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Exhibit 10(r)




CDW SENIOR MANAGEMENT INCENTIVE PLAN

(As Amended and Restated Effective January 1, 2006)




I. Introduction



1.1 Purpose. The CDW Senior Management Incentive Plan (the “Plan”) of CDW Computer
Centers, Inc., an Illinois Corporation (the “Company”), is intended to provide incentives
to certain senior officers and managers of the Company and its subsidiaries and affiliates and
thereby advance the interests of the Company by attracting and retaining senior officers and
managers and motivating such persons to act in the best interests of the Company’s stockholders.




1.2 Certain Definitions.




     “Agreement” shall mean the written agreement evidencing an award hereunder between the
Company and the recipient of such award.



     “Annual Incentive Award” shall mean a right, contingent upon the attainment of
specified Performance Measures within an Annual Incentive Period and continued employment with the
Company through the end of such Annual Incentive Period, to receive payment in cash, in shares of
Common Stock, including restricted shares of Common Stock, in non-statutory stock options or in any
combination of the foregoing, reduced by the sum of all Quarterly Incentive Awards received during
such Annual Incentive Period.



     “Annual Incentive Period” shall mean a fiscal year of the Company.



     “Board” shall mean the Board of Directors of the Company.



     “Change in Control” shall have the meaning set forth in Section 3.6(b).



     “Code” shall mean the Internal Revenue Code of 1986, as amended.



     “Committee” shall mean the Committee designated by the Board, consisting of two or
more members of the Board, each of whom shall be an “outside director” within the meaning of
Section 162(m) of the Code.



     “Common Stock” shall mean the common stock, $.01 per value, of the Company.



     “Company” has the meaning specified in Section 1.1.



     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.



     “Fair Market Value” shall mean the closing transaction price of a share of Common
Stock as reported on The NASDAQ Stock Market on the date as of which such value is being determined
or, if there shall be no reported transaction for such day, on the next preceding day for which a
transaction was reported.



 









 





     “Incentive Award” shall mean an Annual Incentive Award or a Quarterly Incentive Award.



     “Incumbent Board” shall have the meaning set forth in Section 3.6(b)(2) hereof.



     “Mature Shares” shall mean previously acquired shares of Common Stock for which the
holder thereof has good title, free and clear of all liens and encumbrances, and which such holder
either (i) has held for at least six months or (ii) has purchased on the open market.



     “Participant” shall mean a senior officer or manager of the Company or a Subsidiary
who has been selected for participation in the Plan by the Committee.



     “Performance Measures” shall mean the criteria and objectives, established by the
Committee, which shall be satisfied or met during the applicable Quarterly Incentive Period or
Annual Incentive Period as a condition to the holder’s receipt of the payment with respect to an
Incentive Award. Such criteria and objectives may include one or more of the following: operating
income, net income, earnings per share, the attainment by a share of Common Stock of a specified
Fair Market Value for a specified period of time, return to stockholders (including dividends),
return on equity, return on assets, revenues, market share, cash flow, cost reduction goals or
contribution margin, or any combination of the foregoing. If the Committee desires that
compensation payable pursuant to any award subject to Performance Measures be “qualified
performance-based compensation” within the meaning of Section 162(m) of the Code, the Performance
Measures (i) shall be established by the Committee (A) no later than 21 days after the beginning of
the Quarterly Incentive Period (or such other time designated by the Internal Revenue Service) in
the case of a Quarterly Incentive Award and (B) no later than 90 days after the beginning of the
Annual Incentive Period (or such other time designated by the Internal Revenue Service) in the case
of an Annual Incentive Award and (ii) shall satisfy all other applicable requirements imposed under
Treasury Regulations promulgated under Section 162(m) of the Code, including the requirement that
such Performance Measures be stated in terms of an objective formula or standard.



     “Quarterly Incentive Award” shall mean a right, contingent upon the attainment of
specified Performance Measures within a Quarterly Incentive Period and continued employment with
the Company through the end of such Quarterly Incentive Period, to receive payment in cash.



