exv10w5



 





Exhibit 10.5




CDW 2006 STOCK INCENTIVE PLAN

(As Amended and Restated Effective October 19, 2006)




I. INTRODUCTION



1.1 Purposes. The purposes of the 2006 Stock Incentive Plan (the “Plan”) of CDW
Corporation, an Illinois corporation (the “Company”), are (i) to align the interests of the
Company’s shareholders and the recipients of awards under this Plan by increasing the proprietary
interest of such recipients in the Company’s growth and success, (ii) to advance the interests of
the Company by attracting, motivating and retaining officers, other employees and consultants and
(iii) to motivate such persons to act in the long-term best interests of the Company and its
shareholders.



1.2 Administration. This Plan shall be administered by a committee (the
“Committee”) designated by the Board of Directors of the Company (the “Board”)
consisting of two or more members of the Board. It is intended that each member of the Committee
be a “Non-Employee Director” within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and an “outside director” within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).




     The Committee shall, subject to the terms of this Plan, select eligible persons for
participation in this Plan (“Participants”) and determine the form, amount and timing of
each award granted under the Plan, including the number of shares of Common Stock subject to the
award, the exercise price or base price associated with the award, the time and conditions of
exercise or settlement of the award and all other terms and conditions of the award, including,
without limitation, the form of the Agreement evidencing the award. The Committee may, in its sole
discretion and for any reason at any time, subject to the requirements of Section 162(m) of the
Code and regulations thereunder in the case of an award intended to be qualified performance-based
compensation, take action such that (i) any or all outstanding options and SARs shall become
exercisable in part or in full, (ii) all or a portion of the restriction period applicable to any
outstanding restricted stock or restricted stock units shall lapse, (iii) all or a portion of the
performance period applicable to any outstanding award shall lapse and (iv) the performance
measures (if any) applicable to any outstanding award shall be deemed to be satisfied at the target
or any other level. Notwithstanding anything in this Plan to the contrary and subject to Section
4.7, without the approval of shareholders, the Committee will not amend or replace any previously
granted option or SAR in a transaction that constitutes a “repricing,” as such term is used in the
listing rules promulgated by The Nasdaq Stock Market, Inc. (or such other exchange on which the
Common Stock is listed).



     The Committee shall, subject to the terms of this Plan, interpret this Plan and the
application thereof, establish rules and regulations it deems necessary or desirable for the
administration of this Plan and may impose, incidental to the grant of an award, conditions with
respect to the grant, such as limiting competitive employment or other activities. All such
interpretations, rules, regulations and conditions shall be final, binding and conclusive. Each
award shall be evidenced by a written agreement (an “Agreement”) setting forth the
terms and conditions of such award.



 









 





     To the extent permitted by applicable law, the Committee may delegate some or all of its power
and authority hereunder to the Board or the Chairman of the Board and Chief Executive Officer or
other executive officer of the Company as the Committee deems appropriate; provided, however, that
(i) the Committee may not delegate its power and authority to the Board or the Chairman of the
Board and Chief Executive Officer or other executive officer of the Company 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 Chairman of the Board and Chief Executive Officer or other
executive officer 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, pricing or amount of an award to such an officer or other person.



     No member of the Board or Committee, and neither the Chairman of the Board and Chief Executive
Officer 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 Chairman of the Board and Chief Executive Officer 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.



     1.3 Eligibility. Participants in this Plan shall consist of such officers and other
employees, persons expected to become officers and other employees, and consultants of the Company
or any of its Affiliates as the Committee in its sole discretion may select from time to time. For
purposes of this Plan, the term “Affiliate” shall mean any entity that together with the
Company is considered a single employer pursuant to Section 414(b) or 414(c) of the Code; provided,
however, that for purposes of determining the members of a controlled group of corporations under
Section 414(b) of the Code and the trades or businesses that are under common control under Section
414(c) of the Code, all references to “at least 80 percent,” as they apply to such sections, shall
instead be to “at least 20 percent.” For purposes of this Plan, all references to employment shall
also mean an agency relationship with the Company and references to employment by the Company shall
also mean employment by 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.


