Document:

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                                                                    EXHIBIT 10.4

                           INSURANCE MATTERS AGREEMENT

         This INSURANCE MATTERS AGREEMENT (this "Agreement"), is made as of
__________, 2000, by and between INSIGHT ENTERPRISES, INC., a Delaware
corporation ("Insight"), and DIRECT ALLIANCE CORPORATION, a Delaware corporation
("Direct Alliance"). Capitalized terms not defined herein shall have the meaning
set forth in the Separation and Distribution Agreement dated as of
_____________, 2000 by and between Insight and Direct Alliance (the "Separation
Agreement").

                                    RECITALS

         WHEREAS, pursuant to the Separation Agreement, Insight will, subject to
the terms and conditions set forth therein (i) transfer to Direct Alliance
certain assets relating to the Direct Alliance Business and (ii) effect a tax
free, pro-rata distribution to its shareholders of all Direct Alliance common
stock held by it (the "Spin-Off");

         WHEREAS, prior to the Distribution Date, Insight or the Insight
Affiliates (the "Insight Insurance Parties") and Direct Alliance and the Direct
Alliance Affiliates maintained various policies of insurance, including but not
limited to those listed on Schedule 1 hereto (the "Policies"), covering, among
other things, risks associated with, or arising out of, the assets, business or
operations of the Direct Alliance Business;

         WHEREAS, without relinquishing any rights as an owner of, and insured
under, the Policies, the Insight Insurance Parties wish to permit Direct
Alliance to retain, after the Distribution Date, the same rights and benefits it
enjoyed under the Policies as it had prior to the Distribution Date, and Direct
Alliance wishes to assume certain of the Insight Insurance Parties'
responsibilities, under the Policies; and

         WHEREAS, the parties hereto intend for this Agreement to govern the
rights and obligations of the Insight Insurance Parties and Direct Alliance with
respect to various pre-existing contracts insuring Insight and its subsidiaries
and covering risks associated with, or arising out of, the assets, business or
operations of the Direct Alliance Business.

         NOW, THEREFORE, in consideration of the premises and the mutual
promises contained in this Agreement and the other Separation Documents (as
defined in the Separation Agreement), the parties hereto agree as follows:
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                                    ARTICLE I
                               INSURANCE COVERAGE

         1.1. Continuing Ownership. The Insight Insurance Parties and Direct
Alliance and the Direct Alliance Affiliates shall continue at all times as
respective owners of, and beneficiaries under, the Policies to the same extent
each party enjoyed prior to the Distribution Date, and this Agreement shall not
be construed as an attempted assignment of the Policies or as a contract of
insurance.

         1.2. List of Policies. The Policies which are listed on Schedule 1 were
obtained by the Insight Insurance Parties at various times prior to the date of
this Agreement and may cover risks associated with, or arising out of, the
Direct Alliance Business. Neither Insight nor any of the other Insight Insurance
Parties warrant that Schedule 1 contains or will contain an accurate or complete
list of the insurance potentially available to cover the Direct Alliance
Business, and state only that they have compiled the list to the best of their
abilities based on currently available information. Neither Insight nor any of
the other Insight Insurance Parties shall have any obligation to undertake any
further search of their records, or the records of any third parties, to seek
additional policies or information about policies not found on Schedule 1. The
Insight Insurance Parties will permit Direct Alliance to review or search their
records concerning policies not available on Schedule 1, and will take
reasonable steps to give Direct Alliance access to third parties. However, each
party agrees that it will share with the other any information it gathers about
additional existing policies, and that such additional policies which are found
potentially to provide coverage for risks associated with the Direct Alliance
Business shall be subject to the provisions of this Agreement as if listed on
Schedule 1 and shall be deemed within the definition of Policies. The parties
agree to generally cooperate with one another in connection with exchanging
information regarding coverage limits.

         1.3. No Warranty of Coverage. Neither Insight nor any of the other
Insight Insurance Parties warrant that the Policies or any other policies of
insurance provide any coverage to Direct Alliance or the Insight Insurance
Parties generally, or with respect to any particular risk.