     “Quarterly Incentive Period” shall mean one quarter of the fiscal year of the Company.



     “Subsidiary” shall have the meaning set forth in Section 1.4.


1.3 Administration. This Plan shall be administered by the Committee. The Committee shall,
subject to the terms of this Plan, select eligible persons for participation in this Plan and
determine the form, amount and timing of each award to such persons, the time and conditions of
payment of the award and all other terms and conditions of the award. The Committee may, in its
sole discretion and for any reason at any time, subject to the requirements imposed under Section
162(m) of the Code and regulations promulgated thereunder in the case of an award


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intended to be qualified performance-based compensation, take action such that all or a portion of
the Quarterly Incentive Period or the Annual Incentive Period applicable to any outstanding
Incentive Award shall lapse, the Performance Measures applicable to any outstanding Incentive Award
shall be deemed to be satisfied, the amount payable pursuant to such Incentive Award shall be
calculated based on performance through the date specified in such action and such Incentive Award
shall be payable in full. The Committee shall, subject to the terms of this Plan, interpret this
Plan and the application thereof and establish rules and regulations it deems necessary or
desirable for the administration of this Plan. The Committee may impose, incidental to the grant
of an Incentive Award, conditions with respect to such grant, such as limiting competitive
employment or other activities. All such interpretations, rules, regulations and conditions shall
be final, binding and conclusive.




     The Committee may delegate some or all of its power and authority hereunder to the Chairman of
the Board and Chief Executive Officer (the “CEO”) or such other executive officer of the Company as
the Committee deems appropriate; provided, however, that (i) the Committee may not delegate its
power and authority with regard to the grant of an award to any person who is a “covered employee”
within the meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to
be a covered employee at any time during the period an award hereunder to such employee would be
outstanding and (ii) the Committee may not delegate its power and authority to the CEO or other
executive officers of the Company with regard to the selection for participation in this Plan of an
officer or other person subject to Section 16 of the Exchange Act or decisions concerning the
timing, price or an amount of an award to such officer or other person.



     No member of the Board or Committee, and neither the CEO nor other executive officer to whom
the Committee delegates any of its power and authority hereunder, shall be liable for any act,
omission, interpretation, construction or determination made in connection with this Plan in good
faith, and the members of the Board and the Committee and the CEO or other executive officer shall
be entitled to indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including attorneys’ fees) arising therefrom to the full extent permitted by
law, except as otherwise may be provided in the Company’s Articles of Incorporation and/or By-Laws,
and under any directors’ and officers’ liability insurance that may be in effect from time to time.



     A majority of the Committee shall constitute a quorum. The acts of the Committee shall be
either (i) acts of a majority of the members of the Committee present at any meeting at which a
quorum is present or (ii) acts approved in writing by all of the members of the Committee without a
meeting.


1.4 Eligibility. Participants in this Plan shall consist of such senior officers and managers of
the Company, its subsidiaries (individually a “Subsidiary” and collectively the
“Subsidiaries”) and its affiliates, as the Committee in its sole discretion may select from
time to time. For purposes of this Plan, references to employment by the Company shall also mean
employment by a Subsidiary or an affiliate. The Committee’s selection of a person to participate
in this Plan at any time shall not require the Committee to select such person to participate in
this Plan at any other time.




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1.5 Shares Available. Subject to adjustment as provided in Section 3.5, 750,000 shares of Common
Stock shall be available for grants of Common Stock, restricted shares of Common Stock and/or
non-statutory stock options under this Plan, reduced by the sum of the aggregate number of shares
of Common Stock which become subject to outstanding options and outstanding stock awards. To the
extent that shares of Common Stock subject to an outstanding option or stock award are not issued
or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or
by reason of the delivery or withholding of shares of Common Stock to pay all or a portion of the
exercise price of an award, if any, or to satisfy all or a portion of the tax withholding
obligations relating to an award, then such shares of Common Stock shall again be available under
this Plan.




