April 18, 2011

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 27, 2011, 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 Shareholders’ Meeting and Proxy Statement. We will also report on matters of current interest to our shareholders. We are very pleased that Denis A. Cortese, M.D., Emeritus President and Chief Executive Officer of Mayo Clinic, Director of the Arizona State University (ASU) Health Care Delivery and Policy Program and Foundation Professor at ASU, 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 telephone or Internet 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,
Chief Executive Officer and President

CERNER CORPORATION
2800 ROCKCREEK PARKWAY
NORTH KANSAS CITY, MISSOURI 64117

NOTICE OF ANNUAL SHAREHOLDERS’ MEETING
MAY 27, 2011

TO OUR SHAREHOLDERS:

The Annual Shareholders’ Meeting of Cerner Corporation will be held on May 27, 2011, 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.		To elect three Class I Directors: John C. Danforth, Neal L. Patterson and William D. Zollars, each to serve for a three year term, and one Class III Director: Denis A. Cortese, M.D., to fill the vacant Class III Director seat and to serve the remaining two years of the Class III term, until May 2013 (see Proposal #1);
	2.		The ratification of the appointment of KPMG LLP as the independent registered public accounting firm of Cerner Corporation for 2011 (see Proposal #2);
	3.		To conduct an advisory vote on the compensation of our Named Executive Officers (see Proposal #3);
	4.		To conduct an advisory vote on the frequency of an advisory vote on the compensation of our Named Executive Officers (see Proposal #4);
	5.		To approve the Cerner Corporation 2011 Omnibus Equity Incentive Plan (see Proposal #5);
	6.		To approve an increase in the total number of shares available for purchase under the Company’s Associate Stock Purchase Plan (see Proposal #6);
	7.		To increase the number of Authorized Shares of Common Stock under the Company’s Certificate of Incorporation (see Proposal #7);
	8.		To eliminate the Series A Preferred Stock under the Company’s Certificate of Incorporation (see Proposal #8); and
	9.		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 Friday, April 1, 2011 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 27, 2011: The 2011 Proxy Statement and 2010 Annual Report to Shareholders are available at www.cerner.com under “About Cerner, Investor Relations, 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			9
COMMITTEES OF THE BOARD			9
DIRECTOR COMPENSATION			11
AUDIT COMMITTEE REPORT			13
Guidelines of Cerner Corporation’s Audit Committee for Pre-Approval of Independent Auditor Services			14
COMPENSATION COMMITTEE REPORT			15
COMPENSATION DISCUSSION AND ANALYSIS			15
SUMMARY COMPENSATION TABLE			27
GRANTS OF PLAN-BASED AWARDS			28
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END			29
OPTION EXERCISES AND STOCK VESTED			30
EMPLOYMENT AGREEMENTS & POTENTIAL PAYMENTS UNDER TERMINATION OR CHANGE IN CONTROL			30
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			36
CORPORATE GOVERNANCE			36
CONSIDERATION OF DIRECTOR NOMINEES			37
CERTAIN TRANSACTIONS			38
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			42
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF			43
PROPOSAL #1 ELECTION OF DIRECTORS			45
RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			46
Audit and Non-Audit Fees			46
PROPOSAL #2 RATIFICATION OF THE APPOINTMENT OF KPMG AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			46
PROPOSAL #3 ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS			47
PROPOSAL #4 ADVISORY VOTE ON FREQUENCY OF SAY-ON-PAY VOTES			48
PROPOSAL #5 APPROVAL OF THE CERNER CORPORATION 2011 OMNIBUS EQUITY INCENTIVE PLAN			49
PROPOSAL #6 APPROVAL OF AMENDMENT TO AMENDED AND RESTATED ASSOCIATE STOCK PURCHASE PLAN			54
PROPOSAL #7 AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK			58
PROPOSAL #8 AMENDMENT TO CERTIFICATE OF INCORPORATION TO ELIMINATE THE SERIES A PREFERRED STOCK			60

TABLE OF CONTENTS — Continued

		Page
SHAREHOLDER PROPOSALS			62
OTHER MATTERS			63
CERNER CORPORATION 2011 OMNIBUS EQUITY INCENTIVE PLAN		Annex I
CERNER CORPORATION 2001 ASSOCIATE STOCK PURCHASE PLAN (AMENDED AND RESTATED MARCH 1, 2010 AND MAY 27, 2011)		Annex II
CERTIFICATE OF AMENDMENT TO THE SECOND RESTATED CERTIFICATE OF INCORPORATION OF CERNER CORPORATION		Annex III
CERTIFICATE OF AMENDMENT TO THE SECOND RESTATED CERTIFICATE OF INCORPORATION OF CERNER CORPORATION		Annex IV

CERNER CORPORATION
2800 ROCKCREEK PARKWAY
NORTH KANSAS CITY, MISSOURI 64117

PROXY STATEMENT

2011 ANNUAL SHAREHOLDERS’ MEETING
MAY 27, 2011

This Proxy Statement, which is being mailed on or about April 18, 2011, is furnished to you in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Cerner Corporation, a Delaware corporation (“Cerner” or the “Company”), for use at the Annual Shareholders’ Meeting of the Company to be held on May 27, 2011, 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 Friday, April 1, 2011, the record date for our meeting. At the close of business on that date, 84,067,837 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 27, 2011, 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 26, 2011, 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 26, 2011. 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 26, 2011.
		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 27, 2011;
		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 27, 2011; 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 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.
		Brokers do not have discretionary voting rights with respect to all other voting items: the election of Directors (Proposal #1), the advisory vote on the compensation of our Named Executive Officers (Proposal #3), the advisory vote on the frequency of an advisory vote on the compensation of our Named Executive Officers (Proposal #4), the proposal to approve the Cerner Corporation 2011 Omnibus Equity Incentive Plan (Proposal #5), the proposal to approve an increase in the total number of shares available for purchase under the Company’s Associate Stock Purchase Plan (Proposal #6), the proposal to increase the number of Authorized Shares of Common Stock under the Company’s Certificate of Incorporation (Proposal #7) and the proposal to eliminate the Series A Preferred Stock under the Company’s Certificate of Incorporation (Proposal #8); 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 or the other proposals referenced above, your shares will not be voted.
May I attend the Annual Shareholders’ Meeting?		If you were a holder of record on the record date, Friday, April 1, 2011, 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, the favorable vote of a majority of the votes cast, in person or by proxy, is required for the election of Directors (Proposal #1). Therefore, if you elect to “Abstain” from voting 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 four nominees at the Annual Shareholders’ Meeting. Shareholders do not have cumulative voting rights in the election of Directors.
		The favorable vote of a majority of the shares of our Common Stock outstanding will be required for the approval of an increase in the authorized shares of Common Stock under the Company’s Certificate of Incorporation (Proposal #7) and the approval of the elimination of the Series A Preferred Stock under the Company’s Certificate of Incorporation (Proposal #8).
		The favorable vote of a majority of the shares present in person or by proxy and entitled to vote will be required for:

	•		the ratification of the appointment of KPMG LLP as our independent registered public accounting firm (Proposal #2);
	•		the approval, on an advisory basis, of the compensation of our Named Executive Officers (Proposal #3);

	•		the approval, on an advisory basis, of a particular frequency (which may be every one, two or three years) for an advisory vote on the compensation of our Named Executive Officers (Proposal #4);
	•		the approval of the Cerner Corporation 2011 Omnibus Equity Incentive Plan (Proposal #5);
	•		the approval of an increase in the total number of shares available for purchase under the Company’s Associate Stock Purchase Plan (Proposal #6); and
	•		any other proposal that might properly come before the meeting.

		With respect to Proposal #3 and Proposal #4 (the advisory say-on-pay vote on executive compensation and the advisory vote on the frequency of the say-on-pay vote), the results of these votes are not binding on the Board, whether or not any resolution is passed at the Annual Shareholders’ Meeting. In evaluating the shareholder vote on these advisory resolutions, the Board will consider the voting results in their entirety.
		Abstentions and broker non-votes are counted as present and entitled to vote for purposes of determining whether a quorum exists. Abstentions are treated as votes “Against” the proposal for Proposals #s 2, 3, 4, 5, 6, 7 and 8. Brokers may use their discretionary voting authority only with respect to the ratification of our independent registered public accounting firm (Proposal #2), but not with respect to the remaining items.
How does the Board		The Board recommends a vote:
recommend that I vote?

	•		FOR all nominees for Director (Proposal #1);
	•		FOR the ratification of the appointment of KMPG LLP as the independent registered public accounting firm of the Company for 2011 (Proposal #2);
	•		FOR the approval, on an advisory basis, of the compensation of our Named Executive Officers (Proposal #3);
	•		To approve conducting an advisory vote on the compensation of our Named Executive Officers every year (Proposal #4);
	•		FOR the approval of the Cerner Corporation 2011 Omnibus Equity Incentive Plan (Proposal #5);
	•		FOR the approval of an increase in the total number of shares available for purchase under the Company’s Associate Stock Purchase Plan (Proposal #6);
	•		FOR the approval of an increase in the authorized shares of Common Stock under the Company’s Certificate of Incorporation (Proposal #7); and,
	•		FOR the approval of the elimination of the Series A Preferred Stock under the Company’s Certificate of Incorporation (Proposal #8).

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 27, 2011: The 2011 Proxy Statement and 2010 Annual Report to Shareholders are available at www.cerner.com under “About Cerner, Investor Relations, Financial Information, Proxy Materials & Annual Reports.”

INFORMATION CONCERNING DIRECTORS

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

The terms of our three Class I Directors will expire at this year’s Annual Shareholders’ Meeting. All three of the current Class I Directors have been recommended by our Nominating, Governance & Public Policy Committee (the “Committee”) for re-election and have been nominated by our Board. In addition, we have a new nominee, Denis A. Cortese, M.D., who has been recommended by the Committee and nominated by the Board for election as a Class III Director to fill the vacant position in Class III. Those elected as Class I Directors this year will serve as Directors until the 2014 annual meeting. The terms of the Class II and Class III Directors will expire at the 2012 and 2013 annual meetings, respectively.

The Board has determined that all five current non-employee members of the Board and the new Director nominee, Denis A. Cortese, M.D., 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 II and Class III Directors and those individuals nominated for election as Class I and Class III Directors are set forth below.

CLASS I
John C. Danforth (Age 74)     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 61)		Mr. Patterson has been a Director of the Company since 1980 and is a co-founder of the Company. Mr. Patterson has been Chairman of the Board of Directors and Chief Executive Officer of the Company for more than five years. Mr. Patterson has served as President of the Company since July 2010, which position he also held from March 1999 until August 1999.
		The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Patterson should serve as a Director: his entrepreneurial and leadership skills and proven visionary leadership while serving as the Company’s Chief Executive Officer and Chairman, his information technology expertise and his extensive knowledge and understanding of the Company’s business, operations, solutions and services.
William D. Zollars (Age 63)     Member of the: •   Audit Committee •   Compensation Committee •   Nominating, Governance & Public Policy 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. 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: YRC

