Cooperation Agreement, dated April 8, 2019, by and among Cerner Corporation and Starboard Value LP and certain of its affiliates

This Cooperation Agreement (this “Agreement”) is made and entered into as of April 8, 2019 by and among Cerner Corporation, a Delaware corporation (the “Company”) and the entities and natural persons set forth in the signature pages hereto (collectively, “Starboard”) (each of the Company and Starboard, a “Party” to this Agreement, and collectively, the “Parties”).

WHEREAS, Starboard submitted a letter to the Company on February 15, 2019 (the “Nomination Letter”), as supplemented on March 14, 2019, providing notice of Starboard’s intent to nominate director candidates for election as Class III Directors (the “Class III Directors”) of the Board of the Directors of the Company (the “Board”) at the Company’s 2019 annual meeting of stockholders (the “2019 Annual Meeting”);

WHEREAS, the Company and Starboard have engaged in various discussions and communications concerning the Company’s business, financial performance and strategic plans;

WHEREAS, as of the date of this Agreement, Starboard has a combined economic and beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act (as defined below)) interest in the common stock, par value $0.01 per share, of the Company (the “Common Stock”) totaling, in the aggregate, 3,744,394 shares (“Starboard’s Ownership”);

WHEREAS, Denis Cortese has advised the Company he does not intend to stand for re-election at its 2019 Annual Meeting;

WHEREAS, as of the date of this Agreement, the Company and Starboard have determined to come to an agreement with respect to the composition of the Board, as provided in this Agreement;

WHEREAS, the Company and Starboard have determined to come to an agreement with respect to certain targets for improving operational performance at the Company and the Company has agreed to make public those targets and implement certain processes around such improvements; and

WHEREAS, the Company and Starboard have reached agreement on certain other matters.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties to this Agreement, intending to be legally bound, agree as follows:

Class II Directors left by Clifford W. Illig, who retired from the Board effective January 15, 2019 (R. Halsey Wise and John Greisch are referred to herein as the “Company Designees”, and collectively with the Starboard Designees, the “New Independent Directors”). Messrs. Riedel and Wise will be nominated as Class III directors pursuant to Section 1(b)(i) below for election to the Board at the 2019 Annual Meeting. The Company agrees that immediately prior to the 2019 Annual Meeting, the Board and all applicable committees of the Board shall take all necessary actions to decrease the size of the Board from eleven (11) to ten (10) directors, reducing the number of directors comprising Class III Directors of the Board by one (1).

Starboard Replacement Director; provided, however, that if the Board does not appoint such Starboard Replacement Director to the Board pursuant to this Section 1(a)(iii), the Parties shall continue to follow the procedures of this Section 1(a)(iii) until a Starboard Replacement Director is appointed to the Board. Upon a Starboard Replacement Director’s appointment to the Board, the Board and all applicable committees of the Board shall, subject to Nasdaq rules and applicable law, take all necessary actions to appoint such Starboard Replacement Director to any applicable committee of the Board of which the replaced director was a member immediately prior to such director’s resignation or removal, and, subject to Nasdaq rules and applicable law, shall appoint such Starboard Replacement Director to either such committees or, if the qualifications for such committees are not met, to alternative committees of the Board in accordance with Section 1(c) below. Subject to Nasdaq rules and applicable law, until such time as any Starboard Replacement Director is appointed to any applicable committee, the other Starboard Designee will serve as an interim member of such applicable committee. Any Starboard Replacement Director designated pursuant to this Section 1(a)(iii) to replace a Starboard Designee that is a Class III Director prior to the mailing of the Company’s definitive proxy statement for the 2019 Annual Meeting, shall stand for election at the 2019 Annual Meeting together with the other Class III Nominees (as defined below), in accordance with Section 1(b)(i) of this Agreement.

efforts and capital deployment strategy, including taking into consideration recommendations from AlixPartners LLP, the Company’s risk profile and the potential impact of any recommended changes on the Company’s business model, strategic plan and ability to meet commitments to clients. The Finance & Strategy Committee shall remain in effect during the Standstill Period and thereafter until the Board otherwise determines. The Finance & Strategy Committee shall be comprised solely of members of the Board who qualify as “independent” pursuant to Nasdaq listing standards. The members of the Finance & Strategy Committee shall initially be William Zollars, John Greisch, R. Halsey Wise, Melinda Mount and George Riedel, with Mr. Greisch serving as Chairman of the Finance & Strategy Committee. The Finance & Strategy Committee shall promptly meet after the date of this Agreement to organize, plan and commence the evaluation and review to be performed in accordance with this Section 1(d). The Finance & Strategy Committee shall report on the status and substance of its work to the full Board at such times as the Board Chairman, Lead Independent Director of the Board, or any two directors may request.

the ISS or Glass Lewis recommendation. As used in this Agreement, the term “Named Executive Officers” shall have the meaning set forth in Section 229.402 promulgated by the Securities and Exchange Commission under the U.S. Securities Act of 1933, as amended, or the rules or regulations promulgated thereunder.

Company’s Employment Agreements with certain executives, the Company’s 2004 Long-Term Incentive Plan G and 2001 Long-Term Incentive Plan F, or any other related plans or agreements that refer to any such plan’s or agreement’s definition of “Change in Control”, “Change of Control” (or any similar term).

except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) the execution of this Agreement, the consummation of any of the transactions contemplated hereby, and the fulfillment of the terms hereof, in each case in accordance with the terms hereof, will not conflict with, or result in a breach or violation of the organizational documents of Starboard as currently in effect, (d) the execution, delivery and performance of this Agreement by Starboard does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to Starboard, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound, (e) as of the date of this Agreement, Starboard’s Ownership is 3,744,394 shares of Common Stock, including 648,543 shares underlying certain forward purchase contracts exercisable within sixty (60) days hereof, (f) as of the date hereof, other than as disclosed herein, Starboard does not currently have, and does not currently have any right to acquire, any interest in any other securities of the Company (or any rights, options or other securities convertible into or exercisable or exchangeable (whether or not convertible, exercisable or exchangeable immediately or only after the passage of time or the occurrence of a specified event) for such securities or any obligations measured by the price or value of any securities of the Company or any of its controlled Affiliates, including any swaps or other derivative arrangements designed to produce economic benefits and risks that correspond to the ownership of Common Stock, whether or not any of the foregoing would give rise to beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act), and whether or not to be settled by delivery of Common Stock, payment of cash or by other consideration, and without regard to any short position under any such contract or arrangement) and (g) except pursuant to the nomination materials submitted by Starboard to the Company in connection with its Nomination Letter, Starboard will not, directly or indirectly, compensate or agree to compensate any Starboard Designee for their respective service as a director of the Company with any cash, securities (including any rights or options convertible into or exercisable for or exchangeable into securities or any profit sharing agreement or arrangement), or other form of compensation directly or indirectly related to the Company or its securities. For the avoidance of doubt, nothing herein shall prohibit Starboard from compensating or agreeing to compensate any person for his or her respective service as a nominee or director of any other company.

involvement at the Company, including, but not limited to, the negotiation and execution of this Agreement, provided that such reimbursement shall not exceed $275,000 in the aggregate.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the Parties as of the date hereof.