1.4 Shares Available. Subject to adjustment as provided in Section 4.7, 4,660,000 shares
of the common stock, par value $0.01 per share, of the Company (“Common Stock”) shall be





2









 







available for grants of awards under this Plan, reduced by the sum of the aggregate number of
shares of Common Stock which become subject to outstanding awards. To the extent that shares of
Common Stock subject to an outstanding award granted under this Plan or the CDW 2000 Incentive
Stock Option Plan are not issued or delivered by reason of the expiration, termination,
cancellation or forfeiture of such award (other than 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, 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.



     To the extent necessary for an award to be qualified performance-based compensation under
Section 162(m) of the Code and the regulations thereunder, (i) the maximum number of shares of
Common Stock with respect to which options and SARs may be granted during any calendar year to any
person shall be 2,000,000, subject to adjustment as provided in Section 4.7 and (ii) the maximum
number of shares of Common Stock with respect to which restricted stock and restricted stock unit
awards subject to performance measures may be granted during any calendar year to any person shall
be 1,000,000, subject to adjustment as provided in Section 4.7.



II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS



2.1 Grants of Stock Options. The Committee may, in its discretion, grant options to
purchase shares of Common Stock to such eligible persons as may be selected by the Committee. Each
option, or portion thereof, that is not an Incentive Stock Option shall be a “Non-Statutory
Stock Option.” An Incentive Stock Option may not be granted to any person who is not an
employee of the Company or any subsidiary (as defined in Section 424 of the Code). An
“Incentive Stock Option” shall mean an option to purchase shares of Common Stock that meets
the requirements of Section 422 of the Code, or any successor provision, and is intended by the
Committee to constitute an Incentive Stock Option. Each Incentive Stock Option shall be granted
within ten years of the date this Plan is adopted by the Board. To the extent that the aggregate
Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to
which options designated as Incentive Stock Options are exercisable for the first time by a
participant during any calendar year (under this Plan or any other plan of the Company, or any
parent or subsidiary as defined in Section 424 of the Code) exceeds the amount (currently $100,000)
established by the Code, such options shall constitute Non-Statutory Stock Options. “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 transactions on such date, on the next preceding date for which a transaction
was reported; provided, however, that Fair Market Value may be determined by the Committee by
whatever means or method as the Committee, in the good faith exercise of its discretion, shall at
such time deem appropriate.



2.2 Terms of Stock Options. Options 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:




3









 








     (a) Number of Shares and Purchase Price. The number of shares of Common Stock subject
to an option and the purchase price per share of Common Stock purchasable upon exercise of the
option shall be determined by the Committee; provided, however, that the purchase price per share
of Common Stock purchasable upon exercise of an option shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the date of grant of such option; provided further, that
if an Incentive Stock Option shall be granted to any person who, at the time such option is
granted, owns capital stock possessing more than ten percent of the total combined voting power of
all classes of capital stock of the Company (or of any parent or subsidiary as defined in Section
424 of the Code) (a “Ten Percent Holder”), the purchase price per share of Common Stock
shall be the price (currently 110% of Fair Market Value) required by the Code in order to
constitute an Incentive Stock Option.



     (b) Option Period and Exercisability. The period during which an option may be
exercised shall be determined by the Committee; provided, however, that no option shall be
exercised later than ten years after its date of grant and provided further, that if an Incentive
Stock Option shall be granted to a Ten Percent Holder, such option shall not be exercised later
than five years after its date of grant. The Committee may, in its discretion, establish
performance measures or other criteria which shall be satisfied or met as a condition to the grant
of an option or to the exercisability of all or a portion of an option. The Committee shall
determine whether an option shall become exercisable in cumulative or non-cumulative installments
and in part or in full at any time. An exercisable option, or portion thereof, may be exercised
only with respect to whole shares of Common Stock. Prior to the exercise of an option, the holder
of such option shall have no rights as a stockholder with respect to the shares subject to such
option, including the right to receive dividends or dividend equivalents.