		Worldwide and CIGNA Corporation. Mr. Zollars also serves on the boards of: National Association of Manufacturers, Business Roundtable, United Way of Greater Kansas City, American Trucking Association 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 60)		Mr. Illig has been a Director of the Company since 1980 and is a co-founder of the Company. Mr. Illig previously served as Chief Operating Officer of the Company until October 1998 and as President of the Company until March 1999. Mr. Illig was appointed Vice Chairman of the Board of Directors in 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. From June 2000 through June 2010, Dr. Neaves served as the Chief Executive Officer and as a member of the Board of Directors of The Stowers Institute for Medical Research. Dr. Neaves continues as a member of the Board of Directors of The Stowers Institute in his current position as President Emeritus. He also served as President of The Stowers Institute from June 2000 through July 2009. For twenty years prior to 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 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 68)     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 orthopedic 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.
		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.
Denis A. Cortese, M.D. (Age 67)		Denis A. Cortese, M.D. is a first-time nominee as a Cerner Director. Dr. Cortese is currently the Emeritus President and Chief Executive Officer of Mayo Clinic. From 2002 through November 2009, Dr. Cortese was the President, Chief Executive Officer and Chairman of the Board of Governors and a Member of the Board of Trustees of Mayo Clinic, serving as the Chief Executive Officer of Mayo Clinic in Jacksonville, Florida from 1999 through 2002 and as a Physician for the Mayo Clinic from 1976 through 1999. Since January 2010, Dr. Cortese has also been a Foundation Professor at Arizona State University (ASU) in the School of Health Management and Policy, W.P. Carey School of Business and the Department of Biomedical Informatics, Ira A. Fulton School of Engineering, as well as the Director of ASU’s Health Care Delivery and Policy Program. He is also the President of a newly launched Healthcare Transformation Institute based in Phoenix, Arizona. He is currently a board member of: the Essence Group, Pinnacle West Capital Corporation and RAND Health, and a member of: the Institute of Medicine of the National Academy of Sciences (U.S.). Dr. Cortese was the chair of the Institute of Medicine’s Roundtable on Evidence-Based Medicine from 2006 to 2009, and since 2009 he has served as chair of the Roundtable on Value & Science-Driven Health Care. He was a member of the Board of the Healthcare Leadership Council from 2003 to 2009, serving as chair of the Board for two of those years. He was a member of the Harvard/Kennedy Health Policy Group, the Division of Engineering and Physical Sciences of the National Research Council. And, he is an honorary member of the Academia Nacional de Medicina (Mexico) and the Royal College of Physicians (London).
		The following experience, qualifications, attributes and/or skills led the Board to conclude that Dr. Cortese should be nominated as a Director: his medical and science-based professional background and experience, his current and previously held senior-executive level leadership positions at academic institutions and at a world-renowned healthcare enterprise, his service on

		research-related and academic boards, his extensive knowledge of and experience with internal medicine and pulmonary diseases, healthcare leadership and healthcare information technology.
Linda M. Dillman (Age 54)     Member of the: •   Audit Committee •   Compensation Committee (Chairperson)		Ms. Dillman has been a Director of the Company since May 2010. Since August 2009, Ms. Dillman 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 to April 2006, she held the position of Executive Vice President and Chief Information Officer. She held various positions within Wal-Mart 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 serve 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 2010, the Board held four regular meetings, the Audit Committee held nine meetings, the Compensation Committee held three meetings and the Nominating, Governance & Public Policy Committee held three meetings. Each current Director attended at least 75% of the aggregate of the total meetings of the Board and the Board Committees on which the Director served during the fiscal year.

The Board has determined that all of the current non-employee Class II and Class III Directors on each of the Board’s three standing Committees and the non-employee Director nominees nominated as Class I and Class III Directors are independent as defined under the rules of The NASDAQ Stock Market, including, in the case of all current and proposed members of the Audit Committee, the additional independence requirements of Rule 10A-3 under the 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 non-employee Class II and III Directors nor the non-employee Director nominees nominated for election as a Class I or Class III Director has a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director and that each of the following current Directors and the Director nominees 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.; Denis A. Cortese, M.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 each May based on all available facts and circumstances of each Director. The “independence” finding is also reviewed and confirmed by the Company’s Chief Legal Officer, Chief Financial Officer and outside legal counsel.

Pursuant to the Company’s Corporate Governance Guidelines, all individuals nominated for election as Class I and 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 I Directors nominated for re-election this year, attended the 2010 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 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. Compensation Committee members are approved by the full Board each May.

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

The Compensation Committee has 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 reviewed and revised in March 2011. 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 Board:

	•		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 16b-3 promulgated under 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, Vice President, Compensation & 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

In 2010, the Compensation Committee utilized Cerner’s internal Enterprise Risk Management (ERM) team to perform a review of the Company’s 2010 incentive compensation arrangements. More specifically, the ERM team reviewed the policies and processes of incentive compensation arrangements for associates, including the Section 16 officers, and assessed the overall design of and execution by management of ten incentive compensation agreements from 2010, and identified the risks posed from an associate behavior perspective. The scope of the review was based on incentive

compensation arrangements that provided the highest aggregate incentive dollars for 2010. The Compensation Committee assessed the ERM team summary 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 and time-tested 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 2010-2011 Board year (May 2010 — May 2011), non-employee Directors received an annual cash retainer of $66,000. In addition, each Committee Chairperson received an additional annual cash retainer as follows: $22,500 for the Audit Committee Chairperson, $12,500 for the Compensation Committee Chairperson and $10,000 for the Nominating, Governance & Public Policy Committee 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 2010-2011 Board year, the sole exception to the payments discussed above was with respect to Mr. Danforth who was entitled to receive $66,000 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 with 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 2010 to May 2011 Board service period was set at approximately $160,500. In May 2010, pursuant to the Board equity compensation program, 2,000 shares of restricted stock of the Company were granted to each of the then-current non-employee Directors: Dr. Bisbee, Mr. Danforth, Ms. Dillman, Dr. Neaves and Mr. Zollars, respectively. These restricted stock grants will vest in May 2011 at the completion of each respective Director’s one year of service to the Board.

As of June 2007, under the Board equity compensation program, each non-employee Director that is newly appointed or elected to the Board receives an initial grant of shares of restricted stock of the Company with a value equal to the annual equity grant value as discussed above, with a ratable vesting over three years. Linda M. Dillman was eligible to receive an initial appointment/election grant of shares of restricted stock in May 2010 when she was first elected to the Board;

therefore, on May 28, 2010, Ms. Dillman was awarded an additional 2,000 shares of restricted stock of the Company, which restricted shares will vest ratably over the three year term of her Board position.

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, 2011, 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 2010, including Michael E. Herman, who did not stand for re-election in May 2010 as a result of his retirement from our Board effective May 2010.

