000, plus expenses. The Company
may reimburse brokers and other persons holding stock in their names, or in
the names of nominees, for their expenses incurred in sending proxy
materials to their principals and obtaining their proxies. The Company
requests that brokerage houses and other custodians, nominees and
fiduciaries forward the soliciting materials to the beneficial owners of
the shares of Common Stock held of record by such persons.
BY ORDER OF THE BOARD OF DIRECTORS,
___/s/Randy D. Sims_______________
Randy D. Sims
Secretary
North Kansas City, Missouri
April 17, 2000
<PAGE> 13
SHAREHOLDERS LETTER
A Letter to our shareholders, clients and associates
March 31, 2000
As predicted, 1999 was an unpredictable year. Cerner
made great operational progress but our financial
performance was disappointing.
Summary Highlights for 1999
Financial Results: Cerner's financial results were
disappointing with revenues of $340 million, up less than
3%; gross margin of $245 million, up less than 2%; and net
earnings, before non-recurring charges, down 71% to $6.9
million.
Significant Operational Success: Healthcare providers
were using over 530 HNA Millenniumr applications at the end
of 1999; approximately 50% of these were converted in the
last six months of the year. Our tremendous success in
converting HNA Millennium applications demonstrates the
strength of our architecture, the quality of our
applications and the maturity of our products. It also
demonstrates that, as we emerge from the massive technology
build stage for HNA Millennium, the five-year investment
cycle is beginning to yield dramatic benefits.
The Balanced Budget Act: This legislation took its
full grip on healthcare providers in the United States
during 1999, significantly reducing the operating margins of
hospitals and physician groups while raising their cost of
capital. This hostile economic environment, along with our
client's preoccupation with Y2K projects, significantly
impacted our ability to grow our revenues in 1999.
eHealth was Born: Although eHealth is still being
defined, it was born with great promise during the year.
Cerner is at the center of this creation with our
significant ownership position in and strategic relationship
with CareInsite. A merger between CareInsite and
Healtheon/WebMD was announced on February 14, 2000. We
believe that this pending transaction will amplify Cerner's
role as a major participant in eHealth.
The Healthcare Information Technology (HCIT)
Competitive Landscape: Since the beginning of 1999, the
HCIT industry landscape has changed significantly. Two
major competitors were acquired, or agreed to be acquired,
while a third is being actively pursued. In this evolving
environment, Cerner focused its resources on investing in
products and services which truly create value for our
clients. We believe this focus has improved our competitive
position, allowing us to more effectively address the
tremendous opportunities in the healthcare marketplace.
Institute of Medicine (IOM) Articulation of the Tragedy
of Medical Errors: The IOM released a report called "To Err
is Human" on November 29, 1999, indicating that medical
error is one of the top ten causes of death in the United
States. A significant majority of these deaths are
preventable with Cerner information technology - today!
Y2K Arrived Slowly, with Much Fanfare, and Quickly Was
Forgotten: At midnight, December 31, 1999, the two-digit
date field in many legacy computer applications rolled from
"99" to "00". As we assisted our clients in their
preparation for this technology event, Cerner completed
almost 1,000 extra projects during 1999, most of which were
not reimbursable. Our clients spent billions of dollars
preparing for Y2K, an expenditure that generated little
incremental value toward improving their capabilities to
lower cost, improve quality or make healthcare delivery
safer. The good news is that Y2K is now history.
Cerner Stock Price: Recently, Cerner's stock price hit
an all-time high and is now trading at $27, which is up 100%
over its price in November 1999.
<PAGE>
The 1990's: A Decade of Progress and Results
This is Cerner's last Annual Report for the 1990s. A decade
is a meaningful period of time for which to review our
progress.
During the 1990s several core strategies defined our
company. Over the next ten years these strategies will
continue to define Cerner and, we believe, our industry. In
an environment that is constantly changing, with enormous
opportunities emerging from within as well as from without,
we believe the consistency of these core strategies creates
tremendous strength, stability and leverage for Cerner today
and well into the new millennium.
Leadership Through Vision
The healthcare delivery industry is a very inefficient,
sometimes unsafe, industry that produces a result with a
high degree of variance in quality. This is a harsh
statement for an industry that is committed to enhancing and
preserving the quality of life. Significant advancements
and development have come from the marvels of the science
and technology of medicine and the number of truly caring,
brilliant people who have given their lives to delivering
healthcare. However, the organizational delivery models of
healthcare have not benefited from the same level of
innovation. We believe the industry needs a vision on how
to transform itself and that information technology will be
the key source of leverage healthcare executives will use in
this transformation. Cerner has made a major contribution
to help shape the industry's vision over the past ten years.
We are recognized for it. It is this vision, which guides
Cerner.
Common Information Architecture for Healthcare Delivery
The healthcare delivery system is highly fragmented.