     (c) Method of Exercise. An option may be exercised (i) by giving written notice to
the Company specifying the number of whole shares of Common Stock to be purchased and accompanied
by payment therefor in full (or arrangement made for such payment to the Company’s satisfaction)
either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures
established by the Company) of previously owned whole shares of Common Stock (for which the
optionee has good title, free and clear of all liens and encumbrances) having an aggregate Fair
Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable
by reason of such exercise, (C) to the extent permitted by applicable law, in cash by a
broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of
exercise, (D) to the extent expressly authorized by the Committee, through a cashless exercise
arrangement with the Company; or (E) a combination of (A) and (B), in each case to the extent set
forth in the Agreement relating to the option and (ii) by executing such documents as the Company
may reasonably request. Any fraction of a share of Common Stock which would be required to pay
such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the
optionee. No certificate representing Common Stock shall be delivered until the full purchase
price therefor has been paid (or arrangement made for such payment to the Company’s satisfaction).


2.3 Stock Appreciation Rights. The Committee may, in its discretion, grant stock
appreciation rights (“SARs”) to such eligible persons as may be selected by the Committee.
The Agreement relating to an SAR shall specify whether the SAR is a tandem SAR or a free-standing
SAR. A “tandem SAR” is an SAR granted in tandem with, or by reference to, an option




4









 







(including a
Non-Statutory Stock Option granted prior to the date of grant of the SAR), which entitles the
holder thereof to receive, upon exercise of such SAR and surrender for cancellation of all or a
portion of such option, shares of Common Stock (which may be restricted stock) or cash with an
aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the
date of exercise over the base price of such SAR, multiplied by the number of shares of Common
Stock subject to such option, or portion thereof, which is surrendered. A free-standing SAR is an
SAR that is not granted in tandem with, or by reference to, an option, which entitles the holder
thereof to receive, upon exercise, shares of Common Stock (which may be restricted stock) or cash
with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock
on the date of exercise over the base price of such SAR, multiplied by the number of such SARs
which are exercised. SARs 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) Number of SARs and Base Price. The number of SARs subject to an award shall be
determined by the Committee. Any tandem SAR related to an Incentive Stock Option shall be granted
at the same time that such Incentive Stock Option is granted. The base price of a tandem SAR shall
be the purchase price per share of Common Stock of the related option. The base price of a
free-standing SAR shall be determined by the Committee; provided, however, that
such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on
the date of grant of such SAR.



     (b) Exercise Period and Exercisability. The period for the exercise of an SAR shall
be determined by the Committee; provided, however, that (i) no SAR shall be
exercised later than ten years after its date of grant and (ii) no tandem SAR shall be exercised
later than the expiration, cancellation, forfeiture or other termination of the related option.
The Committee may, in its discretion, establish performance measures which shall be satisfied or
met as a condition to the grant of an SAR or to the exercisability of all or a portion of an SAR.
The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative
installments and in part or in full at any time. An exercisable SAR, or portion thereof, may be
exercised, in the case of a tandem SAR, only with respect to whole shares of Common Stock and, in
the case of a free-standing SAR, only with respect to a whole number of SARs. The Agreement
relating to an SAR shall specify whether such SAR may be settled in shares of Common Stock or cash
or a combination thereof. If an SAR is exercised for shares of restricted stock, a certificate or
certificates representing such restricted stock shall be issued in accordance with Section 3.2(c),
or such shares shall be transferred to the Participant in book entry form with restrictions on the
shares duly noted, and the Participant shall have such rights of a shareholder of the Company as
determined pursuant to Section 3.2(d). Prior to the settlement of an SAR in shares of Common
Stock, the holder of such SAR shall have no rights as a shareholder of the Company with respect to
the shares of Common Stock subject to such SAR, including the right to receive dividends or
dividend equivalents.



     (c) Method of Exercise. A tandem SAR may be exercised (i) by giving written notice to
the Company specifying the number of whole SARs which are being exercised, (ii) by surrendering to
the Company any options which are cancelled by reason of the exercise of the tandem SAR and (iii)
by executing such documents as the Company may reasonably request. A free-standing SAR may be
exercised (A) by giving written notice to the Company specifying the



5









 




whole number of SARs which are
being exercised and (B) by executing such documents as the Company may reasonably request.



