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CDW > SEC Filings for CDW > Form 8-K on 18-Jun-2013All Recent SEC Filings

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Form 8-K for CDW CORP


18-Jun-2013

Entry into a Material Definitive Agreement, Change in Directors or Principal Officers, F


Item 1.01. Entry into Material Definitive Agreements.

On June 12, 2013, in anticipation of the planned initial public offering of common stock (the "Offering") of CDW Corporation (the "Company"), the Company entered into a termination agreement (the "Termination Agreement") with Madison Dearborn Partners V-B, L.P. ("MDP"), Providence Equity Partners L.L.C. ("PEP," and together with MDP, the "Sponsors") and CDW LLC that will become effective upon the closing of the Offering. Upon the closing of the Offering and in exchange for the termination of the management services agreement with affiliates of the Sponsors pursuant to which such affiliates currently provide the Company with management, consulting, financial and other advisory services, the Company will pay to MDP a fee in the amount of $12,936,880 and will pay to PEP a fee in the amount of $11,463,120.

The foregoing is only a summary of the material terms of the Termination Agreement and does not purport to be complete, and is qualified in its entirety by reference to the Termination Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein.



Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

CDW Corporation 2013 Senior Management Incentive Plan

On June 12, 2013, in anticipation of the Offering, the Company established the CDW Corporation 2013 Senior Management Incentive Plan (the "2013 SMIP") to assist the Company in attracting, motivating and retaining officers and other senior managers who have significant responsibility for growth and long-term success by providing incentive awards that ensure a strong pay-for-performance linkage for such officers and senior managers.

The material terms of the 2013 SMIP are as follows:

Administration. The 2013 SMIP will be administered by the Compensation Committee of the Company's board of directors. The Compensation Committee will have the authority to select the persons who are granted awards under the 2013 SMIP, to determine the time when awards will be granted, to determine whether objectives and conditions for earning awards have been met, to determine whether awards will be paid at the end of the award period or deferred, and to determine whether an award or payment of an award should be reduced or eliminated. The Compensation Committee, as it deems necessary, may delegate its responsibilities for administering the 2013 SMIP to executives.

Eligible Participants. Officers and senior managers will be eligible to participate in the 2013 SMIP. The Compensation Committee, in its discretion, will approve the officers and senior managers to whom awards may from time to time be granted under the 2013 SMIP.

Award Types. The 2013 SMIP will provide cash award opportunities for eligible participants on an annual basis.

Performance Targets. Under the 2013 SMIP, the performance goals applicable to a particular award will be determined by the Compensation Committee at the time of grant. The performance goals applicable to a particular award will be determined by the Compensation Committee at the time of grant. The performance measures will include one or more of the following corporate-wide or subsidiary, division, operating unit or individual measures: the attainment by a share of common stock of a specified fair market value for a specified period of time; increase in stockholder value; earnings per share; return on or net assets; return on equity; return on investments; return on capital or invested capital; total stockholder return; earnings or income of the Company before or after taxes and/or interest; earnings before interest, taxes, depreciation and amortization ("EBITDA"); EBITDA margin; operating income; revenues; operating expenses, attainment of expense levels or cost reduction goals; market share; cash flow, cash flow per share, cash flow margin or free cash flow; interest expense; economic value created; gross profit or margin; operating profit or margin; net cash provided by operations; price-to-earnings growth; and strategic business criteria, consisting of one or more objectives based on meeting specified goals relating to market penetration, customer acquisition, business expansion, cost targets, customer satisfaction, reductions in errors and


omissions, reductions in lost business, management of employment practices and employee benefits, supervision of litigation and information technology, quality and quality audit scores, efficiency, and acquisitions or divestitures, or any combination of the foregoing. Each goal may be expressed on an absolute or relative basis and may include comparisons based on current internal targets, the past performance of the Company (including the performance of one or more subsidiaries, divisions, or operating units) or the past or current performance of other companies (or a combination of such past and current performance). Performance goals may include comparisons relating to capital (including, but not limited to, the cost of capital), shareholders' equity, shares outstanding, assets or net assets, sales, or any combination thereof. The Compensation Committee may provide for the performance measures or other terms and conditions of an outstanding award to be adjusted in recognition of unusual, nonrecurring or one-time events affecting the Company or its financial statements or changes in law or accounting principles.

Certain Adjustments. The Compensation Committee may provide that the performance targets or the manner in which performance will be measured against the performance targets will be adjusted in such a manner as it deems appropriate, including, without limitation, any adjustments to reflect the impact of specified corporate transactions (such as a stock split or stock dividend), accounting or tax law changes and other extraordinary or nonrecurring events.