         1.4. Obligation to Continue. Neither any of the Insight Insurance
Parties nor Direct Alliance or any of the Direct Alliance Affiliates shall
cancel any Policy under which any of Direct Alliance or any Direct Alliance
Affiliate or any Insight Insurance Party, respectively, remains a beneficiary.
After the Distribution Date, Direct Alliance shall be solely responsible for
obtaining and maintaining all policies of insurance covering its business and
other activities after such date.

                                   ARTICLE II
                           PENDING INSURED LITIGATION

         2.1. List of Pending Insured Litigation. Direct Alliance has compiled
Schedule 2 which contains a list of the litigation, if any, allegedly associated
with, or arising out of, the Direct Alliance Business prior to the date of this
Agreement for which Direct Alliance believes there

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may be insurance coverage under the Policies. This litigation, together with all
threatened litigation and claims arising out of the Direct Alliance Business,
shall be referred to as "Pending Insured Litigation." Direct Alliance does not
warrant that Schedule 2 contains or will contain an accurate or complete list of
the Pending Insured Litigation, and states only that it has compiled and will
compile the list to the best of its abilities based on currently available
information. Additional litigation and threatened litigation determined by
Direct Alliance at a later date as having been omitted from Schedule 2 shall be
subject to this Agreement as if listed on Schedule 2 and shall be deemed
included within the definition of Pending Insured Litigation.

         2.2. Notice to Insurers. Direct Alliance warrants that, to the best of
its knowledge, all appropriate insurance carriers have been or will be placed on
notice concerning the Pending Insured Litigation in a timely fashion, as or if
required by the terms of the Policies.

                                   ARTICLE III
                             NEW INSURED LITIGATION

         3.1. Further Litigation or Claims. The parties acknowledge that after
the Distribution Date there may be further litigation or other claims made,
filed, commenced or threatened against Direct Alliance or Insight allegedly
associated with, or arising out of, the Direct Alliance Business ("New Insured
Litigation").

         3.2. New Insured Litigation Notification. Direct Alliance shall notify
Insight of any New Insured Litigation which may be covered under the Insight
Insurance Parties' insurance policies.

         3.3. Notification to Insight. Direct Alliance shall be solely
responsible for notifying all appropriate insurance carriers providing coverage
to Direct Alliance or for the activities and operations of the Direct Alliance
Business, if any, regarding New Insured Litigation and all other litigation and
claims, except in cases where the insurance carriers have refused in writing to
deal directly with Direct Alliance, in which case Direct Alliance shall promptly
notify Insight. Direct Alliance shall notify Insight of any litigation and
claims Direct Alliance has submitted to Insight's insurers. Direct Alliance also
shall notify Insight promptly if it appears that New Insured Litigation may
involve the assets, business or operations of Insight.

                                   ARTICLE IV
                          CASE HANDLING AND COOPERATION

         4.1. Cooperation with Insurers and Insight. Direct Alliance agrees that
it shall notify, report to, and cooperate fully with the insurance carriers and
Insight with respect to Pending Insured Litigation and New Insured Litigation as
though Direct Alliance were the named insured under the policies of insurance.

         4.2. Notification to Insurers. Insight will notify the insurance
carriers issuing the Policies of

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the terms of this Agreement and the Separation Agreement, and will request that
the insurance carriers deal directly with Direct Alliance, as case handler,
regarding the management of any Pending Insured Litigation and any New Insured
Litigation.

         4.3. Direct Alliance to Continue as Case Handler. In the event that an
insurance carrier shall refuse or fail to deal directly with Direct Alliance,
Direct Alliance shall continue as case handler and Insight shall provide
reasonable support to Direct Alliance in communicating with the insurance
carrier.

         4.4. Actions Against Insurers. In the event Direct Alliance wishes to
commence an action against an insurance carrier for failure to provide defense
or indemnification for Pending Insured Litigation or New Insured Litigation
under one or more of the Policies, it shall not do so without informing Insight
and obtaining Insight's consent. Upon receipt of Insight's consent, Direct
Alliance may prosecute such an action in the name of Insight, in which case
Direct Alliance shall bear all expenses of the litigation and shall hold Insight
harmless from any costs of such litigation, including without limitation fees,
expenses, charges, awards of any type or judgments which may be assessed against
Insight. Insight's consent to the prosecution of such an action will not be
withheld or delayed unreasonably.

