CDW COMPUTER CENTERS INC, DEF 14A, 1998-03-25

CDW COMPUTER CENTERS INC
DEF 14A, 1998-03-25
CATALOG & MAIL-ORDER HOUSES

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

[X] Definitive proxy statement

[ ] Definitive additional materials

[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CDW Computer Centers, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):

- --------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------

(5) Total fee paid:

- --------------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

- --------------------------------------------------------------------------------

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:

- --------------------------------------------------------------------------------

(2) Form, schedule or registration statement no.:

- --------------------------------------------------------------------------------

(3) Filing party:

- --------------------------------------------------------------------------------

(4) Date filed:

- --------------------------------------------------------------------------------

<PAGE> 2

NOTICE OF

ANNUAL MEETING

OF SHAREHOLDERS

AND

PROXY STATEMENT

MAY 19, 1998

CDW COMPUTER CENTERS, INC.
200 NORTH MILWAUKEE AVENUE
VERNON HILLS, ILLINOIS 60061

CDW COMPUTER CENTERS, INC.
--------------------------

<PAGE> 3

CDW COMPUTER CENTERS, INC.
200 NORTH MILWAUKEE AVENUE
VERNON HILLS, ILLINOIS 60061

MARCH 25, 1998

Dear Fellow Shareholders:

You are cordially invited to attend the Annual Meeting of Shareholders
of CDW Computer Centers, Inc. (the "Company") scheduled for 6:00 p.m. on
Tuesday, May 19, 1998, at the Company's headquarters, 200 North Milwaukee
Avenue, Vernon Hills, Illinois 60061.

The matters expected to be acted upon at the meeting are described in
detail in the attached Notice of Annual Meeting of Shareholders and Proxy
Statement.

Members of the Board of Directors, management and I look forward to
personally greeting those shareholders who are able to attend the Annual
Meeting.

Please be sure to sign and return the enclosed proxy card whether or
not you plan to attend the meeting so that your shares will be voted. You may
revoke your proxy by a later dated proxy or vote in person at the meeting, if
you prefer. The Board of Directors joins me in thanking you for your continued
support and hoping that you will attend the meeting.

Sincerely yours,

Michael P. Krasny
Chairman, Chief Executive Officer, Secretary and Treasurer

<PAGE> 4

CDW COMPUTER CENTERS, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

MAY 19, 1998
----------------

The Annual Meeting of Shareholders of CDW Computer Centers, Inc. (the
"Company") will be held at 6:00 p.m. on Tuesday, May 19, 1998 at the Company's
headquarters, 200 North Milwaukee Avenue, Vernon Hills, Illinois 60061 for the
purpose of considering and voting on:

1. The election of five directors. Management's nominees are named in
the accompanying Proxy Statement.
2. The ratification of the selection of Coopers & Lybrand L.L.P.,
independent accountants, as auditors for the Company for the year
ending December 31, 1998.
3. Such other business as may properly come before the meeting and all
adjournments thereof.

The Board of Directors has fixed March 24, 1998 as the record date for
determining the shareholders of the Company entitled to notice of and to vote at
the meeting. Only holders of record of the Company's stock at the close of
business on such date will be entitled to notice of and to vote at such meeting
and all adjournments.

Even if you plan to attend the meeting, please be sure to sign, date
and return the proxy in the enclosed envelope to:

American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Attention: Proxy Section

Michael P. Krasny
Chairman, Chief Executive Officer,
Secretary and Treasurer
Vernon Hills, Illinois
March 25, 1998

YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR SHARES
MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A
QUORUM MAY BE ASSURED. THE PROMPT RETURN OF YOUR SIGNED PROXY, REGARDLESS OF THE
NUMBER OF SHARES YOU HOLD, WILL AID THE COMPANY IN REDUCING THE EXPENSE OF
ADDITIONAL PROXY SOLICITATION. THE GIVING OF SUCH PROXY DOES NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IN THE EVENT YOU ATTEND THE MEETING.

<PAGE> 5

CDW COMPUTER CENTERS, INC.
200 NORTH MILWAUKEE AVENUE
VERNON HILLS, ILLINOIS 60061

PROXY STATEMENT

ANNUAL MEETING - MAY 19, 1998

INFORMATION REGARDING PROXIES

This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of CDW Computer Centers, Inc. (the
"Company"), to be voted at the Annual Meeting of Shareholders on Tuesday, May
19, 1998 and at any and all adjournments thereof.

Solicitation of proxies by mail is expected to commence March 25, 1998
and the cost thereof will be borne by the Company. In addition to such
solicitation by mail, some of the directors, officers and regular employees of
the Company may, without extra compensation, solicit proxies by telephone,
telegraph and personal interview. Arrangements will be made with brokerage
houses, custodians, nominees and other fiduciaries to send proxy material to
their principals and the Company will reimburse them for postage and clerical
expense in doing so. The Company may retain at its expense a proxy solicitation
firm to assist it in soliciting proxies.

Votes cast by proxy or in person at the Annual Meeting of Shareholders
will be tabulated by the election inspectors appointed for the meeting and will
determine whether or not a quorum is present. The election inspectors will treat
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum but as not-voted for purposes of
determining the approval of any matter submitted to the shareholders for a vote.
Shares as to which proxies have been executed will be voted as specified in the
proxies. If no specification is made in an otherwise properly executed proxy,
the shares will be voted "FOR" the election of management's nominees as
directors and "FOR" the other proposal listed. If a broker indicates on the
proxy that it does not have discretionary authority as to certain shares to vote
on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.

Proxies may be revoked at any time prior to the exercise thereof by
filing with the Secretary of the Company, at the Company's executive offices, a
written revocation or a duly executed proxy bearing a later date. The executive
offices of the Company are located at 200 North Milwaukee Avenue, Vernon Hills,
Illinois 60061.

<PAGE> 6

UNLESS OTHERWISE INDICATED, ALL INFORMATION PROVIDED HEREIN IS GIVEN
AS OF THE DATE HEREOF.

VOTING SECURITIES

The securities of the Company entitled to be voted at the meeting
consist of shares of its Common Stock, $0.01 par value ("Common Stock"). Each
share of Common Stock is entitled to one vote on all matters. On March 24, 1998
(the "Record Date"), 21,545,904 shares of Common Stock were issued and
outstanding.

Only shareholders of record at the close of business on the Record Date
will be entitled to receive notice of and to vote at the meeting. There are no
cumulative voting rights.

Assuming a quorum is present in person or by proxy, the affirmative
vote of a majority of the votes represented is required for election of the
directors and the ratification of independent accountants.

SHAREHOLDER PROPOSALS

Any shareholder desirous of including any proposal in the Company's
proxy soliciting material for the next regularly scheduled Annual Meeting of
Shareholders (for the year ending December 31, 1998) must submit his or her
proposal, in writing, directed to the Company's executive offices not later than
November 25, 1998. Any such proposal must comply with Rule 14a-8 of Regulation
14A of the proxy rules of the Securities Exchange Act of 1934, as amended, in
order for such proposal to be included in the 1999 Proxy Statement.

