April 16, 2010

Dear Shareholder:

You are cordially invited to attend the Annual Shareholders’ Meeting of Cerner Corporation (the “Company”) to be held at 10:00 a.m., local time, on May 28, 2010, at The Cerner Round auditorium in the Cerner Vision Center, located on the Cerner campus at 2850 Rockcreek Parkway, North Kansas City, Missouri 64117.

Details of the business to be conducted at the Annual Shareholders’ Meeting are given in the attached Notice of Annual Meeting and Proxy Statement. We will also report on matters of current interest to our shareholders. We are very pleased that Ms. Linda M. Dillman, Sr. Vice President of Enterprise Services/Global Functions IT with Hewlett-Packard Company, is a new nominee for the Board this year.

We hope you will be able to attend the meeting. However, even if you plan to attend in person, please vote your shares promptly to ensure they are represented at the meeting. You may submit your proxy vote by telephone or Internet as described 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.

Promptly voting by Internet or telephone or returning your Proxy Card in the enclosed postage prepaid envelope will help ensure that as many shares as possible are represented.

Very truly yours,
CERNER CORPORATION

Neal L. Patterson
Chairman of the Board of Directors and
Chief Executive Officer

CERNER CORPORATION
2800 ROCKCREEK PARKWAY
NORTH KANSAS CITY, MISSOURI 64117

NOTICE OF ANNUAL SHAREHOLDERS’ MEETING
MAY 28, 2010

TO OUR SHAREHOLDERS:

The Annual Shareholders’ Meeting of Cerner Corporation will be held on May 28, 2010, at 10:00 a.m. local time, at our corporate headquarters, 2850 Rockcreek Parkway, North Kansas City, Missouri 64117, at The Cerner Round auditorium in the Cerner Vision Center, for the following purposes:

	1.		The election of two Directors, Gerald E. Bisbee, Jr., Ph.D. and Linda M. Dillman, each to serve for a three year term (see page 42 of the Proxy Statement);
	2.		The ratification of the appointment of KPMG LLP as the independent registered public accounting firm of Cerner Corporation for 2010 (see page 43 of the Proxy Statement);
	3.		The re-approval of the Amended and Restated Cerner Corporation Performance-Based Compensation Plan, for purposes of complying with Section 162(m) of the Internal Revenue Code (see page 44 of the Proxy Statement); and
	4.		Any other business that may properly come before the Annual Shareholders’ Meeting or any adjournment thereof.

These items are more fully described in the following pages, which are made part of this notice.

The holder of record of each share of our common stock at the close of business on Thursday, April 1, 2010 is entitled to receive notice of and to vote at the Annual Shareholders’ Meeting or any adjournment or postponement of the meeting. Shares of common stock can be voted at the Annual Shareholders’ Meeting only if the holder is present in person or by valid proxy. The Board of Directors of Cerner Corporation solicits you to sign, date and promptly mail the Proxy Card in the enclosed postage prepaid envelope or to vote your shares by telephone or the Internet, regardless of whether or not you intend to be present at the Annual Shareholders’ Meeting. You are urged, however, to attend the Annual Shareholders’ Meeting.

A copy of our Annual Report to Shareholders, which includes audited consolidated financial statements, is enclosed. The Annual Report is not part of our proxy soliciting material.

BY ORDER OF THE BOARD OF DIRECTORS,

Randy D. Sims
Secretary

You may vote your shares by telephone, via the Internet or by mail by following the instructions on 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 Proxy 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. If you are present at the meeting, you may choose to vote your shares in person, and the Proxy will not be used. If you hold shares through a broker or other custodian, please check the voting instructions used by that broker or custodian.

Important Notice Regarding the Availability of Proxy Materials for the Annual Shareholders’ Meeting to be Held on May 28, 2010: The 2010 Proxy Statement and 2009 Annual Report to Shareholders are available at www.cerner.com under “About Cerner, Investors, Financial Information, Proxy Materials.”

PROXY STATEMENT
TABLE OF CONTENTS

		Page
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING			1
INFORMATION CONCERNING DIRECTORS			5
MEETINGS OF THE BOARD AND COMMITTEES			8
COMMITTEES OF THE BOARD			8
DIRECTOR COMPENSATION			10
AUDIT COMMITTEE REPORT			12
Guidelines of Cerner Corporation’s Audit Committee for Pre-Approval of Independent Auditor Services			13
COMPENSATION COMMITTEE REPORT			14
COMPENSATION DISCUSSION AND ANALYSIS			14
SUMMARY COMPENSATION TABLE			24
GRANTS OF PLAN-BASED AWARDS			25
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END			26
OPTION EXERCISES AND STOCK VESTED			27
EMPLOYMENT AGREEMENTS & POTENTIAL PAYMENTS UNDER TERMINATION OR CHANGE IN CONTROL			27
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			33
CORPORATE GOVERNANCE			33
CONSIDERATION OF DIRECTOR NOMINEES			34
CERTAIN TRANSACTIONS			35
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			39
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF			40
FINANCIAL STATEMENTS			41
PROPOSAL NO. 1 ELECTION OF DIRECTORS			42
RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			43
Audit and Non-Audit Fees			43
PROPOSAL NO. 2 RATIFICATION OF THE APPOINTMENT OF KPMG AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			43
PROPOSAL NO. 3 RE-APPROVAL OF THE COMPANY’S AMENDED AND RESTATED PERFORMANCE-BASED COMPENSATION PLAN			44
SHAREHOLDER PROPOSALS			48
OTHER MATTERS			49
CERNER CORPORATION PERFORMANCE-BASED COMPENSATION PLAN		Annex I

CERNER CORPORATION
2800 ROCKCREEK PARKWAY
NORTH KANSAS CITY, MISSOURI 64117

PROXY STATEMENT

2010 ANNUAL SHAREHOLDERS’ MEETING
MAY 28, 2010

This Proxy Statement, which is being mailed on or about April 16, 2010, is furnished to you in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Cerner Corporation, a Delaware corporation (the “Company”), for use at the Annual Shareholders’ Meeting of the Company to be held on May 28, 2010, commencing at 10:00 a.m., 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, and any adjournment thereof. Your vote is very important. For this reason, the Board is requesting that you allow your Common Stock to be represented at the 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 $.01 per share, of the Company (“Common Stock”) if our records show that you held your shares as of Thursday, April 1, 2010, the record date for our meeting. At the close of business on that date, 82,161,532 shares of Common Stock were outstanding and entitled to vote. Each share of Common Stock is entitled to vote. The 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.
How do I vote?		If your Common Stock is held by a broker, bank or other nominee (i.e., in street name), 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 contains voting instructions.
		If you hold your shares in your own name (i.e., as a holder of record), you may vote your shares by mail, by telephone, over the Internet or in person. PLEASE CHOOSE ONLY ONE OF THE FOLLOWING:
		1. By Mail: To vote by mail, you may instruct 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, May 28, 2010, the 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) on Thursday, May 27, 2010, the day before the Annual Shareholders’ Meeting.
		2. By Telephone: You may vote by telephone 24 hours a day, 7 days a week until 11:59 p.m. (ET) on May 27, 2010. If you are in the United States or Canada, you may call toll-free 1 (800) 690-6903.
		In order to vote by telephone, 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 telephone voting system, you do not need to return your Proxy Card.

		3. By Internet: The Web site 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 27, 2010.
		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.
How may I revoke or change my proxy instructions?		If you vote your shares, and later desire to revoke or change your vote (prior to the 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 28, 2010;
		2. Follow the telephone or Internet voting instructions on how to revoke or change your vote by logging in and resubmitting your vote;
		3. Send a letter revoking your proxy to our Corporate Secretary that is received before 10:00 a.m.(CT) on Friday, May 28, 2010; or
		4. Attend the Annual Shareholders’ Meeting and vote your shares in person.
How are votes counted?		The Annual Shareholders’ Meeting will be held if 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 in person, your shares will be counted for the purpose of determining whether there is a quorum, even if you wish to abstain from voting on some or all matters introduced at the meeting. If a quorum is not present, the Annual Shareholders’ Meeting may be adjourned from time to time until a quorum is obtained.
		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 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 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 two independent individuals appointed by the Board of Directors as Inspectors of Election.

What is a broker non-vote?		A “broker non-vote” occurs when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker 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 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.
		If you are a beneficial shareholder and your broker holds your shares in its name, the broker is permitted to vote your shares on the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm even if the broker does not receive voting instructions from you. There are no other broker discretionary voting items in this Proxy. For the first time, in 2010, brokers will not have discretionary voting rights with respect to the election of Directors; therefore, if you do not instruct your broker on how you would like your shares voted with respect to the individuals nominated for election this year, your shares will not be voted. Similarly, if you do not instruct your broker on how you would like your shares voted with respect to the re-approval of the Amended and Restated Cerner Corporation Performance-Based Compensation Plan, your shares will not be voted.
May I attend the Annual Shareholders’ Meeting?		If you were a holder of record on the record date, Thursday, April 1, 2010, you may attend and vote at the Annual Shareholders’ Meeting. If you plan to attend the Annual Shareholders’ Meeting, please indicate this when you vote. If you want to vote in person any shares you hold in street name, you must get a proxy in your name from your bank or broker.
What vote is required?		In an uncontested Director election, such as this one, an affirmative vote of a majority of the shares voted, in person or by proxy, is required for the election of Directors. Therefore, if you elect to “Withhold” authority to vote for any nominee, such action will be counted as a vote against the nominee; however, if you do not: a) vote for a nominee 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. No shareholder may vote in person or by proxy for more than two nominees at the Annual Shareholders’ Meeting. Shareholders do not have cumulative voting rights in the election of Directors.
		The proposals to ratify the appointment of KPMG LLP as our independent registered public accounting firm and to re-approve the Amended and Restated Cerner Corporation Performance-Based Compensation Plan will be adopted upon the affirmative vote of a majority of the shares voting on the proposal. Abstentions are treated as votes “Against” the proposal. Brokers may use their discretionary voting authority with respect to the ratification of our independent registered public accounting firm, but not with respect to the proposal to re-approve the Amended and Restated Cerner Corporation Performance-Based Compensation Plan.
How does the Board		The Board recommends a vote:
recommend that I vote?
		•      FOR all nominees for Director;
		•      FOR the ratification of the appointment of KMPG LLP as the independent registered public         accounting firm of the Company for 2010; and
		•      FOR the re-approval of the Amended and Restated Cerner Corporation Performance-Based         Compensation Plan.