     Shares of Common Stock shall be made available from authorized and unissued shares of Common
Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or
otherwise or a combination thereof.



II. Incentive Awards



2.1 Incentive Awards. The Committee may, in its discretion, grant Incentive Awards to such
eligible persons as may be selected by the Committee.



2.2 Terms of Incentive Awards. Incentive Awards shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not inconsistent with the terms
of this Plan, as the Committee shall deem advisable.




     (a) Amount of Incentive Award. The amount of an Incentive Award shall be determined
by the Committee; provided, however, that the maximum amount that may be paid to any Participant
under any Quarterly Incentive Award for any Quarterly Incentive Period shall not exceed $750,000,
and any Annual Incentive Award for any Annual Incentive Period shall not exceed $3,000,000. In no
event may the aggregate amount paid to any Participant in respect of any fiscal year of the Company
under any Annual Incentive Award and under all Quarterly Incentive Awards exceed $3,000,000.



     (b) Performance Measures. The Performance Measures applicable to a Quarterly
Incentive Award or an Annual Incentive Award shall be determined by the Committee based upon the
achievement during the applicable Quarterly Incentive Period or Annual Incentive Period of the
goals established by the Committee.



     (c) Settlement of Quarterly Incentive Awards. Quarterly Incentive Awards may be
settled only in cash.



     (d) Settlement of Annual Incentive Awards. Annual Incentive Awards may be settled in
cash, in shares of Common Stock, including restricted shares of Common Stock, in non-statutory
stock options or in any combination of the foregoing, as determined by the Committee in its sole
discretion.



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          (1) Settlement in Common Stock. If an Annual Incentive Award, or a portion thereof,
is settled in shares of Common Stock, the Committee in its sole discretion shall determine all the
terms and conditions relating to the award of shares of Common Stock, including any restrictions
upon the transfer of such shares of Common Stock. The number of shares of Common Stock awarded to
a participant in settlement of an Annual Incentive Award, or a portion thereof, shall be equal to
the dollar amount of the Annual Incentive Award, or a portion thereof, to be paid in shares of
Common Stock divided by the Fair Market Value of a share of Common Stock as of the date of the
award of such shares of Common Stock.




          (2) Settlement in Restricted Stock. If an Annual Incentive Award, or a portion
thereof, is settled in restricted shares of Common Stock, such restricted shares shall be subject
to forfeiture if the Participant holding such restricted shares does not remain continuously
employed by the Company during the restriction period. The Committee in its sole discretion shall
determine all of the terms relating to the restricted shares of Common Stock, including the length
of the restriction period. Unless otherwise determined by the Committee, any Participant holding
restricted shares of Common Stock shall have the rights of a stockholder of the Company, including
the right to vote and receive dividends with respect to such restricted shares of Common Stock.
The number of restricted shares of Common Stock granted to a Participant in settlement of an Annual
Incentive Award, or a portion thereof, shall be equal to the dollar amount of the Annual Incentive
Award, or portion thereof, to be paid in restricted shares of Common Stock divided by the Fair
Market Value of a share of Common Stock as of the date of grant of such restricted shares of Common
Stock.




          (3) Settlement in Non-Statutory Stock Options. If an Annual Incentive Award, or a
portion thereof, is settled by means of the grant of a non-statutory stock option, the Committee
shall determine the number of shares of Common Stock subject to such stock option, the related
exercise price per share of Common Stock, the period during which the stock option may be
exercised, whether the stock option shall become exercisable in cumulative or non-cumulative
installments and in part or in full at any time, the extent of the restrictions upon transfer of
the stock option and all other terms and conditions applicable thereto. The number of shares of
Common Stock subject to non-statutory stock options granted in settlement of an Annual Incentive
Award, or a portion thereof, shall be equal to the dollar amount of the Annual Incentive Award, or
a portion thereof, to be settled by means of the grant of a stock option, divided by an amount
equal to the difference between the exercise price per share of Common Stock designated by the
Committee with respect to such stock option and the Fair Market Value of a share of Common Stock as
of the date of grant of such stock option. To the extent necessary for an award to be qualified
performance-based compensation under Section 162(m) of the Code and the regulations thereunder, the
maximum number of shares of Common Stock with respect to which options may be granted under this
Plan during any fiscal year to any Participant shall be 100,000, subject to adjustment as provided
in Section 3.5.