																		Change in
																		Pension Value
		Fees																and
		Earned												Non-Equity				Nonqualified
		or Paid				Stock				Option				Incentive Plan				Deferred				All Other
		in Cash				Awards				Awards				Compensation				Compensation				Compensation				Total
Name		($)				($) (1)				($) (2)				($)				Earnings ($)				($)				($)
Gerald E. Bisbee, Jr., Ph.D.			87,250				167,500				—				—				—				—				254,750
John C. Danforth			64,750	(3)			167,500				—				—				—				—				232,250
Linda M. Dillman			44,250				335,000	(4)			—				—				—				—				379,250
Michael E. Herman			38,000				—				—				—				—				—				38,000
William B. Neaves, Ph.D.			82,250				167,500				—				—				—				—				249,750
William D. Zollars			74,750				167,500				—				—				—				—				242,250

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 four independent members of the Board (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. 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. The Audit Committee’s responsibility is to monitor and oversee these processes and to report to the Board 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 audited financial statements, the representation of management and the report of the independent registered public accounting firm to the Audit Committee, the Audit Committee recommended that the Board include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended January 1, 2011 to be filed with the Securities and Exchange Commission.

Members of the Audit Committee:
Gerald E. Bisbee, Jr., Ph.D.
Linda M. Dillman
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 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 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 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 SEC independence 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 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
Linda M. Dillman
William B. Neaves, Ph.D.
William D. Zollars

____________________

COMPENSATION DISCUSSION AND ANALYSIS

This section explains our executive compensation program and specifically describes the application of that program to the following Named Executive Officers (NEOs) whose compensation information is presented in the tables and narrative discussion following this discussion in accordance with Securities and Exchange Commission rules.

Neal L. Patterson		Chairman of the Board, Chief Executive Officer and President
Marc G. Naughton		Chief Financial Officer
Jeffrey A. Townsend		Executive Vice President
Michael G. Valentine		Executive Vice President
Michael R. Nill		Executive Vice President

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

Executive Summary

     2010 Business Results. A significant portion of the total compensation of our executive officers is directly linked to our performance. The 2010 fiscal year was another excellent year for Cerner. We delivered strong levels of bookings, revenues, earnings and cash flows in 2010. Highlights of the year include:

	•		New business bookings revenue in 2010, which reflects the value of executed contracts for software, hardware, professional services and managed services, was $2.0 billion, which is an increase of 9% compared to $1.8 billion in 2009.
	•		Our 2010 revenues increased 11% to $1.9 billion compared to $1.7 billion in 2009. The year-over-year increase in revenue reflects improved economic conditions and demand driven by the stimulus incentives.
	•		Our 2010 net earnings increased 23% to $237.3 million compared to $193.5 million in 2009. Diluted earnings per share increased 20% to $2.78 compared to $2.31 in 2009. The growth in net earnings and diluted earnings per share was driven primarily by strong revenue growth and continued progress with our margin expansion initiatives, particularly leveraging research and development investments and controlling general and administrative expenses. Though our full-year 2010 operating margin was 19.4%, compared to 17.5% in 2009, we achieved our long term goal of 20% operating margins in the third and fourth quarters of 2010.
	•		We had cash collections of receivables of $1.9 billion in 2010 compared to $1.8 billion in 2009. Day’s sales outstanding decreased to 87 days for the 2010 fourth quarter compared to 91 days for 2010 third quarter and 90 days for the 2009 fourth quarter, reflecting our improved cash collections. Operating cash flows for 2010

were strong at $456.4 million compared to $347.3 million in 2009, with the growth driven by cash collections from clients.

     Compensation Strategy. Our compensation strategy is to offer competitive compensation packages to attract, motivate and reward qualified associates who contribute significant value to the Company and reward performance, such as attainment of business and individual associate goals, business results, leadership, and strong relationships with clients, and is not based on rewarding seniority.

     Performance Management Philosophy. Our compensation strategy is linked to our performance management philosophy that is designed to identify and reward associate performance through compensation. We believe in pay for performance as represented by our NEO pay mix. In 2010, 78% of the total compensation paid to our Chief Executive Officer (CEO) was performance-based and 83% was performance-based for our other NEOs. During 2010, 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.

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

	•		An Equity-based Grant Policy, which outlines the grant practices with respect to equity-based grants awarded under the Company’s equity incentive plans, designed to ensure grant dates for such programs will be outside of trading blackout periods.
	•		Performance-based compensation paid to our executive officers is subject to “claw back” pursuant to performance plan agreements with our executive officers.
	•		Unlike typical ownership guidelines that are based on a multiple of salary or fixed number of shares, our guidelines require the retention of 50% to 80% of equity awards made to our associates and outside Directors. This generally leads to significantly higher stock ownership requirements than other companies.
	•		Our internal pay equity guidelines provide that the CEO’s total cash compensation shall not be more than three times that of the next highest executive officer’s total cash compensation.

     Compensation Structure. Compensation for our executive officers includes: i) base salary, ii) performance-based cash incentive compensation 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. We provide our executive officers with relatively limited perquisites and do not pay tax gross-ups on any of our perquisites.

     We also 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. The cost of these plans and opportunity for benefits thereunder are the same for the executive officers as for all other associates.

