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Table of Contents CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The weighted-average grant date fair value of RSUs granted during the year ended December 31, 2014 and 2013 was $24.29 and
$17.03 , respectively. The aggregate fair value of RSUs that vested during the years ended December 31, 2014 and 2013 , was $0.2
million and zero , respectively.
Performance Share Units ("PSUs")
During the year ended December 31, 2014 , the Company granted 417,784 PSUs under the 2013 LTIP which cliff-vest on December
31, 2016. The percentage of shares that shall vest will range from 0% to 200% of the number of PSUs granted based on the Company's
performance against a cumulative adjusted free cash flow measure and cumulative non-GAAP net income per diluted share measure
over a three-year performance period. The weighted-average grant-date fair value of the PSUs granted during the period was $24.40
per
unit. During the year ended December 31, 2014 , 6,204 PSUs were forfeited at a weighted-average grant-date fair value of $24.29 . As
of December 31, 2014 , 411,580 PSUs were outstanding at a weighted-average grant date fair value of $24.40 . No units vested during
the year ended December 31, 2014.
Restricted Stock
In connection with the IPO, CDW Holdings distributed all of its shares of the Company's common stock to its existing members in
accordance with their respective membership interests. Common stock received by holders of Class B Common Units in connection
with the distribution is subject to any vesting provisions previously applicable to the holder's Class B Common Units. Class B Common
Unit holders received 3,798,508 shares of restricted stock with respect to Class B Common Units that had not yet vested at the time of
the distribution. For the year ended December 31, 2014 , 2,321,973 shares of such restricted stock vested/settled and 9,546 shares were
forfeited. As of December 31, 2014 , 260,514 shares of restricted stock were outstanding. The aggregate fair value of restricted stock
that vested during the years ended December 31, 2014 and 2013 was $68.6 million and $26.7 million , respectively.
Pre-IPO Equity Awards
Prior to the IPO, the Company had the following equity-based compensation plans in place:
Class B Common Units
The Board of Managers of CDW Holdings adopted the CDW Holdings LLC 2007 Incentive Equity Plan (the “Plan”) for coworkers,
managers, consultants and advisors of the Company and its subsidiaries. The Plan permitted a committee designated by the Board of
Managers of CDW Holdings (the “Committee”) to grant or sell to any participant Class A Common Units or Class B Common Units of
CDW Holdings in such quantity, at such price, on such terms and subject to such conditions that were consistent with the Plan and as
established by the Committee.
The Class B Common Units that were granted vested daily on a pro rata basis between the date of grant and the fifth anniversary thereof
and were subject to repurchase by, with respect to vested units, or forfeiture to, with respect to unvested units, the Company upon the
coworker's separation from service as was set forth in each holder’s Class B Common Unit Grant Agreement.
On June 30, 2011, the Board of Managers approved the terms of a modified Class B Common Unit grant agreement with the Company's
former Chief Executive Officer, who retired as the Company's Chief Executive Officer effective October 1, 2011 but continued to serve
as Chairman of the Board through December 31, 2012. As a result of this modification, the Company recorded incremental equity-
based compensation expense of $6.6 million during the year ended December 31, 2012.
The grant date fair value of Class B Common Unit grants was calculated using the Option-Pricing Method. This method considered
Class A Common Units and Class B Common Units as call options on the total equity value, giving consideration to liquidation
preferences and conversion of the preferred units. Such Class A Common Units and Class B Common Units were modeled as call
options that gave their owners the right, but not the obligation, to buy the underlying equity value at a predetermined (or exercise) price.
Class B Common Units were considered to be call options with a claim on equity value at an exercise price equal to the remaining value
immediately after the Class A Common Units and Class B Common Units with a lower participation threshold were liquidated. The
Option-Pricing Method is highly sensitive to key assumptions, such as the volatility assumption. As such, the use of this method can be
applied when the range of possible future outcomes is difficult to predict.
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