Who pays the cost of this proxy solicitation?		We will bear all costs of solicitation of proxies. We will solicit proxies by mail, except for any incidental personal solicitation made by our Directors, officers and associates (employees), for which they will not be paid. We will request brokers, banks, custodians and other fiduciaries 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.
Who should I call if I have questions?		If you have questions about the Annual Shareholders’ Meeting or voting, please call our Corporate Secretary, Randy Sims, at (816) 201-1024.

Important Notice Regarding the Availability of Proxy Materials for the Annual Shareholders’ Meeting to be Held on May 28, 2010: The 2010 Proxy Statement and 2009 Annual Report to Shareholders are available at www.cerner.com under “About Cerner, Investors, Financial Information, Proxy Materials.”

INFORMATION CONCERNING DIRECTORS

Our Bylaws currently provide for a Board consisting of seven persons, divided into three classes serving staggered terms of three years.

The terms of our two Class III Directors will expire at this year’s Annual Shareholders’ Meeting. One of our Class III Directors has been recommended by our Nominating, Governance & Public Policy Committee (the “Committee”) for re-election and nominated by our Board and we have a new nominee, Linda M. Dillman, who has been recommended by the Committee and nominated by the Board for election as a Class III Director. Those elected as Class III Directors this year will serve as Directors until the 2013 annual meeting. The terms of the Class I and Class II Directors will expire at the 2011 and 2012 annual meetings, respectively.

The Board has determined that all five current non-employee members of the Board (including Michael E. Herman, who is retiring and has not been nominated for re-election) and the new Director nominee, Linda M. Dillman, are independent Directors as required by the Securities and Exchange Commission (SEC) and The NASDAQ Stock Market. The names and biographies of the Company’s current Class I and II Directors and those individuals nominated for election as Class III Directors are set forth below.

CLASS I John C. Danforth (Age 73)    Member of the:    •  Compensation Committee    •  Nominating, Governance & Public Policy Committee		Mr. Danforth was a Director of the Company from May 1996 through June 2004 when he resigned to serve as Ambassador to the United Nations, where he served from July 2004 through January 2005. Mr. Danforth was re-appointed by the Board as a Director of the Company in February 2005. Mr. Danforth represented the State of Missouri in the U.S. Senate for 18 years until 1995 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; an advisory member of the Board of Trustees of Eisenhower Medical Center; serves on the commission on Presidential Debates; serves as a Director of Greenhill & Co., Inc.; and, serves as Chairman of the Danforth Foundation.
		The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Danforth should serve as a Director: his government and public policy professional background and experience, current 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 with healthcare related companies and policies.
Neal L. Patterson (Age 60)		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 also served as President of the Company 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.
William D. Zollars (Age 62)    Member of the:    •  Audit Committee    •  Compensation Committee		Mr. Zollars has been a Director of the Company since May 2005. He is currently the Chairman, President and Chief Executive Officer of YRC Worldwide, which position he has held since November 1999. Prior to 1999, 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 spent time with Eastman

		Kodak in various executive positions. Mr. Zollars serves on the boards of the following public companies: YRC Worldwide, ProLogis Trust and CIGNA Corporation. Mr. Zollars also serves on the boards of The Midwest Research Institute, National Association of Manufacturers, Business Roundtable, United Way of Greater Kansas City, American Trucking Associations and The Carlson School of Management at the University of Minnesota.
		The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Zollars should serve as a Director: his professional background and experience, current and previously held 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 his extensive understanding of strategic planning, tactical business decision making, risk management and corporate financial statements.
CLASS II Clifford W. Illig (Age 59)		Mr. Illig has been a Director of the Company since 1980 and is a co-founder of the Company. 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 has served as Vice Chairman of the Board of Directors since March 1999.
		The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Illig should serve as a Director: his leadership skills acquired while serving as the Company’s Vice Chairman of the Board, President and Chief Operating Officer, his information technology expertise and his extensive knowledge and understanding of the Company’s business, operations, solutions and services.
William B. Neaves, Ph.D. (Age 67) Member of the:    •  Audit Committee    •  Compensation Committee    •  Nominating, Governance & Public Policy Committee        (Chairperson)		Dr. Neaves has been a Director of the Company since March 2001. Since June 2000, Dr. Neaves has served as the Chief Executive Officer and as a member of the Board of Directors of The Stowers Institute for Medical Research. He also served as President of The Stowers Institute from June 2000 through July 2009. For twenty years prior to 2000, he served in succession as Dean of Southwestern Graduate School, Dean of 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 Directors of the Midwest Research Institute, the Board of Trustees of Washington University in St. Louis and the National Council of the Washington University School of Medicine.
		The following experience, qualifications, attributes and/or skills led the Board to conclude that Dr. Neaves should serve as a Director: his medical and science- based professional background and experience, current and previously held leadership positions at privately funded research institutions 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, healthcare research and corporate financial statements.

CLASS III Gerald E. Bisbee, Jr., Ph.D. (Age 67)    Member of the:    •  Audit Committee (Chairperson)    •  Compensation Committee    •  Nominating, Governance & Public Policy Committee		Dr. Bisbee has been a Director of the Company since February 1988. Dr. Bisbee is President and Chief Executive Officer of ReGen Biologics, Inc. (ReGen), which develops, manufactures and markets orthopaedic tissue repair products worldwide and is the co-founder, Chairman and Chief Executive Officer of The Health Management Academy which provides an open environment for the senior executives of the country’s largest health systems and corporations to exchange best practices and benchmarking data, focused on increasing the quality, appropriateness and efficiency of care. He has also served as Chairman of the Board of Directors for ReGen since 1998. 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. He was Chief Executive Officer of Aros from December 1989 to November 1997. In June 2002, ReGen and Aros merged. Prior to 1989, Dr. Bisbee was President of the Hospital Research and Educational Trust and also was a faculty member of the Department of Epidemiology and Public Health at Yale University. Dr. Bisbee is also currently a Director of Care Investment Trust Inc.
		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 healthcare-based professional background and experience, current and previously held leadership positions in medical and healthcare-related entities, his service on other research-related and academic boards, Cerner board experience, board attendance and participation, his extensive experience with healthcare research and specialized expertise in public company accounting and mergers and acquisitions.
Linda M. Dillman (Age 53)		Ms. Dillman is a first-time nominee as a Cerner Director. Since August 2009, she has been Senior Vice President of Enterprise Services/Global Functions IT for Hewlett-Packard Company. Prior to Hewlett-Packard, Ms. Dillman was Executive Vice President of Benefits and Risk Management for Wal-Mart Stores, Inc. from April 2006 through July 2009, and prior to that, from August 2002, she held the position of Executive Vice President and Chief Information Officer. She held various positions within the company from 1991-2002. Ms. Dillman is presently a member of the University of Arkansas School of Engineering Advisory Board and the University of Indianapolis Advisory Board.
		The following experience, qualifications, attributes and/or skills led the Board to conclude that Ms. Dillman should be nominated as a Director: her professional background and experience, current and previously held senior-executive level leadership positions at public companies and her extensive knowledge of information technology, human resources and healthcare insurance and healthcare plans for large employers.

MEETINGS OF THE BOARD AND COMMITTEES

The Board has established Audit, Compensation and Nominating, Governance & Public Policy Committees. The Board has adopted a written charter for each of these Committees. The full text of each charter and the Company’s Corporate Governance Guidelines are available on the Company’s Web site located at www.cerner.com under “About Cerner, Leadership”. The Board does not have an Executive Committee. During 2009, the Board held four regular meetings, the Audit Committee held 12 meetings, the Compensation Committee held two meetings and the Nominating, Governance & Public Policy Committee held three meetings. Each current Director attended at least 75% of the total meetings of the Board and the Board Committees on which the Director served during the fiscal year.

The Board has determined that all of the current Class I and II members on each of the Board’s three standing Committees and the two individuals who have been nominated as Class III Directors and the Committees to which they have been recommended to serve 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 Exchange Act. Under applicable 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 Class I and II Directors nor the individuals 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 these Directors and individuals nominated for election as Directors are “independent” as defined under Rule 4200(a)(15) of The NASDAQ Stock Market Marketplace Rules: Gerald E. Bisbee, Jr., Ph.D.; John C. Danforth; Linda M. Dillman; William B. Neaves, Ph.D.; and, William D. Zollars. The independence determination is made by the full Board of Directors 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 counsel.