Plan Term. The 2013 SMIP will continue in effect until terminated by the board of directors.

The foregoing is only a summary of the material terms of the 2013 SMIP and does not purport to be complete, and is qualified in its entirety by reference to the 2013 SMIP, a copy of which is filed as Exhibit 10.2 hereto and incorporated by reference herein.

CDW Corporation 2013 Long-Term Incentive Plan

On June 12, 2013, in anticipation of the Offering, the Company adopted the CDW Corporation 2013 Long-Term Incentive Plan (the "2013 LTIP"). The purposes of the 2013 LTIP are to align the interests of stockholders and those eligible for awards, to retain officers, directors, employees, and other service providers, and to encourage them to act in the Company's long term best interests. The 2013 LTIP provides for the grant of incentive stock options, within the meaning of Internal Revenue Code Section 422, nonqualified stock options, stock appreciation rights, restricted stock (including the 3,963,925 shares of restricted stock the Company expects to grant in substitution for unvested B Units of CDW Holdings LLC in connection with the Offering assuming an initial public offering price of $21.50 per share), restricted stock units, bonus stock and performance awards. Officers, directors, employees, consultants, agents and independent contractors who provide services to the Company or to any of its subsidiaries are eligible to receive such awards. The material terms of the 2013 LTIP are as follows:

Stock Subject to the Plan. The maximum aggregate number of shares that may be issued under the 2013 LTIP is 11,700,000 shares of common stock in addition to the 3,963,925 shares of restricted stock the Company expects to grant in substitution for unvested B Units in connection with the Offering assuming an initial public offering price of $21.50 per share. To the extent a stock option or other stock award granted under the 2013 LTIP (other than any substitute award) expires or otherwise terminates without having been exercised or paid in full, or is settled in cash, the shares subject to such awards will become available for future grant or sale under the 2013 LTIP. In addition, to the extent shares are withheld to satisfy a participant's tax withholding obligation upon the exercise or settlement of any award (other than any substitute award) or to pay the exercise price of a stock option, such shares will become available for future grant or sale under the 2013 LTIP.

Plan Administration. The Compensation Committee will administer the 2013 LTIP. The board of directors has the authority to amend and modify the plan, subject to any stockholder approval required by law or stock exchange rules. Subject to the terms of the 2013 LTIP, the Compensation Committee will have the authority to determine the eligibility for awards and the terms, conditions, and restrictions, including vesting terms, the number of shares subject to an award, and any performance goals applicable to grants made under the 2013 LTIP. The committee also will have the authority, subject to the terms of the 2013 LTIP, to construe and interpret the 2013 LTIP and awards, and amend outstanding awards at any time.



Stock Options and Stock Appreciation Rights. The Compensation Committee may grant incentive stock options, nonqualified stock options, and stock appreciation rights under the 2013 LTIP, provided that incentive stock options are granted only to employees. The exercise price of stock options and stock appreciation rights under the 2013 LTIP will be fixed by the committee, but must equal at least 100% of the fair market value of common stock on the date of grant. The term of an option or stock appreciation right may not exceed ten years; provided, however, that an incentive stock option held by an employee who owns more than 10% of all of the classes of stock, or of certain affiliates, may not have a term in excess of five years, and must have an exercise price of at least 110% of the fair market value of common stock on the grant date. Subject to the provisions of the 2013 LTIP, the committee will determine the remaining terms of the options and stock appreciation rights (e.g., vesting). Upon a participant's termination of service, the participant may exercise his or her option or stock appreciation right, to the extent vested (unless the committee permits otherwise), as specified in the award agreement.

Stock Awards. The Compensation Committee will decide at the time of grant whether an award will be in restricted stock, restricted stock units, or bonus stock. The committee will determine the number of shares subject to the award, vesting, and the nature of any performance measures. Unless otherwise specified in the award agreement, the recipient of restricted stock will have voting rights and be entitled to receive dividends with respect to his or her shares of restricted stock. The recipient of restricted stock units will not have voting rights, but his or her award agreement may provide for the receipt of dividend equivalents.