2.3 Termination of Employment or Service. All of the terms relating to the satisfaction of
Performance Measures and the termination of a Quarterly Incentive Period or an Annual Incentive
Period, or any cancellation or forfeiture of an Incentive Award upon a termination of employment
with the Company of the holder of such Incentive Award, whether by reason of


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disability, retirement, death or other termination, shall be determined by the Committee.
Notwithstanding anything herein to the contrary, in furtherance of this Plan’s objective of
retaining senior officers and managers of the Company, an Incentive Award shall not accrue on a pro
rata basis and shall not become earned in any amount or to any extent unless and until a
Participant has been employed by the Company throughout the entire applicable incentive period, at
which time the Incentive Award will become earned in its entirety, subject to the Committee’s
certification that the Performance Measures applicable to such Incentive Award have been satisfied.




III. General



3.1 Effective Date and Term of Plan. This Plan, as amended and restated as set forth herein, shall
become effective as of January 1, 2006, and shall apply to all awards granted after such effective
date and to all awards outstanding as of such effective date. This Plan shall terminate as of
January 1, 2010, unless earlier terminated by the Board.



3.2 Amendments. The Board may amend this Plan as it shall deem advisable, subject to any
requirement of stockholder approval required by applicable law, rule or regulation, including
Section 162(m) of the Code; provided, however, that no amendment shall be made without stockholder
approval if such amendment would (a) increase the maximum number of shares of Common Stock
available under this Plan (subject to Section 3.5) or (b) extend the term of this Plan. No
amendment may impair the rights of a holder of an outstanding Incentive Award without the consent
of such holder.



3.3 Non-Transferability of Awards. No Incentive Award and, unless otherwise specified in the
Agreement relating thereto, no shares of Common Stock, restricted shares of Common Stock or stock
options received in payment of an Annual Incentive Award, shall be transferable other than by will,
the laws of descent and distribution or pursuant to beneficiary designation procedures approved by
the Company. Each Incentive Award may be settled during the holder’s lifetime only by the holder
or the holder’s legal representative or similar person. No Incentive Award may be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by
operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any
attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any
such award, such award and all rights thereunder shall immediately become null and void.



3.4 Restrictions on Shares. Each award made hereunder shall be subject to the requirement that if
at any time the Company determines that the listing, registration or qualification of the shares of
Common Stock subject to such award upon any securities exchange or under any law, or the consent or
approval of any governmental body, or the taking of any other action is necessary or desirable as a
condition of, or in connection with, the exercise or settlement of such award or the delivery of
shares thereunder, such award shall not be exercised or settled and such shares shall not be
delivered unless such listing, registration, qualification, consent, approval or other action shall
have been effected or obtained, free of any conditions not acceptable to the


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Company. The Company may require that certificates evidencing shares of Common Stock delivered
pursuant to any award made hereunder bear a legend indicating that the sale, transfer or other
disposition thereof by the holder is prohibited except in compliance with the Securities Act of
1933, as amended, and the rules and regulations thereunder.