Compensation Strategy and 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 2010 peer group for compensation comparison were selected based on standard industrial classifications (SIC) and/or financial measures. The SICs 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 2010 peer group were market capitalization of $750 million to $10 billion and revenues of $840 million to $3.35 billion. Our peer group changed slightly from 2009 due to the increased

range of the financial measures we use each year to reflect the growth of Cerner and also due to mergers and acquisitions within the peer group. The 22 companies included in our 2010 peer group were:

2010 Compensation Peer Group

Company Name		Ticker
Acxiom Corporation		ACXM
Autodesk, Inc.		ADSK
BMC Software, Inc.		BMC
CACI International, Inc.		CACI
Cadence Design Systems, Inc.		CDNS
Citrix Systems, Inc.		CTXS
Cognizant Technology Solutions Corporation		CTSH
Compuware Corporation		CPWR
DST Systems, Inc.		DST
Eclipsys Corporation		ECLP
IMS Health Incorporated		RX
Intuit, Inc.		INTU
Lender Processing Services, Inc.		LPS
McAfee, Inc.		MFE
MICROS Systems, Inc.		MCRS
Parametric Technology Corporation		PMTC
Scientific Games Corporation		SGMS
Sybase, Inc.		SY
Synopsys, Inc.		SNPS
Teradata Corporation		TDC
Total Systems Services		TSS
Verisign, Inc.		VRSN

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 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 ten years. In 2010, Mr. Kesner was engaged to advise the Compensation Committee regarding executive and Board compensation matters, including competitive pay benchmarking, incentive plan design and risk review, performance metric testing, peer group selection, updates on trends in executive and director compensation, and review of the Compensation Discussion and Analysis and related tables included in the 2010 Proxy Statement.

Aligning Pay with Performance

During 2010, 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 or other equity grants. In addition, such executive’s performance-based incentive compensation award, if earned, may be reduced or eliminated due to the individual’s performance rating.

Compensation Elements

Compensation for our executive officers includes: i) base salary, ii) performance-based cash incentive compensation 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. 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, 2010, the cash compensation package for the NEOs ranged from 50% to 57% in base salary and 43% to 50% in targeted performance-based cash incentive compensation. Our total compensation package mix for the NEOs in 2010 ranged from 27% to 51% in cash compensation and 49% to 73% in non-cash compensation, which includes equity-related awards. The compensation mix of non-cash compensation increased over 2009 due to the performance-based restricted stock awards granted to three of our NEOs in 2010 as discussed below under “Long-Term Incentive Plan Compensation.” 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 2010 the Company and the Compensation Committee determined that the Company would provide performance related increases to the base salaries of the executive officers and other executives. For 2009, the Compensation Committee adopted a one-time supplemental performance-based cash incentive approach for executives, in-lieu of any base salary or performance-based cash incentive increases from 2008 levels due to the unstable economic conditions at that time.

          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.

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 2010. 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: i) 140% of the target incentive amount based on the pre-approved performance metric for the year, plus ii) 25% of the target incentive amount based on the executive officer’s individual performance rating as determined by management. Regardless of amounts earned under the performance metrics, the maximum possible payout under the Performance-Based Compensation Plan is capped at 200% of base salary for our CEO and 175% of base salary for the other executive officers.

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 2010, the performance metric for the Company’s CEO and other executive officers consisted solely of earnings per share (“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. The Company has used Earnings Per Share as the sole performance metric for the Company’s CEO and other executive officers since 2007.

As a result of the Company’s 2010 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 2010 fiscal year averaged 126% of the target incentive amount and 76% of the maximum cash incentive opportunity available. Payouts were based solely on attainment of the performance target and no discretionary changes based on performance were made to the amounts earned. Additionally, cash bonus payments tied to the individual performance ratings for each NEO were not approved by the Committee in 2010 due to the over-attainment of the performance metric and therefore, individual performance ratings were not applied as a factor to the cash bonus payments for any of the Company’s NEOs in 2010. The following tables detail the payouts by performance plan metric for our NEOs in 2010 and the related performance plan metric attainment by quarter.

																								%
																								Earned								%
								Results																Relative								Earned of
								Relative to								Target				Actual				to				Maximum				Maximum
				Performance				Performance				Target				Incentive				Amount				Target				Cash Incentive				Cash
		Performance		Plan Target				Plan Target				Attainment				Amount				Earned				Incentive				Opportunity				Incentive
NEO		Metric		($)				($) (1)				%				($)				($) (2)				Amount				($)				Opportunity
Neal L. Patterson		Earnings Per Share			2.82				2.93				104	%			1,003,750				1,263,450				126	%			1,656,188				76	%
Marc G. Naughton		Earnings Per Share			2.82				2.93				104	%			280,000				351,600				126	%			462,000				76	%
Jeffrey A. Townsend		Earnings Per Share			2.82				2.93				104	%			392,500				494,100				126	%			647,625				76	%
Michael G. Valentine		Earnings Per Share			2.82				2.93				104	%			385,000				484,200				126	%			635,250				76	%
Michael R. Nill		Earnings Per Share			2.82				2.93				104	%			337,500				424,500				126	%			556,875				76	%
Totals of Named Executive Officers																	2,398,750				3,017,850				126	%			3,957,938				76	%

Performance Metric Summary (EPS)

Measurement		Target								Attainment				Payout				Quarterly Weighting
Period		(1)				Results				%				%				(2)
Q1		$	0.61			$	0.63				103	%			140	%			15	%
Q2 YTD		$	1.27			$	1.32				104	%			140	%			15	%
Q3 YTD		$	2.00			$	2.08				104	%			120	%			15	%
Q4 YTD		$	2.82			$	2.93				104	%			120	%			55	%

In 2011, our human resources compensation team, together with executive management, reviewed and considered compensation alternatives related to base salary, performance-based cash incentive compensation and/or long-term incentive plan compensation. Based on this review, the Compensation Committee determined that our compensation approach under all three types of compensation meets the needs and serves the purposes as set forth in this Compensation Discussion and Analysis. For 2011, 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 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 2010 earnings per share performance for incentive compensation purposes represented a 16% growth over the prior year. The 2011 performance targets have been set based on the 2011 financial plan approved by the Board of Directors and reflect earnings growth between 15% and 23%. The 2011 bonus opportunity for the NEOs can range between 0% and 140% of the targeted bonus amount, depending on the level of performance achieved in 2011 plus 25% of the targeted bonus amount based on the executive officer’s individual performance rating as determined by management, except for the CEO, whose individual performance is evaluated by the Board of Directors. The earnings per share target designated for 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 2010, the Compensation Committee approved executive officer awards in the form of stock options and performance-based restricted shares. The performance-based restricted shares made to three of our NEOs in 2010 were intended to add additional long-term compensation incentives, increase focus and alignment to corporate strategies and goals and increase retention. In 2011, the Compensation Committee again approved executive officer awards in the form of stock options and performance-based restricted shares. Our Long Term Incentive Plan F expires on May 24, 2011, our Long Term Incentive Plan G is expected to run out of shares by late 2012 and there are no other active equity grant plans. Therefore, this Proxy Statement includes a proposal for a new Omnibus Equity Incentive Plan that would allow us to continue to have similar equity tools available in the future to ensure recruitment and retention of top talent (see Proposal #5 of this Proxy Statement).

