10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q

(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2002
OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________

Commission file number         0-21796

CDW Computer Centers, Inc.
(Exact name of registrant as specified in its charter)

Illinois	36-3310735
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
200 N. Milwaukee Ave.	60061
Vernon Hills, Illinois	(Zip Code)
(Address of principal executive offices)

(847) 465-6000

(Registrant's telephone number, including area code)

______________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ____________X_____________ No _________________________

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes ____________X_____________ No _________________________

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

        As of April 30, 2002, 89,041,313 common shares were issued and 85,993,813 were outstanding.

CDW COMPUTER CENTERS, INC.

TABLE OF CONTENTS

			Page No.
PART I.	Financial Information
	Item 1.	Financial Statements (unaudited):
		Condensed Consolidated Balance Sheets - March 31, 2002 and December 31, 2001	1
		Condensed Consolidated Statements of Income - Three months ended March 31, 2002 and 2001	2
		Condensed Consolidated Statement of Shareholders' Equity - Three months ended March 31, 2002	3
		Condensed Consolidated Statements of Cash Flows - Three months ended March 31, 2002 and 2001	4
		Notes to Condensed Consolidated Financial Statements	5 - 9
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	10 - 15
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
PART II.	Other Information
	Item 1.	Legal Proceedings	16
	Item 6.	Exhibits and Reports on Form 8-K	16

Part I. Financial Information

Item 1. Financial Statements

CDW COMPUTER CENTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
		March 31, 2002	December 31, 2001
		(unaudited)
Assets
Current Assets:
	Cash and cash equivalents	$      114,365	$      145,977
	Marketable Securities	277,811	248,404
	Accounts receivable, net of allowance for doubtful    accounts of $9,900 and $9,500, respectively	345,741	318,405
	Merchandise inventory	137,678	119,117
	Prepaid income taxes	23,361	-
	Miscellaneous receivables	41,821	9,760
	Deferred income taxes	9,040	9,040
	Prepaid expenses	2,805	3,455
	Total current assets	952,622	854,158
Property and equipment, net		66,734	69,073
Investment in and advances to joint venture		5,395	5,382
Deferred income taxes and other assets		7,661	8,416
	Total assets	$  1,032,412	$    937,029
Liabilities and Shareholders' Equity
Current Liabilities:
	Accounts payable	$    122,204	$     106,808
	Accrued expenses:
	Compensation	22,910	28,113
	Income taxes	-	7,847
	Other	15,378	15,604
	Total current liabilities	160,492	158,372
Commitments and contingencies
Shareholders' Equity:
	Preferred shares, $1.00 par value; 5,000 shares    authorized; none issued	-	-
	Common shares, $0.01 par value; 500,000 shares    authorized; 88,997 and 88,466 shares issued, respectively	890	885
	Paid-in capital	318,496	258,708
	Retained earnings	662,055	621,299
	Unearned compensation	(1,607)	(1,931)
		979,834	878,961
	Less cost of common shares in treasury, 3,048 shares    and 2,893 shares, respectively	(107,914)	(100,304)
	Total shareholders' equity	871,920	778,657
	Total liabilities and shareholders' equity	$   1,032,412	$     937,029
The accompanying notes are an integral part of the consolidated financial statements.

1

CDW COMPUTER CENTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
	Three Months Ended March 31,
	2002	2001
Net sales	$    1,002,836	$    987,245
Cost of Sales	872,673	857,126
Gross profit	130,163	130,119
Selling and administrative expenses	64,236	63,843
Net advertising expense	733	2,813
Income from operations	65,194	63,463
Interest income	2,500	3,824
Other expense, net	(328)	(106)
Income before income taxes	67,366	67,181
Income tax provision	26,610	26,705
Net income	$      40,756	$      40,476
Earnings per share
Basic	$          0.47	$          0.47
Diluted	$          0.45	$          0.45
Weighted average number of common shares outstanding
Basic	85,842	86,194
Diluted	89,750	89,089
The accompanying notes are an integral part of the consolidated financial statements.

2

CDW COMPUTER CENTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(in thousands)
(unaudited)
	Common Shares		Paid-in	Retained	Unearned	Treasury Shares		Total Shareholders'
	Shares	Amount	Capital	Earnings	Compensation	Shares	Amount	Equity
Balance at December 31, 2001	88,466	$   885	$   258,708	$   621,299	$    (1,931)	2,893	$    (100,304)	$   778,657
MPK Restricted Stock    Plan forfeitures			(21)		21			-
Amortization of unearned    compensation					303			303
Exercise of stock options	531	5	7,158					7,163
Tax benefit from stock    option and restricted    stock transactions			52,651					52,651
Purchase of treasury    shares						155	(7,610)	(7,610)
Net income				40,756				40,756
Balance at March 31, 2002	88,997	$   890	$   318,496	$   662,055	$  (1,607)	3,048	$  (107,914)	$   871,920
	The accompanying notes are an integral part of the consolidated financial statements.

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CDW COMPUTER CENTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
		Three Months Ended March 31,
		2002	2001
Cash flows from operating activities:
Net income		$        40,756	$      40,476
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation	4,213	3,181
	Accretion of marketable securities	213	(160)
	Stock-based compensation expense	303	477
	Allowance for doubtful accounts	400	1,000
	Deferred income taxes	1,296	380
	Tax benefit from stock option and restricted stock transactions	52,651	4,422
	Changes in assets and liabilities:
	Accounts receivable	(27,736)	8,148
	Miscellaneous receivables and other assets	(32,205)	2,030
	Merchandise inventory	(18,561)	(43,095)
	Prepaid expenses	109	28
	Prepaid income taxes	(23,361)	-
	Accounts payable	15,396	65,850
	Accrued compensation	(5,203)	(2,516)
	Accounts income taxes and other expenses	(8,073)	9,032
	Net cash provided by operating activities	198	89,253
Cash flows from investing activities:
	Purchases of available-for-sale securities	(108,500)	(19,250)
	Redemptions of available-for-sale securities	156,375	52,000
	Purchases of held-to-maturity securities	(86,240)	-
	Redemptions of held-to-maturity securities	8,745	33,378
	Investments in and advances to joint venture	(6,369)	(5,648)
	Repayments of advances from joint venture	6,500	4,749
	Purchase of property and equipment	(1,874)	(6,245)
	Net cash (used in)/provided by investing activities	(31,363)	58,984
Cash flows from financing activities:
	Purchase of treasury shares	(7,610)	(71,381)
	Proceeds from exercise of stock options	7,163	600
	Net cash used in financing activities	(447)	(70,781)
Net (decrease) increase in cash		(31,612)	77,456
Cash and cash equivalents - beginning of period		145,977	43,664
Cash and cash equivalents - end of period		$        114,365	$      121,120
	The accompanying notes are an integral part of the consolidated financial statements.

4

CDW COMPUTER CENTERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1.     Description of Business

        CDW Computer Centers, Inc. (collectively with its subsidiaries, the "Company" or "CDW") is the largest direct marketer of multi-brand computers and related technology products and services in the United States. Our primary business is conducted from a combined corporate office, distribution center and showroom facility located in Vernon Hills, Illinois, sales offices in Mettawa, Buffalo Grove and Chicago, Illinois and a government sales office in Lansdowne, Virginia. Additionally, we market and sell products through www.cdw.com and www.cdwg.com, our Internet sites.

        We extend credit to corporate and public sector customers under certain circumstances based upon the financial strength of the customer. Such customers are typically granted net 30 day credit terms. The balance of our sales are made primarily through third party credit cards and for cash-on-delivery.

2.     Summary of Significant Accounting Policies

Basis of Presentation

        The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States. Such principles were applied on a basis consistent with those reflected in the 2001 Annual Report on Form 10-K and documents incorporated therein as filed with the Securities and Exchange Commission. The accompanying financial data should be read in conjunction with the notes to consolidated financial statements contained in the 2001 Annual Report on Form 10-K and documents incorporated therein. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring accruals) necessary to present fairly our financial position as of March 31, 2002 and December 31, 2001, the results of operations for the three months ended March 31, 2002 and 2001, the cash flows for the three months ended March 31, 2002 and 2001, and the changes in shareholders' equity for the three months ended March 31, 2002. The unaudited condensed consolidated statements of income for such interim periods are not necessarily indicative of results for the full year.