Performance Awards. The Compensation Committee will determine the value of any performance award, the vesting and nature of the performance measures, and whether the award is denominated or settled in cash or in shares of common stock. The performance goals applicable to a particular award will be determined by the Compensation Committee at the time of grant. The performance measures will include one or more of the following corporate-wide or subsidiary, division, operating unit or individual measures: the attainment by a share of common stock of a specified fair market value for a specified period of time; increase in stockholder value; earnings per share; return on or net assets; return on equity; return on investments; return on capital or invested capital; total stockholder return; earnings or income of the Company before or after taxes and/or interest; EBITDA; EBITDA margin; operating income; revenues; operating expenses, attainment of expense levels or cost reduction goals; market share; cash flow, cash flow per share, cash flow margin or free cash flow; interest expense; economic value created; gross profit or margin; operating profit or margin; net cash provided by operations; price-to-earnings growth; and strategic business criteria, consisting of one or more objectives based on meeting specified goals relating to market penetration, customer acquisition, business expansion, cost targets, customer satisfaction, reductions in errors and omissions, reductions in lost business, management of employment practices and employee benefits, supervision of litigation and information technology, quality and quality audit scores, efficiency, and acquisitions or divestitures, or any combination of the foregoing. Each goal may be expressed on an absolute or relative basis and may include comparisons based on current internal targets, the past performance of the Company (including the performance of one or more subsidiaries, divisions, or operating units) or the past or current performance of other companies (or a combination of such past and current performance). Performance goals may include comparisons relating to capital (including, but not limited to, the cost of capital), shareholders' equity, shares outstanding, assets or net assets, sales, or any combination thereof. The Compensation Committee may provide for the performance measures or other terms and conditions of an outstanding award to be adjusted in recognition of unusual, nonrecurring or one-time events affecting the Company or its financial statements or changes in law or accounting principles.

Dividends and Dividend Equivalents. The Compensation Committee in its sole discretion may provide that holders of awards will be entitled to dividends or dividend equivalents, on such terms and conditions as may be determined by the Compensation Committee in its sole discretion; provided that no dividend equivalents will be payable with respect to outstanding
(i) stock options or stock appreciation rights or (ii) unearned performance compensation awards or other unearned awards subject to performance conditions (although dividend equivalents may be accumulated in respect of unearned awards and paid after such awards are earned).

Transferability of Awards. The 2013 LTIP does not allow awards to be transferred other than by will or the laws of inheritance following the participant's death, and such options may be exercised, during the lifetime of the participant, only by the participant. However, an award agreement may permit a participant

. . .



Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.                                  Description

10.1              Termination Agreement, dated as of June 12, 2013, by and among
                  the Company, CDW LLC, Madison Dearborn Partners V-B, L.P. and
                  Providence Equity Partners L.L.C., previously filed as Exhibit
                  10.6 with the Company's Amendment No. 2 to Form S-1 filed on June
                  14, 2013 (Reg. No. 333-187472) and incorporated herein by
                  reference.

10.2              CDW Corporation 2013 Senior Management Incentive Plan, previously
                  filed as Exhibit 10.34 with the Company's Amendment No. 2 to Form
                  S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated
                  herein by reference.

10.3              CDW Corporation 2013 Long-Term Incentive Plan, previously filed
                  as Exhibit 10.35 with the Company's Amendment No. 2 to Form S-1
                  filed on June 14, 2013 (Reg. No. 333-187472) and incorporated
                  herein by reference.

10.4              Form of CDW Corporation Option Award Notice and Stock Option
                  Agreement (to be executed by Thomas E. Richards), previously
                  filed as Exhibit 10.37 with the Company's Amendment No. 2 to Form
                  S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated
                  herein by reference.

10.5              Form of CDW Corporation Option Award Notice and Stock Option
                  Agreement (to be executed by Neal J. Campbell and Christina M.
                  Corley), previously filed as Exhibit 10.38 with the Company's
                  Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333
                  187472) and incorporated herein by reference.

10.6              Form of CDW Corporation Restricted Stock Award Notice and
                  Restricted Stock Award Agreement (to be executed by Thomas E.
                  Richards, Dennis G. Berger, Douglas E. Eckrote, Christine A.
                  Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed
                  as Exhibit 10.39 with the Company's Amendment No. 2 to Form S-1
                  filed on June 14, 2013 (Reg. No. 333 187472) and incorporated
                  herein by reference.

10.7              Form of CDW Corporation Restricted Stock Award Notice and
                  Restricted Stock Award Agreement (to be executed by Neal J.
                  Campbell, Christina M. Corley, Christina V. Rother and Matthew A.
                  Troka), previously filed as Exhibit 10.40 with the Company's
                  Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No.
                  333-187472) and incorporated herein by reference.

10.8              CDW Corporation Coworker Stock Purchase Plan, previously filed as
                  Exhibit 10.36 with the Company's Amendment No. 2 to Form S-1
                  filed on June 14, 2013 (Reg. No. 333-187472) and incorporated
                  herein by reference.

10.9              CDW Amended and Restated Restricted Debt Unit Plan, previously
                  filed as Exhibit 10.41 with the Company's Amendment No. 2 to Form
                  S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated
                  herein by reference.


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