          Vesting of Performance-Based Restricted Stock Grants. The following discusses details of the performance-based restricted stock grants made during 2010 and the determination of the related shares that will vest in 2011.

On June 1, 2010, the company granted 25,000 shares of performance-based restricted stock to each of Jeffrey A. Townsend, Michael G. Valentine and Michael R. Nill. These grants will vest over a three year period based on the achievement of growth in adjusted earnings over 2009 and continued employment. A portion of the restricted shares that meet the vesting requirements are subject to a subjective reduction based on review of individual performance goals disclosed in the agreements.

On June 1, 2011, 2,500 restricted shares for each individual will be eligible to vest. The Company’s 2010 third quarter and fourth quarter adjusted earnings growth was 22% over the same period in 2009, thus meeting the target of 7%. Based on a review of the subjective criteria defined below, management decided and the Compensation Committee approved, that 2,500 shares will vest for each named individual on June 1, 2011, contingent upon the individual’s continued employment through the vesting date. If the performance metrics had not been attained, the Company could have reduced the number of shares that would vest; however, based on internal review of the individual performance against these metrics, it was determined that no subjective reduction would apply to this tranche of vesting shares. The following describes the individual performance goals for 2010 that were reviewed for each individual.

Individual Performance Goals Applied
to 2010 Performance-Based Restricted Stock Grants to Vest in June 2011
Jeffrey A.		•    2010 individual performance rating in the top quartile, and
Townsend		•    revenue growth of our consumer, employer, research and network business units.
Michael G.		•    2010 individual performance rating in the top quartile, and
Valentine		•    U.S. earnings, revenue and bookings growth and Global earnings, revenue and bookings growth.
Michael R.		•    2010 individual performance rating in the top quartile, and
Nill		•    Cerner ITWorks & CernerWorks earnings growth.

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 the interests of 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 recent 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 resources compensation team, together with executive management, has recommended and the Compensation Committee has approved the use of performance-based restricted shares in 2011 for three of our NEOs, who also received these types of grants 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 restricted shares vest based on performance metrics established at the date of grant. Time-based 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 (other than the three NEOs mentioned above who were granted performance based restricted stock awards in June 2010), including the CEO, in March 2010. Additionally, individual grants for executive officers were based on job responsibilities, performance during 2009 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 2011, along with the aforementioned performance-based restricted shares to add additional long-term compensation incentives, increase focus and alignment to business priorities, and increase retention. The details of these grants to NEOs are provided below.

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 2010, the Compensation Committee determined that it would increase Mr. Patterson’s, base salary and performance-based cash incentive compensation as explained in the following paragraph. Mr. Patterson’s total cash compensation in 2010 continued to approximate the median of our peer group, similar to 2009. Mr. Patterson was issued a stock option grant of 60,000 shares at the closing fair market value on March 12, 2010, 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 in 2009, the Company met internal earnings targets, exceeded cash flow expectations and implemented strategies to participate in the economic stimulus package that benefited the Company. 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 solid execution in its global markets and that Mr. Patterson is recognized externally for his visionary leadership in the industry and history of innovation and that Mr. Patterson ensured the Company participated effectively in public policy discussions, positively influencing decisions relating to the future of healthcare IT. 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 net earnings growth rates of 17% and 40%, respectively, and strong cash flow are notable achievements.

Specifically in 2010, the Compensation Committee approved a base salary of $1,025,000 and performance-based cash incentive target opportunity of $1,025,000 (with a maximum performance-based cash incentive opportunity of $1,656,188) for Mr. Patterson effective March 28, 2010. During 2010, Mr. Patterson earned total cash compensation of $2,268,835 which included $1,005,385 in base salary and $1,263,450 in payments earned under the Company’s Performance-Based Compensation Plan. Mr. Patterson earned 126% of the target incentive amount and 76% of the maximum cash incentive opportunity available to him under the Performance-Based Compensation Plan during 2010. Mr. Patterson also earned a total of $121,777 in other compensation from: i) private use of the corporate jet ($110,000), ii) Company provided life insurance ($394), iii) 401(k) match ($4,851), iv) the second tier 401(k) match ($5,406) and v) home/office security system ($1,126).

The Compensation Committee has determined that Mr. Patterson’s base salary for 2011 shall remain at $1,025,000 and his performance-based cash incentive compensation target shall be increased to $1,200,000. The maximum performance-based cash incentive opportunity is $1,907,813. The Compensation Committee also approved Mr. Patterson’s personal use of the corporate aircraft in 2011 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 a Time Sharing Agreement 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 8, 2011, the Section 16 Insider Equity and Incentive Compensation Subcommittee of the Compensation Committee also approved a stock option grant to Mr. Patterson of 55,000 shares which was granted on March 11, 2011. His 2011 base salary became effective March 27, 2011 and his 2011 performance-based incentive cash compensation became effective April 3, 2011.

The Compensation Committee and the Section 16 Insider Equity and Incentive Compensation Subcommittee of the Compensation Committee (with respect to equity and incentive compensation grants) has approved the 2011 compensation packages, effective March 27, 2011 for base salaries, March 11, 2011 for equity grants and April 3, 2011 for performance-based incentive cash compensation, for each of the NEOs, other than the CEO, as follows:

														Maximum
														Performance-based
						Performance-based Cash								Cash Incentive
NEO		Base Salary ($)				Incentive Target ($)				Equity Grant (Shares)				Opportunity ($)
Marc G. Naughton			420,000				350,000				14,000	(1)			556,875
Jeffrey A. Townsend			500,000				500,000				20,000	(2)			783,750
Michael G. Valentine			500,000				500,000				20,000	(2)			783,750
Michael R. Nill			500,000				500,000				20,000	(2)			763,125

The performance-based restricted share grants made to three of our NEOs disclosed above will vest on the following schedule based on attainment of the related performance target noted and the NEO’s continued employment through the vesting date.