        We adopted Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" in 2002. This statement supercedes Statement of Financial Accounting Standards No. 121. We have determined that the Statement has no significant impact on our financial statements for the three months ended March 31, 2002 nor do we expect it to have any impact for the year ended December 31, 2002.

Pervasiveness of Estimates

        The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates, and revisions to estimates are included in our results for the period in which the actual amounts become known.

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3.      Marketable Securities

        The amortized cost and estimated fair values of our investments in marketable securities at March 31, 2002, were (in thousands):

			Gross Unrealized Holding
		Estimated			Amortized
		Fair Value	Gains	(Losses)	Cost
Security Type
Available-for-sale:
	U.S. government and government agency securities	$     84,741	$       241	$           -	$     84,500
	Municipal bonds	59,464	-	(1)	59,465
	Total available-for-sale	144,205	241	(1)	143,965
Held-to-maturity:
	U.S. government and government agency securities	123,943	-	(258)	124,201
	Corporate fixed income securities	9,675	30	-	9,645
	Total held-to-maturity	133,618	30	(258)	133,846
Total marketable securities		$     277,823	$       271	$    (259)	$     277,811

         Estimated fair values of marketable securities are based on quoted market prices. The amortized cost and estimated fair value of our investments in marketable securities at March 31, 2002 by contractual maturity were (in thousands):

	Estimated	Amortized
	Fair Value	Cost
Due in one year or less	$     253,037	$      252,913
Due in greater than one year	24,786	24,898
Total investments in marketable securities	$     277,823	$      277,811

        All of the marketable securities that were due in greater than one year have maturity dates prior to September 30, 2003.

4.     Financing Arrangements

        We have an aggregate $70 million available pursuant to two $35 million unsecured lines of credit with two financial institutions. One line of credit expires in June 2002, at which time we intend to renew the line, and the other does not have a fixed expiration date. Borrowings under the first credit facility bear interest at the prime rate less 2 1/2%, LIBOR plus 1/2% or the federal funds rate plus 1/2%, as determined by us. Borrowings under the second credit facility bear interest at the prime rate less 2 1/2%, LIBOR plus .45% or the federal funds rate plus .45%, as determined by us. At March 31, 2002, there were no borrowings under either of the credit facilities.

        We have entered into security agreements with certain financial institutions ("Flooring Companies") in order to facilitate the purchase of inventory from various suppliers under certain terms and conditions. The agreements allow for a maximum credit line of $84.0 million collateralized by inventory purchases financed by the Flooring Companies. At March 31, 2002, all amounts owed the Flooring Companies are included in trade accounts payable.

6

5.     Earnings Per Share

        At March 31, 2002, we had outstanding common shares totaling approximately 85,949,000. We have granted options to purchase common shares to the directors and coworkers of CDW under several stock option plans. These options have a dilutive effect on earnings per share. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations as required by Statement of Financial Accounting Standards No. 128, "Earnings Per Share."

	Three Months Ended
	March 31,
	(in 000's except per share data)
	2002	2001
Basic earnings per share:
Income available to      common shareholders (numerator)	$        40,756	$       40,476
Weighted average common      shares outstanding (denominator)	85,842	86,194
Basic earnings per share	$            0.47	$           0.47
Diluted earnings per share:
Income available to      common shareholders (numerator)	$        40,756	$       40,476
Weighted average common      shares outstanding	85,842	86,194
Effect of dilutive securities:      Options on common stock	3,908	2,895
Total common shares and dilutive securities (denominator)	89,750	89,089
Diluted earnings per share	$           0.45	$          0.45

        Additional options to purchase common shares were outstanding during the three months ended March 31, 2002 but were not included in the computation of diluted earnings per share as the exercise price of these options was greater than the average market price of common shares during the respective periods. The following table summarizes the weighted average number of options outstanding and the weighted average exercise price of those options, which were excluded from the calculation:

	Three Months Ended March 31, 2002 (in 000's except per share data)
Weighted average number of options	679
Weighed average exercise price	$55.99

        The options were all outstanding at March 31, 2002.

6.        Share Repurchase Program

        In January 2001, our Board of Directors authorized the purchase of up to 5 million shares of our common stock, slightly more than 5% of our total outstanding shares, from time to time in both open market and private transactions, as conditions warrant. The repurchase program is expected to remain effective for approximately twenty-four months, unless sooner completed or terminated by the Board of Directors. We intend to hold the repurchased shares in treasury for general corporate purposes, including issuances under various employee stock plans. In connection with the program, we purchased 155,000 shares of our common stock during the first quarter of 2002 at a total cost of approximately $7.6 million. Since January 2001, we purchased a total of 2,847,500 shares of our common stock at a total cost of approximately $105.8 million.

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7.     Public Offering of Common Shares

        In March 2002, Gregory C. Zeman, who is a member of our Board of Directors and employed as an advisor to CDW, sold 2,000,000 shares of common stock at a price of $48.00 per share. The Company did not receive any proceeds from the sale of shares and the number of outstanding common shares was not impacted. The shares sold by Mr. Zeman were acquired from Mr. Krasny, our founder and former chairman and chief executive officer, through the exercise of options previously granted to Mr. Zeman pursuant to the MPK Stock Option Plan. The exercise of options by Mr. Zeman resulted in CDW realizing an income tax benefit of approximately $37.9 million in the first quarter, of which approximately $400,000 had been previously recorded to deferred taxes. We recorded the incremental tax benefit of $37.5 million as an increase to paid-in-capital. In addition, we recorded incremental payroll tax expense related to the option exercise of approximately $1.4 million. Also in connection with the exercise of options by Mr. Zeman, we recorded a $30.2 million miscellaneous receivable for the payment of federal and state tax withholdings on behalf of Mr. Zeman. Reimbursement for these withholding payments was received on April 1, 2002.

8.     Segment Information

        We are engaged in the sale of multi-brand computers and related technology products and services primarily through direct marketing. We have two operating segments: corporate, which is primarily comprised of corporate customers but also includes consumers, and public sector, which is comprised of federal, state and local government and education customers. In accordance with Statement of Financial Accounting Standards (FAS) 131, "Disclosure about Segments of an Enterprise and Related Information," the internal organization that is used by management for making operating decisions and assessing performance is the source of the our reportable segments.

        The accounting policies of the segments are the same as those described above in the "Summary of Significant Accounting Policies." We allocate resources to and evaluate performance of our business segments based on both sales and operating income. Our corporate segment provides purchasing, merchandising, accounting, information technology, marketing, distribution and fulfillment services to the public sector segment. Certain elements of gross margin and operating expenses are subject to intercompany service agreements which provide for, among other things, a mark-up on intercompany sales and allocation of indirect expenses such as occupancy, operations and other support, payroll, training and benefits. The table below presents information about our reportable segments:

	Three Months Ended March 31, 2002 (in 000's)
	Corporate	Public Sector	Eliminations	Consolidated
External customer sales	$    844,655	$        158,181	$                  -	$   1,002,836
Transfers between segments	150,424	-	(150,424)	-
Total sales	$    995,079	$        158,181	$     (150,424)	$   1,002,836
Operating income	$      62,397	$            2,797	$                   -	$        65,194
Net interest income and other				2,172
Pretax income				$       67,366
Total assets	$   1,324,027	$          76,307	$     (367,922)	$  1,032,412

8

	Year Ended March 31, 2001 (in 000's)
	Corporate	Public Sector	Eliminations	Consolidated
External customer sales	$   870,534	$        116,711	$                  -	$   987,245
Transfers between segments	106,800	-	(106,800)	-
Total sales	$   977,334	$        116,711	$     (106,800)	$   987,245
Operating income	$     59,934	$           3,529	$                   -	$     63,463
Net interest income and other				3,718
Pretax income				$     67,181
Total assets	$   785,680	$        53,010	$       (43,294)	$   795,396

        Our assets are primarily managed as part of the corporate segment, including all inventory and the majority of all property and equipment. As a result, capital expenditures and related depreciation are immaterial for the public sector segment. The public sector segment assets consist principally of cash and cash equivalents and accounts receivable, including intercompany accounts.