SECURITY OWNERSHIP

The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock at February 28, 1998 by: (i)
each person or group that is known by the Company to be the beneficial owner of
more than five percent (5%) of the outstanding shares of Common Stock; (ii) each
director and director nominee of the Company; (iii) each of the Named Officers
(as hereinafter defined); and (iv) all directors, director nominees and
executive officers of the Company as a group. All information with respect to
beneficial ownership has been furnished by the respective shareholders to the
Company.

<TABLE>
<CAPTION>
COMMON STOCK
--------------------------
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF COMMON
NAME OF BENEFICIAL OWNER OWNERSHIP STOCK
- ------------------------ ---------- ---------
<S> <C> <C>
Michael P. Krasny (1) (2) 12,032,729 55.9%
Gregory C. Zeman (1) (3) 2,433,199 11.3%
AIM Management Group (4) 1,981,200 9.2%
Pilgrim Baxter & Associates, Ltd. (5) 1,211,169 5.6%
Daniel B. Kass (6) 516,134 2.4%
Paul A. Kozak 150 *
Harry J. Harczak, Jr. 750 *
Joseph Levy, Jr. 25,500 *
Michelle L. Collins 500 *
All directors and officers as a group (12 persons) (7) 12,060,379 56.0%
</TABLE>

<PAGE> 7

* Less than 1%
(1) The address for Messrs. Krasny and Zeman is the executive office of
the Company.
(2) Includes 3,207,401 shares remaining subject to the MPK Stock Option
Plan (of which 2,949,333 shares are also included in the holdings of
Messrs. Zeman and Kass above), 410,103 shares remaining subject to the
MPK Restricted Stock Plan and 8,956 shares owned by Mr. Krasny's minor
stepson. Mr. Krasny disclaims beneficial ownership with respect to the
shares subject to the MPK Stock Option Plan and the MPK Restricted
Stock Plan.
(3) Reflects 2,433,199 shares issuable pursuant to non-forfeitable options
granted under the MPK Stock Option Plan out of Mr. Krasny's own shares.
The options are exercisable at the rate of 390,087 on December 31,
1997 and 471,488 on each December 31 thereafter until all options are
exercisable. Additional shares may be exercised proportionately to
any shares sold by Mr. Krasny from his holdings. These shares are
also reported as being beneficially owned by Mr. Krasny.
(4) The address of AIM Management Group is 11 Greenway Plaza, Suite 1919,
Houston, Texas, 77046. The number of shares held was obtained from
the holder's Schedule 13G filing with the Securities Exchange
Commission as of December 31, 1997.
(5) The address of Pilgrim Baxter & Associates, Ltd. is 825 Duportail Road,
Wayne, Pennsylvania, 19087-5525. The number of shares held was obtained
from the holder's Schedule 13G filing with the Securities Exchange
Commission as of December 31, 1997.
(6) Reflects 516,134 shares issuable pursuant to options granted under the
MPK Stock Option Plan out of Mr. Krasny's own shares. The options are
exercisable at the rate of 82,747 on December 31, 1997 and 100,013 on
each December 31 thereafter until all options are exercisable.
Additional shares may be exercised proportionately to any shares sold
by Mr. Krasny from his holdings. These shares are also reported as
being beneficially owned by Mr. Krasny.
(7) For purposes of computing aggregate number of shares owned by directors
and officers of the Company as a group, shares of Common Stock
beneficially owned by more than one executive officer are counted only
once.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 and regulations of
the Securities and Exchange Commission thereunder require the Company's
executive officers and directors and persons who own more than ten percent of
the Company's stock, as well as certain affiliates of such persons, to file
initial reports of ownership and changes in ownership with the Securities and
Exchange Commission and The Nasdaq Stock Market. Executive officers, directors
and persons owning more than ten percent of the Company's stock are required by
the Securities and Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on its review of the
copies of such forms received by it and written representations that no other
reports were required for those persons, the Company believes that, during the
year ended December 31, 1997, all persons subject to Section 16(a) were in
compliance with all Section 16(a) filing requirements, except that Ms. Collins,
a director of the Company, inadvertently filed late a Form 4 reflecting the open
market purchase of shares of Common Stock.

ANNUAL REPORT AND FORM 10-K

The 1997 Annual Report of the Company which includes financial
statements for the years ended December 31, 1997, 1996 and 1995 has been mailed
with this Proxy Statement to shareholders of record on the Record Date. The
Annual Report does not constitute a part of the proxy material. A copy of the
Company's Report on Form 10-K for the year ended December 31, 1997, including
the financial statements and the financial statement schedule, as filed with the
Securities and Exchange Commission, is available to shareholders and may be
obtained by writing to the Secretary at the Company's executive offices.

<PAGE> 8

PROPOSAL 1
ELECTION OF DIRECTORS

The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company, although it
is not involved in day-to-day operating activities. Members of the Board are
kept informed of the Company's business by various reports and documents sent to
them on a regular basis, including operating and financial reports made at Board
and Committee meetings by the Chairman and other officers.

Five directors, all of whom are members of the present Board of
Directors, are recommended for election at the Annual Meeting. All directors
serve until the annual meeting next following their election and until their
successors have been elected. There are no family relationships between or among
any directors of the Company.

All of the nominees have consented to serve if elected, and at the date
of this Proxy Statement, the Company has no reason to believe that any of the
named nominees will be unable to serve. Correspondence may be directed to
nominees at the Company's executive offices. Unless otherwise directed, the
persons named as proxies intend to vote in favor of the election of all
nominees.

The information presented as to principal occupation and shares of
stock beneficially owned as of February 28, 1998, is based in part on
information received from the respective persons and in part from the records of
the Company. All directors and officers as a group were the beneficial owners of
12,060,379 shares of Common Stock representing approximately 56.0% of the class.

NOMINEES FOR ELECTION TO BOARD OF DIRECTORS

Set forth below is certain information concerning the nominees for
election to the Board of Directors of the Company.
<TABLE>
<CAPTION>

NAME AGE POSITION(S) WITH THE COMPANY
- ------------------------------------------ --- --------------------------------------------------
<S> <C> <C>
Michael P. Krasny......................... 44 Chairman of the Board, Chief Executive Officer,
Secretary and Treasurer
Gregory C. Zeman.......................... 39 President and Director
Daniel B. Kass ........................... 41 Vice President-Sales and Director
Joseph Levy, Jr .......................... 71 Director
Michelle L. Collins ...................... 38 Director
</TABLE>

Michael P. Krasny is the founder of the Company and currently serves
as Chairman of the Board, Chief Executive Officer, Secretary and Treasurer.
Mr. Krasny has had similar positions and responsibilities with the Company
since the Company's inception. Mr. Krasny served as the Company's President
from its incorporation through December, 1990. Mr. Krasny's responsibilities
with the Company include the overall supervision of its operations and focus on
finance, human resources, operations and management information systems
functions. Mr. Krasny is a 1975 graduate of the University of Illinois where he
earned a Bachelor of Science degree in Finance.

Gregory C. Zeman is President and a director of the Company. Mr. Zeman
has been an employee and officer of the Company, serving in varying capacities,
since March, 1987. Prior to becoming President in January, 1991, Mr. Zeman
served as an account executive, Sales Manager, Purchasing Manager and Vice
President of Sales, Purchasing and Marketing. Mr. Zeman became a director
of the Company in June, 1990. Mr. Zeman's responsibilities with the
Company focus on the sales, purchasing and marketing functions. Mr. Zeman
is a 1983 graduate of Marquette University where he earned a Bachelor of Science
degree in Computational Math.