2.4 Non-Competition. In the event that a Participant engages, directly or indirectly
(through any person, firm, corporation, partnership or other enterprise, or as an officer,
director, stockholder, partner, investor, employee or consultant thereof, or otherwise), in any
Business (as defined herein) at any time prior to one year after the termination of such
Participant’s employment or service with the Company or any of its Affiliates: (i) any and all
unexercised options and SARs shall be forfeited and (ii) any and all Option/SAR Proceeds (as
hereinafter defined) shall be immediately due and payable by the Participant to the Company. For
purposes of this Section, “Business” shall mean any business conducted or planned by the
Company or any of its Affiliates in any geographic area in which the Company or any of its
Affiliates is conducting such business or plans to conduct such business if the Participant, while
employed by or providing services to the Company or any of its Affiliates, was involved in such
business or had knowledge of such business. For purposes of this Section, “Option/SAR
Proceeds” shall mean, with respect to any option or SAR which is exercised later than 24 months
prior to the date of the Participant’s termination of employment or service with the Company (x)
the difference between (A) the Fair Market Value of a share of Common Stock on the date such option
or SAR was exercised and (B) the per share exercise price or base price of such option or SAR,
multiplied by (y) the number of shares of Common Stock subject to such option or SAR. The remedy
provided by this Section shall be in addition to and not in lieu of any rights or remedies which
the Company may have against the Participant in respect of a breach by the Participant of any duty
or obligation to the Company.




2.5 Termination of Employment or Service.




     (a) Disability. Subject to paragraph (e) below and unless otherwise specified in the
Agreement relating to an option or SAR, if a Participant’s employment with or service to the
Company terminates by reason of Disability, each option or SAR held by such Participant shall be
fully exercisable and may thereafter be exercised by such Participant (or such Participant’s legal
representative or similar person) until and including the earlier to occur of (i) the date which is
one year after the effective date of such Participant’s termination of employment or service and
(ii) the expiration date of the term of such option or SAR. For purposes of this Plan,
“Disability” shall mean the inability of a Participant substantially to perform such
Participant’s duties and responsibilities for a continuous period of at least six months.



     (b) Retirement. Subject to paragraph (e) below and unless otherwise specified in the
Agreement relating to an option or SAR, if a Participant’s employment with or service to the
Company terminates by reason of retirement on or after age 62 after a minimum of 10 years of
continuous employment with or service to the Company (“Retirement”), each option or SAR
held by such Participant (i) shall, to the extent not exercisable as of the effective date of the
Participant’s retirement, become exercisable in accordance with the vesting provisions set forth
in the Agreement relating to such option or SAR and (ii) upon becoming exercisable may be
exercised by such Participant (or such Participant’s legal representative or similar person) until
the expiration date of the term of such option or SAR.



6









 





     (c) Death. If a Participant’s employment with or service to the Company terminates by
reason of death, each option or SAR held by such Participant shall be fully exercisable and may
thereafter be exercised by such Participant’s executor, administrator, legal representative,
beneficiary or similar person until and including the earlier to occur of (i) the date which is one
year after the date of death and (ii) the expiration date of the term of such option or SAR.



     (d) Other Termination. Subject to paragraph (e) below and unless otherwise specified
in the Agreement relating to an option or SAR, if a Participant’s employment with or service to the
Company terminates for any reason other than Disability, Retirement or death or for Cause, each
option or SAR held by such Participant shall be exercisable only to the extent that such option or
SAR is exercisable on the effective date of such Participant’s termination of employment or service
and may thereafter be exercised by such Participant (or such Participant’s legal representative or
similar person) until and including the earlier to occur of (i) the date which is three months
after the effective date of such Participant’s termination of employment or service and (ii) the
expiration date of the term of such option or SAR. For purposes of this Plan, “Cause”
shall mean (1) the commission of a criminal act, fraud, gross negligence or willful misconduct
against, or in derogation of, the interests of the Company; (2) divulging confidential information
regarding the Company; (3) interference with the relationship between the Company and any major
supplier or customer; or (4) the performance of any similar action that the Committee, in its sole
discretion, may deem to be sufficiently injurious to the interests of the Company to constitute
cause for termination.