Pursuant to the Company’s Corporate Governance Guidelines, all individuals nominated for election as Class III Directors are expected to attend the Annual Shareholders’ Meeting. All other Directors, barring unforeseen circumstances, are expected to attend the Annual Shareholders’ Meeting as well. All of our current Directors, including the Class III Director nominated for re-election this year, attended the 2009 Annual Shareholders’ Meeting.

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 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. 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 Marketplace Rules for audit committees. In particular, all Audit Committee members possess the required level of financial literacy, at least one member of the Audit Committee meets the current standard of requisite financial management expertise and 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 401(d)(5)(ii) of Regulation S-K of the Securities Act of 1933.

Compensation Committee

The Compensation Committee’s primary responsibilities are to review and approve our compensation policies and practices, establish compensation for Directors, evaluate our Chief Executive Officer’s performance and establish compensation accordingly, review and approve the total compensation of our Section 16 Officers, review and approve executive Performance-Based Compensation Plan targets and earned payouts and equity stock grants to our Section 16 Officers and adopt and approve major changes in our benefit plans and compensation philosophy.

The Compensation Committee of the Board of Directors is currently comprised of five 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. Compensation Committee membership is reviewed annually by the Company’s Nominating, Governance & Public

Policy Committee, which then recommends the Compensation Committee membership to the full Board of Directors. Compensation Committee members are approved by the full Board of Directors 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 a Charter that is available on the Company’s Web site 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 revised in March 2005 and last reviewed, with no amendments recommended, by the Compensation Committee in March 2010. The Compensation Committee’s scope of authority is as set forth in its Charter. The Compensation Committee has further delegated its authority as follows and as approved by the Company’s Board of Directors:

	•		Section 16 Insider Equity and Incentive Compensation Subcommittee – this subcommittee of the Compensation Committee is appointed annually and consists of “outside directors” for purposes of Section 162(m) of the Internal Revenue Code and “non-employee directors” for purposes of 16(b) of the Securities Exchange Act. It has authority to review recommendations and approve equity grants and incentive-based compensation (targets, metrics and payments) of our Section 16 Insiders,
	•		Equity-based Grant Policy – Quarterly Administration Subcommittee – this subcommittee of the Compensation Committee currently consists of the Chairperson of the Compensation Committee 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 – 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 currently consists of the Chairperson of the Compensation Committee and has authority to ensure timely administration of the Performance-Based Compensation (162(m)) Plan for matters that require action between regularly scheduled Compensation Committee meetings. 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
	•		Foundations Retirement Plan Administrative and Investment Committee – this committee currently consists of the Chief Financial Officer, Chief People Officer, Director of Benefits 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”) third party administrator, record keeper, custodian and trustee, ii) monitor the Plan’s reporting to the IRS and Department of Labor, the Plan’s ERISA compliance, Plan audits and the payment of Plan expenses, iii) monitor and evaluate disclosures by the Plan to participants and beneficiaries, iv) ensure maintenance of fiduciary liability insurance coverage and the ERISA fidelity bond coverage, v) research and recommend Plan amendments, vi) adopt, review and carry-out investment policies and objectives for the Plan, vii) review and select the investment options offered under the Plan, viii) select and monitor the Plan’s investment managers and fund providers, ix) supervise, monitor and evaluate the performance of the investment options offered under the Plan, x) periodically review the Plan’s investment performance as a whole and xi) retain independent outside consultants.

Compensation Consultant

The Compensation Committee is advised by a compensation consultant, Deloitte Consulting, who has no other role with Cerner other than to advise the Compensation Committee.

Relationship between Compensation and Risk Management

The Compensation Committee engaged Deloitte Consulting to perform a high level review of the Company’s incentive compensation arrangements. More specifically, Deloitte Consulting reviewed the policies and processes of incentive compensation arrangements for associates, including the Section 16 officers, and assessed the overall design of ten incentive compensation plans (along with the performance measures utilized to reward associates), and

identified the risks posed from an associate behavior perspective. The scope of Deloitte Consulting’s review was based on incentive compensation arrangements that provided the highest aggregate incentive dollars for 2009. The Compensation Committee assessed Deloitte Consulting’s review 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 of design features of our cash incentive program that mitigate risk, including:

	•		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 process and are tied to the Company’s annual budget;
	•		incentive plan metrics and goals for Section 16 Officers are approved by the Compensation Committee within the first 90 days of each year and goals are not altered during the performance cycle;
	•		the Company has a rigorous verification and review process to calculate the performance of each incentive plan; and
	•		the Company has a compensation recovery policy that applies to all associates receiving cash incentives.

Nominating, Governance & Public Policy Committee

The Nominating, Governance & Public Policy Committee provides assistance and recommendations to the Board, the Chairman and the Chief Executive Officer of the Company in the areas of: i) Board membership nomination, ii) committee membership selection and rotation practices, iii) evaluation of the overall effectiveness of the Board, iv) review and consideration of developments in corporate governance 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 Chairperson of the Nominating, Governance & Public Policy Committee presides at all executive session meetings of the independent Directors.

DIRECTOR COMPENSATION

For the 2009-2010 Board year (May 2009 – May 2010), non-employee Directors received an annual cash retainer of $63,500. In addition, each Committee Chairperson received an additional annual cash retainer of varying amounts as follows: $22,500 for the Audit Chairperson, $12,500 for the Compensation Chairperson and $5,000 for the Nominating, Governance & Public Policy Chairperson. Each member of the Audit Committee (excluding the Chairperson) received an additional annual cash retainer of $10,000. The Directors are not paid meeting fees. All cash retainers as disclosed above are paid in quarterly installments at each Board meeting. During the 2009-2010 Board year, the sole exception to the payments discussed above was with respect to Mr. Danforth who was entitled to receive $63,500 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 planes owned by or under contract to the Company, in accordance with our policies on personal use of such 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 2009 to May 2010 Board service period was set at approximately $150,000. In May 2009, pursuant to the Board equity compensation program, 2,700 shares of restricted stock of the Company were granted to each of the then-current Directors: Dr.

Bisbee, Mr. Danforth, Mr. Herman, Dr. Neaves and Mr. Zollars, respectively. These restricted stock grants will vest in May 2010 at the completion of the one year of Board services for which they were granted.

As of June 2007, 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. There were no Directors eligible to receive an initial appointment/election grant of shares of restricted stock in 2009.

In March 2007, the Board approved Stock Ownership Guidelines that apply to the Company’s executive officers and the Board of Directors. The guidelines are further discussed in the Compensation Discussion and Analysis section. As of January 1, 2010, at the annual measurement date, all non-employee Directors were compliant with these guidelines.

The following table contains information regarding the compensation earned by non-employee Directors during 2009, including Nancy-Ann DeParle, who notified us of her resignation from her Director position on the Company’s Board of Directors, effective March 3, 2009, after she was selected by President Barack Obama to serve as Counselor to the President and Director of the White House Office of Health Care Reform under his administration.

																		Change in
																		Pension
																		Value and
																		Nonqualified
		Fees												Non-Equity				Deferred
		Earned or				Stock				Option				Incentive Plan				Compensa-				All Other
		Paid in				Awards				Awards				Compensation				tion Earnings				Compensation
Name		Cash ($)				($) (1)				($) (2)				($)				($)				($)				Total ($)
Gerald E. Bisbee, Jr., Ph.D.			86,000				152,604				—				—				—				—				238,604
John C. Danforth			63,500				152,604				—				—				—				—				216,104
Nancy-Ann DeParle (3)			18,375				—				—				—				—				—				18,375
Michael E. Herman			76,000				152,604				—				—				—				—				228,604
William B. Neaves, Ph.D.			78,500				152,604				—				—				—				—				231,104
William D. Zollars			73,500				152,604				—				—				—				—				226,104

AUDIT COMMITTEE REPORT

Notwithstanding anything to the contrary set forth in any of the Company’s filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, 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.

The Audit Committee of the Company is currently composed of three 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) and operates under a written charter adopted by the Board of Directors. 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 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, and management’s assessment of the 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 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 independent registered public accounting firm matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

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’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 discussion with management and the independent registered public accounting firm and the Audit Committee’s review of 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 January 2, 2010 to be filed with the Securities and Exchange Commission.

Members of the Audit Committee:
Gerald E. Bisbee, Jr., Ph.D.
William B. Neaves, Ph.D.
William D. Zollars

Guidelines of Cerner Corporation’s Audit Committee
for Pre-Approval of Independent Auditor Services

The Audit Committee has adopted the following guidelines regarding the engagement of 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) and audit-related 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 Audit Committee meeting. The 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 Audit Committee delegates authority to and the Board of Directors formally appoints the Chairperson of 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. 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; our management will request pre-approval for such change in audit, audit-related or non-audit services or fees from the Chairperson of the Audit Committee. The Audit Committee Chairperson will report on all action taken with respect to pre-approval of audit, audit-related or non-audit services and fees to the Audit Committee at the next Audit Committee meeting. 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 legal requirements.

With respect to each proposed pre-approved service, 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.

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.

COMPENSATION COMMITTEE REPORT

Notwithstanding anything to the contrary set forth in any of the Company’s filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, 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.

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

Members of the Compensation Committee:
Gerald E. Bisbee, Jr., Ph.D.
John C. Danforth
Michael E. Herman
William B. Neaves, Ph.D.
William D. Zollars

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Strategy/Objectives

Our compensation strategy is to offer competitive compensation packages to attract, motivate and reward qualified associates who contribute significant value to Cerner. 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 based on rewarding seniority. We believe this strategy allows us to attract qualified candidates and maintain a reasonable business model. This compensation strategy is linked to our performance management philosophy that is designed to identify and reward associate performance through compensation. Our strategy is to target our pay in aggregate at the median (50th percentile) within our peer group with top performers able to earn within the top quartile (75th percentile). We believe this strategy keeps us competitive in the marketplace.