Daniel B. Kass is Vice President-Sales and a director of the Company.
Mr. Kass joined the Company in November, 1987 as a sales representative. He
served as Sales Manager from January, 1989 through December, 1990. Mr. Kass
became Vice President-Operations in January, 1991, a director of the Company
in March, 1993 and Vice President-Sales in January, 1996. Mr. Kass'
responsibilities with the Company focus on sales, sales recruiting, sales
training and customer service. Mr. Kass is a 1981 graduate of Southern Illinois
University where he earned a Bachelor of Science degree in Journalism.

<PAGE> 9

Joseph Levy, Jr. is a director of the Company. Mr. Levy is the founder,
and for more than the past five years has been chairman, of Levy Venture
Management, Inc., a real estate rental and development group that assists
auto manufacturers in establishing new dealerships. Levy Venture Management,
Inc. currently has holdings in Illinois, Texas and Minnesota. Mr. Levy became
a director of the Company in November, 1993. Mr. Levy is a 1947 graduate of
Northwestern University, where he earned a Bachelor of Science in Business
Administration.

Michelle L. Collins is a director of the Company. Ms. Collins is a
partner in Svoboda, Collins, L.L.C., a venture capital firm since January,
1998. Previously, Ms. Collins was a principal at William Blair & Company,
L.L.C. since 1992 and, prior to that time, she served as an associate at
William Blair & Company since 1986. Ms. Collins became a director of the Company
in April, 1996. Ms. Collins is a member of the Board of Directors of McWhorter
Technologies, Inc., and has been since 1995. Ms. Collins is a 1982 graduate of
Yale University where she earned an undergraduate degree in Economics and a
1986 graduate of Harvard University, where she earned a Masters Degree in
Business Administration.

BOARD MEETINGS AND COMMITTEES

Regular meetings of the Board of Directors of the Company are conducted
quarterly. From time to time, special meetings of the Board of Directors are
conducted as required. The Board of Directors had four regular meetings during
the calendar year ended December 31, 1997. Each director attended all meetings
of the Board of Directors and the committees of which they were members.

The Audit Committee is currently comprised of Messrs. Krasny and Levy
and Ms. Collins. The Audit Committee reviews and approves the general nature of
audit services by the independent accountants; monitors and reviews the internal
control system of the Company; monitors the integrity of the Company's financial
systems, reports and financial statements; reviews procedures to communicate
conflicts of interest and related party transactions; and reviews matters where
independence from management is indicated. The Audit Committee met once during
the year ended December 31, 1997.

The Compensation and Stock Option Committee is currently comprised of
Mr. Levy and Ms. Collins. The functions performed by the Compensation and Stock
Option Committee include approval of Chief Executive Officer compensation;
review and approval of the terms of performance-based compensation programs for
officers; review and certification of amounts due under performance-based
compensation programs for officers and allocation of the Employee Incentive
Bonus Pool; review and approval of compensation and/or adjustments thereto for
other officers and employees to the extent requested by the Chief Executive
Officer or otherwise required by the terms of existing employment agreements;
review and approval of the terms of incentive stock option grants. The
Compensation and Stock Option Committee met once during the year ended December
31, 1997. The Compensation and Stock Option Committee met in January of 1998 in
connection with stock option grants, review and approval of 1997 officer
compensation, ratification of the CDW 1997 Officer and Manager Bonus Plan, the
allocation of the 1997 Employee Incentive Bonus Pool and the establishment of
officer base compensation levels for the 1998 fiscal year. See "Report of the
Compensation and Stock Option Committee."

The Nominating Committee is currently comprised of Messrs. Krasny and
Levy and Ms. Collins. The functions performed by the Nominating Committee
include the review of the Board of Directors present and future composition;
recruitment of new directors; the recommendation and placing in nomination at
annual meetings of a slate of directors; and the review and determination of
director compensation. The Nominating Committee will also consider nominees
recommended by shareholders, in writing, provided such candidates demonstrate a
serious interest in serving as directors. The Nominating Committee did not meet
during the year ended December 31, 1997. The Nominating Committee acted pursuant
to Unanimous Written Consent in March, 1998, for the purpose of nominating the
persons presented herein for election as directors.

<PAGE> 10

MANAGEMENT

Set forth below are the names, ages and titles of each executive
officer of the Company. Executive officers are elected by and serve at the
discretion of the Board of Directors until their successors are duly chosen and
qualified.

NAME AGE POSITION(S) WITH THE COMPANY
- ------------------------------------ --- -----------------------------------------------------------------
<S> <C> <C>
Michael P. Krasny................... 44 Chairman of the Board, Chief Executive Officer, Secretary and
Treasurer
Gregory C. Zeman.................... 39 President and Director
Daniel B. Kass...................... 41 Vice President-Sales and Director
Harry J. Harczak, Jr. .............. 41 Chief Financial Officer
Mary C. Gerlits..................... 39 Vice President-Corporate and Community Relations
Daniel F. Callen.................... 40 Vice President-Finance, Controller and Chief Accounting Officer
Paul A. Kozak....................... 33 Vice President-Purchasing
Donald M. Gordon.................... 57 Vice President-Advertising
James R. Shanks..................... 33 Vice President-Information Technology
Joseph K. Kremer ................... 33 Vice President-Marketing
</TABLE>

See "Election of Directors-Nominees for Election to Board of Directors"
for the discussion of Messrs. Krasny, Zeman and Kass.

Harry J. Harczak, Jr. became Chief Financial Officer of the Company
on May 1, 1994. Prior to joining the Company, Mr. Harczak was an audit partner
in the accounting firm of Coopers & Lybrand L.L.P. where he worked since 1978.
Mr. Harczak's responsibilities at the Company include the finance, accounting,
SEC reporting, investor relations and human resource functions. He is a 1978
graduate of Depaul University, where he earned a Bachelor of Science degree in
Accounting, and a 1995 graduate of the University of Chicago Executive Program,
where he earned a Masters of Business Administration. Mr. Harczak is a certified
public accountant.

Mary C. Gerlits is Vice President-Corporate and Community Relations of
the Company and has served in that capacity since May, 1997. Ms. Gerlits joined
the Company in March, 1986 and has previously served in varying capacities as
Personnel Director, Human Resources Manager, Director of Human Resources and
Vice President-Human Resources. Ms. Gerlits is a 1980 graduate of Hampshire
College where she earned a Bachelor of Arts degree in Humanities and Languages.

Daniel F. Callen is Vice President-Finance, Controlle and Chief
Accounting Officer of the Company. Mr. Callen became Vice President - Finance
and Chief Accounting Officer in January, 1992. Mr. Callen became Controller
in May, 1989. Prior to joining the Company, Mr. Callen was employed by Rand
McNally & Company from February, 1987 to April, 1989 as Group Controller. Mr.
Callen is a 1979 graduate of Northern Illinois University where he earned a
Bachelor of Science degree in Accounting. Mr. Callen is also a 1986 graduate
of Northwestern University's J.L. Kellogg's Graduate School of Management where
he earned a Masters in Management, Marketing and Finance. Mr. Callen is a
certified public accountant.