     (e) Termination
of Employment - Incentive Stock Options. Unless otherwise specified
in the Agreement relating to an option, if the employment with the Company of a holder of an
Incentive Stock Option terminates by reason of Permanent and Total Disability (as defined in
Section 22(e)(3) of the Code), each Incentive Stock Option held by such optionee shall be
exercisable to the extent set forth in Section 2.5(a), and may thereafter be exercised by such
optionee (or such optionee’s legal representative or similar person) until and including the
earlier to occur of (i) the date which is one year after the effective date of such optionee’s
termination of employment and (ii) the expiration date of the term of such option.



     Unless otherwise specified in the Agreement relating to an option, if the employment with the
Company of a holder of an Incentive Stock Option terminates for any reason other than Permanent and
Total Disability or death or for Cause, each Incentive Stock Option held by such optionee shall be
exercisable to the extent set forth in Section 2.5(a), Section 2.5(b) or Section 2.5(d), as
applicable, and may thereafter be exercised by such Participant (or such Participant’s legal
representative or similar person) until and including the earlier to occur of (i) the date which is
three months after the effective date of such optionee’s termination of employment and (ii) the
expiration date of the term of such option.



     (f) Death Following Termination of Employment or Service. Unless otherwise specified
in the Agreement relating to an option or SAR, if a Participant dies during the period set forth in
Section 2.5(a), Section 2.5(b), Section 2.5(d), if any, or Section 2.5(e), each option or
SAR held by such Participant shall be exercisable only to the extent that such option or SAR
is exercisable on the date of such Participant’s death and may thereafter be exercised by such
Participant’s executor, administrator, legal representative, beneficiary or similar person until
and



7









 




including the earlier to occur of (i) the date which is one year after the date of death and
(ii) the expiration date of the term of such option or SAR.




     (g) Cause. Notwithstanding anything to the contrary in this Plan or in any Agreement
relating to an option or SAR, if the employment with or service to the Company of the holder of an
option or SAR is terminated by the Company for Cause, each option or SAR held by such Participant
shall terminate automatically on the effective date of such Participant’s termination of employment
or service.



III. STOCK AWARDS



3.1 Stock Awards. The Committee may, in its discretion, grant stock awards to such
eligible persons as may be selected by the Committee. The Agreement relating to a stock award
shall specify whether the stock award is a restricted stock award or a restricted stock unit award.



3.2 Terms of Restricted Stock Awards. Restricted stock 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) Number of Shares and Other Terms. The number of shares of Common Stock subject to
a restricted stock award and the restriction period, performance period (if any) and performance
measures (if any) applicable to a restricted stock award shall be determined by the Committee.



     (b) Vesting and Forfeiture. The Agreement relating to a restricted stock award shall
provide, in the manner determined by the Committee, in its discretion, and subject to the
provisions of this Plan, for the vesting of the shares of Common Stock subject to such award (i) if
the holder of such award remains continuously in the employment of the Company during the specified
restriction period and (ii) if specified performance measures (if any) are satisfied or met during
a specified performance period, and for the forfeiture of the shares of Common Stock subject to
such award (x) if the holder of such award does not remain continuously in the employment of the
Company during the specified restriction period or (y) if specified performance measures (if any)
are not satisfied or met during a specified performance period.



     (c) Stock Issuance. During the applicable restriction period, the shares of
restricted stock shall be held by a custodian in book entry form with restrictions on such shares
duly noted or, alternatively, a certificate or certificates representing a restricted stock award
shall be registered in the Participant’s name and may bear a legend, in addition to any legend
which may be required pursuant to Section 4.6, indicating that the ownership of the shares of
Common Stock represented by such certificate is subject to the restrictions, terms and conditions
of this Plan and the Agreement relating to the restricted stock award. All such certificates shall
be deposited with the Company, together with stock powers or other instruments of assignment
(including a power of attorney), each endorsed in blank with a guarantee of signature if deemed
necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares of Common Stock subject to the restricted stock award in the event such award is
forfeited in whole or in part. Upon termination of any applicable restriction period (and the
satisfaction or attainment of applicable performance measures), subject to the Company’s right to
require



8









 




payment of any taxes in accordance with Section 4.5, the restrictions shall be removed from
the requisite number of any shares of Common Stock that are held in book entry form, and all
certificates evidencing ownership of the requisite number of shares of Common Stock shall be
delivered to the holder of such award.