        Sales, operating expenses and income relating to our investment in CDW Leasing, L.L.C., accounted for under the equity method, are immaterial to our Company as a whole and are evaluated by management for making operating decisions and allocating resources as part of the corporate segment.

        The following schedule presents net sales dollars by product category for all segments as a percentage of total net sales dollars. Product lines are based upon internal product code classifications. Product mix for the three month period ended March 31, 2001 has been retroactively adjusted for certain changes in individual product categorization.

Analysis of Product Mix	Three Months Ended March 31,
	2002	2001
Notebook computers and accessories	12.8   %	15.4   %
Desktop computers and servers	13.6	14.1
Subtotal computer products	26.4	29.5
Software	16.9	15.5
Data storage devices	14.7	14.3
Printers	13.6	13.0
Net/Comm products	9.5	9.5
Video	8.5	8.1
Add-on boards/memory	4.6	5.0
Input devices	3.0	2.6
Supplies,accessories and other	2.8	2.5
Total	100.0   %	100.0   %

         No single customer accounted for more than 1.0% of net sales in the three months ended March 31, 2002 or 2001. Less than 1.0% of our revenues are comprised of sales to customers outside of the United States.

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Item 2.      Management's Discussion and Analysis of Financial Condition and Results of Operations

        The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto.

Overview

        We are the largest direct marketer of multi-brand computers and related technology products and services in the United States. Our primary business is conducted from a combined corporate office, distribution center and showroom facility located in Vernon Hills, Illinois, and sales offices in Mettawa, Buffalo Grove and Chicago, Illinois and Lansdowne, Virginia. Additionally, we market and sell products through www.cdw.com and www.cdwg.com, our Web sites.

        For financial reporting purposes, we have two operating segments: corporate, which is primarily comprised of business customers but also includes consumers (which generated approximately 3% of total sales in the first quarter of 2002), and public sector, comprised of federal, state and local government and educational institutions who are served by CDW Government, Inc. ("CDW-G"), a wholly owned subsidiary.

        In Item 7 ("Management's Discussion and Analysis of Financial Condition and Results of Operations") of the Company's Annual Report on Form 10-K for the year ended December 31, 2001, which report was filed with the Securities and Exchange Commission on March 27, 2002, and amended on April 16, 2002, the Company included a discussion of the most significant accounting policies and estimates used in the preparation of the Company's financial statements. There has been no material change in the policies and estimates used by the Company in the preparation of its financial statements since the filing of the Company's Annual Report.

Results Of Operations

        The following table sets forth financial information derived from our consolidated statements of income expressed as a percentage of net sales:

	Percentage of Net Sales
Financial Information	Three Months Ended March 31,
	2002	2001
Net sales	100.0   %	100.0   %
Cost of sales	87.0	86.8
Gross profit	13.0	13.2
Selling and administrative expenses	6.4	6.5
Net advertising expenses	0.1	0.3
Income from operations	6.5	6.4
Interest and other income	0.2	0.4
Income before income taxes	6.7	6.8
Income tax provision	2.6	2.7
Net income	4.1   %	4.1   %

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        The following table sets forth for the periods indicated a summary of certain of our consolidated operating statistics:

Operating Statistics	Three Months Ended March 31,
	2002	2001	Percent Change
Commercial customers served: (1)
Current quarter	178,025	164,184	8%
Trailing 12 months	361,346	320,060	13%
% of sales to commercial customers	97%	96%	1%
Number of invoices processed	1,248,653	1,091,790	14%
Average invoice size	$ 866	$ 955	(9)%
Direct web sales (000's)	$ 188,179	$ 150,584	25%
Daily average unique web users	99,087	105,021	(6)%
Sales force, end of period	1,311	1,204	9%
Annualized inventory turnover	27	26	4%
Accounts receivable days sales outstanding	31	30	3%
Net sales per coworker	$ 1,429	$ 1,459	(2)%
(1)     Commercial customers represent public sector customers and corporate sector customers excluding consumers.

        The following table presents consolidated net sales dollars by product category as a percentage of total net consolidated sales dollars. Product lines are based upon internal product code classifications. Product mix for the three months ended March 31, 2001 has been adjusted for certain changes in individual product categorization.

Analysis of Product Mix	Three Months Ended March 31,
	2002	2001
Notebook computers and accessories	12.8   %	15.4   %
Desktop computers and servers	13.6	14.1
Subtotal computer products	26.4	29.5
Software	16.9	15.5
Data storage devices	14.7	14.3
Printers	13.6	13.0
Net/Comm products	9.5	9.5
Video	8.5	8.1
Add-on boards/memory	4.6	5.0
Input devices	3.0	2.6
Supplies,accessories and other	2.8	2.5
Total	100.0   %	100.0   %

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        The following table represents the change in year-over-year consolidated sales dollars by product category for the period indicated. Product lines are based upon internal product code classifications. The rates of change for the three months ended March 31, 2001 have been adjusted for certain changes in individual product categorization.

Analysis of Product Category Growth	Three Months Ended March 31,
	2002	2001
Notebook computers and accessories	(16.0)   %	(18.6)   %
Desktop computers and servers	(1.7)	1.4
Subtotal computer products	(9.2)	(10.2)
Software	10.2	52.9
Data storage devices	3.9	18.8
Printers	6.7	29.6
Net/Comm products	1.0	22.3
Video	6.4	21.7
Add-on boards/memory	(7.8)	(0.7)
Input devices	15.5	26.6
Supplies,accessories and other	16.1	31.9
Total	1.6   %	14.3   %

Three months ended March 31, 2002 compared to three months ended March 31, 2001

        Net sales in the first quarter of 2002 increased 1.6% to $1.003 billion compared to $987.2 million in the first quarter of 2001. The increase in sales was due to an increase in the number of commercial customers served and increased sales in our public sector, partially offset by reduced average unit selling prices and decreased levels of IT spending by some customers. Public sector sales increased 35.5% from $116.7 million in the first quarter of 2001 to $158.2 million in the first quarter of 2002, and comprised 15.8% of our total sales for first quarter of 2002. Corporate sector sales declined 3.0% from the first three months of 2001 to $844.6 million. Our strength in the public sector business is primarily due to focused sales and marketing efforts in the federal, state and local government and education markets and because these customers have not reduced IT budgets as severely as those in the corporate markets.

        The average selling prices of desktop computers decreased 13.5%, servers decreased 10.0% and notebook computers decreased 21.2% from the first quarter of 2001. Unit sales of desktop computers increased 12.8%, servers increased 10.8% and notebook computers increased 0.7% from the first quarter of 2001. While there were significant changes in pricing in some product categories from the first quarter of 2001, changes in average selling prices from the fourth quarter 2001 indicate that pricing of computer products may be stabilizing. However, decreases in pricing for computer products are possible in 2002. Price decreases require us to generate more orders and sell more units in order to maintain or increase the level of sales.

        Software sales increased 10.2% in the first quarter of 2002 compared to the first quarter of 2001, and remained our top selling product category in the first quarter of 2002. Sales of input devices, printers, video and multi-media were also strong during the first quarter of 2002, with sales up 6.0% or more for each of these product categories over the first quarter of 2001.

        Gross profit as a percentage of net sales was 13.0% in the first quarter of 2002, compared to 13.2% in the first quarter of 2001. This decrease was primarily due to reductions in selling margins and vendor rebates, partially offset by increases in software upgrade insurance accounted for on a net basis. Our goal is to maintain gross profit as a percentage of sales between 12.5% and 13.0%. Gross profit margin depends on various factors, including the continued participation by vendors in inventory price protection and rebate programs, product mix, including software maintenance and third party services, pricing strategies, market conditions and other factors, any of which could result in a fluctuation of gross margin below recent experience.