Paul A. Kozak is Vice President-Purchasing of the Company. Mr. Kozak
joined the Company in August of 1987 and since that time has served as an
Account Executive, Sales Manager and Director of Purchasing. He is a 1986
graduate of the University of Iowa where he earned a Bachelor of Science degree
in Business Administration.

Donald M. Gordon is Vice President-Advertising of the Company. Mr.
Gordon joined the Company as Director of Marketing in February of 1993. Prior
to joining the Company, Mr. Gordon was employed by Spiegel as Director of
Customer Acquisition. He is a 1961 graduate of Bryant University where he
earned a Bachelor of Business Administration degree in Business Management.

<PAGE> 11

James R. Shanks is Vice President-Information Technology of the
Company. Mr. Shanks joined the Company as Director of Information Systems in
August of 1993. Prior to joining the Company, Mr. Shanks was employed by
American Hotel Register from January, 1985 to August, 1993 as Manager of
Information Systems. Mr. Shanks is a 1991 graduate of Barat College where he
earned a Bachelor of Science degree in Computer Information Systems, and a 1996
graduate of Northwestern University's J.L. Kellogg's Graduate School of
Management.

Joseph K. Kremer became Vice President-Marketing of the Company on
February 16, 1998. Prior to joining the Company, Mr. Kremer was U.S. Manager
Channel Marketing Programs at IBM Corporation, where he worked since 1987. Mr.
Kremer is a 1987 graduate of Virginia Polytechnic Institute and State University
where he earned a Bachelor of Science degree in Accounting and a 1989 graduate
of University of Scranton, where he earned a Masters of Business Administration
Degree in Finance.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Investment Banking Relationship

Michelle L. Collins, a director of the Company, was a principal in the
investment banking firm of William Blair & Company, L.L.C. ("Blair") through
December 31, 1997. Blair served as the sole underwriter of the Company's initial
public offering of Common Stock in May, 1993 and the Company's second public
offering in June, 1994 and the lead underwriter of the Company's third and
fourth public offerings in August, 1995 and February, 1997, respectively. Blair
also acts as a market maker for the Company's Common Stock. In connection with
the Company's secondary offering in February, 1997, William Blair & Company,
L.L.C. received underwriting discounts and commissions in the aggregate amount
of $640,000 from the management selling shareholders.

Repurchase of Stock from Former Executive Officer

In July, 1990, the Company redeemed all shares of the Company's Common
Stock then held by Mr. John Marks, a former executive officer, director and
shareholder who has since terminated any association with the Company. The
purchase price of such redeemed shares was $506,113, of which $124,085 was paid
in cash and $382,028 was payable by a promissory note. The note bore interest at
a rate of 10% per annum, and principal and interest was payable in equal
quarterly installments of $31,835, which began in July, 1991 and continued
through April 1, 1994, at which time the note was paid in full. The note was
personally guaranteed by Mr. Krasny.

In June, 1993, Mr. Marks filed a three-count Complaint in the United
States District Court for the Northern District of Illinois, Eastern Division,
alleging violations of the federal securities laws, fraud and breach of
fiduciary duty in connection with the July, 1990 acquisition of his common
stock. Count I alleged violations of Section 10(b) of the Securities and
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder against the Company
and Mr. Krasny. Count II alleged fraud and deceit against the Company and Mr.
Krasny. Count III alleged a breach of fiduciary duty against only Mr. Krasny.
Mr. Marks sought to rescind the 1990 sale and have himself restored to the
position he was in prior to the purchase of his shares or, alternatively, be
awarded sufficient damages to compensate him for the damages allegedly sustained
including pre-judgment interest. In addition, in Counts II and III, Mr. Marks
seeks to recover punitive damages in an unspecified amount.

<PAGE> 12

In July, 1993, the Company and Mr. Krasny filed a motion to dismiss the
Complaint. In their motion to dismiss, the Company and Mr. Krasny argued that
Mr. Marks' claims for the alleged violation of Section 10(b) and Rule 10b-5 were
barred because the statute of limitations for such claims had expired. Further,
Mr. Krasny and the Company denied making any misrepresentations and argued, in
the alternative, that if any misrepresentations were made, they were not
material, nor did they cause Mr. Marks' purported damages. The Company and Mr.
Krasny also asserted that certain portions of Mr. Marks' Complaint do not comply
with Federal Rule of Civil Procedure 9(b), which requires that fraud claims be
plead with particularity. In addition, the Company and Mr. Krasny argued that
since the sole basis for federal jurisdiction was Count I, if it is dismissed,
Counts II and III should also be dismissed for lack of subject matter
jurisdiction.

In September, 1995, the District Court granted, without prejudice, the
Company's and Mr. Krasny's motion to dismiss. In its Memorandum Opinion
dismissing the Complaint, the Court held Mr. Marks' allegations established that
he had inquiry notice of the purported securities law violations no later than
July 27, 1990, the date the Company purchased his shares. Because Mr. Marks
brought his action in June 1993, beyond the applicable statute of limitations
period, and because no facts alleged in the Complaint provided a basis to toll
that period, the District Court dismissed the federal securities claims
contained in Count I. The District Court then dismissed the state law claims in
Counts II and III for lack of federal jurisdiction. The District Court provided
Mr. Marks with leave to file an Amended Complaint if he could plead facts that
enabled him to surmount the statute of limitations obstacles to his claims of
violation of federal securities laws.

In October, 1995, Marks filed an Amended Complaint alleging the same
three causes of action contained in his original Complaint. The factual
allegations of the Amended Complaint are, in management's opinion, essentially
the same as those of the original Complaint. The Amended Complaint, however,
includes allegations which endeavor to avoid application of the statute of
limitations by alleging Mr. Marks' lack of notice of his purported claims. The
Company and Mr. Krasny in November, 1995 filed a motion to dismiss the Amended
Complaint, arguing that it contained the same deficiencies relative to the
statute of limitations and other defects as the original Complaint.

On June 14, 1996, the District Court granted the motion to dismiss the
Amended Complaint, with prejudice on the grounds that the securities law claim
alleged in Count I was barred by the statute of limitations and it did not have
jurisdiction over the state law claims alleged in Counts II and III. Mr. Marks
appealed the District Court decision to the United States Court of Appeals for
the Seventh Circuit. On July 28, 1997, the Court of Appeals reversed the
District Court's ruling and remanded the matter back to the District Court for
further proceedings. The Court of Appeals held, among other things, that the
District Court improperly granted the motion to dismiss the Amended Complaint
because it based its decision on inferences of fact inappropriate at this stage
of the proceedings. The case is currently proceeding in the District Court. The
Company and Mr. Krasny have answered the Amended Complaint. They denied any
wrongdoing or liability on their part and asserted a number of affirmative
defenses.

On June 10, 1997, Mr. Marks filed in the Circuit Court of the
Nineteenth Judicial Circuit, Lake County, Illinois, a lawsuit alleging
essentially the same fraud and breach of fiduciary duty claims asserted in the
previously dismissed federal lawsuit. The Company and Mr. Krasny have answered
the complaint and moved to strike a portion of the relief requested by Mr.
Marks. In their answer to the Complaint, the Company and Mr. Krasny denied any
wrongdoing or liability. The Company anticipates this action will likely be
dismissed or stayed in light of the subsequent ruling by the Court of Appeals
discussed above.