     (d) Rights with Respect to Restricted Stock Awards. Unless otherwise set forth in the
Agreement relating to a restricted stock award, and subject to the terms and conditions of a
restricted stock award, the holder of such award shall have all rights as a shareholder of the
Company, including, but not limited to, voting rights, the right to receive dividends and the right
to participate in any capital adjustment applicable to all holders of Common Stock;
provided, however, that a distribution with respect to shares of Common Stock,
other than a regular cash dividend, shall be deposited with the Company and shall be subject to the
same restrictions as the shares of Common Stock with respect to which such distribution was made.


3.3 Terms of Restricted Stock Unit Awards. Restricted stock unit 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) Number of Shares and Other Terms. The number of shares of Common Stock subject to
a restricted stock unit award and the restriction period, performance period (if any) and
performance measures (if any) applicable to a restricted stock unit award shall be determined by
the Committee.



     (b) Vesting and Forfeiture. The Agreement relating to a restricted stock unit award
shall provide, in the manner determined by the Committee, in its discretion, and subject to the
provisions of this Plan, for the vesting of such restricted stock unit award (i) if the holder of
such award remains continuously in the employment of the Company during the specified restriction
period and (ii) if specified performance measures (if any) are satisfied or met during a specified
performance period, and for the forfeiture of the shares of Common Stock subject to such award (x)
if the holder of such award does not remain continuously in the employment of the Company during
the specified restriction period or (y) if specified performance measures (if any) are not
satisfied or met during a specified performance period.



     (c) Settlement of Vested Restricted Stock Unit Awards. The Agreement relating to a
restricted stock unit award shall specify (i) the time at which the award shall be settled, (ii)
whether such award may be settled in shares of Common Stock or cash or a combination thereof and
(iii) whether the holder thereof shall be entitled to receive, on a current or deferred basis,
dividend equivalents, and, if determined by the Committee, interest on, or the deemed reinvestment
of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject
to such award. Prior to the settlement of a restricted stock unit award, the holder of such award
shall have no rights as a shareholder of the Company with respect to the shares of Common Stock
subject to such award.


3.4 Termination of Employment or Service.




     (a) Disability. Unless otherwise specified in the Agreement relating to a stock
award, if a Participant’s employment with or service to the Company terminates by reason of
Disability,



9









 




each stock award held by such Participant shall become fully vested, all restrictions
on such award shall lapse, and the shares of Common Stock subject to such award shall be issued or
delivered to the Participant (or such Participant’s legal representative or similar person).




     (b) Death. If a Participant’s employment with or service to the Company terminates by
reason of death, each stock award held by such Participant shall become fully vested, all
restrictions on such award shall lapse, and the shares of Common Stock subject to such award shall
be issued or delivered to the Participant’s executor, administrator, legal representative,
beneficiary or similar person.



     (c) Other Termination. Unless otherwise specified in the Agreement relating to a
stock award, if a Participant’s employment with or service to the Company terminates for any reason
other than Disability or death, each stock award held by such Participant that is not vested shall
be forfeited as of the date of such termination of employment or service.


3.5 Performance-Based Stock Awards. The grant or vesting of a restricted stock award or
restricted stock unit award may be subject to performance criteria and objectives established by
the Committee. To the extent necessary for an award to be qualified as performance-based
compensation under Section 162(m) of the Code and the regulations thereunder, such criteria and
objectives shall 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 shareholders (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.