3.5 Adjustment. In the event of any stock split, stock dividend, recapitalization, reorganization,
merger, consolidation, combination, exchange of shares, liquidation, spin-off or other similar
change in capitalization or event, or any distribution to holders of Common Stock other than a
regular cash dividend, the number and class of securities available under this Plan, the maximum
number and class of securities with respect to which options may be granted during any fiscal year
to any person, the number and class of securities subject to each outstanding option and the
purchase price per security and the number and class of securities subject to each outstanding
restricted stock award shall be appropriately adjusted by the Committee, such adjustments to be
made in the case of outstanding options without an increase in the aggregate purchase price. The
decision of the Committee regarding any such adjustment shall be final, binding and conclusive. If
any such adjustment would result in a fractional security being (a) available under this Plan, such
fractional security shall be disregarded, or (b) subject to an award under this Plan, the Company
shall pay the holder of such award, in connection with the first vesting, exercise or settlement of
such award in whole or in part occurring after such adjustment, an amount in cash determined by
multiplying (i) the fraction of such security (rounded to the nearest hundredth) by (ii) the
excess, if any, of (A) the Fair Market Value on the vesting, exercise or settlement date over (B)
the exercise, if any, of such award.




3.6 Change in Control.




     (a) (1) Notwithstanding any provision in this Plan or any Agreement, in the event of a
Change in Control pursuant to Section (b)(3) or (4) below in connection with which the holders of
Common Stock receive shares of common stock that are registered under Section 12 of the Exchange
Act, (i) all outstanding stock options shall immediately become exercisable in full, (ii) the
restriction period applicable to any outstanding restricted stock previously granted shall lapse,
(iii) the Performance Measures applicable to any outstanding Incentive Award shall be deemed to be
satisfied, the amount payable pursuant to such Incentive Award shall be calculated based on
performance through the date of the Change in Control and such Incentive Award shall become payable
in full and (iv) there shall be substituted for each share of Common Stock available under this
Plan, whether or not then subject to an outstanding award, the number and class of shares into
which each outstanding share of Common Stock shall be converted pursuant to such Change in Control.
In the event of any such substitution, the purchase price per share in the case of a stock option
shall be appropriately adjusted by the Board, as constituted prior to such Change in Control (whose
determination shall be final, binding and conclusive), such adjustments to be made in the case of
outstanding stock options without an increase in the aggregate purchase price.



     (2) Notwithstanding any provision in this Plan or any Agreement, in the event of a Change in
Control pursuant to Section (b)(1) or (2) below, or in the event of a Change in Control



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pursuant to Section (b)(3) or (4) below in connection with which the holders of Common Stock
receive consideration other than shares of common stock that are registered under Section 12 of the
Exchange Act, then (i) each outstanding share of restricted stock shall be surrendered to the
Company by the holder thereof, and be immediately canceled by the Company, and the holder thereof
shall receive, within ten days of the occurrence of such Change in Control, a cash payment from the
Company in an amount equal to the number of shares of Common Stock then subject to such restricted
stock award, multiplied by the greater of (A) the highest per share price offered to stockholders
of the Company in any transaction whereby the Change in Control takes place or (B) the Fair Market
Value of a share of Common Stock on the date of occurrence of the Change in Control and (ii) the
Board, as constituted prior to such Change in Control, may in its discretion require either (x)
that each outstanding option be surrendered to the Company by the holder thereof and be immediately
canceled by the Company, and that the holder receive, within ten days of the occurrence of such
Change in Control, a cash payment from the Company in an amount equal to the number of shares of
Common Stock then subject to such stock option, multiplied by the excess, if any, of the greater of
(A) the highest per share price offered to stockholders of the Company in any transaction whereby
the Change in Control takes place or (B) the Fair Market Value of a share of Common Stock on the
date of occurrence of the Change in Control, over the purchase price per share of Common Stock
subject to the stock option or (y) that each outstanding stock option immediately become
exercisable in full and that shares of capital stock of the surviving corporation in such Change in
Control, or a parent corporation thereof, be substituted for some or all of the shares of Common
Stock available under this Plan, whether or not then subject to an outstanding option. In the
event of any such substitution under subsection (y) hereof, the purchase price per share in the
case of a stock option shall be appropriately adjusted by the Board, as constituted prior to such
Change in Control (whose determination shall be final, binding and conclusive), such adjustments to
be made in the case of outstanding stock options without an increase in the aggregate purchase
price. The Company may, but is not required to, cooperate with any person who is subject to
Section 16 of the Exchange Act to assure that any cash payment in accordance with the foregoing to
such person is made in compliance with Section 16 and the rules and regulations thereunder.