The Company and Mr. Krasny believe that their actions were honest
and proper and that the suit by Mr. Marks is without merit. The Company and Mr.
Krasny are committed to vigorously defending the litigation.

Mr. Krasny has agreed that in the event that the Company is ordered to
pay damages to Mr. Marks on account of the purchase by the Company of Mr. Marks'
shares, Mr. Krasny will indemnify and reimburse the Company for all damages,
including amounts, net of tax benefits received by the Company, ordered to be
paid and legal fees and costs incurred by the Company in connection with the
defense of the litigation and any appeals. In the event the matter is settled,
Mr. Krasny has agreed to indemnify and reimburse the Company for any amount paid
to Mr. Marks in settlement of this matter, net of tax benefits received by the
Company. No agreement of settlement may be entered into by the Company without
the consent of Mr. Krasny. The Company and Mr. Krasny incurred legal expenses of
approximately $379,000, $133,000 and $140,000 for the years ended December 31,
1997, 1996 and 1995, respectively, which have been assumed, net of tax, by Mr.
Krasny. These legal expenses are recorded as a selling and administrative
expense and the reimbursement by Mr. Krasny, net of tax, is recorded as an
increase to paid-in-capital.

<PAGE> 13

EXECUTIVE COMPENSATION

Information concerning the annual and long-term compensation for
services in all capacities to the Company for the years ended December 31, 1997,
1996 and 1995, of those persons who were, at December 31, 1997 (i) the chief
executive officer and (ii) the other four most highly compensated executive
officers of the Company whose total annual salary and bonus exceeded $100,000 in
1997 (the "Named Officers") is shown below:

SUMMARY COMPENSATION TABLE

LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------- ----------------------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
BONUS COMPENSATION OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) ($)(1) ($) SARS(#) ($)(2)
--------------------------- ---- --------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael P. Krasny 1997 $ 223,574 $ 1,774,134 (3) $ 2,407 (4) --- $ 5,207
Chairman of the Board, Chief 1996 $ 216,430 $ 1,781,276 (3) --- --- $ 4,918
Executive Officer, Secretary 1995 $ 210,946 $ 833,424 (3) --- --- $ 4,284
Treasurer

Gregory C. Zeman 1997 $ 195,624 $ 1,498,630 (3) $ 2,407 (4) --- $ 5,207
President and Director 1996 $ 189,377 $ 1,373,747 (3) --- --- $ 4,918
1995 $ 184,578 $ 632,599 (3) $ 1,616 (4) --- $ 4,284

Daniel B. Kass 1997 $ 195,624 $ 1,079,563 (3) $ 3,739 (4) --- $ 5,207
Vice President-Sales and 1996 $ 189,377 $ 989,602 (3) --- --- $ 4,918
Director 1995 $ 184,578 $ 431,774 (3) $ 1,287 (4) --- $ 4,284

Paul A. Kozak 1997 $ 184,447 $ 350,280 $ 2,407 15,596 $ 5,207
Vice President-Purchasing 1996 $ 178,555 $ 265,413 --- 8,331 $ 4,918
1995 $ 165,000 $ 141,996 $ 1,616 (4) 6,000 $ 4,284

Harry J. Harczak, Jr. 1997 $ 136,059 $ 297,468 $ 2,407 (4) 8,595 $ 5,207
Chief Financial Officer 1996 $ 131,713 $ 203,995 $ 13,050 (4) 32,827 $ 4,918
1995 $ 125,000 $ 130,108 --- 3,000 $ 4,284
</TABLE>

(1) Amounts reflected for Messrs. Kozak and Harczak for all periods,
are attributable to a non-contractual bonus.
(2) Reflects the Company's contributions to the CDW Computer Centers, Inc.
Employees' Profit Sharing Plan.
(3) The 1997, 1996 and 1995 bonus amounts for Messrs. Krasny, Zeman and
Kass are pursuant to the terms of employment agreements which provide
for allocations from the Employee Incentive Bonus Pool, the total of
which will not exceed twenty percent of the Company's increase in
income from operations as defined in accordance with generally
accepted accounting principles consistently applied over the previous
year. See "Executive Compensation -- Employment Related Agreements."
(4) Amounts represent travel incentive awards and a company-wide bonus plan
paid in 1997 relating to goals achieved in 1996, and travel incentive
awards for the years preceding 1997.

<PAGE> 14

DIRECTOR COMPENSATION; CDW DIRECTOR STOCK OPTION PLAN

Directors who are not also employees of the Company ("Independent
Directors") are paid an annual fee of $20,000. Additionally, the Company has
established the CDW Director Stock Option Plan for Independent Directors (the
"Director Option Plan"). A maximum of 1,050,000 shares of Common Stock, in the
aggregate, reduced on a share for share basis for options outstanding under the
CDW Incentive Stock Option Plan (the "Stock Option Plan"), subject to
adjustment, have been authorized for the granting of stock options under the
Director Option Plan. Except as stated herein, the Director Option Plan is
identical in terms to the CDW Incentive Stock Option Plan available to officers
and employee directors and other employees of the Company or its subsidiaries.
In November, 1993, the Board of Directors granted, effective as of January 3,
1994 and on the first trading day of each calendar year thereafter, each
Independent Director options to purchase shares of Common Stock of the Company
at a price based on the closing price of the Company's shares on the first
trading day of such calendar year, subject to the terms and conditions of the
Director Option Plan and pending modification by the Board of Directors (which
shall not be made more than once each six months other than to comport with
changes in the Internal Revenue Code of 1986, as amended, and the Employee
Retirement Income Security Act). The number of options authorized to be granted
to each Independent Director was initially 3,000 shares and each year thereafter
beginning January 1, 1995 shall be 3,000 shares, plus the product of 3,000
shares multiplied by the percentage increase in the Company's immediately
preceding year's net income over the second immediately preceding year's net
income, in each case calculated in accordance with generally accepted accounting
principles, applied on a consistent basis. The options shall vest on the third
anniversary of the date of grant and shall expire on the tenth anniversary of
the date of grant. If an Independent Director ceases to be a member of the Board
of Directors, all options granted to such Independent Director which have not
vested shall expire by their terms. The Company received no monetary
consideration for the grants.

Pursuant to the Director Option Plan, options that were granted and remain
outstanding, as of February 28, 1998 are as follows:

# of Options
-------------------------------
Grant Date Exercisable Unexercisable Exercise Price
--------------- ----------- ------------- --------------
<S> <C> <C> <C>
Mr. Levy January 3, 1995 4,920 $22.83
January 2, 1996 4,980 $27.00
January 2, 1997 5,160 $53.75
January 2, 1998 4,449 $51.25

Ms. Collins January 2, 1997 5,160 $53.75
January 2, 1998 4,449 $51.25
</TABLE>

On January 28, 1998, Mr. Levy exercised 3,000 options, which were granted on
January 2, 1994, and became exercisable on January 2, 1997, at an exercise price
of $9.33.