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, net income, total shareholder return (one year and three year), market capitalization and business model are similar to that of our Company. The Compensation Committee then reviews and approves use of the recommended peer group. The companies included in our 2009 peer group for compensation comparison were selected based on standard industrial classifications (SIC) and/or financial measures. The SIC’s used were computer programming services, prepackaged software, computer integrated systems design and computer processing, data preparation and processing services. The financial measures used to obtain information for our 2009 peer group were market capitalization of $745 million to $10 billion and revenues of $760 million to $3 billion. The companies included in our 2009 peer group were: Acxiom Corporation, Autodesk, Inc., BMC Software, Inc., CACI International Inc., Cadence Design Systems, Inc., Citrix Systems, Inc., Compuware Corporation, DST Systems, Inc., Eclipsys Corporation, IMS Health Incorporated, McAfee, Inc., Mentor Graphics Corporation, MICROS Systems, Inc., Parametric Technology Corporation, Perot Systems Corporation, Scientific Games Corporation, Sybase, Inc., Synopsys, Inc., THQ Inc. and Verisign, Inc. Our peer group changed slightly from 2008 due to the increased range of the market capitalization and revenue financial measures we use each year to reflect the growth of Cerner and also due to mergers and acquisitions within the peer group.

At the beginning of each fiscal year, the Compensation Committee reviews our peer group and the history of all the elements of each executive officer’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 executive officers in our peer group. Typically, our Chief Executive Officer (CEO), along with our Chief People Officer (CPO), makes compensation recommendations to the Compensation Committee with respect to the executive officers (excluding the CEO’s compensation) who report to the CEO. The other executive officers do not participate in executive officer compensation recommendations. The Compensation Committee Chairperson reviews the peer group comparisons with the CPO and makes compensation recommendations to the Compensation Committee with respect to the CEO. The Compensation Committee, after review and discussion of the items set forth above, makes the ultimate decision as to the total compensation and compensation components for the Company’s CEO and reviews and approves the total compensation and compensation components for the other executive officers.

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 Director compensation or to perform any other analysis the Compensation Committee deems appropriate. Historically, the Compensation Committee has worked with our internal resources, such as the CPO and the human resources compensation team, to help it carry out its responsibilities. The Compensation Committee has also engaged Michael S. Kesner, Principal with Deloitte Consulting, an independent compensation consultant, to assist it in fulfilling its responsibility on an as-needed basis. Mr. Kesner is retained directly by the Compensation Committee and has worked with the Company for approximately nine years. In 2009, Mr. Kesner was engaged to advise the Compensation Committee regarding executive and Board of Directors compensation matters, including competitive pay benchmarking, incentive plan design, performance metric testing, peer group selection, updates on trends in executive and director compensation, review of the Compensation Discussion and Analysis and related tables included in the 2009 Proxy Statement.

Aligning Pay with Performance

During 2009, 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 Company goals. Under this program, executives whose performance was evaluated as being in the bottom 20% of all executives were not generally eligible for pay increases or additional stock option grants. In addition, such executive’s performance-based incentive compensation award, if earned, may be reduced or eliminated due to their performance rating.

Compensation Elements

Compensation for our executive officers includes: i) base salary, ii) performance-based cash incentive compensation (in 2009, this type of compensation discussed throughout this report is inclusive of the one-time supplemental performance-based cash incentive opportunity, which was offered to executives in 2009 in lieu of base salary or performance-based cash incentive compensation increases, as discussed in more detail below under “2009 Supplemental Performance-Based Cash Incentive”) and iii) long-term incentive plan compensation. To provide incentives to attain our business goals, a significant portion of executive compensation is at-risk and tied to individual and Company performance. The at-risk component of our executive officers’ compensation in 2009 was increased with our 2009 approach to executive compensation increases discussed below. Additionally, we provide our executive officers with relatively limited perquisites, which the Compensation Committee believes are reasonable. Our process for allocating between short-term and long-term compensation is to ensure adequate base salary and cash bonus opportunity to attract and retain executives, while providing incentives to maximize long-term value for our Company 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. Effective April 1, 2009, the cash compensation package for the Named Executive Officers (NEOs) ranged from 48% to 61% in base salary and 39% to 52% in targeted performance-based cash incentive compensation. Our total compensation package mix for the NEOs in 2009 ranged from 55% to 66% in cash compensation and 34% to 45% in non-cash compensation, which includes equity-related awards. We believe this formula is competitive within the marketplace, appropriate to fulfill our corporate objectives and addresses the goals outlined below under “Long-Term Incentive Plan Compensation.”

     Base Salary. As set forth above, the Compensation Committee reviews peer group data and recommendations proposed by the CEO, CPO and human resources compensation team prior to approving the salary of the Company’s executive officers during the first quarter of each calendar year. Salary is based on the duties and responsibilities that each executive officer is expected to discharge during the current year and upon the executive officer’s performance during the prior year. We also perform external market comparisons for the executive officers, relative to industry-specific peers as disclosed above, based on individual job responsibility. This comparison data helps ensure that the proposed executive officer’s compensation is within reasonable market comparison ranges and in line with our compensation strategy, detailed above.

As discussed in more detail below, in 2009 the Company and the Compensation Committee determined that the Company would not provide increases to the base salaries of the executive officers and other executives, and that the base salaries of executive officers and other executives would remain at the same level as 2008 absent any other unique circumstances warranting the reduction of an individual executive’s base salary such as a role change or performance issue. In lieu of base salary or performance-based compensation increases for 2009, the Compensation Committee adopted a supplemental performance-based cash incentive. The Company and the Compensation Committee decided this was a one-time approach for 2009 due to unstable economic conditions and did not elect to continue this approach in 2010, as discussed in more detail below.

     Performance-Based Cash Incentive Compensation. Our Performance-Based Compensation Plan is designed to provide a meaningful incentive on both a quarterly and annual basis to key associates and executive officers and to motivate them to assist in achieving short-term Company goals. Approximately 15% of our associates are eligible for some form of performance-based compensation. These associates are typically sales or executive level associates. Individual payments will vary, depending upon 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 executive officers 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 executive officers 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 upon subjective evaluations by the participant’s executive or manager or, in the case of executive officers, the discretion of the Compensation Committee.

Performance targets are initially developed and recommended by management through our annual financial planning process during the last quarter of the preceding year. The Compensation Committee reviews the performance targets proposed by management for the executive officers to ensure they reflect appropriate business growth and return to our shareholders.

All of our executive officers are eligible to participate under the executive feature of the Performance-Based Compensation Plan. Payments made under the executive feature qualify for deductibility under Section 162(m) of the Internal Revenue Code. A subcommittee, comprised solely of outside directors as defined under Section 162(m) (the “Section 16 Insider Equity and Incentive Compensation Subcommittee” or the “162(m) Subcommittee”), of the Compensation Committee establishes the targets prior to or at the beginning of the performance period. The measurement of the achievement of such targets can be, and is, determined under pre-established objective formulas. The 162(m) Subcommittee may select metrics such as earnings per share, operating margins, contract margins or other metrics specifically permitted by the executive feature of the plan. The 162(m) Subcommittee selects metrics which 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. No changes were made to the established targets during 2009. Bonuses awarded to executive officers under the executive feature of the plan may only be adjusted downward, based upon a subjective analysis of the executive officer’s overall performance, from the maximum bonus amount available to such executive officer. The maximum bonus available is 140% of the targeted bonus amount, plus (for 2009 only) the one time supplemental performance-based cash incentive opportunity (discussed below), plus 25% of the targeted bonus amount (excluding the 2009 Supplemental Performance-Based Cash Incentive) based on the

executive officer’s individual performance rating. The maximum possible payout is set at 200% of Neal Patterson’s base salary and 175% of the other executive officer’s base salary.

Between Compensation Committee meetings, the Incentive Compensation Plan — Quarterly Administration Subcommittee approves annual and quarterly executive targets, approves eligible executive officers for the plan, approves the payment metrics for each executive officer and determines whether one or more executive targets have been satisfied, prior to payment by the Company to any executive officer.

During 2009, the performance metric for the Company’s CEO and other executive officers consisted solely of earnings per share, 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.

As a result of the Company’s 2009 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 2009 fiscal year averaged 78% of the target incentive amount and 48% of the maximum cash incentive opportunity available. Payouts were based solely on attainment of the performance target and no discretionary changes were made to the amounts earned. The following tables detail the payouts by performance plan metric for our NEOs in 2009 and the related performance plan metric attainment by quarter.

