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EXHIBIT 10(oo)
LETTER AGREEMENT BY AND AMONG THE COMPANY, THE MPK STOCK OPTION PLAN, XXXXXXX
X. XXXXX, XXXXXX X. XXXX AND XXXX X. XXXXXXX DATED JULY 23, 1998.
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EXHIBIT 10(oo)
[CDW Computer Centers Inc Letterhead]
Xx. Xxxxxxx X. Xxxxx
Xx. Xxxxxx X. Xxxx
Xx. Xxxx X. Xxxxxxx
c/o CDW Computer Centers, Inc.
000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Re: MPK STOCK OPTION PLAN
Dear Xx. Xxxxx, Xx. Xxxx and Xx. Xxxxxxx:
This letter is intended to memorialize the agreement between each of
you, as participants in the MPK Stock Option Plan (the "Plan"), on the one hand
and CDW Computer Centers, Inc. (the "Company") and the Plan itself, on the other
hand, regarding your ability to sell in the public market shares received by you
upon exercise of your Plan options. As you know, absent any action by the Plan
or the Company to register the shares underlying your Plan options, you would be
unable to sell such shares in the public market for a period of at least one (1)
year from the date upon which you received the shares (i.e., the date on which
you exercised your options). However, the Company has agreed with each of you to
register a certain number of your option shares (the "Shares") of which a
certain percentage may be sold by you each calendar quarter from and after the
effective date of the registration statement covering the Shares (the
"Registration Statement"). The following represents the terms and conditions of
that agreement.
1. REGISTRATION STATEMENT. The Company will cause a Registration
Statement on Form S-3 to be filed covering an aggregate of 612,360 Shares
subject to options under the Plan. You will reimburse the Company, on a pro rata
basis, for the reasonable, out-of-pocket costs incurred in connection with the
preparation and filing of the Registration Statement, and the costs of
maintaining the effectiveness of same. Each of you will bear the same percentage
of such costs as the percentage of Shares you are eligible to sell under the
Registration Statement. The Registration Statement will be a "shelf"
registration thereby enabling you to sell Shares from time to time at your
discretion, subject to paragraphs 2 and 3 hereof. The Company will keep the
Registration Statement effective until such time that all Shares registered have
been sold.
2. VOLUME RESTRICTIONS. You will be permitted to sell no more than one
and three quarters percent (1.75%) of your total Plan Shares (exercisable and
non-exercisable) which were not previously available for sale under the
Registration Statement in any calendar quarter, as more fully set forth on
Exhibit A attached hereto and made a part hereof. The foregoing limitation on
sales of your Plan Shares shall terminate when you have sold all the Shares
allocated to you on Exhibit A. In the event you sell less than all of your
permitted 1.75% allotment in any quarter, you do not lose the right to sell
those Shares. Rather, the unsold Shares will continue to be available for sale
and will be added to the Shares becoming available for sale in the next quarter
on a cumulative, rolling basis. Notwithstanding anything herein to the contrary,
the limitations of this paragraph shall not apply to sales of Company common
stock which may be made by you pursuant to (i) Rule 144 under the Securities Act
of 1933, as amended, (ii) a secondary offering registered by the Company in
which your participation is approved by the Company's Board of Directors, or
(iii) any other transaction in which your participation is approved by the
Company's Board of Directors.
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3. TRADING RESTRICTIONS. All sales by you of the Shares will continue
to be subject to the Company's internal trading restrictions, as they may change
from time to time, and the trading restrictions imposed by applicable laws,
including, without limitation, Section 16 of the Securities Exchange Act of 1934
("Section 16"). As you know, pursuant to the Company's xxxxxxx xxxxxxx policy
which is now in effect, you may only sell shares of the Company's common stock
during the forty-five (45) day period commencing three (3) full days after the
release of the Company's quarterly results. Additionally, pursuant to Section
16, you may not sell any of the Company's common stock within six (6) months
(either before or after the sale) of any non-exempt purchases or acquisitions of
any of the Company's securities (whether direct (i.e. common stock) or
derivative (i.e. options, warrants, etc.)). Because the determination of whether
a purchase or an acquisition of the Company's securities is exempt or non-exempt
for Section 16 purposes is complicated and technical in nature, you should
consult with the Company's legal advisors to ensure Section 16 compliance before
selling any of the Shares. In addition, you agree that you will not sell any
Shares under the Registration Statement within five (5) days of any purchase by
the Company of its common stock, or any purchase by any affiliate of the
Company. Furthermore, you agree that you will refrain from selling any Shares
under the Registration Statement at any time that you are requested to do so by
the Company's Board of Directors. FINALLY, IN ADDITION TO AND WITHOUT LIMITING
THE PREVIOUS RESTRICTIONS, YOU MAY NOT SELL (OR PURCHASE) ANY OF THE COMPANY'S
SECURITIES (INCLUDING, WITHOUT LIMITATION, THE SHARES) AT ANY TIME THAT YOU
POSSESS ANY MATERIAL INFORMATION WHICH HAS NOT BEEN DISSEMINATED IN THE PUBLIC
FOR AT LEAST THREE (3) DAYS. FOR THE PURPOSES OF THE FOREGOING, "MATERIAL
INFORMATION" SHALL CONSTITUTE ANY INFORMATION WHICH A REASONABLE INVESTOR WOULD
CONSIDER IN DETERMINING WHETHER OR NOT TO EFFECT A TRANSACTION IN THE COMPANY'S
SECURITIES. TO ENSURE COMPLIANCE WITH ALL OF THE FOREGOING RESTRICTIONS YOU
AGREE TO NOTIFY THE COMPANY AT LEAST TEN (10) DAYS PRIOR TO SELLING ANY SHARES
UNDER THE REGISTRATION STATEMENT, THE NUMBER OF SHARES YOU PROPOSE TO SELL AND
THE OUTSIDE DATE BY WHICH THOSE SHARES WILL BE SOLD.