EMPLOYMENT RELATED AGREEMENTS

Mr. Krasny. The Company has entered into an Employment and
Non-Competition Agreement with Mr. Krasny that became effective upon the
consummation of the initial public offering in 1993. In accordance with the
terms of the Agreement, Mr. Krasny's employment is terminable with or without
cause and the Company will pay Mr. Krasny an initial annual base salary of
$200,000, to be adjusted annually in accordance with the Consumer Price Index.
Additionally, the Agreement provides that Mr. Krasny shall be eligible to
receive an annual bonus to be paid out of the Employee Incentive Bonus Pool,
which pool shall be calculated not to exceed twenty percent of the Company's
increase in income from operations over the prior year as determined in
accordance with generally accepted accounting principles consistently applied.
This bonus will be awarded in the discretion of the Compensation and Stock
Option Committee. In addition, the Agreement contains a non-competition
restriction prohibiting Mr. Krasny from undertaking certain competitive
activities for a two year period after the date Mr. Krasny ceases his employment
with the Company.

<PAGE> 15

Mr. Zeman. The Company has entered into an Employment and
Non-Competition Agreement with Mr. Zeman which became effective upon the
consummation of the initial public offering in 1993. In accordance with the
terms of the Agreement, Mr. Zeman's employment is terminable with or without
cause and the Company will pay Mr. Zeman an initial annual base salary of
$175,000, to be adjusted annually in accordance with the Consumer Price Index.
Additionally, the Agreement provides that Mr. Zeman shall be eligible to receive
an annual bonus to be paid out of the Employee Incentive Bonus Pool, which pool
shall be calculated not to exceed twenty percent of the Company's increase in
income from operations over the prior year as determined in accordance with
generally accepted accounting principles consistently applied. This bonus will
be awarded in the discretion of the Compensation and Stock Option Committee. In
addition, the Agreement contains a non-competition restriction prohibiting Mr.
Zeman from undertaking certain competitive activities for a two year period
after the date Mr. Zeman ceases his employment with the Company.

Mr. Kass. The Company has entered into an Employment and
Non-Competition Agreement with Mr. Kass which became effective upon the
consummation of the initial public offering in 1993. In accordance with the
terms of the Agreement, Mr. Kass's employment is terminable with or without
cause and the Company will pay Mr. Kass an initial annual base salary of
$175,000, to be adjusted annually in accordance with the Consumer Price Index.
Additionally, the Agreement provides that Mr. Kass shall be eligible to receive
an annual bonus to be paid out of the Employee Incentive Bonus Pool, which pool
shall be calculated not to exceed twenty percent of the Company's increase in
income from operations over the prior year as determined in accordance with
generally accepted accounting principles consistently applied. This bonus will
be awarded in the discretion of the Compensation and Stock Option Committee. In
addition, the Agreement contains a non-competition restriction prohibiting Mr.
Kass from undertaking certain competitive activities for a two year period after
the date Mr. Kass ceases his employment with the Company.

OPTION GRANTS

Information with respect to grants of stock options to Named Officers
during 1997 is set forth below. See "Incentive Stock Option Plans".

Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term
- --------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
% of Total Exercise
Options Granted or Base
Options to Employees Price Expiration
Named Officers(1) Granted in Fiscal Year ($/Sh) Date 0% ($) 5% ($) 10% ($)
- ---------------------- ------- --------------- -------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Paul A. Kozak 6,250 (2) 0.73% $ 52.125 12/31/2017 $ 0 $ 538,594 $ 1,865,906
3,095 (3) 0.36% $ 0.01 12/31/2017 $ 161,296 $ 428,008 $ 1,085,293
6,251 (4) 0.73% $ 59.00 12/31/2017 $ 0 $ 495,704 $ 1,823,229

Harry J. Harczak, Jr. 6,250 (2) 0.73% $ 52.125 12/31/2017 $ 0 $ 538,594 $ 1,865,906
2,345 (3) 0.27% $ 0.01 12/31/2017 $ 122,210 $ 324,290 $ 822,298
</TABLE>

(1) No other Named Officers received grants of stock options in 1997.
(2) Options are exercisable at the rate of 12.5% per year, beginning
December 31, 2001.
(3) Options are exercisable in full on January 1, 2002.
(4) Options are exercisable at the rate of 25% per year, beginning
December 31, 2000.

<PAGE> 16

OPTION EXERCISES AND FISCAL YEAR-END VALUES

Information with respect to options exercised and restricted shares
sold during 1997, unexercised options to purchase the Company's Common Stock
granted under the MPK Stock Option Plan and the Company's Incentive Stock Option
Plans (as hereinafter defined) and restricted shares granted under the MPK
Restricted Stock Plan to the Named Officers and held by them at December 31,
1997 is set forth below.

NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES VALUE UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON REALIZED DECEMBER 31, 1997(#) DECEMBER 31, 1997($) (1)
----------- ---------- --------------------------- -----------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael P. Krasny --- --- --- --- --- ---
Gregory C. Zeman 103,504 $ 6,105,007 390,087 2,043,112 (2) $ 20,323,533 $ 106,446,135
Daniel B. Kass 21,955 $ 1,294,978 82,747 433,387 (2) $ 4,311,119 $ 22,579,463
Paul A. Kozak 6,251 $ 368,809 750 50,928 (3) $ 22,031 $ 1,463,987
Harry J. Harczak, Jr. --- --- 500 50,922 $ 14,684 $ 803,009

</TABLE>

(1) Based on the closing price as reported by The Nasdaq Stock Market of
the Company's Common Stock on December 31, 1997 ($52.125), less the
respective exercise prices.
(2) Pursuant to the provisions of the MPK Stock Option Plan, the options
become fully exercisable upon termination of employment.
(3) Includes 18,751 shares of restricted stock allocated to Mr. Kozak under
the MPK Restricted Stock Plan which vest in equal installments on
January 1, 2000, 2001, 2002 and 2003. See MPK Restricted Stock Plan.

MPK STOCK OPTION PLAN

At the time of the Company's initial public offering, Mr. Krasny
established the MPK Stock Option Plan pursuant to which he granted as of
December 31, 1992 to Messrs. Zeman and Kass and Ms. Gerlits, options to purchase
in the aggregate 4,143,375 shares of Common Stock owned by him. As of the date
hereof, options to acquire an aggregate of 3,207,401 shares of common stock
remain outstanding. These options are non-forfeitable and become exercisable
during the employment of such individual at the rate of 5% per year upon each of
the first four anniversaries of the grant and an additional 15% on each
anniversary date thereafter until all options are exercisable. Additional shares
may be exercised proportionately to any shares sold by Mr. Krasny from his
holdings. The options may be exercised at a price of $.0167 per share. If any of
these three individuals terminates his or her employment with the Company, all
options become exercisable and such individual will be required to exercise his
or her options at the option exercise price within six months of the date of
termination. Mr. Krasny will, in such event, have a right to repurchase the
shares relating to the terminating employee's exercised options at the
prevailing market rate, less costs and expenses attendant to the sale of the
stock. Mr. Krasny's acquisition may be made pursuant to a note payable over a
ten-year period with interest at the applicable federal rate as defined in the
Internal Revenue Code of 1986, as amended. Upon the death or disability of any
of these individuals, their options shall become immediately exercisable, and
said option privileges shall expire unless exercised within one year after the
date of death or disability. The MPK Stock Option Plan, which is wholly funded
from shares of Common Stock owned by Mr. Krasny, does not result in a cash
payment from plan participants to the Company or increase the number of
outstanding shares of Common Stock.