																										% Earned
										Results																Relative to				Maximum				% Earned of
										Relative to								Target				Actual				Target				Cash				Maximum Cash
						Performance				Performance				Target				Incentive				Amount				Incentive				Incentive				Incentive
NEO		Performance Metric				Plan Target (1)				Plan Target (1)				Attainment %				Amount				Earned (2)				Amount				Opportunity				Opportunity
Neal L. Patterson		Earnings Per Share				$	2.45			$	2.43				99	%		$	1,030,000			$	807,750				78	%		$	1,677,000				48	%
Marc G. Naughton		Earnings Per Share				$	2.45			$	2.43				99	%		$	235,000			$	184,500				78	%		$	384,000				48	%
Jeffrey A. Townsend		Earnings Per Share				$	2.45			$	2.43				99	%		$	415,000			$	325,125				78	%		$	673,500				48	%
Michael R. Nill		Earnings Per Share				$	2.45			$	2.43				99	%		$	325,000			$	248,250				76	%		$	517,625				48	%
Michael G. Valentine		Earnings Per Share				$	2.45			$	2.43				99	%		$	365,000			$	286,500				78	%		$	596,000				48	%
Total of Named Executive Officers																		$	2,370,000			$	1,852,125				78	%		$	3,848,125				48	%

Performance Metric Summary (EPS)
Measurement														Payout				Quarterly
Period		Target(1)				Results				Attainment %				%				Weighting(2)
Q1		$	0.50			$	0.50				100	%			100	%			15	%
Q2 YTD		$	1.07			$	1.05				98	%			100	%			15	%
Q3 YTD		$	1.72			$	1.68				98	%			100	%			15	%
Q4 YTD		$	2.45			$	2.43				99	%			75	%			55	%

     2009 Supplemental Performance-Based Cash Incentive: Due to the unstable worldwide economic environment in 2008 and leading into 2009, our human resources compensation team, together with executive management, reviewed and considered compensation alternatives for 2009, including 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 historical compensation approach under all three types of compensation arrangements continued to meet the needs and serve the purposes as set forth in this Compensation Discussion and Analysis (CD&A). However, in an effort to prudently approach 2009, the human resources compensation team recommended and the Compensation Committee approved a one-time modified approach to executive compensation increases for 2009. Under this 2009 approach, in lieu of base salary or performance-based cash incentive compensation increases, we provided executives with a supplemental performance-based cash incentive opportunity in 2009 to be paid in March 2010 based on achievement of our 2009 internal earnings per share target. The Compensation Committee determined this was a responsible approach to executive compensation increases for 2009 that allowed us to reward our executives, while aligning their interests to those of our shareholders. Based on our 2009 results against this performance target, we paid 75% of the targeted incentive amounts available to eligible executives.

In 2010, our human resources compensation team, together with executive management, reviewed and considered compensation alternatives for 2010, including 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 CD&A. It was also determined that we would provide cash compensation increases as we have historically, prior to 2009, based on market pay comparisons and individual performance. We believe this approach is consistent with industry practice and aligns our executives’ focus with business objectives. Therefore, compensation increases in 2010 will not include a supplemental performance-based cash incentive compensation amount. For 2010, the Compensation Committee has approved the continued use of earnings per share as the sole performance metric for all executive officers. We continue to believe that 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 help drive and ensure business growth and return to our shareholders while providing a meaningful incentive on both a quarterly and annual basis to our executive officers. The 2009 earnings per share performance for incentive compensation purposes represented a 16% growth over the prior year. The 2010 performance targets have been set based on the 2010 financial plan approved by the Board of Directors and reflect earnings growth between 13% and 21%. The 2010 bonus opportunity for the NEOs can range between 0% and 140% of the targeted bonus amount, depending on the level of performance achieved in 2010 plus 25% of the targeted bonus amount based on the executive officer’s individual performance rating. The earnings per share target set at each level of payout, as a percentage of the performance target, is consistent with prior years.

Performance-based compensation paid to our executive officers for all years beginning with 2008 is subject to “claw back” pursuant to performance plan agreements with our executive officers. These agreements have language stating that in the event we implement a Mandatory Restatement (as defined in the Performance-Based Compensation Plan), which restatement relates to the respective fiscal year, some or all of any amounts paid as an incentive payment earned by the executive officer under the Performance-Based Compensation Plan and related to such restated period(s) will be recoverable and must be repaid, in most cases, within 90 days of such restatement(s). The amount to be repaid will be the amount by which the incentive compensation paid exceeds the amount that would have been paid based on the financial results reported in the restated financial statement(s). Additionally, since 2008, the language in our incentive plan agreements provides that all participants (including our executive officers) will be required to repay all earned incentive compensation payments if they are individually found by Cerner’s Board of Directors to have engaged in fraud or misconduct that caused or partially caused the need for a Mandatory Restatement.

     Long-Term Incentive Plan Compensation. Awards under our Long-Term Incentive Plans 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 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 2009, the Compensation Committee approved executive officer awards in the form of stock options. In 2010, the Compensation Committee has approved executive officer awards in the form of stock options, performance-based shares and restricted shares. Our Long-Term Incentive Plans are 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 shareholders.

The Compensation Committee approves an annual aggregate value target for all eligible associates excluding executive officers and members of the Board. The Compensation Committee also approves specific grant levels for executive officers and members of the Board on an annual basis. Stock option grants are typically made to an executive upon commencement of employment with the Company or upon an associate’s promotion to an executive role. Executives are 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 review of the Company’s financial condition and its stock performance during the current global economic crisis, the Compensation Committee has re-determined that stock option grants continue to provide the appropriate value and incentive for our associates and executives given our historical stock performance, the familiarity of this type of compensation to associates and the fact exercises have historically generated value to associates in excess of the expense to the Company. The human resource compensation team, together with executive management, has recommended and the Compensation Committee has also approved the use of performance-based shares and restricted shares for certain key executives in 2010 to: add additional long-term compensation incentives, increase focus and alignment to corporate strategies and goals and increase retention.

The Board of Directors has adopted an Equity-based Grant Policy, which outlines the grant practices with respect to equity-based grants awarded under the Company’s Long-Term Incentive Plans. This policy establishes grant dates for our equity grant programs to ensure grant dates for such programs will be outside of trading blackout periods. Under the policy, the Board of Directors, the Compensation Committee or an authorized sub-committee of the Compensation Committee approves: i) the equity grant type, ii) the grant date and iii) the number of shares of the annual performance review equity grants made to the Company’s executive officers. Grants are made at an exercise price that is equal to the closing fair market price of our common stock on the date of grant. Under the Equity-based Grant Policy, the date of grant must be a date set at the time of grant approval, which date: a) shall be on or after the grant approval date, b) shall not be during a quarterly blackout period as defined in the Company’s 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, shall be a date that is at least two full trading days after the public disclosure of such material, non-public information. Equity grants for new hires shall be the associate’s first day of employment or a later equity grant program date. The type and size of the grant is based on the individual’s level of responsibility, the individual’s contributions to the achievement of the Company’s financial and strategic objectives, anticipated future contributions to the Company, market pay and, for our 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 been determined by the Board and is intended to promote long-term investment in Cerner stock). These grants typically expire 10 years from the date of grant. Performance-based shares vest based on performance metrics established at the date of grant. Restricted shares typically vest over a three-year term.

In accordance with our overall compensation philosophy and to align the executives’ focus on the Company’s long-term performance, we granted stock option awards to our executive officers, including the CEO, in March 2009. Additionally, individual grants for executive officers were based on job responsibilities, performance during 2008 and contributions to the achievement of the Company’s financial and strategic objectives, anticipated future contributions to the Company, market pay and stock option wealth accumulation — all factors the Compensation Committee believes help ensure we are awarding such executives competitively and fairly. The Compensation Committee has approved similar stock option grants to our executive officers for 2010, along with the aforementioned performance shares and restricted stock grants for certain key executive officers to add additional long-term compensation incentives, increase focus and alignment to business priorities, and increase retention. The details of those grants to NEOs are provided below. The Stock Option grants were approved on March 9, 2010 and granted on March 12, 2010. The performance shares and restricted stock grants will be approved in May and granted after the shareholders approve the amended Performance Based Compensation Plan.

Compensation of the Chief Executive Officer and other NEOs

The Compensation Committee determines compensation for the Chief Executive Officer (CEO) using the same criteria it uses for other executive officers. 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. We analyze the total compensation for our NEOs compared to the compensation of the corresponding executive officers in our peer group to ensure alignment with our strategy of paying in aggregate at the median (50^th percentile) within our peer group with top performers able to earn within the top quartile (75^th percentile).

As explained in the “Compensation Elements” section above, in March 2009, the Compensation Committee determined that it would not provide increases to any executives’, including Mr. Patterson’s, base salary and performance-based cash incentive compensation as part of the 2009 compensation approach. Mr. Patterson’s total cash compensation in 2009 continued to approximate the median of our peer group, similar to 2008. Mr. Patterson was issued a stock option grant of 70,000 shares at the closing fair market value on March 6, 2009, the date of the grant. This grant aligned his total compensation at the median of the market within our peer group. In particular, the Compensation Committee noted that, under Mr. Patterson’s leadership, the Company met internal earnings targets and exceeded cash flow expectations during very challenging global macro economic conditions. The Compensation Committee also noted that under Mr. Patterson’s leadership the Company continued to leverage its size, scale, existing intellectual property and business models to expand its boundaries and new market entry through innovation and development of new solutions and services. The Compensation Committee also recognized the Company’s continued solid execution in its 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 exceeded expectations in organizing and developing management teams and that the Company’s operating and financial performance in sustaining long-term growth in backlog, revenue and earnings with 10 year compounded annual revenue and earnings growth rates in excess of 15% and 20%, respectively, and strong cash flow are notable achievements.

Specifically in 2009, the Compensation Committee approved a base salary of $940,000 and performance-based cash incentive target opportunity (inclusive of the 2009 supplemental performance-based cash incentive opportunity) of $1,030,000 (with a maximum performance-based cash incentive opportunity of $1,677,000) for Mr. Patterson effective April 1, 2009. During 2009, Mr. Patterson earned total cash compensation of $1,747,750 which included $940,000 in base salary and $807,750 in payments earned under the Company’s Performance-Based Compensation Plan. Mr. Patterson earned 78% of the target incentive amount and 48% of the maximum cash incentive opportunity available to him under the Performance-Based Compensation Plan during 2009. Mr. Patterson also earned a total of $120,147 in other compensation from: i) private use of the corporate jet ($100,000), ii) Company provided life insurance ($394), iii) 401(k) match ($4,851), iv) the second tier 401(k) match ($1,837) and v) home/office security system ($13,065).