3.6 Non-Competition. In the event that a Participant engages, directly or indirectly
(through any person, firm, corporation, partnership or other enterprise, or as an officer,
director, stockholder, partner, investor, employee or consultant thereof, or otherwise), in any
Business (as defined in Section 2.4) at any time prior to one year after the termination of such
Participant’s employment or service with the Company or any of its Affiliates: (i) any and all
unvested shares subject to each stock award held by such Participant shall be forfeited and (ii)
any and all Stock Award Proceeds (as hereinafter defined) shall be immediately due and payable by
the Participant to the Company. For purposes of this Section, “Stock Award Proceeds” shall
mean, with respect to any stock award that became vested later than 24 months prior to the date of
the Participant’s termination of employment or service with the Company (x) the Fair Market Value
of a share of Common Stock on the date of vesting multiplied by (y) the number of shares of Common
Stock which became vested pursuant to such stock award. The remedy provided by this Section shall
be in addition to and not in lieu of any rights or remedies which the Company may have against the
Participant in respect of a breach by the Participant of any duty or obligation to the Company.




IV. GENERAL



4.1 Effective Date and Term of Plan. This Plan shall be effective as of the date the Plan
is approved by the Board, subject to approval of the Plan by the shareholders of the Company at the
Company’s 2006 annual meeting. This Plan shall terminate as of the tenth anniversary of its
effective date, unless terminated earlier by the Board. Termination of this Plan shall not affect
the terms or conditions of any award granted prior to termination.




10









 








     Awards hereunder may be granted at any time prior to the termination of this Plan, provided
that no award may be granted later than 10 years after the effective date of this Plan. In the
event that this Plan is not approved by the shareholders of the Company, this Plan and any awards
hereunder shall be void and of no force or effect. Upon the effective date of this Plan, no
further awards shall be granted under the CDW 2000 Incentive Stock Option Plan or the CDW Senior
Management Incentive Plan.


4.2 Amendments. The Board may amend this Plan as it shall deem advisable, subject to any
requirement of shareholder approval required by applicable law, rule or regulation, including
Section 162(m) and Section 422 of the Code and the rules of the Nasdaq Stock Market; provided,
however, that no amendment shall be made without shareholder approval if such amendment would (a)
increase the maximum number of shares of Common Stock available under this Plan (subject to Section
4.7), (b) effect any change inconsistent with Section 422 of the Code, (c) extend the term of this
Plan or (d) permit the granting of a stock option or SAR having a purchase price or base price per
share of Common Stock of less than 100% of the Fair Market Value of a share of Common Stock on the
date of grant of such award. No amendment may impair the rights of a holder of an outstanding
award without the consent of such holder.



4.3 Agreement. No award shall be valid until an Agreement is authorized and issued by the
Company and accepted by the recipient of the award, and thereupon such award shall be effective as
of the effective date set forth in the Agreement.



4.4 Non-Transferability. Unless otherwise specified in the Agreement relating to an award,
no award hereunder shall be transferable other than by will or the laws of descent and distribution
or pursuant to beneficiary designation procedures approved by the Company. Except to the extent
permitted by the foregoing sentence, each award may be exercised or settled during the
Participant’s lifetime only by the Participant or the Participant’s legal representative or similar
person. Except as permitted by the second preceding sentence, no award hereunder shall 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
award hereunder, such award and all rights thereunder shall immediately become null and void.



4.5 Tax Withholding. The Company shall have the right to require, prior to the issuance or
delivery of any shares of Common Stock or the payment of any cash pursuant to an award made
hereunder, 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 award. An Agreement may provide
that (i) the Company shall withhold whole shares of Common Stock which would otherwise be delivered
to a Participant, 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 Participant, in the amount necessary to
satisfy any such obligation or (ii) the Participant 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
previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as
of the Tax Date, equal to the amount necessary to satisfy any such obligation, (C)





11









 







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 Participant, equal to the amount necessary to satisfy any such
obligation, (D) except as may be prohibited by applicable law, a cash payment by a broker-dealer
acceptable to the Company to whom the Participant has submitted an irrevocable notice of exercise
of an option or through whom the Participant has sold the shares subject to an award, or (E) a
combination of (A) and either (B) or (C), in each case to the extent set forth in the Agreement
relating to the award. 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
Participant.