In connection with the Company's secondary public offerings, Messrs.
Zeman and Kass and Ms. Gerlits exercised options to acquire 349,895, 74,220 and
37,109 shares, respectively, in June, 1994, 256,653, 54,441 and 27,221 shares,
respectively, in August, 1995, and 103,504, 21,955, and 10,978 shares,
respectively, in February, 1997. These shares were immediately sold in the
respective secondary public offerings.

<PAGE> 17

INCENTIVE STOCK OPTION PLANS

The Company has established the CDW Incentive Stock Option Plan, the
CDW 1996 Incentive Stock Option Plan, the CDW 1996 Officer and Manager Bonus
Plan, the CDW 1997 Officer and Manager Bonus Plan and certain non-statutory
stock option agreements (hereafter collectively referred to as the "Incentive
Stock Option Plans"), as described below, to advance the interests of the
Company and shareholders by providing Company employees with an additional
incentive to continue their efforts on behalf of the Company, as well as to
attract to the Company people of experience and ability. The Incentive Stock
Option Plans are intended to comply with Rule 16b-3 of the Securities Exchange
Act of 1934, as amended.

CDW Incentive Stock Option Plan

The Company established the CDW Incentive Stock Option Plan effective
as of May 18, 1993. A maximum of 1,050,000 shares of Common Stock in the
aggregate, subject to adjustment, were authorized for the granting of stock
options under both the CDW Incentive Stock Option Plan and the Director Option
Plan. See "Director Compensation; CDW Director Stock Option Plan." In 1997, no
options were granted pursuant to the CDW Incentive Stock Option Plan, except
those granted under the CDW Director Option Plan discussed herein.

CDW 1996 Incentive Stock Option Plan

The Board of Directors of the Company established the CDW 1996
Incentive Stock Option effective as of November 14, 1996. A maximum of 3,000,000
shares of Common Stock in the aggregate, subject to adjustment, were authorized
for the granting of stock options to directors, officers, employees and
consultants. On February 21, 1997, in connection with the modification to the
MPK Restricted Stock Plan more fully described below, the Company granted
132,064 options under the CDW 1996 Incentive Stock Option Plan at an exercise
price of $59.00, the fair market value at the Company's Common Stock on the date
of grant. See "MPK Restricted Stock Plan." During 1997, 702,958 options were
granted pursuant to the CDW Incentive Stock Option Plan, of which 31,250 were
granted to executive officers. All of these options have an exercise price of
$52.125, the fair market value of the Company's Common Stock on the date of
grant.

It is expected that all officers, directors, other employees and
consultants of the Company or its subsidiaries will be eligible to participate
under the CDW Incentive Stock Option Plan and/or the CDW 1996 Incentive Stock
Option Plan as deemed appropriate by the Compensation and Stock Option
Committee. Participants will not pay any cash consideration to the Company to
receive the options. These stock option plans will be administered by the
Compensation and Stock Option Committee. The options will have exercise prices
at least equal to 100% of the fair market value of the Common Stock at the date
of grant. Options will expire no later than the twentieth anniversary of the
date of grant. An option holder will be able to exercise options from time to
time, subject to the vesting schedule applicable to the options. Options will
not vest prior to the third anniversary of the date of grant, except that
options will vest immediately upon the earlier of death or disability of a
participant. Upon termination for cause by the Company, all vested and unvested
options will be forfeited. Upon termination of employment with the Company,
other than for cause by the Company or upon death or disability, all unvested
options shall be forfeited and vested options shall be exercisable only during
the ninety (90) day period following termination of employment. Subject to the
above conditions, the exercise price, duration of the options and vesting
provisions will be set by the Compensation and Stock Option Committee in its
discretion.

<PAGE> 18

CDW 1997 Officer and Manager Bonus Plan

The Compensation and Stock Option Committee of the Company approved the
CDW 1997 Officer and Manager Bonus Plan in January, 1998, pursuant to which a
portion of the 1997 annual bonus for certain executive officers and managers of
the Company would be paid by a grant of stock options with an exercise price of
$0.01 per share. The number of options granted was determined by the amount of
the bonus due to each individual, which was formula-based, and the market value
of the Company's common stock as of December 31, 1997. There were 14,417 options
granted pursuant to the CDW 1997 Officer and Manager Bonus Plan, of which 10,716
were granted to executive officers. All options under the CDW 1997 Officer and
Manager Bonus Plan vest on January 1, 2002.

Federal Tax Consequences

The Incentive Stock Option Plans are neither subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended,
nor are they qualified plans under the Internal Revenue Code of 1986, as amended
(the "Code"). The granting of an option under the Incentive Stock Option Plans
will not result in any taxable income to the participant or deduction to the
Company at the time of grant. Generally, the holder of an option will recognize
ordinary income for federal income tax purposes at the time such participant
exercises the options and receives Common Stock. The amount of such taxable
income will be measured by the excess of the fair market value of the Common
Stock at the time of exercise over such option price and such excess will be
treated for tax purposes as compensation expense of the Company.

MPK RESTRICTED STOCK PLAN

Effective upon the closing of the initial public offering, Mr. Krasny
transferred 668,604 shares of his Common Stock to the MPK Restricted Stock Plan
(the "MPK Plan Shares"), to be held in escrow for the benefit of those persons
employed by the Company on December 31, 1992. Shares contributed on behalf of
participating employees were calculated on the basis of their months of service
and average salary. During such time as the MPK Plan Shares are held in escrow,
Mr. Krasny will retain the right to vote the MPK Plan Shares, and dividends
thereon, if any, will inure to the benefit of Mr. Krasny. The purpose of the MPK
Restricted Stock Plan was to provide participants with additional incentives to
remain in the Company's employ, to build upon employee loyalty and to provide
such employees with an opportunity to share in the Company's profits and growth.

In accordance with the original terms of the MPK Restricted Stock Plan,
all of the MPK Plan Shares were scheduled to fully vest upon January 1, 2000,
provided that a participant has remained continually employed with the Company
or its subsidiaries during such period. Participants who do not complete
continuous employment through such date will forfeit their right to the MPK Plan
Shares and such shares will revert to Mr. Krasny. As of December 31, 1997,
124,836 shares have been forfeited and reverted to Mr. Krasny. MPK Plan Shares
will immediately vest upon the death or total disability of a participating
employee. The MPK Restricted Stock Plan, which is wholly funded from shares of
Common Stock owned by Mr. Krasny, does not result in a cash payment from Plan
participants to the Company or increase the number of outstanding shares of
Common Stock.

On January 31, 1997, the Company filed a Registration Statement on Form
S-3, which was declared effective on February 7, 1997, to modify the terms of
the MPK Restricted Stock Plan and provide participants the option to accelerate
the vesting on 25% of their shares in exchange for the extension of the vesting
period on their remaining shares through 2003. Under the terms of this
modification, participants who elected the acceleration were granted options by
the Company equal to the number of shares that became vested, with an exercise
price equal to the fair market value of the Company's Common Stock on the
acceleration date. Pursuant to this modification, participants elected
accelerated vesting for an aggregate of 132,064 shares, which vested and were
sold in a secondary public offering on February 21, 1997, the acceleration date.
Participants who elected accelerated vesting were granted an aggregate of
132,064 options from the 1996 CDW Incentive Stock Option Plan. The newly granted
options have an exercise price of $59.00 per share and vest 25% per year
beginning January 1, 2001.