12

        Selling and administrative expenses, excluding net advertising expense, decreased to 6.4% of net sales in the three months ended March 31, 2002 from 6.5% in the same period of 2001. The decrease resulted primarily from decreased payroll and coworker costs, and, to a lesser extent, bad debt expense, partially offset by an increase in occupancy costs and $1.4 million in payroll taxes resulting from stock options exercised by Gregory C. Zeman, who is a member of our Board of Directors and is employed as an advisor to CDW. Our sales force increased by 9% from the first quarter of 2001 to over 1,300. Our sales force includes account managers and sales specialists, who provide consultation in areas requiring technical or specialized product expertise such as servers, high level storage and volume licenses. We continue to evaluate our need for additional account managers and will adjust hiring goals as business conditions dictate. Selling and administrative expenses may increase as a percentage of net sales due to additional coworkers and continued investments in infrastructure.

        Net advertising expense decreased as a percentage of net sales to 0.1% for the three months ended March 31, 2002 from 0.3% in the same quarter of the prior year. Gross advertising expense decreased $1.5 million to 2.0% of net sales, a decrease from 2.2% of net sales in the first quarter of 2001. While gross advertising expense dollars decreased from the first quarter of 2001, we are generating more coverage through an aggressive branding campaign, including national television and print media. Based upon our planned marketing initiatives, gross advertising expense as a percentage of net sales is expected to be relatively consistent with or higher than the percentage for the first quarter of 2002. Cooperative advertising reimbursements as a percentage of net sales were 1.9% in the first quarter of 2002, consistent with the first quarter of 2001. Cooperative advertising reimbursements as a percentage of net sales may decrease in future periods depending on the level of vendor participation achieved and collection experience.

        Consolidated operating income was $65.2 million in the first quarter of 2002, a 2.7% increase from $63.5 million in the first quarter of 2001. This increase was primarily a result of the increase in sales and decrease in operating expenses in 2002, partially offset by the decrease in gross margin. Consolidated operating income as a percentage of net sales increased to 6.5% in the first quarter of 2002 from 6.4% in the first quarter of 2001.

        Corporate segment operating income was $62.4 million in the first three months of 2002, compared to $59.9 million in the same period in 2001. Corporate segment operating income increased as a percentage of net sales to 6.3% in the first quarter of 2002 from 6.1% in the first quarter of 2001 due to a decrease in operating expenses, partially offset by a decrease in gross margin. Public sector segment operating income was $2.8 million in the first three months of 2002, a decrease from $3.5 million in the first three months of 2001. Public sector segment operating income as a percentage of net sales was 1.8% in the period ending March 31, 2002 compared to 3.0% in the period ending March 31, 2001. The decline in public sector operating income was due to lower gross margin and higher operating expenses, primarily payroll and coworker costs due to the addition of account managers in anticipation of seasonal sales growth in the second and third quarters.

        Interest income, net of other expenses, decreased to $2.2 million in the first quarter of 2002 compared to $3.7 million in the first quarter of 2001, as higher levels of cash available for investing was offset by decreases in the rate of interest earned, primarily due to substantially lower market interest rates.

        The effective income tax rate, expressed as a percentage of income before income taxes, was 39.5% for the first quarter of 2002 compared to 39.75% for the first quarter of 2001.

        Net income in the first quarter of 2002 was $40.8 million, a 0.7% increase over $40.5 million in the first quarter of 2001. Diluted earnings per share were $0.45 for the three months ended March 31, 2002 and 2001. Excluding the incremental payroll tax expense of approximately $1.4 million incurred by the Company related to Mr. Zeman's exercise of options, diluted earnings per share for the first quarter of 2002 were $0.46.

13

Seasonality

        Although we have historically experienced variability in the rates of sales growth, we have not historically experienced seasonality in our business as a whole. While sales by our corporate segment, which serves business and consumer markets, have not historically experienced significant seasonality throughout the year, sales by our public sector segment have historically been higher in the third quarter than in other quarters due to the buying patterns of government and education customers. If sales to public sector customers continue to increase as a percentage of overall sales, our Company as a whole may experience increased seasonality in future periods.

Liquidity and Capital Resources

Working Capital

        We have financed our operations and capital expenditures primarily through cash flow from operations. At March 31, 2002, we had cash, cash equivalents and marketable securities of $392.2 million and working capital of $792.1 million, representing a decrease of $2.2 million in cash, cash equivalents and marketable securities and an increase of $96.3 million in working capital from December 31, 2001. Cash, cash equivalents and marketable securities decreased and miscellaneous receivables increased $30.2 million as a result of the Company's payment of federal and state tax withholdings related to Gregory C. Zeman's exercise of 2,000,000 stock options on March 27, 2002. Reimbursement for these payments was received on April 1, 2002.

        We have an aggregate $70 million available pursuant to two $35 million unsecured lines of credit with two financial institutions. One line of credit expires in June 2002, at which time we intend to renew the line, and the other does not have a fixed expiration date. Borrowings under the first credit facility bear interest at the prime rate less 2 1/2%, LIBOR plus 1/2% or the federal funds rate plus 1/2%, as determined by us. Borrowings under the second credit facility bear interest at the prime rate less 2 1/2%, LIBOR plus .45% or the federal funds rate plus .45%, as determined by us. At March 31, 2002 and March 31, 2001, there were no borrowings under either of the credit facilities.

        Our current and anticipated uses of our cash, cash equivalents and marketable securities are to fund growth in working capital and capital expenditures necessary to support future growth in sales, our stock buyback program and possible expansion through acquisitions. We believe that the funds held in cash, cash equivalents and marketable securities, and funds available under the credit facilities, will be sufficient to fund our working capital and cash requirements at least through March 31, 2003.

        In January 2001, our Board of Directors authorized the purchase of up to 5 million shares of our common stock, slightly more than 5% of our total outstanding shares, from time to time in both open market and private transactions, as conditions warrant. In connection with the program, we purchased approximately 155,000 shares of our common stock during the first quarter of 2002 at a total cost of approximately $7.6 million. Since January 2001, we purchased a total of 2,847,500 shares of our common stock at a total cost of approximately $105.8 million.

        In March 2002, Gregory C. Zeman, who is a member of our Board of Directors and employed as an advisor to CDW, sold 2,000,000 shares of common stock at a price of $48.00 per share. The Company did not receive any proceeds from the sale of shares and the number of outstanding common shares was not impacted. The shares sold by Mr. Zeman were acquired from Mr. Krasny, our founder and former chairman and chief executive officer, through the exercise of options previously granted to Mr. Zeman pursuant to the MPK Stock Option Plan. The exercise of options by Mr. Zeman resulted in CDW realizing an income tax benefit of approximately $37.9 million in the first quarter, of which approximately $400,000 had been previously recorded to deferred taxes. We recorded the incremental tax benefit of $37.5 million as an increase to paid-in-capital. In addition, we recorded incremental payroll tax expense related to the option exercise of approximately $1.4 million, which reduced diluted earnings per share in the three months ended March 31, 2002 by approximately $0.01 per share. Also in connection with the exercise of options by Mr. Zeman, we recorded a $30.2 million miscellaneous receivable for the payment of federal and state tax withholdings on behalf of Mr. Zeman. Reimbursement for these withholding payments was received on April 1, 2002.