Cerner has a long-held belief that information technology
can serve as the foundation for the delivery of healthcare
across these disparate organizational boundaries. We have
executed on this belief by investing over $200 million in
building the industry's most comprehensive, contemporary
information architecture - Health Network ArchitectureT
(HNA), the Millennium version. HNA Millennium creates
solutions for healthcare delivery organizations across the
entire continuum of care. It goes deep into the workflows
of the many clinical, operational and business services of
healthcare delivery. It is extensible into managed care,
disease management and demand management organizations. Our
architecture is designed around the person, creating an
information platform that enables health services to be
accessible anytime, anywhere. It is this unique, person-
focused design principle that has positioned HNA Millennium
to be the backbone of the new emerging eHealth community.
Mission Critical Applications First
Cerner has always believed huge value can be created by
first focusing on the mission of an industry rather than the
administration of the industry. That has led us to become
the leading clinical information systems company in the
world. Today almost 80% of every dollar spent in healthcare
is spent because a physician makes a clinical decision. In
the near future, given the explosion of internet
connectivity, Cerner technology will be instrumental in
redefining how physicians and consumers interact to make
these decisions, empowering and informing the consumer in
the redefined process. While the administration of
healthcare is very costly and cumbersome and needs to be
<PAGE>
redesigned, this redesign must start with the clinical
process. Cerner has done exactly that, attacking the
clinical mission first and then following with the
administration. Cerner will be delivering to healthcare
organizations, in 2000, a next generation set of business
applications designed from that perspective.
Organic Growth
We have witnessed significant consolidation in the
healthcare information technology industry. Many of our
competitors have used acquisition-based business plans to
create short-term growth, which endears them to Wall Street
for a period of time. Cerner has always questioned whether
`fundamental value' can be created for our clients by
amassing pre-existing, disparate information technologies.
Cerner's core growth strategy has been to create value by
developing great software within industrial strength
architecture. The overall results produced by this strategy
were tremendous over the decade of the 90s. Over a 10-year
period, Cerner revenues grew nearly 600% with a 10-year
Compound Annual Growth Rate (CAGR) of 21%; Gross margins
grew over 1000% with a 27% 10-year CAGR and shareholders
experienced a 1200% increase in share value based on the end-
of-the-year price of $19.69 or over a 1600% increase based
on more recent share prices. We are, by most measures
today, considered the third largest healthcare information
technology company in the world and we are the clearly the
largest clinical information systems company delivering
mission critical applications to healthcare. Although we
clearly under-performed in creating incremental shareholder
value during the last half of the 1990s, we believe strongly
that we have created a position that is an outstanding
starting point for the next decade.
In the Short-term: Our Year 2000 Plan
In the last paragraph of last year's 1998 Annual Report
Letter, we said that 1999 would be very unpredictable. It
was. And it's over. While we do expect healthcare delivery
organizations to continue to be under financial pressure for
the next two to three years, we believe the year 2000 is
much more predictable. Y2K is gone and forgotten and the
realities of BBA are now clearly understood by our clients.
Healthcare providers can now focus on building better
delivery systems. We have built our year 2000 plan based on
these expected realities. We are focused on achieving four
goals: revenue growth, operating margin expansion, growing
our presence in eHealth and operational excellence.
Revenue Growth: The completion and maturing of HNA
Millennium gives us an excellent opportunity to take market
share from our competitors by offering the industry a state-
of-the-art architecture and significantly expanding the
number of solutions we offer healthcare providers. We are
investing in growing the size of our direct sales force,
having already doubled its size in the last six months of
1999. We are also focused on growing significant market
opportunities outside the United States.
Operating Margin Expansion: We believe we can grow our
bottom line by expanding our operating margins in our Client
Services and our Cerner Consulting groups while at the same
time decreasing the relative investment we make in
engineering, as a percent of our revenues, now that the
major build of HNA Millennium is complete.
Presence in eHealth: As we said, our technology
investment in HNA Millennium was designed around the person.
In the age of the connected and empowered consumer this
looks very smart. Now, we see eHealth opportunities
everywhere we look. In 1998 and 1999 we leveraged our
investment in HNA Millennium into significant value for
<PAGE>
Cerner's shareholders through our CareInsite (and now,
potentially, Healtheon|WebMD) relationship. We also have
enormous opportunities to work with our clients to define
their role in the new age eHealth space. Year 2000 is a
critical period for developing this wave of new
opportunities.
Operational Excellence: A significant portion of our
thinking and plan for the year 2000 is simply to become much
better at what we do. That includes continuing to build
great software and world-class architecture, delivering
great professional and technical services to our clients,
helping our clients achieve their visions while realizing a
return on their investments with Cerner, and providing great
post-installation service for our solutions. To be a great
company, we must have great talent and great execution.