<PAGE> 19

REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE

The Compensation and Stock Option Committee (the "Compensation
Committee") is currently comprised of Mr. Levy and Ms. Collins. The Compensation
Committee met in February 1997 to review and approve bonus and stock option
allocations to employees of the Company relative to their performance in 1996
and to establish, as necessary, the 1997 base compensation and performance-based
compensation programs for executive officers. The Compensation Committee met in
January 1998 to review and approve bonus and stock option allocations to
employees of the Company relative to their performance in 1997, ratify the CDW
1998 Officer and Manager Bonus Plan and to establish, as necessary, the 1998
base compensation programs for certain executive officers.

As previously described in the Proxy Statement, Messrs. Krasny, Zeman
and Kass are each party to an Employment and Non-Competition Agreement with the
Company (each an "Employment Agreement"). With respect to compensation for these
officers, each Employment Agreement provides for: (i) a specific base salary to
be adjusted annually based upon changes in the United States Consumer Price
Index, and (ii) an opportunity for each of these executives to participate in an
Employee Incentive Bonus Pool ("the Bonus Pool") as established pursuant to
Article VIII of the Company's By-laws. Pursuant to the By-laws, the Bonus Pool
shall be established, on an annual basis, in an amount up to twenty percent
(20%) of the increase in the Company's income from operations, as defined in
accordance with generally accepted accounting principles, over the prior fiscal
year. At the January 1998 meeting, the Compensation Committee discussed the
Employment Agreements and confirmed the relevant cost of living increases in the
base salaries based upon the increase in the United States Consumer Price Index
for 1997. Additionally, the Compensation Committee reviewed the Company's 1997
financial performance for the purpose of determining allocations to be made
under the Bonus Pool.

As a result of the increase in the Company's income from operations in
1997 over the Company's 1996 income from operations, an aggregate of $5,438,371
would be available for distribution pursuant to the Bonus Pool. Of this amount,
the Committee determined that $4,352,327 should be distributed to Messrs.
Krasny, Zeman and Kass, $1,086,045 would be distributed to a number of other
Company employees. Of the $4,352,327, the Compensation Committee directed that
$1,774,134, $1,498,630 and $1,079,563 should be distributed to Messrs. Krasny,
Zeman and Kass, respectively, based on each person's perceived contribution to
the Company's 1997 results. Included among the other Company employees who
received the $1,086,045 were Mr. Harczak, who received $89,624 in recognition of
his efforts on behalf of the Company in connection with the development of the
Company's finance and accounting organization, and Mr. Kozak, who received a
$75,926 bonus for his efforts in developing and maintaining efficient inventory
purchasing methods and controls. The remaining $920,495 was distributed to other
officers and employees of the Company based upon the recommendation of Mr.
Krasny and as approved by the Compensation Committee.

As of the date hereof, no Named Officers other than Messrs. Krasny,
Zeman and Kass are employed pursuant to employment agreements. The base
compensation for Named Officers not subject to employment agreements was
established by Mr. Krasny and Mr. Zeman at the time each of the respective
officers assumed their positions based upon their level of experience, past
performance and expected future performance. At the January 1998 meeting, the
Compensation Committee reviewed the base compensation of such officers and
approved an increase based upon the increase in the United States Consumer Price
Index for 1997. In addition to this base compensation, each of the respective
officers received a bonus out of the CDW 1997 Officer and Manager Bonus Plan
which was payable part in cash and part in stock options of the Company with an
exercise price of $0.01 per share. The aggregate amount of the bonus was
determined based upon the recommendation of Mr. Krasny and as approved by the
Compensation Committee. Messrs. Kozak and Harczak were granted options pursuant
to the CDW 1997 Officer and Manager Bonus Plan of 3,095 and 2,345 shares,
respectively.

<PAGE> 20

The 6,250 options granted to each of to Messrs. Kozak and Harczak in
1997, as reflected in the Option Grants table, were granted pursuant to the CDW
Incentive Stock Option Plan and were determined based on a formula for officers
of the Company that was reviewed and approved by the Compensation and Stock
Option Committee. The 6,251 options granted to Mr. Kozak in 1997 were granted
pursuant to the CDW 1996 Incentive Stock Option Plan as a result of the
modification to the terms of the MPK Restricted Stock Plan (see "MPK Restricted
Stock Plan"). No options were granted to the three Named Officers subject to
employment contracts.

Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a federal income tax deduction to public companies for compensation
over $1,000,000 paid to the corporation's chief executive officer and four other
most highly compensated executive officers. Qualifying performance-based
compensation will not be subject to the deduction limit if certain requirements
are met. The Company currently intends to structure the performance based
portion of the compensation of its executive officers in a manner that complies
with this provision so that such amounts will be deductible to the Company.

COMPENSATION AND STOCK OPTION COMMITTEE
Joseph Levy, Jr. Michelle L. Collins

<PAGE> 21

SHAREHOLDER RETURN PERFORMANCE PRESENTATION

STOCK PRICE PERFORMANCE GRAPH

The Stock Price Performance Graph below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.

Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on the Company's Common Stock with
the cumulative total return of the Nasdaq Composite Index and the Nasdaq Retail
Trade Index for the period commencing May 27, 1993 and ending December 31, 1997
where $100 was invested on May 27, 1993.

Historical stock price performance shown on the graph is not
necessarily indicative of the future price performance.

5/27/93 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
CDW Computer Centers, Inc. $ 100 $ 224 $ 546 $ 648 $ 1,423 $ 1,251
Nasdaq Stock Market (US) $ 100 $ 111 $ 109 $ 153 $ 189 $ 232
Nasdaq Retail $ 100 $ 113 $ 103 $ 114 $ 136 $ 160

</TABLE>

<PAGE> 22

PROPOSAL 2

RATIFICATION OF SELECTION OF
INDEPENDENT ACCOUNTANTS

Subject to ratification by shareholders at the Annual Meeting, the
Audit Committee has recommended to the Board of Directors, and the Board of
Directors has approved, the selection of the independent accounting firm of
Coopers & Lybrand L.L.P. to audit the Company's financial statements for the
1998 year. Coopers & Lybrand L.L.P. has audited the Company's financial
statements since March 31, 1993. It is expected that representatives of Coopers
& Lybrand L.L.P. will be present at the Annual Meeting, will have the
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.

If the foregoing recommendation is rejected or if Coopers & Lybrand
L.L.P. declines to act or otherwise becomes incapable of acting or if their
appointment is otherwise discontinued, the Board of Directors will appoint other
independent accountants whose appointment for any period subsequent to the 1998
Annual Meeting of Shareholders shall be subject to the ratification by the
shareholders at that meeting.

OTHER MATTERS THAT MAY COME BEFORE THE MEETING

As of this date, the Company is not aware that any matters are to be
presented for action at the meeting other than those referred to in the Notice
of Annual Meeting, but the proxy form sent herewith, if executed and returned,
gives discretionary authority with respect to any other matters that may come
before the meeting.

By Order of the Board of Directors,

Michael P. Krasny
Chairman, Chief Executive Officer,
Secretary and Treasurer
Vernon Hills, Illinois
March 25, 1998