                                    ARTICLE V
                          PAYMENT OF COSTS AND PROCEEDS

         5.1. Payment to Direct Alliance.

                  (a) To the extent that an insurance carrier pays one of the
Insight Insurance Parties for all or any portion of the costs of defense of, or
pays all or any portion of the amounts in settlement of, or in satisfaction of a
judgment for, Pending Insured Litigation or New Insured Litigation, for which
Direct Alliance provided one of the Insight Insurance Parties or itself with
defense and indemnification as required by the Separation Agreement, such
Insight Insurance Parties shall pay over (or cause to be paid over) to Direct
Alliance or for its benefit such sums in excess of such Insight Insurance
Parties' own reasonable expenses and costs within thirty (30) days of their
receipt.

                  (b) If Direct Alliance fails to defend and indemnify an
Insight Insurance Party for a Pending Insured Litigation matter or New Insured
Litigation matter as required under the Separation Agreement, that Insight
Insurance Parties shall have no obligation to pay over to Direct Alliance any
portion of the payments received with respect to that matter from the insurance
carriers; provided, however, that receipt of such payments by that Insight
Insurance Party shall not relieve Direct Alliance of its obligations to defend
or indemnify that Insight Insurance Party to the extent such proceeds are
insufficient to meet Direct Alliance's obligations.

         5.2. Obligation to Defend and Indemnify. It is understood between the
parties that Direct

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Alliance's obligation to defend, indemnify, save and hold harmless Insight under
the Separation Agreement shall arise at a time specified in that Agreement which
will often be prior to the time insurance proceeds will be available. The
parties acknowledge that Direct Alliance's obligation to provide a defense and
indemnification under the Separation Agreement shall not be delayed pending the
results of any claims made under insurance policies and that Insight and Direct
Alliance shall account between themselves at the conclusion of a matter if any
financial adjustments are required due to the receipt of such proceeds.

         5.3. Allocation of Deductible. To the extent a non-claim specific
deductible or self-insured retention applies, the parties agree that the
deductible or self-insured retention will be allocated proportionately among
Direct Alliance and Insight based upon the total amount claimed by each party in
any respective insurance period.

                                   ARTICLE VI
                                     NOTICES

         6.1. General. All notices and communications required or permitted
under this Agreement shall be in writing and any communication or delivery of
them shall be deemed to have been duly made if actually delivered, or if mailed
by first class or certified mail, postage prepaid, or by air express service,
with charges prepaid. Except for notices to insurance carriers under Section 3.2
and 3.3 and for bills and payments under Article V of this Agreement, all
notices and communications shall be addressed as follows:

         If to any Insight Insurance Parties

                  Insight Enterprises, Inc.
                  1305 West Auto Drive
                  Tempe, Arizona

                  Attention: General Counsel

         If to Direct Alliance:

                  Direct Alliance Corporation
                  8123 South Hardy
                  Tempe, Arizona

                  Attention: General Counsel

         6.2. Change of Address. Either party may by written notice so delivered
to the other, change the address to which future delivery shall be made.

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                                   ARTICLE VII
                                  MISCELLANEOUS

         7.1. Entire Agreement. This Agreement and the Separation Agreement
constitute the entire understanding of the parties hereto with respect to the
subject matter hereof, superseding all negotiations, prior discussions and prior
agreements and understandings relating to their subject matter; provided,
however, that the specific provisions of any other agreement between the parties
executed and delivered by the parties in connection with the closing under the
Separation Agreement shall not be superseded by this Agreement and to the extent
any such other agreement is in conflict herewith, such specific agreement shall
control.

         7.2. Assignment. This Agreement and all the provisions hereof shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by either party
without the prior written consent of the other party; except that this Agreement
may be assigned to a parent or subsidiary of a party, or to a third party
acquiring substantially all of the assets of a party, without such prior written
consent to such an assignment, provided that any such third party expressly
assumes, and agrees to be bound by the terms of, this Agreement, and provided
further that the assigning party shall not be relieved of any of its obligations
hereunder in the event of such an assignment.

         7.3. No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties and is not intended to confer upon any person except the
parties any rights or remedies hereunder. There are no third party beneficiaries
to this Agreement.

         7.4. Written Amendment and Waiver. This Agreement may not be altered or
amended nor any rights hereunder be waived, except by an instrument in writing
executed by the party or parties to be charged with the amendment or waiver.

