CDW 2000 INCENTIVE STOCK OPTION
PLAN
(As Amended and Restated Effective January 1, 2006)
1.1
Purposes . The
purposes of the 2000 Incentive Stock Option 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
options 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. Each member of the Committee shall 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 and shall determine the number of
shares of Common Stock subject to each option granted hereunder,
the exercise price of such option, the time and conditions of
exercise of such option and all other terms and conditions of such
option, including, without limitation, the form of the option
agreement. 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 option
intended to be qualified performance-based compensation, take
action such that any or all outstanding options shall become
exercisable in part or in full. Notwithstanding anything in this
Plan to the contrary and subject to Section 3.7, without the
approval of shareholders, the Committee will not reprice a
previously granted option.
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 option, 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 option
shall be evidenced by a written agreement (an “
Agreement ”) between the Company and the optionee
setting forth the terms and conditions of such option.
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, its affiliates
and its subsidiaries from time to time (individually a “
Subsidiary ” and collectively the “
Subsidiaries ”) as the Committee in its sole
discretion may select from time to time. For purposes of this Plan,
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 of the Company or a
Subsidiary. 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 3.7, 4,000,000 shares of the common stock, par value
$0.01 per share, of the Company (“ Common Stock
”) plus the sum of: (i) the number of shares of Common
Stock available for the future grant of stock options under the CDW
1996 Incentive Stock Option Plan and (ii) the total number of
shares of Common Stock available for the future grant of stock
options under the CDW Incentive Stock Option Plan and the CDW
Director Stock Option Plan combined, shall be available for grants
of options under this Plan, reduced by the sum of the aggregate
number of shares of Common Stock which become subject to
outstanding options. To the extent that shares of Common Stock
subject to an outstanding option are not issued or delivered by
reason of the expiration, termination, cancellation or forfeiture
of such option (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 such option, or to satisfy all or a portion of the tax
withholding obligations relating to such option), then such shares
of Common Stock shall again be available under this
Plan.
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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, the maximum number of shares of Common Stock with
respect to which options may be granted during any calendar year to
any person shall be 2,000,000, subject to adjustment as provided in
Section 3.7.
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, which 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:
(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.
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(b)
Option Period and Exercisability . The period during which
an option may be exercised shall be determined by the Committee;
provided, however, that no Incentive Stock 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.
(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 (which the optionee has held for at least six months
prior to the delivery of such shares or which the optionee
purchased on the open market and in each case 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).
(d)
Non-Competition . In the event that an optionee is employed
by, receives compensation from or otherwise is associated with or
has agreed in principle to be employed by or to receive
compensation from or otherwise be associated as an officer, agent,
director, employee, shareholder, consultant or otherwise with a
Competitor (as hereinafter defined) of the Company at any time
prior to the expiration of the optionee’s options:
(i) any and all unexercised options shall be forfeited and
(ii) any and all Option Proceeds (as hereinafter defined)
shall be immediately due and payable by the optionee to the
Company. For purposes of this Section, “Competitor”
shall mean any entity or person which engages for any portion of
its business in the sale of personal computer products to residents
of the United States or any other country, region or territory in
which the Company or its Subsidiaries conduct business or, to the
knowledge of the optionee, plan to conduct business at the time in
question. For purposes of this Section, “Option
Proceeds” shall mean (i) the difference between
(A) the Fair Market Value of a share of Common Stock on the
date of exercise and (B) the per share exercise price of the
option, multiplied by (ii) the number of shares of Common
Stock acquired pursuant to any exercise of options issued under
this Plan which occurs after the date 24 months prior to the
date of the optionee’s termination of employment with the
Company. The remedy provided by this Section
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shall be in
addition to and not in lieu of any rights or remedies which the
Company may have against the optionee in respect of a breach by the
optionee of any duty or obligation to the Company.
2.3
Termination of Employment or Service .
(a)
Disability . Subject to paragraph (e) below and unless
otherwise specified in the Agreement relating to an option, if an
optionee’s employment with or service to the Company
terminates by reason of Disability, each option held by such
optionee shall be fully exercisable 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 or service and
(ii) the expiration date of the term of such option. For
purposes of this Plan, “ Disability ” shall mean
the inability of an optionee substantially to perform such
optionee’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, if an
optionee’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
held by such optionee (i) shall, to the extent not exercisable
as of the effective date of the optionee’s retirement, become
exercisable in accordance with the vesting provisions set forth in
the Agreement relating to such option and (ii) upon becoming
exercisable may be exercised by such optionee (or such
optionee’s legal representative or similar person) until the
expiration date of the term of such option.
(c)
Death . If an optionee’s em
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