The Compensation Committee has determined that Mr. Patterson’s base salary for 2010 shall be $1,025,000 and his performance-based cash incentive compensation target shall be $1,025,000. There will be no supplemental performance-based cash incentive opportunity in 2010. The maximum performance-based cash incentive opportunity is $1,656,188. The Compensation Committee also approved Mr. Patterson’s personal use of the corporate aircraft in 2010 up to a value of $110,000. The Company converts 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 (including when using aircraft under contract to, but not owned by, Cerner). Any personal use of corporate aircraft by Mr. Patterson exceeding the Compensation Committee approved value is permitted pursuant to the terms and conditions of the Time Sharing Agreement entered into between Mr. Patterson and the Company, which requires Mr. Patterson to pay the Company the actual incremental cost for such personal use (including any deadhead hours). Any Compensation Committee approved value for use of corporate aircraft that is not used during the year is paid out to Mr. Patterson at the end of the calendar year for which the compensation was awarded. On March 9, 2010, the Section 16 Insider Equity and Incentive Compensation Subcommittee of the Compensation Committee also approved a stock option grant to Mr. Patterson of 60,000 shares which was granted on March 12, 2010. His 2010 base salary became effective March 28, 2010 and his performance-based incentive cash compensation became effective April 4, 2010.

The Compensation Committee has approved the 2010 compensation packages, effective March 28, 2010 for base salaries and effective April 4, 2010 for performance based incentive cash compensation, for each of the NEOs, other than the CEO, as follows:

Marc G. Naughton — base salary of $390,000; performance-based cash incentive compensation target of $300,000; and, a stock option grant of 15,000 shares. Mr. Naughton’s 2010 maximum performance-based cash incentive opportunity has been set at $462,000.

Jeffrey A. Townsend — base salary of $455,000; performance-based cash incentive compensation target of $400,000. Mr. Townsend’s 2010 maximum performance-based cash incentive opportunity has been set at $647,625. The Company intends to grant Mr. Townsend performance shares and restricted stock grants in May 2010 subject to review and approval by the Section 16 Insider Equity and Incentive Compensation Subcommittee.

Michael R. Nill — base salary of $400,000; performance-based cash incentive compensation target of $350,000. Mr. Nill’s 2010 maximum performance-based cash incentive opportunity has been set at $556,875. The Company intends to grant Mr. Nill performance shares and restricted stock grants in May 2010 subject to review and approval by the Section 16 Insider Equity and Incentive Compensation Subcommittee.

Michael G. Valentine — base salary of $400,000; performance-based cash incentive compensation target of $400,000. Mr. Valentine’s 2010 maximum performance-based cash incentive opportunity has been set at $635,250. The Company intends to grant Mr. Valentine performance shares and restricted stock grants in May 2010 subject to review and approval by the Section 16 Insider Equity and Incentive Compensation Subcommittee.

On March 9, 2010, the Section 16 Insider Equity and Incentive Compensation Subcommittee of the Compensation Committee also approved the above described stock option grants to the NEOs which were granted on March 12, 2010. The intent is to grant the performance shares and restricted stock grants in May 2010 following the approval by the shareholders of our amended Performance-Based Compensation Plan and the further review and approval by the Section 16 Insider Equity and Incentive Compensation Subcommittee at that time.

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.

Stock Ownership Guidelines

In March 2007, our Board of Directors approved stock ownership guidelines. Under these guidelines, our non-employee Board members and every associate that is a vice-president or higher in rank, are required to have a certain level of share ownership in our Company. Ownership in our Company demonstrates a long-term commitment and ensures strong alignment of interests of Directors and executives with the interests of shareholders. The stock ownership guidelines were made effective immediately, with future measurements completed on January 1^st of each year. The Compensation Committee reviewed the stock ownership guidelines in December 2009 and recommended that management monitor the stock ownership guidelines in the current economic market to be sure they remain reasonable and meet the intended purpose.

Ownership Percentage Requirement
Board of Directors and CEO			80	%
President and Executive Vice President			70	%
Senior Vice President			60	%
Vice President			50	%

Ownership Position Formula = Ownership Position (defined below) divided by Total Stock Options Granted (net of expired and stock option grants with terms greater than 15 years) + Restricted Stock Awards

The Ownership Position includes any shares fully owned, including: shares owned by spouse, dependent children or a trust, outstanding stock options (excluding stock option grants with terms greater than 15 years), fully vested shares held in the Company’s 401(k) plan, shares held in the Associate Stock Purchase Plan, non-vested restricted stock awards and shares held in the Company’s deferred compensation plan.

For employee Directors and executives, a reduced ownership requirement scale will be applied based on tenure, starting with 11 years of full-time service with the Company with a minimum ownership requirement of one-half of the Ownership Percentage Requirement noted above regardless of tenure. For non-employee Directors, a reduced ownership requirement scale will be applied based on years of service with the Board with a minimum ownership requirement of 5 times the annual cash retainer, 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, 2010, all NEOs were compliant. The guidelines allow any executive or Director who is not currently compliant to submit a plan to the CEO 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 the Company to the executive officers 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. The Company makes 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. The Company also has the option to make a discretionary match to participants’ accounts deferring at least 2% of their base salary, based on attainment of established earnings per share targets for the year. A discretionary match was made during 2009. The discretionary match is calculated as a percentage of paid base salary to plan participants based on performance against earnings per share targets used in our Performance-Based Compensation Plan and was paid at 0.75% for 2009.

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 by the Internal Revenue Service. Participants may purchase Company Common Stock at a 15% discount on the last business day of the purchase period. Executive officers are allowed to participate with the exception of those who own an aggregate of 5% or more of the total outstanding shares of the Company stock.

Health and Welfare Benefits

We have medical, dental and vision plans in which contributions are made by the Company to the executive officers on the same basis as to all other associates. Also, the cost of these plans and opportunity for benefits thereunder are the same for the executive officers as for all other associates. We offer these plans as part of our overall benefits and compensation package to remain competitive in the market and retain talent.

Perquisites

We consider offering 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.

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 aircraft (“Corporate Aircraft”). In limited circumstances, the Corporate Aircraft are available for personal use by certain Cerner executives as approved by the Compensation Committee or executive management. Our 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 Cliff Illig, Vice Chairman of the Company. Personal use of the Corporate Aircraft by the 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 the Company. Business travel needs override all personal use requests.

During 2009, Neal Patterson’s personal use of our Corporate Aircraft was valued at $101,320 incremental cost to the Company. Pursuant to the Aircraft Time Sharing Agreement described below, Mr. Patterson paid the Company for the value of the Corporate Aircraft personal use in excess of the Compensation Committee Approved Value for Mr. Patterson’s personal use of Corporate Aircraft in 2009. In 2010, Mr. Patterson and his family may use the Corporate Aircraft for personal use up to $110,000 in value (excluding “deadhead” hours, calculated at the incremental cost to use Cerner’s corporate aircraft (including when using non-Cerner aircraft in accordance with corporate policies)), which allows Mr. Patterson to use his limited personal time effectively. Any amounts 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, which 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. 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 Cerner Associate Employment Agreement or as specifically set forth in our Enhanced Severance Pay Plan, which was first approved in 2005. 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 used 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; help recruit and assure retention of valuable associate experience, skills, knowledge and background; and, reinforce and encourage continued attention and dedication to duties without distraction arising from the possibility of a Change in Control.

Our Enhanced Severance Pay Plan is discussed in more detail below under the heading “Employment Agreements & Potential Payments Under 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” section of this CD&A for further details.

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code generally disallows a federal income tax deduction to a public company for compensation over $1 million per fiscal year paid to a company’s chief executive officer and its three other most highly compensated executive officers serving at the end of that year. Not subject to the deductibility limit, however, is compensation that qualifies as “performance-based” compensation. Our objective is to maximize the deductibility of compensation under Section 162(m) to the extent doing so is reasonable and consistent with the Company’s strategies and goals. Gains on exercises of stock options awarded under our shareholder approved Long-Term Incentive Plans 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).

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 executive officers for the fiscal year ended January 2, 2010.

																										Change in
																										Pension Value
																										and Nonqualified
																										Deferred
Name and														Stock				Option				Non-Equity				Compensation				All Other
Principal		Year				Salary				Bonus				Awards				Awards				Incentive Plan				Earnings				Compensation
Position		(1)				($)				($)				($)				($)(2)				Compensation (3)				($)				($)(4)				Total ($)
Neal L. Patterson			2009				940,000				—				—				1,451,835				807,750				—				120,147				3,319,732
Chairman of the			2008				948,077				—				—				1,577,520				801,750				—				106,673				3,343,020
Board and Chief			2007				891,250				—				—				2,328,792				971,200				—				106,593				4,297,835
Executive Officer
Marc G. Naughton			2009				375,000				—				—				311,108				184,500				—				6,985				877,592
Chief Financial Officer			2008				373,462				—				—				492,975				185,250				—				6,568				1,058,254
			2007				330,000				—				—				582,198				218,000				—				9,879				1,140,077
Jeffrey A. Townsend			2009				440,000				—				—				570,364				325,125				—				7,035				1,342,524
Executive Vice President			2008				445,962				—				—				657,300				309,000				—				6,624				1,418,885
			2007				422,500				—				—				727,748				347,250				—				9,951				1,507,449
Michael R. Nill			2009				373,846				—				—				570,364				248,250				—				6,984				1,199,444
Executive Vice President
Michael G. Valentine			2009				380,000				—				—				518,513				286,500				—				11,464				1,196,476
Executive Vice President			2008				379,808				—				—				657,300				284,250				—				9,278				1,330,635
			2007				337,500				—				—				727,748				313,000				—				14,539				1,392,787

GRANTS OF PLAN-BASED AWARDS

The following table reflects estimated possible payouts under non-equity incentive plan awards and the number, exercise price and grant date fair value of option awards made to the NEOs in 2009. The Company’s non-equity incentive awards are granted to participants of our Performance-Based Compensation Plan based upon pre-established performance targets set annually by the Compensation Committee and the 162(m) Subcommittee. For more detailed information regarding our Performance-Based Compensation Plan, see “Compensation Elements — Performance-Based Cash Incentive Compensation” above in this CD&A.