         7.5 Limited Amendment or Waiver. No waiver of any term, provision or
condition of this Agreement or failure to exercise any right, power or remedy or
failure to enforce any provision of this Agreement, in any one or more
instances, shall be deemed to be a further or continuing waiver of any such
term, provision or condition or as a waiver of any other term, provision or
condition or enforcement right of this Agreement or deemed to be an impairment
of any right, power or remedy or acquiescence to any breach.

         7.6. Reformation and Severability. If any provision of this Agreement
shall be held to be invalid, unenforceable or illegal in any jurisdiction under
any circumstances for any reason, (a) that provision shall be reformed to the
minimum extent necessary to cause such provision to be valid, enforceable and
legal and preserve the original intent of the parties, or (b) if that provision
cannot be so reformed, it shall be severed from this Agreement. The holding
shall not affect or

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impair the validity, enforceability or legality of the provision in any other
jurisdiction or under any other circumstances. Neither the holding nor the
reformation or severance shall affect or impair the legality, validity or
enforceability of any other provision of this Agreement to the extent that the
other provision is not itself actually in conflict with any applicable law. Upon
a determination that any term or provision is invalid, unenforceable or illegal,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible.

         7.7. Jurisdiction. This Agreement shall be governed and construed and
enforced in accordance with the internal laws of the State of Arizona (without
regard to conflict of law principles) as to all matters including, without
limitation, matters of validity, construction, effect, performance and remedies.

         7.8. Titles and Headings. All titles and headings have been inserted
solely for the convenience of the parties and are not intended to be a part of
this Agreement or to affect its meaning or interpretation.

         7.9. Counterparts. This Agreement, and any other agreement to be
executed in connection herewith, may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

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         IN WITNESS WHEREOF the parties have caused this Agreement to be
executed as of the date first above written by their duly authorized officers.

                          INSIGHT ENTERPRISES, INC.

                          By:
                             -----------------------------------------
                          Name:
                          Title: President and Chief Executive Officer

                          DIRECT ALLIANCE CORPORATION

                          By:
                             -----------------------------------------
                          Name:
                          Title: President and Chief Executive Officer

                                       8<PAGE>   1
                                                                    EXHIBIT 10.6

                           DIRECT ALLIANCE CORPORATION
                          2000 LONG-TERM INCENTIVE PLAN

ARTICLE 1  PURPOSE

         1.1 GENERAL. The purpose of the Direct Alliance Corporation 2000
Long-Term Incentive Plan (the "Plan") is to promote the success, and enhance the
value, of Direct Alliance Corporation (the "Company") by linking the personal
interests of its, its parent's, and its corporate affiliates' officers,
employees, directors, and consultants or independent contractors to those of
Company stockholders and by providing its officers, employees, directors, and
consultants or independent contractors with an incentive for outstanding
performance. The Plan is further intended to provide flexibility to the Company
in its ability to motivate, attract, and retain the services of officers,
employees, directors, and consultants or independent contractors upon whose
judgment, interest, and special effort the successful conduct of the Company's
operation is largely dependent. Accordingly, the Plan permits the grant of
incentive awards from time to time to officers, employees, directors, and
consultants or independent contractors of the Company, its parent, and its
corporate affiliates.

ARTICLE 2  EFFECTIVE DATE

         2.1 EFFECTIVE DATE. The Plan is effective as of May 2, 2000 (the
"Effective Date").

ARTICLE 3  DEFINITIONS AND CONSTRUCTION

         3.1 DEFINITIONS. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Sections 1.1 or 2.1 unless a clearly different meaning is required
by the context. The following words and phrases shall have the following
meanings:

                  (a) "Award" means any Option, Stock Appreciation Right,
Restricted Stock Award, or Performance Share Award granted to a Participant
under the Plan.

                  (b) "Award Agreement" means any written agreement, contract,
or other instrument or document evidencing an Award.

                  (c) "Board" means the Board of Directors of the Company.