     (b) “Change in Control” shall mean:



     (1) the acquisition by any individual, entity or group (a “Person”), including any
“person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act , of beneficial
ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of both (x) 25% or
more of the combined voting power of the then outstanding securities of the Company entitled to
vote generally in the election of directors (the “Outstanding Company Voting Securities”)
and (y) combined voting power of the Outstanding Company Voting Securities equal to or in excess of
the combined voting power of the Outstanding Company Voting Securities held by the Krasny Family
(as hereinafter defined); excluding, however, the following: (A) any acquisition directly from the
Company or any member of the Krasny Family (excluding any acquisition resulting from the exercise
of an exercise, conversion or exchange privilege unless the security being so exercised, converted
or exchanged was acquired directly from the Company or from any member of the Krasny Family), (B)
any acquisition by the Company, any member of the Krasny Family or any group that includes a member
of the Krasny



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Family, (C) any acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (D) any acquisition by
any corporation pursuant to a reorganization, merger or consolidation involving the Company, if,
immediately after such reorganization, merger or consolidation, each of the conditions described in
clauses (i), (ii) and (iii) of subsection (3) of this Section 3.6(b) shall be satisfied, provided
that, for purposes of clause (B), if any Person (other than the Company or any employee benefit
plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the
Company or any member of the Krasny Family) shall, by reason of an acquisition of Outstanding
Company Voting Securities by the Company, become the beneficial owner of both (x) 25% or more of
the Outstanding Company Voting Securities and (y) combined voting power of the Outstanding Company
Voting Securities equal to or in excess of the combined voting power of the Outstanding Company
Voting Securities held by the Krasny Family, and such Person shall, after such acquisition of
Outstanding Company Voting Securities by the Company, become the beneficial owner of any additional
Outstanding Company Voting Securities and such beneficial ownership is publicly announced, such
additional beneficial ownership shall constitute a Change in Control;



     (2) individuals who, as of the date of approval of this Plan by the stockholders of the
Company, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at
least a majority of such Board; provided, however, that any individual who becomes
a director of the Company subsequent to the date of approval of this Plan by the stockholders of
the Company whose election, or nomination for election by the Company’s stockholders, was approved
by the vote of at least a majority of the directors then comprising the Incumbent Board shall be
deemed a member of the Incumbent Board; and provided further, that no individual
who was initially elected as a director of the Company as a result of an actual or threatened
solicitation by a person or group for the purpose of opposing a solicitation by any other person or
group with respect to the election or removal of directors, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other than the Board shall be
deemed a member of the Incumbent Board;



     (3) consummation of a reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation, (i) more than 50% of the combined
voting power of the then outstanding securities of the corporation resulting from such
reorganization, merger or consolidation entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially all of the individuals or
entities who were the beneficial owners, respectively, of the Outstanding Company Voting Securities
immediately prior to such reorganization, merger or consolidation, (ii) no Person (other than the
Company, any employee benefit plan (or related trust) sponsored or maintained by the Company or the
corporation resulting from such reorganization, merger or consolidation (or any corporation
controlled by the Company) and any Person which beneficially owned, immediately prior to such
reorganization, merger or consolidation, directly or indirectly, 25% or more of the Outstanding
Company Voting Securities) beneficially owns, directly or indirectly, both (x) 25% or more of the
combined voting power of the then outstanding securities of such corporation entitled to vote
generally in the election of directors and (y) combined voting power of the then outstanding
securities of such corporation equal to or in excess of the combined



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voting power of the then outstanding securities of such corporation held by the Krasny Family
and (iii) at least a majority of the members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of the Incumbent Board at the time
of the execution of the initial agreement or action of the Board providing for such reorganization,
merger or consolidation; or