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Cash flows for the three months ended March 31, 2002

        Net cash provided by operating activities for the quarter ended March 31, 2002, was $198,000. Net income, tax benefits from stock options and restricted stock transactions and an increase in accounts payable were nearly offset by increases in miscellaneous receivables, accounts receivable, prepaid income taxes, merchandise inventory and a decrease in accrued expenses. The increase in accounts receivable relates primarily to an increase in sales and in days sales outstanding. Days sales outstanding at March 31, 2002 were 31 as compared to 30 at December 31, 2001. Inventory increased during the period, primarily due to higher levels of inventory in-transit. Annualized inventory turnover was 27 times for the quarter ended March 31, 2002, consistent with the quarter ended December 31, 2001. The increase in miscellaneous receivables, prepaid income taxes and tax benefit from stock options and restricted stock transactions primarily relate to the sale of shares by Gregory C. Zeman, one of our directors and an advisor to us, under the MPK Stock Option Plan.

        Net cash used for investing activities for the quarter ended March 31, 2002 was $31.4 million, including $29.6 million for investments in marketable securities and $1.9 million used for capital expenditures. At March 31, 2002, we had a $5.4 million net investment in and loan to CDW Leasing, L.L.C. ("CDW-L"). CDW-L is a joint venture that is 50 percent owned by each of CDW Capital Corporation ("CDWCC"), a wholly-owned subsidiary of the Company, and First Portland Corporation, an unrelated third party leasing company. We use the equity method to account for our investment in CDW-L. We advanced approximately $6.4 million to CDW-L during the three months ended March 31, 2002, which was offset by repayments of approximately $6.5 million. CDWCC is committed to loan up to $10 million to CDW-L to fund new leases, of which $4.5 million is outstanding as of March 31, 2002 and $4.1 million is subordinated to CDW-L's loan from a financial institution. The terms of the loan provide for monthly interest payments to us based on the 90-day LIBOR rate plus 2.2%.

        Any statements in this report that are forward-looking (that is, not historical in nature) are made pursuant to the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, for example, statements concerning the Company's sales, gross profit as a percentage of sales, advertising expense and cooperative advertising reimbursements. In addition, words such as "likely," "may," "would," "could," "anticipate," "believe," "estimate," "expect," "intend," "plan," and similar expressions, may identify forward-looking statements in this report. Forward-looking statements in this report are based on the Company's beliefs and expectations as of the date of this report and are subject to risks and uncertainties, including those described below, which may have a significant impact on the Company's business, operating results or financial condition. Investors are cautioned that these forward-looking statements are inherently uncertain. Should one or more of the risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein. The following factors, among others, may have an impact on the accuracy of the forward-looking statements contained in this report: the continued acceptance of the Company's distribution channel by vendors and customers, the timely availability and acceptance of new products, continuation of key vendor relationships and support programs, the continuing development, maintenance and operation of the Company's I.T. systems, changes and uncertainties in economic conditions that could affect the rate of I.T. spending by the Company's customers, changes in pricing by our vendors, the ability of the Company to hire and retain qualified account managers and any additional factors described from time to time in the Company's filings with the Securities and Exchange Commission. These among other factors are discussed in further detail in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001, which was filed with the Securities and Exchange Commission in March 2002 and which discussion is incorporated by reference herein.

15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk
	There has been no material change from the information provided in Item 7a of the Company's Annual Report on Form 10-K for the year ended December 31, 2001.
Part II	Other Information
Item 1.	Quantitative and Qualitative Disclosures About Market Risk
	None

Item 6.	Exhibits and Reports on Form 8-K
(a)	Exhibits:
	3 (d)	Restated Bylays of CDW Computer Centers, Inc.
(b)	Reports on Form 8-K:
	(i)	We filed a Current Report on Form 8-K on March 11, 2002 reporting the filing of a registration statement with the Securities and Exchange Commission registering 2,000,000 shares of CDW common stock on behalf of Gregory C. Zeman and including management's discussion and analysis and financial statements relating to the year ended December 31, 2001.
	(ii)	We filed a Current Report Form 8-K on March 19, 2002 containing a press release describing updated business trends and financial information.
	(iii)	We filed a Current Report on Form 8-K on March 27, 2002 containing the Underwriting Agreement relating to the sale of 2,000,000 shares by Gregory C. Zeman.
	(iv)	We filed a Current Report on Form 8-K on March 28, 2002 containing a press release providing an update on the sale of 2,000,000 shares by Gregory C. Zeman.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		CDW Computer Centers, Inc.
		(Registrant)
Date:	May 6, 2002	/s/ Barbara A. Klein
		By: Barbara A. Klein Senior Vice President and Chief Financial Officer (Duly authorized officer and principal financial officer)

17

EX-3.(II)

                                                      BY-LAWS
                                                        OF
                                            CDW COMPUTER CENTERS, INC.


ARTICLE I
                                              OFFICES


Section 1.        Registered  Office.  The registered  office shall be established and maintained at c/o Arnstein &
Lehr,  120 S.  Riverside  Plaza,  Suite 1200,  Chicago,  Illinois  60606 and Michael S. Tepper,  Esq.  shall be the
registered agent of this corporation in charge thereof.

Section 2.        Other Offices.  The  corporation  may have other  offices,  either within or without the State of
Illinois,  at such place or places as the Board of  Directors  may from time to time appoint or the business of the
corporation may require.


ARTICLE II
                                        MEETINGS OF SHAREHOLDERS


Section 1.        Annual  Meetings.  Annual  meetings of  Shareholders  for the election of directors  and for such
other  business  as may be stated in the  notice of the  meeting,  shall be held at such  place,  either  within or
without  the  State of  Illinois  and at such  time  and date as the  Board of  Directors,  by  resolutions,  shall
determine  and as set  forth in the  notice  of the  meeting.  In the  event  the  Board of  Directors  fails to so
determine the time, date and place of meeting,  the annual meeting of Shareholders  shall be held at the offices of
CDW Computer  Centers,  Inc., 200 North  Milwaukee  Avenue,  Vernon Hills,  Illinois on May 1 at 6:00 p.m.  central
standard time.

         If the date of the annual  meeting  shall fall upon a  Saturday,  Sunday or a legal  holiday,  the meeting
shall be held on the next  succeeding  business  day. At each annual  meeting,  the  Shareholders  entitled to vote
shall elect a Board of Directors  and they may  transact  such other  corporate  business as shall be stated in the
notice of the meeting.

Section 2.        Other  Meetings.  Meetings  of  Shareholders  for any other  purpose may be held at such time and
place, within or without the State of Illinois, as shall be stated in the notice of the meeting.

Section 3.        Voting.  Each  Shareholder  entitled  to vote in  accordance  with the terms of the  Articles  of
Incorporation  and in accordance  with the  provisions of these By-Laws shall be entitled to one vote, in person or
by proxy,  for each share of stock  entitled  to vote held by such  Shareholder,  but no proxy shall be voted after
three  (3)  years  from  its date  unless  such  proxy  provides  for a  longer  period.  Upon  the  demand  of any
Shareholder,  the vote for directors  and the vote upon any question  before the meeting,  shall be by ballot.  All
elections for directors  and, all other  questions  shall be elected by majority vote except as otherwise  provided
by the Articles of Incorporation or the laws of the State of Illinois.

         A complete list of the  Shareholders  entitled to vote at the ensuing  election,  arranged in alphabetical
order,  with the address of each,  and the number of shares held by each,  shall be open to the  examination of any
Shareholder,  for any purpose germane to the meeting,  during ordinary business hours, for a period of at least ten
(10) days prior to the  meeting  either at a place  within the city where the  meeting is to be held,  which  place
shall be specified in the notice of the meeting,  or, if not so specified,  at the place where the meeting is to be
held.  The list  shall  also be  produced  and kept at the time and place of the  meeting  during  the  whole  time
thereof, and may be inspected by any Shareholder who is present.

Section 4.        Quorum.  Except as  otherwise  required by Law,  by the  Articles  of  Incorporation  or by these
By-Laws,  the presence,  in person or by proxy, of Shareholders  holding a majority of the stock of the corporation
entitled to vote shall  constitute  a quorum at all  meetings of the  Shareholders.  In case a quorum  shall not be
present at any meeting, a majority in interest of the Shareholders  entitled to vote thereat,  present in person or
by proxy,  shall have power to adjourn the meeting  from time to time,  without  notice  other than at the meeting,
until the  requisite  amount of stock  entitled to vote shall be present.  At any such  adjourned  meeting at which
the requisite  amount of stock entitled to vote shall be  represented,  any business may be transacted  which might
have been  transacted at the meeting as originally  noticed;  but only those  Shareholders  entitled to vote at the
meeting as originally noticed shall be entitled to vote at any adjournment or adjournments thereof.