	•		2,000 shares shall vest on June 1, 2012 if the Company’s reported adjusted earnings for fiscal year 2011 are equal to or greater than a 7% increase over the Company’s reported adjusted earnings for fiscal year 2010
	•		2,000 shares shall vest on June 1, 2013 if the Company’s reported adjusted earnings for fiscal year 2012 are equal to or greater than a 14% increase over the Company’s reported adjusted earnings for fiscal year 2010
	•		16,000 shares shall vest on June 1, 2014 if the Company’s reported adjusted earnings for fiscal year 2013 are equal to or greater than a 20% increase over the Company’s reported adjusted earnings for fiscal year 2010.

The number of shares vesting is subject to reduction down to zero based on each NEO’s individual performance rating and performance goal attainment.

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 March 2011 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.

Unlike typical ownership guidelines that are based on a multiple of salary or fixed number of shares, our guidelines (referred to as an “Ownership Percentage”) require the retention of 50% to 80% of equity awards made to our associates and outside Directors. This generally leads to significantly higher stock ownership requirements than other companies.

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

Ownership Percentage 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, 2011, all NEOs were compliant with the stock ownership guidelines. 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 2010. 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 2% for 2010.

Associate Stock Purchase Plan

We have an Associate Stock Purchase Plan (ASPP) 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. The ASPP was first approved by the Company’s shareholders in 2001. It has served as a valuable benefit to the Company, assisting with recruiting and retention of needed talent and also helping to develop a culture of ownership in the Company. We expect to run out of authorized shares under the ASPP in 2012; and therefore, this Proxy Statement includes a proposal for shareholder approval of an additional 2,000,000 shares to be authorized for purchase under the ASPP (see Proposal #6 in this Proxy Statement).

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 2010, Neal Patterson’s personal use of our Corporate Aircraft was valued at $117,650 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 2010. In 2011, 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” 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 1, 2011.

																										Change in
																										Pension Value
																										and
																										Nonqualified
																						Non-Equity				Deferred
Name and														Stock				Option				Incentive Plan				Compensation				All Other
Principal		Year				Salary				Bonus				Awards				Awards				Compensation				Earnings				Compensation
Position		(1)				($)				($)				($)(2)				($)(3)				(4)				($)				($)(5)				Total ($)
Neal L. Patterson			2010				1,005,385				—				—				2,693,424				1,263,450				—				121,777				5,084,035
Chairman of the Board,			2009				940,000				—				—				1,451,835				807,750				—				120,147				3,319,732
Chief Executive Officer			2008				948,077				—				—				1,577,520				801,750				—				106,673				3,343,020
and President
Marc G. Naughton			2010				386,538				—				—				673,356				351,600				—				10,562				1,422,056
Chief Financial Officer			2009				375,000				—				—				311,108				184,500				—				6,985				877,592
			2008				373,462				—				—				492,975				185,250				—				6,568				1,058,254
Jeffrey A. Townsend			2010				451,538				—				2,047,500				—				494,100				—				10,612				3,003,751
Executive Vice			2009				440,000				—				—				570,364				325,125				—				7,035				1,342,524
President			2008				445,962				—				—				657,300				309,000				—				6,624				1,418,885
Michael G. Valentine			2010				395,385				—				2,047,500				—				484,200				—				12,355				2,939,440
Executive Vice			2009				380,000				—				—				518,513				286,500				—				11,464				1,196,476
President			2008				379,808				—				—				657,300				284,250				—				9,278				1,330,635
Michael R. Nill			2010				394,231				—				2,047,500				—				424,500				—				10,567				2,876,798
Executive Vice President			2009				373,846				—				—				570,364				248,250				—				6,984				1,199,444

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 and performance-based restricted stock awards made to the NEOs in 2010. 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”.

																																		All Other
																														All Other				Option
																														Stock				Awards:								Grant Date
						Estimated Future Payouts												Estimated Future Payouts												Awards:				Number of				Exercise or				Fair Value of
						Under Non-Equity												Under Equity												Number of				Securities				Base Price of				Stock and
						Incentive Plan Awards												Incentive Plan Awards												Shares of				Underlying				Option				Option
						Threshold				Target				Maximum								Target								Stock or Units				Options				Awards				Awards ($)
Name		Grant Date				($) (1)				($)				($) (2)				Threshold				(#) (3)				Maximum				(#)				(#)				($/Sh) (4)				(5)
Neal L. Patterson			03/12/2010				752,813				1,003,750				1,656,188				—				—				—				—				60,000				85.20				2,693,424
Marc G. Naughton			03/12/2010				210,000				280,000				462,000				—				—				—				—				15,000				85.20				673,356
Jeffrey A. Townsend			06/01/2010				294,375				392,500				647,625				—				25,000				—				—				—				—				2,047,500
Michael G. Valentine			06/01/2010				288,750				385,000				635,250				—				25,000				—				—				—				—				2,047,500
Michael R. Nill			06/01/2010				253,125				337,500				556,875				—				25,000				—				—				—				—				2,047,500

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.