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



4.7 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 for all awards
under this Plan, the number and class of securities available for stock awards granted under this
Plan, the maximum number and class of securities with respect to which awards may be granted during
any calendar year to any person, and the number (including on its date of grant for purposes of
determining exercisability pursuant to Section 2.2(b)) and class of securities subject to each
outstanding award and the purchase price or base price per security, shall be equitably adjusted by
the Committee, such adjustments to be made in the case of outstanding options and SARs without an
increase in the aggregate purchase price or base price. The decision of the Committee regarding
any such adjustment shall be final, binding and conclusive. If any 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 Participant, in
connection with the first exercise, vesting or settlement of such award in whole or in part
occurring after such adjustment, an amount in cash determined by multiplying (A) the fraction of
such security (rounded to the nearest hundredth) by (B) the excess, if any, of (x) the Fair Market
Value on the exercise date over (y) the exercise price or base price, if any, of such award.




12









 








4.8 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 options and SARs shall immediately become exercisable in full, (ii) the restriction
period applicable to any outstanding restricted stock award or restricted stock unit award shall
lapse, (iii) the performance period applicable to any outstanding award shall lapse, (iv) the
performance measures applicable to any outstanding award shall be deemed to be satisfied at the
target level or at any other level as determined by the Board (as constituted prior to such Change
in Control) and (v) 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 or for which it shall be exchanged
pursuant to such Change in Control. In the event of any such substitution, the purchase price or
base price per share of each option or SAR 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 without an increase in the aggregate purchase price or
base 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 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, the Board, as constituted prior to such Change in Control, may in its discretion
require (x) that each outstanding award be surrendered to the Company by the holder thereof and be
immediately canceled by the Company, and that the Participant 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 award, multiplied by the excess, if any, of
(A) the greater of (1) the highest per share price offered to shareholders of the Company in any
transaction whereby the Change in Control takes place or (2) the Fair Market Value of a share of
Common Stock on the date of occurrence of the Change in Control over (B) the purchase price or base
price, if any, per share of Common Stock subject to the award or (y) that each outstanding award
immediately become exercisable or vested 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 award. In the event of any substitution under subsection (y) hereof, the purchase
price or base price per share of Common Stock subject to each option or SAR 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 without an increase in the aggregate
purchase price or base 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



13









 




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 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 4.8(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 shareholders 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 shareholders of
the Company whose election, or nomination for election by the Company’s shareholders, 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



14









 




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 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.


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




15









 







4.10 Rights as Shareholder. No person shall have any rights as a shareholder of the
Company with respect to any shares of Common Stock which are subject to an award hereunder until
such person becomes a shareholder of record with respect to such shares of Common Stock.



4.11 Designation of Beneficiary. If permitted by the Company, a Participant may file with
the Committee a written designation of one or more persons as such Participant’s beneficiary or
beneficiaries (both primary and contingent) in the event of the Participant’s death. To the extent
an outstanding option or SAR granted hereunder is exercisable, such beneficiary or beneficiaries
shall be entitled to exercise such award.




     Each beneficiary designation shall become effective only when filed in writing with the
Committee during the Participant’s lifetime on a form prescribed by the Committee. The spouse of a
married Participant domiciled in a community property jurisdiction shall join in any designation of
a beneficiary other than such spouse. The filing with the Committee of a new beneficiary
designation shall cancel all previously filed beneficiary designations.



     If a Participant fails to designate a beneficiary, or if all designated beneficiaries of such
Participant predecease the Participant, then each outstanding option or SAR hereunder held by such
Participant, to the extent exercisable, may be exercised by such Participant’s executor,
administrator, legal representative or similar person.


4.12 Governing Law. This Plan, each award hereunder and the related Agreement, 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.



4.13 Foreign Employees. Without amending this Plan, the Committee may grant awards to
eligible persons who are subject to laws of foreign countries or jurisdictions on such terms and
conditions different from those specified in this Plan as may in the judgment of the Committee be
necessary or desirable to foster and promote achievement of the purposes of this Plan and, in
furtherance of such purposes the Committee may make such modifications, amendments, procedures,
subplans and the like as may be necessary or advisable to comply with provisions of laws of other
countries or jurisdictions in which the Company or any of its Affiliates operates or has employees.





16