All Other

Grant

Option

Exercise

Date Fair

All Other Stock

Awards:

or Base

Value of

Awards:

Number of

Price of

Stock and

Estimated Possible Future

Estimated Future Payouts

Number of

Securities

Option

Option

Grant

Payouts Under Non-Equity

Under Equity Incentive Plan

Shares of Stock

Underlying

Awards

Awards

Name

Date

Incentive Plan Awards

Awards

or Units(#)

Options (#)

($/Sh) (3)

($) (4)

Threshold

Target

Maximum

Threshold

Target

Maximum

($) (1)

($)

($) (2)

(#)

(#)

(#)

(#)

(#)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

(l)

Neal L. Patterson

3/6/2009

772,500

1,030,000

1,677,000

—

70,000

36.72

1,451,835

Marc G. Naughton

3/6/2009

176,250

235,000

384,000

—

15,000

36.72

311,108

Jeffrey A. Townsend

3/6/2009

311,250

415,000

673,500

—

27,500

36.72

570,364

Michael R. Nill

3/6/2009

243,750

325,000

517,625

—

27,500

36.72

570,364

Michael G. Valentine

3/6/2009

273,750

365,000

596,000

—

25,000

36.72

518,513

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table provides information regarding outstanding awards to the NEOs that have been granted but not vested or exercised.

Option Awards
		Number of				Number of
		Securities Underlying				Securities Underlying
		Unexercised Options				Unexercised Options				Equity Incentive Plan Awards:				Option
		(#)				(#)				Number of Securities Underlying				Exercise Price				Option
Name		Exercisable				Unexercisable				Unexercised Unearned Options (#)				($)				Expiration Date
Neal L. Patterson			75,000				—				—				21.65				6/14/2011	(1)
			50,000				—								23.12				4/5/2012	(1)
			50,000				—								11.30				6/12/2013	(1)
			60,000				—								20.99				6/3/2014	(1)
			64,000				16,000								31.41				6/3/2015	(1)
			67,200				16,800								41.13				9/16/2015	(1)
			60,000				40,000								43.51				3/9/2016	(1)
			32,000				48,000								53.81				3/9/2017	(1)
			—				72,000								40.22				3/14/2018	(1)
			—				70,000								36.72				3/6/2019	(1)
			590,000				—								14.81				6/28/2020	(2)
Marc G. Naughton			10,000				—				—				21.65				6/14/2011	(1)
			20,000				—								23.12				4/5/2012	(1)
			4,000				—								20.99				6/3/2014	(1)
			20,000				5,000								31.41				6/3/2015	(1)
			12,000				8,000								43.51				3/9/2016	(1)
			8,000				12,000								53.81				3/9/2017	(1)
			—				22,500								40.22				3/14/2018	(1)
			—				15,000								36.72				3/6/2019	(1)
			20,584				—								7.50				2/24/2022	(2)
Jeffrey A. Townsend			18,400 16,700				—				—				12.50 12.00				6/1/2010 6/5/2010	(3)  (1)
			10,000				—								9.34				6/14/2011	(3)
			20,000				—								21.65				6/14/2011	(1)
			20,000				—								23.12				4/5/2012	(1)
			2,000				—								10.50				7/3/2012	(4)
			11,080				—								12.00				2/10/2013	(4)
			10,000				—								11.30				6/12/2013	(1)
			10,000				—								18.04				9/4/2013	(1)
			24,000				—								20.99				6/3/2014	(1)
			24,000				—								31.41				6/3/2015	(1)
			15,000				6,000								43.51				3/9/2016	(1)
			10,000				10,000								53.81				3/9/2017	(1)
			—				15,000								40.22				3/14/2018	(1)
			—				30,000								36.72				3/6/2019	(1)
			4,916				27,500								7.50				2/24/2022	(2)
							—
Michael R. Nill			200				—				—				7.59				11/5/2011	(3)
			6,000				—								23.12				4/5/2012	(1)
			2,400				—								11.30				6/12/2013	(1)
			15,000				—								20.99				6/3/2014	(1)
			20,000				5,000								31.41				6/3/2015	(1)
			12,000				8,000								40.84				4/25/2016	(1)
			10,000				15,000								54.61				4/24/2017	(1)
			—				25,000								46.32				4/25/2018	(1)
			—				27,500								36.72				3/6/2019	(1)
			1,300				—								7.00				11/8/2021	(2)
			780				—								14.00				11/1/2022	(2)
Michael G. Valentine			1,600				—				—				21.65				6/14/2011	(1)
			8,000				—								23.12				4/5/2012	(1)
			12,900				—								20.99				6/3/2014	(1)
			16,000				4,000								31.41				6/3/2015	(1)
			12,000				8,000								43.51				3/9/2016	(1)
			10,000				15,000								53.81				3/9/2017	(1)
			—				30,000								40.22				3/14/2018	(1)
			—				25,000								36.72				3/6/2019	(1)

OPTION EXERCISES AND STOCK VESTED

The following table provides information regarding option exercises by our NEOs during 2009.

		Option Awards								Stock Awards
		Number of								Number of
		Shares								Shares
		Acquired				Value Realized				Acquired				Value Realized
		on Exercise				on Exercise				on Vesting				on Vesting
Name		(#)				($) (1)				(#)				($)
Neal L. Patterson			—				—				—				—
Marc G. Naughton			1,000				45,299				—				—
Jeffrey A. Townsend			—				—				—				—
Michael R. Nill			12,160				734,620				—				—
Michael G. Valentine			28,300				1,427,201				—				—

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 the associate has to 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 employment agreements with all of our associates, including all of the NEOs. We entered into an updated employment agreement, dated January 1, 2008, with Neal Patterson, our Chairman of the Board and Chief Executive Officer. This updated employment agreement was amended from the November 10, 2005 version to: i) bring severance payments made pursuant to the terms of the agreement into compliance with Section 409A of the Internal Revenue Code and ii) add language that will reduce severance payments classified as a “parachute payment” under Section 280G of the Internal Revenue Code to the maximum amount allowable before the parachute penalties are triggered 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. This amendment was made to mutually benefit both parties without taking any potential benefit away from Mr. Patterson or exposing Cerner to any additional payment obligations. The material terms of Mr. Patterson’s employment agreement provide for: a) at-will employment, b) an annual base salary, specified use of the Company’s airplane 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 nonsolicitation provisions that are effective during the term of Mr. Patterson’s employment and for two years following termination of employment, for any reason, with the Company and g) a general indemnification provision by Mr. Patterson and the Company.

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 was amended in 2007 to conform with the final regulations of Section 409A (deferred compensation) and again in 2010 to provide flexibility for management to set an appropriate level of benefits received. Our Enhanced Severance Pay Plan, which applies to all of our U.S. based permanent, full-time salaried associates, offers severance pay upon: i) certain termination without cause events, which severance benefits will range from two weeks to 52 weeks (as periodically adopted and approved by Company management, depending on the associate’s role and tenure), as set forth in the current Severance Matrix below, of such associate’s annual base salary and contingent upon the associate 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 by the eligible associate, 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

Years of Service		Less than 2 years				>2, less than 5				>5, less than 10				> 10
Role Level		Severance Weeks				Severance Weeks				Severance Weeks				Severance Weeks
Executive Cabinet/Executive Officers / EVP			16				24				36				52
Senior Vice President			13				20				30				42
Vice President			10				16				24				32
Senior Director			8				14				21				28
Director			6				12				18				24
Levels 2 and 3 (Managers/Senior Managers)			4				8				12				16
Levels 4 and 5 (Senior Staff)			3				6				9				12
Levels 6 and 7 (Staff)			2				4				6				8

The amount of any severance benefits 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.

One of our NEOs is entitled to severance payments other than as set forth in our Enhanced Severance Pay Plan. The severance agreement for this NEO, Neal Patterson, our CEO, is disclosed immediately below.

Potential Payments Upon Termination or Change in Control

The following summaries set forth potential payments payable to our NEOs upon termination of employment or a Change in Control in the Company under (and as defined in) their current employment agreements and our other compensation programs, including our Enhanced Severance Pay Plan. The Compensation Committee may at its discretion revise, amend or add to the benefits if it deems advisable.

Neal L. Patterson

Termination by us without Cause (prior to a Change in Control): If Mr. Patterson’s employment is terminated by us without Cause (as defined in his Employment Agreement), Mr. Patterson will be entitled to:

     Severance Pay: i) three years’ base salary (based on his annual base salary at the time of the termination) (less normal tax and payroll deductions) and ii) three times the average annual cash bonus received during the prior three year period (less normal tax and payroll deductions). These severance payments will generally be payable pro rata during the three year 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).