Section 5.        Special  Meetings.  Special  meetings of the  Shareholders  for any  purpose or  purposes  may be
called by the Chairman of the Board of Directors or by resolution of the directors.

Section 6.        Notice of  Meetings.  Written  notice,  stating  the place,  date and time of the meeting and the
general nature of the business to be  considered,  shall be given to each  Shareholder  entitled to vote thereat at
his  address as it appears on the  records of the  corporation,  not less than ten (10) or in the case of a merger,
consolidation,  share exchange,  dissolution or sale, lease or exchange of assets,  not less than twenty (20) days,
nor more than sixty (60) days  before the date of the  meeting.  No  business  other than that stated in the notice
shall be transacted at any meeting without the unanimous consent of all the Shareholders entitled to vote thereat.

Section 7.        Action Without Meeting.  Unless otherwise  provided by the Articles of Incorporation,  any action
required  to be taken at any annual or special  meeting of  Shareholders,  or any action  which may be taken at any
annual or special  meeting,  may be taken without a meeting,  without prior notice and without a vote, if a consent
in writing,  setting  forth the action so taken,  shall be signed by the holders of  outstanding  stock  having not
less than the minimum  number of votes that would be  necessary  to  authorize  or take such action at a meeting at
which all shares  entitled to vote  thereon were present and voted.  Prompt  notice of the taking of the  corporate
action without a meeting by less than unanimous  written consent shall be given to those  Shareholders who have not
consented in writing.



ARTICLE III
                                               DIRECTORS


Section 1.        Number and Term.  The number of directors  shall be ten (10).  The directors  shall be elected at
the annual meeting of the  Shareholders  and each director  shall be elected to serve until his successor  shall be
elected and shall qualify.

Section 2.        Resignations.  Any  director,  member of a  committee  or other  officer  may resign at any time.
Such resignation shall be made in writing,  and shall take effect at the time specified therein,  and if no time be
specified, at the time of its receipt by the Chairman of the Board of Directors.

Section 3.        Vacancies.  If the  office  of any  director,  member of a  committee  or other  officer  becomes
vacant,  the  remaining  directors  in  office,  though  less than a quorum by a majority  vote,  may  appoint  any
qualified  person to fill such vacancy,  who shall hold office for the unexpired term and until his successor shall
be duly chosen.

Section 4.        Removal.  Any director or  directors  may be removed  either for or without  cause at any time by
the affirmative  vote of the holders of a majority of all the shares of stock  outstanding and entitled to vote, at
a special meeting of the Shareholders  called for the purpose and the vacancies thus created may be filled,  at the
meeting  held for the purpose of removal,  by the  affirmative  vote of a majority in interest of the  Shareholders
entitled to vote.

Section 5.        Increase or Decrease of Number.  The number of directors  may be increased or decreased  (but not
below three (3)) by amendment  of these  By-Laws by the  affirmative  vote of a majority of the  directors,  though
less than a quorum,  or, by the  affirmative  vote of a majority  in interest  of the  Shareholders,  at the annual
meeting or at a special  meeting called for that purpose,  and by like vote the additional  directors may be chosen
at such meeting to hold office until the next annual election and until their successors are elected and qualify.

Section 6.        Powers.  The Board of Directors shall exercise all of the powers of the  corporation  except such
as are by law, or by the  Articles of  Incorporation  of the  corporation  or by these  By-Laws  conferred  upon or
reserved to the Shareholders.

Section 7.        Committees.  The Board of Directors  may, by  resolution or  resolutions  passed by a majority of
the whole board,  designate one or more  committees,  each committee to consist of two (2) or more of the directors
of the corporation.  The board may designate one or more directors as alternate  members of any committee,  who may
replace any absent or disqualified  member at any meeting of the committee.  In the absence or  disqualification of
any member of such  committee  or  committees,  the  member or  members  thereof  present  at any  meeting  and not
disqualified  from voting,  whether or not he or they constitute a quorum,  may unanimously  appoint another member
of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

         Any such  committee,  to the extent  provided in the  resolution  of the Board of  Directors,  or in these
By-Laws,  shall have and may exercise all the powers and  authority of the Board of Directors in the  management of
the business and affairs of the  corporation,  and may authorize the seal of the  corporation  to be affixed to all
papers which may require it; but no such  committee  shall have the power or authority in reference to amending the
Articles of Incorporation,  adopting an agreement of merger or consolidation,  recommending to the Shareholders the
sale, lease or exchange of all or substantially all of the corporation's  property and assets,  recommending to the
Shareholders  a dissolution of the  corporation  or a revocation of a  dissolution,  or amending the By-Laws of the
corporation;  and, unless the resolution,  these By-Laws, or the Articles of Incorporation expressly so provide, no
such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock.

Section 8.        Meetings.  The  Board of  Directors  of the  corporation  may hold  meetings,  both  regular  and
special, either within or without the State of Illinois.

         The first  meeting of each newly  elected Board of Directors  shall be held  immediately  after the annual
meeting of  Shareholders  without any notice other than these By-Laws.  The newly elected  directors may hold their
first  meeting  for the  purpose  of  organization  and the  transaction  of  business,  if a  quorum  be  present,
immediately  after the annual  meeting of the  Shareholders;  or the time and place of such meeting may be fixed by
consent in writing of all the directors.

         Regular  meetings  of the  directors  may be held  without  notice  at such  places  and times as shall be
determined from time to time by resolution of the directors.

         Special  meetings  of the  Board of  Directors  may be called  by the  Chairman  of the Board and shall be
called by  Chairman  of the Board on the written  request of any two  directors  on at least two (2) days notice to
each  director  and shall be held at such place or places as may be  determined  by the  directors,  or as shall be
stated in the call of the meeting.

         Unless otherwise  restricted by the Articles of  Incorporation  or these By-Laws,  members of the Board of
Directors,  or any committee  designated by the Board of Directors,  may  participate  in a meeting of the Board of
Directors,  or any  committee,  by means of conference  telephone or similar  communications  equipment by means of
which all persons  participating  in the meeting can hear each other,  and such  participation  in a meeting  shall
constitute presence in person at the meeting.

Section 9.        Quorum.  A  majority  of  the  directors  shall  constitute  a  quorum  for  the  transaction  of
business.  If at any meeting of the board there shall be less than a quorum  present,  a majority of those  present
may adjourn the meeting from time to time until a quorum is obtained,  and no further  notice thereof need be given
other than by announcement at the meeting which shall be so adjourned.

Section 10.       Compensation.  Unless  otherwise  restricted  by the  Articles  of  Incorporation,  the  Board of
Directors  may be paid their  expenses,  if any, of attendance at each meeting of the Board of Directors and may be
paid a fixed sum for  attendance  at each  meeting of the Board of Directors  or a stated  salary as director.  The
directors  may also be entitled to  participate  in the Director  Stock Option Plan or such other  benefit plans as
they shall  determine.  No such  payment  shall  preclude any director  from serving the  corporation  in any other
capacity and receiving compensation therefor.

Section 11.       Action  Without  Meeting.  Any action  required  or  permitted  to be taken at any meeting of the
Board of  Directors,  or of any  committee  thereof,  may be taken  without a  meeting,  if prior to such  action a
written  consent  thereto is signed by all members of the board,  or of such committee as the case may be, and such
written consent is filed with the minutes or proceedings of the board or committee.