4. METHOD OF SALE. In order to sell the Shares, you must first exercise
your options by providing written notice to Xxxxxxx Xxxxxx, the Plan
administrator, of your desire to do so and tendering therewith a check in the
amount of the aggregate exercise price ($0.017 x the number of options
exercised). Xx. Xxxxxx will thereupon direct the Company's legal counsel and
transfer agent to cause the Shares to be issued in your name. Upon receipt by
you of your Shares, you may sell your Shares through brokers of your choice or
in privately-negotiated transactions, provided that you notify the Company of
the manner in which such Shares are proposed to be sold. In order to facilitate
your sales, the Company intends to engage one or more brokers to provide you
brokerage services. You will be responsible for all commissions and costs
incurred in connection with the sale of your Shares.
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5. TAX ASPECTS. At the time you exercise your options, you will
recognize taxable income in the amount of the difference between the aggregate
exercise price and the value of the Shares received upon exercise. You will be
solely responsible for all such taxes (federal and state). However, the Company
may withhold from the proceeds you receive upon the sale of your Shares such
amounts as are required to be withheld by federal and state law on account of
your employment with the Company. THE TAX ASPECTS OF YOUR EXERCISE AND SALE ARE
TECHNICAL AND COMPLEX IN NATURE. YOU ARE HEREBY ADVISED TO CONSULT YOUR OWN TAX
ADVISORS TO DETERMINE THE IMPACT ON YOU OF SUCH EXERCISES AND SALES.
6. TERMINATION. In the event your employment with the Company ceases
for any reason during the effectiveness of the Registration Statement, your
rights (including without limitation the right to sell under the Registration
Statement) and your obligations (including without limitation your obligation to
pay fees and expenses for any post-termination activities) under this letter
agreement shall thereupon cease. Thereafter, the terms of the Plan shall control
in all respects with respect to the exercise of your Plan options and your sale
of the shares received thereupon (including those registered under the
Registration Statement).
If the foregoing reflects your understanding of the agreement among
you, the Company and the Plan, please execute this letter where indicated below
thereby evidencing your agreement to comply with all the terms and conditions
herein contained. In addition, to the extent the Company is advised by counsel
that any further documents are required to be executed by you in order to fully
effectuate the terms hereof, you agree to cooperate to cause any such documents
to be prepared and executed. Please return an originally executed copy of this
letter to the undersigned no later than July 23, 1998.
Sincerely,
MPK STOCK OPTION PLAN
By:____________________________________
Xxxxxxx X. Xxxxxx, Administrator
and
CDW COMPUTER CENTERS, INC.
By:____________________________________
Xxxxxxx X. Xxxxxx, Chairman and
Chief Executive Officer
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ACCEPTED AND AGREED TO
THIS 23RD DAY OF JULY, 1998.
____________________________
Xxxxxxx X. Xxxxx
____________________________
Xxxxxx X. Xxxx
____________________________
Xxxx X. Xxxxxxx
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EXHIBIT A
MPK STOCK OPTION PLAN
OPTION EXERCISE SCHEDULE
Date Shares Total Plan Xxxxxxx Xxxxx Xxxxxx Xxxx Xxxx X. Xxxxxxx
available for Sale 3,207,401 2,433,199 516,134 258,068
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(1) (2) (1) (2) (1) (2) (1) (2)
January 1, 1998 56,129 3,151,272 42,581 2,390,618 9,032 507,102 4,516 253,552
April 1, 1998 55,147 3,096,125 41,836 2,348,782 8,874 498,228 4,437 249,115
July 1, 1998 54,183 3,041,942 41,104 2,307,678 8,719 489,509 4,360 244,755
October 1, 1998 53,233 2,988,709 40,384 2,267,294 8,566 480,943 4,283 240,472
January 1, 1999 52,303 2,936,406 39,678 2,227,616 8,417 472,526 4,208 236,264
April 1, 1999 51,387 2,885,019 38,983 2,188,633 8,269 464,257 4,135 232,129
July 1, 1999 50,487 2,834,532 38,301 2,150,332 8,124 456,133 4,062 228,067
October 1, 1999 49,604 2,784,928 37,631 2,112,701 7,982 448,151 3,991 224,076
January 1, 2000 48,736 2,736,192 36,972 2,075,729 7,843 440,308 3,921 220,155
April 1, 2000 47,883 2,688,309 36,325 2,039,404 7,705 432,603 3,853 216,302
July 1, 2000 47,046 2,641,263 35,690 2,003,714 7,571 425,032 3,785 212,517
October 1, 2000 46,222 2,595,041 35,065 1,968,649 7,438 417,594 3,719 208,798
Total (3) 612,360 464,550 98,540 49,270
(1) Represents shares issuable under the MPK Stock Option Plan (the "Plan"), a
plan established by the registrant's Chairman and Chief Executive Officer out of
his own holdings. Pursuant to Rule 416 under the Securities Act of 1933, as
amended, there are registered hereunder such indeterminate number of additional
shares as may become issuable under the Plan as a result of the antidilution
provisions contained herein.
(2) Represents the balance of options held by the Selling Shareholders under the
Plan as of the beginning of each calendar quarter, assuming the sale of all
shares available in the immediately preceding quarter.
(3) Represents 612,360 total shares eligible for sale pursuant to this
Registration Statement.