Cerner executive management and associates are committed to
delivering all four goals.
Over the Long-term: Opportunities for the New Decade
We believe the opportunities for Cerner over the next
ten years are enormous. We are in the world's largest
industry (healthcare is over 14% of the United States
economy) and we are the world's best-positioned company to
help transform this industry with information technology.
Currently, healthcare organizations are seeing increased
workflow volume while the reimbursement per case decreases.
We believe that the healthcare industry will reach an
inflection point within the next decade, creating the
emergence of 'New Health Enterprises' using information
technology as the `digital backbone'.
The `New Health Enterprise' will require information
systems that can manage care delivery virtually across an
entire community while simultaneously managing the business
services side of healthcare management. This will require
managing care from the `living room' to the `operating room'
in a paperless, smart fashion. In this digital environment,
Cerner envisions that consumers and physicians will be able
to choose from a variety of electronic access devices (e.g.,
personal computers, network computers,
entertainment/internet portals, Personal Digital Assistants
and home/personal-based diagnostic and therapeutic
technology) to connect directly to the clinical processes of
care and for accessing a complete health record for each
individual. This precise and specific personal medical
information will be used to create a customized health
system for each person in the community as well as
establishing large data repositories storing and tracking
health outcomes over many lives and multiple lifetimes. New
knowledge and medical insights will be gained from the use
of this trusted data. New, powerful `transaction engines'
that securely manage healthcare transactions from each point
of access to their destination will redefine the basic
workflows of healthcare. These `transaction engines' will
allow preferencing and customization by the consumer and
physicians. They will embed clinical rules, clinical
evidence and protocols to monitor care safety and quality.
Finally, they will use business and compliance rules to
create more efficient business management between the health
enterprise and their payors, patients, community, supply
chain, physician groups, and outside business relationships.
We plan to become the dominant company innovating,
designing and building the information technology for
healthcare in this new environment. We expect our HNA
Millennium architecture to become the backbone for eHealth,
redefining the healthcare transactions and connections for
consumers, doctors, payors, and employers as well as
<PAGE>
participants in the supply chains. We will be able to
create a new set of professional and technology services for
our clients utilizing the new delivery platforms we are
building. We believe there are enormous opportunities for
Cerner in the emerging data and knowledge discovery
marketplace.
In short, Cerner has the opportunity to transform
healthcare. And in doing so, we will create significant
value for our shareholders, clients, and associates.
As with everything in business there are few
guarantees. We do, however, believe we have the vision,
experience, energy and resources to achieve great things
early in this new decade. The year 2000 will be a great
launching point.
Very truly yours,
Neal L. Patterson
Chairman and Chief Executive Officer
Clifford W. Illig
Vice Chairman
Earl H. Devanny, III
President
Glenn P. Tobin, Ph.D.
Executive Vice President &
Chief Operating Officer
PROXY CARD
CERNER CORPORATION
2800 Rockcreek Parkway PROXY
Kansas City, Missouri 64117
- ---------------------------------------------------------------------------
This Proxy is for the 2000 Annual Meeting of Shareholders of Cerner
Corporation, a Delaware corporation, to be held May 26, 2000, at 10:00
a.m., local time, at the Cerner Associate Center, located on the Cerner
Campus at 2901 Rockcreek Parkway, North Kansas City, Missouri 64117.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF CERNER CORPORATION.
The undersigned hereby appoints Clifford W. Illig and Neal L. Patterson,
and each of them, jointly and severally, with full power of substitution,
as attorneys-in-fact, to vote all the shares of Common Stock which the
undersigned is entitled to vote at the 2000 Annual Meeting of Shareholders
of Cerner Corporation to be held on May 26, 2000, and at any 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 BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
- ---------------------------------------------------------------------------
1. Election of Director:
Clifford W. Illig
___ FOR the nominee ___ WITHHOLD AUTHORITY to vote for the nominee
2. Ratification and approval of the selection of KPMG LLP as the
independent auditors of Cerner Corporation for the fiscal year ending
December 30, 2000.
___ FOR ___ AGAINST ___ ABSTAIN
(PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED
ENVELOPE)
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is made, this
proxy will be voted "FOR" proposals 1 and 2.
In their discretion, the proxies are to vote upon 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.
Please date and sign as name appears hereon. If shares are held jointly or
by two or more persons, each shareholder named should sign. Executors,
administrators, trustees, etc. should so indicate when signing. If the
signer is a corporation, please sign full corporate name by duly authorized
officer. If a partnership, please sign in partnership name by authorized
person.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
and Proxy Statement, dated April 17, 2000.
DATE_________________________
_____________________________
(Signature)
_____________________________
Signature(s)
PLEASE MARK, SIGN, DATE AND
MAIL THIS PROXY IN THE
ENVELOPE PROVIDED.