     Benefits: health benefits for a three-year period following the termination of employment.

     Equity Awards: immediate vesting of all equity incentive awards granted to Mr. Patterson after the original date of his Employment Agreement, to the extent 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. Patterson 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 options in accordance with the terms of each specific option agreement.

Termination by us without Cause or Resignation by Mr. Patterson for Good Reason (both upon or following a Change in Control): If there is a Change in Control of the Company (as defined in Mr. Patterson’s Employment Agreement), and either: a) Mr. Patterson’s employment with us is terminated without Cause within 12 months following the date the Change in Control becomes effective, or b) Mr. Patterson resigns his employment with Good Reason (as defined in his Employment Agreement) within 12 months after the Change in Control becomes effective, then Mr. Patterson will be entitled to:

     Severance Pay: i) three years’ base salary (based on his annual base salary at the time of the termination or resignation) (less normal tax and payroll deductions) and ii) three times the average annual cash bonus received during the prior three year period (less normal tax and payroll deductions). These severance payments will be payable either pro rata or in a lump sum payment depending on whether the Change in Control event meets the definition of change in control under Section 409A.

     Benefits: health benefits for a three-year period following the termination or resignation.

     Equity Awards: following the Change in Control, 50% of each equity incentive award granted to Mr. Patterson under any of our equity incentive plans after June 1, 2005 and prior to the date the Change in Control becomes effective that has not yet vested will become vested on the date the Change in Control becomes effective. The remaining 50% of each 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 made after June 1, 2005 will become fully vested upon the effective date of such termination or resignation. Upon termination by us without Cause, Mr. Patterson will forfeit any outstanding equity awards granted prior to June 1, 2005, unless otherwise provided in the 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 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.

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 and earned incentive pay in accordance with our policies.

     Equity Awards: unless otherwise provided in the award agreement entered into with Mr. Patterson at the time of grant, upon termination for Cause (as defined in the award agreements) or resignation by Mr. Patterson (other than for Good Reason within 12 months following a Change in Control), Mr. Patterson 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 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 and earned 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 and dismemberment, Mr. Patterson’s estate would receive 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.

Assuming Mr. Patterson’s employment was terminated under each of these circumstances on January 2, 2010, such payments and benefits have an estimated value of:

														For Cause
										Termination				Termination or
										Without Cause or				Resignation
						Termination				Resignation for				(without Good
						Without Cause				Good Reason				Reason following
Name		Payment/Benefit				(prior to a CIC)				(following a CIC)(1)				a CIC)				Death(2)				Disability
Neal L. Patterson		Cash Severance				$	5,400,700			$	5,400,700				—				—				—
		Benefits (3)				$	46,101			$	46,101				—			$	500,000				—
		Value of Accelerated Equity (4)(5)				$	7,283,552			$	5,021,126				—				—				—

Marc G. Naughton; Jeffrey A. Townsend; Michael R. Nill and Michael G. Valentine

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 the employment agreement), each one will be entitled to:

     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.

     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 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). It is our intent that the proposed performance shares and restricted stock grants described in the Compensation of the Chief Executive Officer and other NEOs section of this CD&A will contain similar 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 and earned 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.

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 other than: unpaid salary and earned 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 salary at the time of death. In the event of accidental death and dismemberment, the NEO’s estate would receive an additional one year’s salary, with a cap of $500,000, based upon his salary at the time of death. In the event the NEO 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 at the time of grant, upon termination due to Disability or death, the above NEO 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.

Non-compete Payments: If any of the above NEOs (other than Mr. Townsend) 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 earnings during the last three years of his employment. Mr. Townsend’s employment agreement, while containing a non-compete provision, does not address severance pay or non-compete payments.

Assuming employment was terminated on January 2, 2010 for each of the four NEOs (excluding Mr. Patterson, see table above) under each set of circumstances set forth above; the following table provides information regarding the estimated value of all such payments and benefits.

								Termination				For Cause
								Without Cause or				Termination or
				Termination				Resignation for				Resignation (without
				Without Cause				Good Reason				Good Reason following
Name		Benefit		(prior to a CIC)				(following a CIC)(1)				a CIC)				Death(2)				Disability
Marc G. Naughton		Cash Severance		$	375,000			$	856,375				—				—				—
		Benefits			—				—				—			$	375,000				—
		Value of Accelerated Equity and Performance Awards (3) (4)			—			$	1,272,963				—				—				—
		Non-compete Payments (5)		$	971,957			$	971,957				—				—				—
Jeffrey A. Townsend		Cash Severance		$	440,000			$	1,150,688				—				—				—
		Benefits			—				—				—			$	440,000				—
		Value of Accelerated Equity and Performance Awards (3) (4)			—			$	1,824,430				—				—				—
		Non-compete Payments (5)			—				—				—				—				—
Michael R. Nill		Cash Severance		$	375,000			$	930,063				—				—				—
		Benefits			—				—				—			$	375,000				—
		Value of Accelerated Equity and Performance Awards (3) (4)			—			$	1,582,863				—				—				—
		Non-compete Payments (5)		$	1,060,842			$	1,060,842				—				—				—
Michael G. Valentine		Cash Severance		$	380,000			$	1,011,875				—				—				—
		Benefits			—				—				—			$	380,000				—
		Value of Accelerated Equity and Performance Awards (3) (4)			—			$	1,677,315				—				—				—
		Non-compete Payments (5)		$	1,155,617			$	1,155,617				—				—				—

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of our Directors is an executive officer of a public company of which a Company executive officer is a director. Other than Gerald E. Bisbee, Jr., Ph.D., none of our non-employee Directors has an interest in a reportable transaction that would be required to be disclosed under the section in this Proxy Statement titled “Certain Transactions.” Both of our non-independent directors, Neal Patterson and Cliff Illig, have an interest in a reportable transaction as set forth under the section of this Proxy Statement titled “Certain Transactions.” All such reportable transactions have been approved by the Board of Directors consisting of votes from only the disinterested Directors.

During the last fiscal year, none of the Company’s current Compensation Committee members (Gerald E. Bisbee, Jr., Ph.D., John C. Danforth, Michael E. Herman, William B. Neaves, Ph.D. and William D. Zollars) was: i) an officer or employee of the Company or ii) a former officer of the Company.

CORPORATE GOVERNANCE

Code of Business Conduct and Ethics

We have adopted a Code of Conduct for all Cerner associates and Directors (including our Chief Executive Officer, Chief Financial Officer and corporate controller). Any amendments to or waivers of the Code of Conduct applicable to our Chief Executive Officer, Chief Financial Officer or corporate controller will be posted on www.cerner.com.

Governance Documents

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

Board Leadership Structure

Our Board is currently comprised of five independent Directors, plus Mr. Neal Patterson, the Chairman of the Board, and Mr. Cliff Illig, Vice Chairman. Messrs. Patterson and Illig are both associates of the Company. Additionally, as set forth in our Corporate Governance Guidelines (the “Guidelines”), the Board has designated the Chairperson of the Nominating, Governance & Public Policy 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 on 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. The Board has established three standing Committees — i) Audit, ii) Compensation, and iii) Nominating, Governance & Public Policy (the “NG&PP Committee”). 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. William B. 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 the Company and its shareholders.

With respect to the roles of Chairman and CEO, the Guidelines provide that the Board specifically reserves the right 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 with Neal Patterson, one of the founders of the Company. The Board believes that it is in Cerner’s best interests for the CEO to serve as the Chairman of the Board in light of Mr. Patterson’s vision as a co-founder of the Company and Mr. Patterson’s unique knowledge, experience and relationship with the Board, the Company’s industry and the Company’s management. 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 Cerner.

Board Oversight of Enterprise Risk

Much attention has recently been given to the subject of corporate risk and how companies identify and manage risk. At Cerner, we believe that carefully taken risks lead to innovation and business success. We also recognize that reckless acceptance of risk or the failure to appropriately identify and mitigate risks could be destructive to the Company’s overall health and shareholder value.

The Company’s Enterprise Risk Management (“ERM”) team conducts an annual survey to identify risks, and together with the Company’s other compliance focused teams (such as Regulatory Affairs, Human Resources and Legal) and executive management, is responsible for assessing and managing the Company’s various exposures to risk 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 and assess the Company’s risks, including the nature, likelihood, magnitude of and ability to control the risk, as well as to identify steps to mitigate and manage each risk. Many of our executive management team and other managers are surveyed and/or interviewed to develop this information.

While risk oversight is a full Board responsibility, responsibility for overseeing management of the Company’s ERM team has been delegated to the Audit Committee. The Audit Committee also directly periodically reviews and explores with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies. Due to the dynamic nature of risk, the overall status of Cerner’s significant risks are updated and a summary of significant risks is reviewed 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 the Company’s risks.

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

CONSIDERATION OF DIRECTOR NOMINEES

Director Qualifications

The Board’s NG&PP Committee considers candidates 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 identifying and evaluating potential candidates, regardless of the source of the nomination, the Board considers the qualifications listed in our Corporate Governance Guidelines and the NG&PP Committee Charter, including without limitation: the requirement that nominees should possess the highest personal and professional ethics, integrity and values and be committed to representing the long-term interests of the shareholders. Cerner endeavors to have a Board representing diverse and in depth experience in business, healthcare, information technology, government and in areas that are relevant to the Company’s global activities. 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.