                  (d) "Change of Control" means and includes each of the
following:

                           (1) When the individuals who, at the beginning of any
period of two years or less, constituted the Board of Directors of the Company
cease, for any reason, to constitute at least a majority thereof, unless the
election or nomination for election of each new director was approved by the
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period;

                           (2) A change of control of the Company through a
transaction or series of transactions, such that any person (as that term is
used in Sections 13 and 14(d)(2) of the 1934 Act), excluding affiliated persons
or companies (as those terms are defined in Section 3(a)(19) of the 1934 Act)

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of the Company as of the Effective Date, is or becomes the beneficial owner (as
that term is used in Section 13(d) of the 1934 Act) directly or indirectly of
securities of the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities;

                           (3) Any consolidation or liquidation of the Company
in which either the Company or a corporate affiliate under majority common
ownership with the Company prior to such consolidation or liquidation is not the
continuing or surviving corporation or pursuant to which Stock would be
converted into cash, securities or other property, other than a merger of the
Company in which the holders of the shares of Stock immediately before the
merger have the same proportionate ownership of common stock of the surviving
corporation immediately after the merger;

                           (4) The stockholders of the Company approve any plan
or proposal for the liquidation or dissolution of the Company; or

                           (5) Substantially all of the assets of the Company
are sold or otherwise transferred to parties that are not within a "controlled
group of corporations" (as defined in Section 1563 of the Code) of which the
Company is a member.

                  (e) "Code" means the Internal Revenue Code of 1986, as
amended.

                  (f) "Committee" means the committee of the Board described in
Article 4. If at any time or to any extent the Board shall not administer the
Plan, then the functions of the Board specified in the Plan shall be exercised
by the Committee.

                  (g) "Corporate Affiliate" means any company under majority
common ownership with the Company or with any Parent or Subsidiary of the
Company.

                  (h) "Disability" shall mean any illness or other physical or
mental condition of a Participant which renders the Participant incapable of
performing his customary and usual duties for the Company, or any medically
determinable illness or other physical or mental condition resulting from a
bodily injury, disease or mental disorder which in the judgment of the Committee
is permanent and continuous in nature. The Committee may require such medical or
other evidence as it deems necessary to judge the nature and permanency of the
Participant's condition.

                  (i) "Fair Market Value" means, as of any given date, the fair
market value of Stock or other property on a particular date determined by such
methods or procedures as may be established from time to time by the Committee.
Unless otherwise determined by the Committee, the Fair Market Value of Stock as
of any date shall be the closing price for the Stock as reported on the NASDAQ
National Market System (or on any national securities exchange on which the
Stock is then listed) for that date or, if no closing price is so reported for
that date, the closing price on the next preceding date for which a closing
price was reported.

                  (j) "Incentive Stock Option" means an Option that is intended
to meet the requirements of Section 422 of the Code or any successor provision
thereto.

                  (k) "Non-Qualified Stock Option" means an Option that is not
intended to be an Incentive Stock Option.

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                  (l) "Option" means a right granted to a Participant under
Article 7 of the Plan to purchase Stock at a specified price during specified
time periods. An Option may be either an Incentive Stock Option or a
Non-Qualified Stock Option.

                  (m) "Parent" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company, if each of the
corporations in the chain (other than the Company) owns stock possessing 50% or
more of the combined voting power of all classes of stock in one of the other
corporations in the chain.

                  (n) "Participant" means a person who, as an officer, employee,
director, and consultant or independent contractor of the Company or any
Subsidiary, Parent or other Corporate Affiliate has been granted an Award under
the Plan.

                  (o) "Performance Share" means a right granted to a Participant
under Article 9, to receive cash, Stock, or other Awards, the payment of which
is contingent upon achieving certain performance goals established by the
Committee.

                  (p) "Plan" means the Direct Alliance Corporation 2000
Long-Term Incentive Plan, as amended from time to time.

                  (q) "Restricted Stock Award" means Stock granted to a
Participant under Article 10 that is subject to certain restrictions and to risk
of forfeiture.

                  (r) "Retirement" means a Participant's termination of
employment with the Company after attaining any normal or early retirement age
specified in any pension, profit sharing or other retirement program sponsored
by the Company.

                  (s) "Stock" means the common stock of the Company and such
other securities of the Company that may be substituted for Stock pursuant to
Article 12.

                  (t) "Stock Appreciation Right" or "SAR" means a right granted
to a Participant under Article 8 to receive a payment equal to the difference
between the Fair Market Value of a share of Stock as of the date of exercise of
the SAR over the grant price of the SAR, all as determined pursuant to Article
8.

                  (u) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company, if
each of the corporations (other than the last corporation) in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.