																						Stock Awards
																														Equity Incentive Plan Awards
																						Number of				Market Value				Number of
		Option Awards																				Shares of				of Shares of				Unearned				Market Value of
						Number of Securities Underlying								Option								Stock That				Stock That				Shares That				Unearned Shares
						Unexercised Options								Exercise				Option				Have Not				Have Not				Have Not				That Have Not
		Grant				Exercisable				Unexercisable				Price				Expiration				Vested				Vested				Vested				Vested
Name		Date				(#)				(#)				($)				Date				(#)				($)				(#) (5)				($)
Neal L. Patterson			06/14/2001				75,000				—				21.65				06/14/2011	(1)			—				—				—				—
			04/05/2002				50,000				—				23.12				04/05/2012	(1)			—				—				—				—
			06/12/2003				50,000				—				11.30				06/12/2013	(1)			—				—				—				—
			06/03/2004				60,000				—				20.99				06/03/2014	(1)			—				—				—				—
			06/03/2005				80,000				—				31.41				06/03/2015	(1)			—				—				—				—
			09/16/2005				84,000				—				41.13				09/16/2015	(1)			—				—				—				—
			03/09/2006				80,000				20,000				43.51				03/09/2016	(1)			—				—				—				—
			03/09/2007				48,000				32,000				53.81				03/09/2017	(1)			—				—				—				—
			03/14/2008				28,800				43,200				40.22				03/14/2018	(1)			—				—				—				—
			03/06/2009				—				70,000				36.72				03/06/2019	(1)			—				—				—				—
			03/12/2010				—				60,000				85.20				03/12/2020	(1)			—				—				—				—
			06/28/1995				590,000				—				14.81				06/28/2020	(2)			—				—				—				—
Marc G. Naughton			04/05/2002				20,000				—				23.12				04/05/2012	(1)			—				—				—				—
			06/03/2004				4,000				—				20.99				06/03/2014	(1)			—				—				—				—
			06/03/2005				25,000				—				31.41				06/03/2015	(1)			—				—				—				—
			03/09/2006				16,000				4,000				43.51				03/09/2016	(1)			—				—				—				—
			03/09/2007				12,000				8,000				53.81				03/09/2017	(1)			—				—				—				—
			03/14/2008				9,000				13,500				40.22				03/14/2018	(1)			—				—				—				—
			03/06/2009				—				15,000				36.72				03/06/2019	(1)			—				—				—				—
			03/12/2010				—				15,000				85.20				03/12/2020	(1)			—				—				—				—
			02/24/1997				20,584				—				7.50				02/24/2022	(2)			—				—				—				—
Jeffrey A. Townsend			06/14/1999				10,000				—				9.34				06/14/2011	(3)			—				—				—				—
			06/14/2001				20,000				—				21.65				06/14/2011	(1)			—				—				—				—
			04/05/2002				20,000				—				23.12				04/05/2012	(1)			—				—				—				—
			07/03/1997				2,000				—				10.50				07/03/2012	(4)			—				—				—				—
			02/10/1998				11,080				—				12.00				02/10/2013	(4)			—				—				—				—
			06/12/2003				10,000				—				11.30				06/12/2013	(1)			—				—				—				—
			09/04/2003				10,000				—				18.04				09/04/2013	(1)			—				—				—				—
			06/03/2004				24,000				—				20.99				06/03/2014	(1)			—				—				—				—
			06/03/2005				30,000				—				31.41				06/03/2015	(1)			—				—				—				—
			03/09/2006				20,000				5,000				43.51				03/09/2016	(1)			—				—				—				—
			03/09/2007				15,000				10,000				53.81				03/09/2017	(1)			—				—				—				—
			03/14/2008				12,000				18,000				40.22				03/14/2018	(1)			—				—				—				—
			03/06/2009				—				27,500				36.72				03/06/2019	(1)			—				—				—				—
			02/24/1997				4,916				—				7.50				02/24/2022	(2)			—				—				—				—
			06/01/2010				—				—				—				—	—			—				—				25,000				2,368,500
Michael G. Valentine			06/14/2001				1,600				—				21.65				06/14/2011	(1)			—				—				—				—
			04/05/2002				8,000				—				23.12				04/05/2012	(1)			—				—				—				—
			06/03/2004				4,967				—				20.99				06/03/2014	(1)			—				—				—				—
			06/03/2005				20,000				—				31.41				06/03/2015	(1)			—				—				—				—
			03/09/2006				16,000				4,000				43.51				03/09/2016	(1)			—				—				—				—
			03/09/2007				15,000				10,000				53.81				03/09/2017	(1)			—				—				—				—
			03/14/2008				12,000				18,000				40.22				03/14/2018	(1)			—				—				—				—
			03/06/2009				—				25,000				36.72				03/06/2019	(1)			—				—				—				—
			06/01/2010				—				—				—				—	—			—				—				25,000				2,368,500

																						Stock Awards
																														Equity Incentive Plan Awards
																						Number of				Market Value				Number of
		Option Awards																				Shares of				of Shares of				Unearned				Market Value of
						Number of Securities Underlying								Option								Stock That				Stock That				Shares That				Unearned Shares
						Unexercised Options								Exercise				Option				Have Not				Have Not				Have Not				That Have Not
		Grant				Exercisable				Unexercisable				Price				Expiration				Vested				Vested				Vested				Vested
Name		Date				(#)				(#)				($)				Date				(#)				($)				(#) (5)				($)
Michael R. Nill			11/05/1999				200				—				7.59				11/05/2011	(3)			—				—				—				—
			04/05/2002				6,000				—				23.12				04/05/2012	(1)			—				—				—				—
			06/12/2003				2,400				—				11.30				06/12/2013	(1)			—				—				—				—
			06/03/2004				15,000				—				20.99				06/03/2014	(1)			—				—				—				—
			06/03/2005				25,000				—				31.41				06/03/2015	(1)			—				—				—				—
			04/25/2006				16,000				4,000				40.84				04/25/2016	(1)			—				—				—				—
			04/24/2007				15,000				10,000				54.61				04/24/2017	(1)			—				—				—				—
			04/25/2008				10,000				15,000				46.32				04/25/2018	(1)			—				—				—				—
			03/06/2009				—				27,500				36.72				03/06/2019	(1)			—				—				—				—
			11/08/1996				1,300				—				7.00				11/08/2021	(2)			—				—				—				—
			11/10/1997				780				—				14.00				11/01/2022	(2)			—				—				—				—
			06/01/2010				—				—				—				—	—			—				—				25,000				2,368,500