If you expect to attend the
2000 Annual Meeting of
Shareholders please check
this box.
___________
401K PROXY CARD
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
---------------------------
________________________________________________________________
Name: Number of Shares:
- ----------------------------------------------------------------
Mail Drop:
- ----------------------------------------------------------------
Address:
- ----------------------------------------------------------------
TO: All Participants
The Annual Meeting of the Shareholders of Cerner Corporation (the
"Company") will be held at the Cerner Associate Center on the Cerner
campus, at 2901 Rockcreek Parkway, North Kansas City, Missouri 64117,
on May 26, 2000, commencing at 10:00 a.m. As a participant in the
Cerner Corporation Foundations Retirement Plan (the "Plan"), you are
entitled to instruct American Century Services, Inc., as trustee of
the Plan (the "Trustee"), to vote the shares of Common Stock, par
value $.01 per share, of the Company (the "Common Stock"), which have
been credited to you under the Plan as of April 7, 2000.
As of this date, your Plan account has been credited with the number
of shares of Common Stock indicated on the label affixed to the bottom
of the second page of the enclosed Participant Instruction Form. The
number of shares of Common Stock shown includes shares of Common Stock
purchased with your elective deferrals, Company matching
contributions, and allocations to your account of shares of Common
Stock forfeited by terminated associates, as allocated by the
provisions of the Plan. Therefore, you may not be fully vested in the
total number of shares of Common Stock indicated.
The Plan gives you the right to direct the Trustee to vote your shares
in accordance with your instructions. Your votes are to be indicated
on the enclosed Participant Instruction Form and returned to Vivian
Vaughan of Cerner Corporation, Mail Drop W0411, no later than May 15,
2000. The Trustee may vote only those shares in the Plan for which
valid instructions have been received from the participant. Please
sign and date your form and mail it as promptly as possible to Vivian
Vaughan at Mail Drop W0411.
Your voting instructions are confidential.
AMERICAN CENTURY SERVICES, INC.,
as trustee of Cerner Corporation
Foundations Retirement Plan
PARTICIPANT INSTRUCTIONS
UNDER
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
FOR ANNUAL MEETING OF SHAREHOLDERS
May 26, 2000
------------
I am a participant in the Cerner Corporation Foundations Retirement
Plan (the "Plan") of Cerner Corporation (the "Company") entitled to
vote the number of shares of Common Stock, par value $.01 per share,
of the Company (the "Common Stock") indicated on this form.
I understand that AMERICAN CENTURY SERVICES, INC., as trustee of the
Plan (the "Trustee"), will vote the shares of Common Stock upon
instructions from participants. I further understand that I may
direct the Trustee to vote certain shares of Common Stock in favor and
certain shares of Common Stock against any of the proposals, but that
to do so requires separate forms.
I acknowledge receipt of the Company's Notice of Annual Meeting and
Proxy Statement for its Annual Meeting of Shareholders to be held May
26, 2000 at 10:00 a.m., local time, at the Cerner Associate Center on
the Cerner campus located at 2901 Rockcreek Parkway, North Kansas
City, Missouri 64117.
I instruct the Trustee to vote all of my shares of Common Stock as
follows:
<PAGE>
1. The election of Clifford W. Illig as director.
FOR Withheld as to all nominees
--- ---
To withhold authority to vote for any nominee(s), mark the "FOR" box
and write the name of each such nominee with respect to which you
intend to withhold authority to vote on the line provided below.
-----------------------------------------------------------------
Unless authority to vote for each nominee is withheld, this Proxy
will be deemed to confer authority to vote "FOR" each nominee
whose name is not written on the line provided.
2. Ratification and approval of the selection of KPMG LLP as the
independent auditors of Cerner Corporation for the fiscal year ending
December 30, 2000.
FOR AGAINST ABSTAIN
--- --- ---
3. Considering and acting upon any other matters which may properly
come before the meeting or any adjournment thereof.
I direct that Clifford W. Illig and Neal L. Patterson, and
each or any one of them, be appointed my true and lawful attorneys,
agents and proxies with full power of substitution in my name to vote
at the Annual Meeting, and at any and all adjournments thereof, with
respect to the shares of Common Stock which have been credited to me
under the Plan for the purpose of any matters which may properly come
before the meeting or any adjournment thereof.
___ a. I hereby grant the power of attorney to above.
___ b. I hereby withhold the grant of the power of attorney
referred to above.
Date: ________________________, 2000
______________________________________
(Signature of Participant)
(Please sign exactly as your name
appears on the label to this form. If
you are signing as executor,
administrator or guardian, please give
your full title as such.)
PLEASE MARK, SIGN, DATE AND RETURN THIS PARTICIPANT INSTRUCTION FORM
IN THE ENVELOPE PROVIDED TO VIVIAN VAUGHAN AT MAIL DROP W0411.