     (4) consummation of (i) a plan of complete liquidation or dissolution of the Company or (ii)
the sale or other disposition of all or substantially all of the assets of the Company other than
to a corporation with respect to which, immediately after such sale or other disposition, (A) more
than 50% of the combined voting power of the then outstanding securities thereof entitled to vote
generally in the election of directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities who were the beneficial owners, respectively,
of the Outstanding Company Voting Securities immediately prior to such sale or other disposition,
(B) no Person (other than the Company, any employee benefit plan (or related trust) sponsored or
maintained by the Company or such corporation (or any corporation controlled by the Company) and
any Person which beneficially owned, immediately prior to such sale or other disposition, directly
or indirectly, 25% or more of the Outstanding Company Voting Securities) beneficially owns,
directly or indirectly, both (x) 25% or more of the combined voting power of the then outstanding
securities thereof entitled to vote generally in the election of directors and (y) combined voting
power of the then outstanding securities thereof equal to or in excess of the combined voting power
of the then outstanding securities thereof held by the Krasny Family and (C) at least a majority of
the members of the board of directors thereof were members of the Incumbent Board at the time of
the execution of the initial agreement or action of the Board providing for such sale or other
disposition.



     (c) “Krasny Family” shall mean Michael P. Krasny, Janet Krasny, any descendant of Michael P.
Krasny or Janet Krasny or the spouse of any such descendant (collectively, the “Krasny Family
Group”), any trust, partnership or other entity for the benefit of any member of the Krasny
Family Group, the estate of any member of the Krasny Family Group or any charitable organization
established by any member of the Krasny Family Group.


3.7 Tax Withholding. The Company shall have the right to withhold any Federal, state, local or
other taxes that may be required to be withheld in connection with an Incentive Award. With
respect to any portion of an Annual Incentive Award that is paid in Common Stock, in restricted
shares of Common Stock or as a non-statutory stock option, the Company shall have the right to
require, prior to the issuance or delivery of any shares of Common Stock, payment by the holder of
such award of any federal, state, local or other taxes which may be required to be withheld or paid
in connection with such portion of an Annual Incentive Award. An Agreement may provide that (i)
the Company shall withhold whole shares of Common Stock which would otherwise be delivered to a
holder, having an aggregate Fair Market Value determined as of the date the obligation to withhold
or pay taxes arises in connection with an award (the “Tax Date”), or withhold an amount of
cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such
obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a
cash payment to the Company, (B) delivery (either actual delivery or by attestation procedures
established by the Company) to the Company of Mature Shares


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having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary
to satisfy any such obligation, (C) authorizing the Company to withhold whole shares of Common
Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of
the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, equal to
the amount necessary to satisfy any such obligation, (D) in the case of the exercise of an option,
a cash payment by a broker-dealer acceptable to the Company to whom the optionee has submitted an
irrevocable notice of exercise or (E) any combination of (A), (B) and (C), in each case to the
extent set forth in the Agreement relating to the award; provided, however, that
the Company shall have sole discretion to disapprove of an election pursuant to any of clauses
(ii)(B)-(E). Shares of Common Stock to be delivered or withheld may not have an aggregate Fair
Market Value in excess of the amount determined by applying the minimum statutory withholding rate.
Any fraction of a share of Common Stock, which would be required to satisfy such an obligation,
shall be disregarded and the remaining amount due shall be paid in cash by the holder.



3.8 No Right of Participation or Employment. No person shall have any right to participate in this
Plan. Neither this Plan nor any award made hereunder shall confer upon any person any right to
continued employment by the Company, any Subsidiary or any affiliate of the Company or affect in
any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate
the employment of any person at any time without liability hereunder.



3.9 Governing Law. This Plan, each award hereunder, and all determinations made and actions taken
pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United
States, shall be governed by the laws of the State of Illinois and construed in accordance
therewith without giving effect to principles of conflicts of laws.





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