ARTICLE IV
                                                OFFICERS


Section 1.        Officers.  The  officers  of the  corporation  shall be a Chairman of the Board of  Directors,  a
Chief Executive  Officer,  a President,  a Treasurer and a Secretary,  all of whom shall be elected by the Board of
Directors and who shall hold office until their  successors  are elected and qualified.  In addition,  the Board of
Directors may elect one or more Vice  Presidents and such Assistant  Secretaries  and Assistant  Treasurers as they
may deem  proper.  None of the  officers  (other than the Chairman of the Board of  Directors)  of the  corporation
need be  directors.  The  officers  shall be elected  at the first  meeting  of the Board of  Directors  after each
annual meeting.  More than two (2) offices may be held by the same person.

Section 2.        Other  Officers  and Agents.  The Board of Directors  may appoint such other  officers and agents
as it may deem  advisable,  who shall hold their offices for such terms and shall  exercise such powers and perform
such duties as shall be determined from time to time by the Board of Directors.

Section 3.        Chairman of the Board.  The Chairman of the Board of Directors  shall  preside at all meetings of
directors and  shareholders  of the  corporation  and may call meetings of the Board of Directors.  The Chairman of
the Board of Directors shall also perform such other duties as may be assigned to him by the Board of Directors.

Section 4.        Vice Chairman of the Board.  The Vice  Chairman of the Board of Directors  shall have such powers
and shall perform such duties as shall be assigned to him by the Board of Directors.

Section 5.        Chief  Executive  Officer.  The  Chief  Executive  Officer  of the  corporation  shall  formulate
policies  with  respect to the  affairs  of the  corporation  and shall  have  general  powers of  supervision  and
management.

Section 6.        President.  The President shall be the chief operating  officer of the corporation  and,  subject
to the direction of the Chairman of the Board of Directors,  shall  supervise and direct and be responsible for the
direction of the ongoing  business of the  corporation.  In the absence of the Chairman of the Board of  Directors,
the President  shall  preside at meetings of the  Shareholders  and the Board of Directors.  Except as the Board of
Directors  shall  authorize  the  execution  thereof in some other  manner,  the  President  shall be authorized to
execute bonds,  mortgages and other  contracts on behalf of the corporation to cause the  corporation's  seal to be
affixed to any  instrument  requiring  such seal, and when so affixed such seal shall be attested by the signatures
of the Secretary or Assistant Secretary.

Section 7.        Vice  President.  Each Vice  President  shall have such powers and shall  perform  such duties as
shall be assigned to him by the directors.

Section 8.        Treasurer.  The  Treasurer  shall have the  custody of the  corporate  funds and  securities  and
shall keep full and accurate  account of receipts and  disbursements  in books  belonging  to the  corporation.  He
shall  deposit  all  moneys  and  other  valuables  in the  name  and to the  credit  of the  corporation  in  such
depositaries as may be designated by the Board of Directors.

         The Treasurer  shall  disburse the funds of the  corporation  as may be ordered by the Board of Directors,
the Chairman of the Board of  Directors,  or the  President,  taking  proper  vouchers for such  disbursements.  He
shall render to the Chairman of the Board of Directors,  President  and Board of Directors at the regular  meetings
of the Board of  Directors,  or whenever they may request it, an account of all his  transactions  as Treasurer and
of the  financial  condition  of the  corporation.  If  required  by the  Board of  Directors,  he  shall  give the
corporation  a bond for the  faithful  discharge  of his duties in such  amount  and with such  surety as the board
shall prescribe.

Section 9.        Secretary.  The  Secretary  shall  give,  or  cause  to  be  given,  notice  of  all  meeting  of
Shareholders and directors,  and all other notices required by law or by these By-Laws,  and in case of his absence
or refusal or neglect so to do, any such notice may be given by any person  thereunto  directed by the  Chairman of
the Board of Directors,  President,  or by the directors,  or Shareholders,  upon whose  requisition the meeting is
called as provided in these By-Laws.  He shall record all the  proceedings of the meetings of the  corporation  and
of the directors in a book to be kept for that  purpose,  and shall perform such other duties as may be assigned to
him by the  directors or the Chairman of the Board of  Directors,  or the  President.  He shall have the custody of
the seal of the  corporation  and shall affix the same to all  instruments  requiring  it, when  authorized  by the
directors or the Chairman of the Board of Directors, or the President, and attest the same.

Section 10.       Assistant   Treasurers   and   Assistant   Secretaries.   Assistant   Treasurers   and  Assistant
Secretaries,  if any,  shall be  elected  and shall  have such  powers and shall  perform  such  duties as shall be
assigned to them respectively, by the Board of Directors.


ARTICLE V
                                              MISCELLANEOUS


Section 1.        Certificates  of Stock.  Every  holder of stock in the  corporation  shall be  entitled to have a
certificate  certifying  the  number  of  shares  owned by him in the  corporation,  signed  by the  Chairman,  the
President  or the Vice  President  and the  Treasurer  or an  Assistant  Treasurer,  or  Secretary  or an Assistant
Secretary.  Where a  certificate  is  countersigned  (1) by a  transfer  agent  other than the  corporation  or its
employee,  or (2) by a  registrar  other  than  the  corporation  or  its  employee,  any  other  signature  on the
certificate  may be facsimile.  In case any officer,  transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a  certificate  shall have ceased to be such  officer,  transfer  agent or registrar
before such  certificate  is issued,  it may be issued by the  corporation  with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.

Section 2.        Lost  Certificates.  A new  certificate  of stock may be  issued in the place of any  certificate
theretofore  issued by the corporation,  alleged to have been lost, stolen or destroyed,  and the directors may, in
their discretion,  require the owner of the lost, stolen or destroyed certificate, or his legal representative,  to
give the corporation a bond, in such sum as they may direct,  sufficient to indemnify the  corporation  against any
claim that may be made against it on account of the alleged loss,  theft or  destruction  of any such  certificate,
or the issuance of any such new certificate.

Section 3.        Transfer of Shares.  Upon surrender to the  corporation  or transfer agent of the  corporation of
a certificate  for shares duly endorsed or accompanied by proper-  evidence of succession,  assignment of authority
to transfer,  it shall be the duty of the corporation to issue a new  certificate to the person  entitled  thereto,
cancel the old  certificate  and record the  transaction  upon its books.  Whenever any transfer of shares shall be
made for  collateral  security,  and not  absolutely,  it shall be so  expressed  in the entry of transfer if, when
certificates  are presented to the  corporation  for transfer,  both the transferor and the transferee  request the
corporation to do so.

Section 4.        Shareholders  Record  Date.  In  order  that  the  corporation  may  determine  the  Shareholders
entitled to notice of or to vote at any meeting of Shareholders  or any  adjournment  thereof or to express consent
to  corporate  action in writing  without a  meeting,  or  entitled  to receive  payment of any  dividend  or other
distribution  or allotment of any rights,  or entitled to exercise any rights in respect of any change,  conversion
or exchange of stock or for the purpose of any other lawful action,  the Board of Directors may fix, in advance,  a
record  date,  which shall not be more than sixty (60) nor less than ten (10) days before the date of such  meeting
or in the case of a merger,  consolidation,  share exchange,  dissolution or sale, lease or exchange of assets, not
less than  twenty  (20)  days,  nor more  than  sixty  (60) days  prior to any other  action.  A  determination  of
Shareholders  of  record  entitled  to  notice  of or to vote at a  meeting  of  Shareholders  shall  apply  to any
adjournment  of the  meeting;  provided,  however,  that the Board of  Directors  may fix a new record date for the
adjourned meeting.

Section 5.        Registered  Shareholders.  The corporation  shall be entitled to recognize the exclusive right of
a person  registered on its books as the owner of shares to receive  dividends,  and to vote as such owner,  and to
hold liable for calls and assessments a person  registered on its books,  as the owner of shares,  and shall not be
bound to  recognize  any  equitable  or other claim to or interest in such share or shares on the part of any other
person,  whether or not it shall have express or other notice thereof,  except as otherwise provided by the laws of
Illinois.

