CDW 2003 Annual Report Download - page 59

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46
Tax Benefits
The exercise and vesting of shares pursuant to all stock-based compensation plans, including the MPK
Stock Option Plan, MPK Restricted Stock Plan and the CDW Incentive Stock Option Plan resulted in the
realization by the Company of tax benefits of $37.2 million in 2003, $71.0 million in 2002, and $59.2
million in 2001, of which $0.7 million, $1.5 million, and $1.1 million, respectively, were previously
recorded in deferred taxes. The incremental tax benefits of $36.5 million in 2003, $69.5 million in 2002
and $58.1 million in 2001 were recorded to paid-in capital.
Restricted Stock
On January 28, 2001, we granted a restricted stock award of 100,000 shares of common stock to our
Chairman and Chief Executive Officer that will vest in equal annual installments on the first four
anniversaries of the date of grant. Compensation expense related to this restricted stock award is
recognized over the vesting period. As of December 31, 2003, 50,000 of such shares had not yet vested.
Employee Stock Purchase Plan
On October 1, 2002, we established an Employee Stock Purchase Plan (“ESPP”) which provides that
eligible coworkers may contribute up to 15% of their eligible compensation towards the quarterly purchase
of our common stock. The coworkers’ purchase price is 85% of the lesser of the fair market value of the
stock on the first business day or the last business day of the quarterly offering period. Coworkers may
purchase shares having a fair market value of up to $25,000 (measured on the first day of the quarterly
offering period for each calendar year) or 325 shares per quarter. No compensation expense is recorded in
connection with the plan. The total number of shares issuable under the ESPP is 500,000. Under the ESPP,
we issued 78,318 and 20,300 shares to coworkers in 2003 and 2002, respectively.
12. Earnings Per Share
At December 31, 2003, we had outstanding common shares totaling 83,342,433. We have granted options
to purchase common shares to the directors and coworkers of the Company as discussed in Note 11. These
options have a dilutive effect on the calculation of earnings per share. The following table is a
reconciliation of the numerators and denominators of the basic and diluted earnings per share computations
as required by SFAS 128 (in thousands, except per share amounts):