Section 6.        Dividends.  Subject to the  provisions of the Articles of  Incorporation,  the Board of Directors
may, out of funds legally  available  therefor at any regular or special meeting declare dividends upon the capital
stock of the  corporation  as and when they deem  expedient.  Dividends  may be paid in cash,  in  property,  or in
shares of capital stock of the  corporation,  subject to the  provisions of the Articles of  Incorporation.  Before
declaring any dividend there may be set apart out of any funds of the  corporation  available for  dividends,  such
sum or sums as the  directors  from time to time in their  discretion  deem  proper  for  working  capital  or as a
reserve fund to meet  contingencies  or for equalizing  dividends or for such other purposes as the directors shall
deem conducive to the interests of the corporation.

Section 7.        Seal.  The  corporate  seal  shall  be  circular  in  form  and  shall  contain  the  name of the
corporation,  the year of its creation and the words  "CORPORATE  SEAL  ILLINOIS." Said seal may be used by causing
it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 8.        Fiscal Year.  The fiscal year of the  corporation  shall be determined by resolution of the Board
of Directors.

Section 9.        Checks.  All checks,  drafts or other orders for the payment of money,  notes or other  evidences
of  indebtedness  issued in the name of the  corporation  shall be signed by such  officer  or  officers,  agent or
agents of the  corporation,  and in such manner as shall be determined from time to time by resolution of the Board
of Directors.

Section 10.       Notice and Waiver of  Notice.  Whenever  any  notice is  required  by these  By-Laws to be given,
personal  notice is not meant  unless  expressly  so  stated,  and any  notice  so  required  shall be deemed to be
sufficient if given by  depositing  the same in the United States mail,  postage  prepaid,  addressed to the person
entitled  thereto at his address as it appears on the records of the  corporation,  and such notice shall be deemed
to have  been  given on the day of such  mailing.  Shareholders  not  entitled  to vote  shall not be  entitled  to
receive notice of any meetings except as otherwise provided by statute.

         Whenever  any notice  whatever  is  required  to be given  under the  provisions  of any law, or under the
Provisions of the Articles of  Incorporation  of the  corporation  or these  By-Laws,  a waiver thereof in writing,
signed by the person or persons  entitled to said notice,  whether before or after the time stated  therein,  shall
be deemed  equivalent  thereto.  Attendance  of a person at a meeting  shall  constitute a waiver of notice of such
meeting,  except when the person  attends a meeting for the express  purpose of objecting,  at the beginning of the
meeting,  to the transaction of any business  because the meeting is not lawfully  called or convened.  Neither the
business to be transacted at, nor the purpose of any regular or special meeting of the  Shareholders,  directors or
members of a committee of directors need be specified in any written waiver of notice.


ARTICLE VI
                                           INDEMNIFICATION OF
                                           DIRECTORS, EMPLOYEES AND AGENTS


Section 1.        The  corporation  shall  indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,  whether civil, criminal,  administrative
or  investigative  (other than an action by or in the right of the corporation) by reason of the fact that he is or
was a  director,  officer,  employee  or agent of the  corporation,  or who is or was serving at the request of the
corporation as a director,  officer,  employee or agent of another corporation,  partnership,  joint venture, trust
or  other  enterprise,  against  expenses  (including  attorneys'  fees).  Judgments,  fines  and  amounts  paid in
settlement  actually and reasonable  incurred by him in connection with such action, suit or proceeding if he acted
in good  faith  and in a manner  he  reasonably  believed  to be in or not  opposed  to the best  interests  of the
corporation,  and,  with  respect to any  criminal  action or  proceeding  had no  reasonable  cause to believe his
conduct was unlawful.  The termination of any action,  suit or proceeding by judgment or settlement,  conviction or
upon a plea of nolo contendere or its equivalent,  shall not, of itself,  create a presumption  that the person did
not act in good faith and in a manner which he  reasonably  believed to be in or not opposed to the best  interests
of the  corporation,  and with respect to any criminal action or proceeding,  had reasonable  cause to believe that
his conduct was unlawful.

Section 2.        The  corporation  may  indemnify  any person who was or is a party or is  threatened to be made a
party to any  threatened,  pending or completed  action or suit by or in the right of the  corporation to procure a
judgment  in its  favor by  reason  of the fact that he is or was a  director,  officer,  employee  or agent of the
corporation,  or is or was serving at the request of the corporation as a director,  officer,  employee or agent of
another corporation,  partnership,  joint venture, trust or other enterprise against expenses (including attorneys'
fees) actually and reasonably  incurred by him in connection  with the defense or settlement of such action or suit
if he acted in good faith and in a manner he reasonably  believed to be in or not opposed to the best  interests of
the corporation  and except that no  indemnification  shall be made in respect of any claim,  issue or matter as to
which such Person shall have been adjudged to be liable to the  corporation  unless and only to the extent that the
court in which such action or suit was brought shall determine upon  application,  that despite the adjudication of
liability  but in view of all the  circumstances  of the case,  such  person is fairly and  reasonably  entitled to
indemnity for such expenses which the court shall deem proper.

Section 3.        To the extent that a director,  officer,  employee or agent of a corporation  has been successful
on the merits or  otherwise  in defense of any action,  suit or  proceeding  referred to in Sections 1 and 2, or in
defense of any claim,  issue or matter therein,  he shall be indemnified  against  expenses  (including  attorneys'
fees) actually and reasonably incurred by him in connection therewith.

Section 4.        Any  indemnification  under  Sections 1 and 2 (unless  ordered  by a court)  shall be made by the
corporation  only as authorized in the specific case upon a  determination  that  indemnification  of the director,
officer,  employee or agent is proper in the  circumstances  because he has met the applicable  standard of conduct
set forth in Sections 1 and 2. Such  determination  shall be made (a) by the Board of Directors by a majority  vote
of a quorum  consisting of directors  who were not parties to such action,  suit or  proceedings,  or (b) if such a
quorum is not obtainable,  or, even if obtainable,  a quorum of disinterested  directors so directs, by independent
legal counsel in a written opinion, or (c) by the Shareholders.

Section 5.        Expenses  incurred in defending a civil or criminal  action,  suit or  proceeding  may be paid by
the corporation in advance of the final  disposition of such action,  suit or proceeding as authorized by the Board
of  Directors  in the  specific  case upon  receipt of an  undertaking  by or on behalf of the  director,  officer,
employee  or agent to repay such  amount,  unless it shall  ultimately  be  determined  that he is  entitled  to be
indemnified by the corporation authorized in this Article.

Section 6.        The  indemnification  provided by this article shall not be deemed  exclusive of any other rights
to which those  indemnified may be entitled under any contract,  agreement,  vote of Shareholders or  disinterested
directors or  otherwise,  both as to action in his official  capacity  and as to action in another  capacity  while
holding  such  office,  and shall  continue  as to a person who has ceased to be a director,  officer,  employee or
agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 7.        The corporation  shall have power to purchase and maintain  insurance on behalf of any person who
is or was a director,  officer,  employee or agent of the  corporation,  or is or was serving at the request of the
corporation as a director,  officer,  employee or agent of another corporation,  partnership,  joint venture, trust
or other  enterprise  against any  liability  asserted  against him and  incurred by him in any such  capacity,  or
arising out of his status as such,  whether or not the  corporation  would have the power to indemnify  him against
such liability under the provisions of this Article.


ARTICLE VII
                                             AMENDMENTS


         These  By-Laws  may be  altered  or  repealed  and  By-Laws  may be  made  at any  annual  meeting  of the
Shareholders  or at any  special  meeting  thereof  if notice  of the  proposed  alteration  or repeal or By-Law or
By-Laws to be made be contained in the notice of such special  meeting,  by the  affirmative  vote of a majority of
the stock issued and  outstanding  and entitled to vote thereat,  or by the  affirmative  vote of a majority of the
Board of Directors,  at any regular  meeting of the Board of Directors,  or at any special  meeting of the Board of
Directors,  if notice of the proposed  alteration  or repeal,  or By-Law or By-Laws to be made, be contained in the
notice of such special meeting.