ARTICLE 4  ADMINISTRATION

         4.1 COMMITTEE. The Plan shall be administered by a Committee that is
appointed by, and shall serve at the discretion of, the Board in accordance with
applicable law.

         4.2 ACTION BY THE COMMITTEE. A majority of the Committee shall
constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present and acts approved in writing by a majority
of the Committee in lieu of a meeting shall be deemed the acts of the Committee.
Each member of the Committee is entitled to, in good faith, rely or act upon any
report or other information furnished to that member by any officer or other
employee of the Company or any Parent

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<PAGE>   4

or Subsidiary, the Company's or any Parent's independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Company or any Parent to assist in the administration of the
Plan.

         4.3 AUTHORITY OF COMMITTEE. The Committee has the exclusive power,
authority and discretion to:

                  (a) Designate Participants to receive Awards;

                  (b) Determine the type or types of Awards to be granted to
each Participant;

                  (c) Determine the number of Awards to be granted and the
number of shares of Stock to which an Award will relate;

                  (d) Determine the terms and conditions of any Award granted
under the Plan including but not limited to, the exercise price, grant price, or
purchase price, any restrictions or limitations on the Award, any schedule for
lapse of forfeiture restrictions or restrictions on the exercisability of an
Award, and accelerations or waivers thereof, based in each case on such
considerations as the Committee in its sole discretion determines; provided,
however, that the Committee shall not have the authority to accelerate the
vesting, or waive the forfeiture, of any Performance-Based Awards;

                  (e) Determine whether, to what extent, and under what
circumstances an Award may be settled in, or the exercise price of an Award may
be paid in, cash, Stock, other Awards, or other property, or an Award may be
canceled, forfeited, or surrendered;

                  (f) Prescribe the form of each Award Agreement, which need not
be identical for each Participant;

                  (g) Decide all other matters that must be determined in
connection with an Award;

                  (h) Establish, adopt or revise any rules and regulations as it
may deem necessary or advisable to administer the Plan;

                  (i) Make all other decisions and determinations that may be
required under the Plan or as the Committee deems necessary or advisable to
administer the Plan; and

                  (j) Reduce the option price of any option to the then Fair
Market Value if the Fair Market Value of the Common Stock covered by such option
has declined since the date such option was granted.

         4.4 DECISIONS BINDING. The Committee's interpretation of the Plan, any
Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.

ARTICLE 5  SHARES SUBJECT TO THE PLAN

         5.1 NUMBER OF SHARES. Subject to adjustment provided in Section 13.1,
the aggregate number of shares of Stock reserved and available for grant under
the Plan shall be 4,500,000.

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<PAGE>   5

         5.2 LAPSED AWARDS. To the extent that an Award terminates, expires or
lapses for any reason, any shares of Stock subject to the Award will again be
available for the grant of an Award under the Plan and shares subject to SARs or
other Awards settled in cash will be available for the grant of an Award under
the Plan.

         5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.

ARTICLE 6  ELIGIBILITY AND PARTICIPATION

         6.1 ELIGIBILITY. Persons eligible to participate in this Plan include
all officers, employees, directors, and consultants or independent contractors
of the Company, or any Parent, Subsidiary or other Corporate Affiliate, as
determined by the Committee, including employees who are also members of the
Board.

         6.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from among all eligible individuals,
those to whom Awards shall be granted and shall determine the nature and amount
of each Award. No individual shall have any right to be granted an Award under
this Plan.

ARTICLE 7  STOCK OPTIONS

         7.1 GENERAL. The Committee is authorized to grant Options to
Participants on the following terms and conditions:

                  (a) EXERCISE PRICE. The exercise price per share of Stock
under an Option shall be determined by the Committee and set forth in the Award
Agreement. It is the intention under the Plan that the exercise price for any
Option shall not be less than the Fair Market Value as of the date of grant;
provided, however that the Committee may, in its discretion, grant Options
(other than Incentive Stock Options) with an exercise price of less than Fair
Market Value on the date of grant.

                  (b) TIME AND CONDITIONS OF EXERCISE. The Committee shall
determine the time or times at which an Option may be exercised in whole or in
part. The Committee also shall determine the performance or other conditions, if
any, that must be satisfied before all or part of an Option may be exercised.

                  (c) PAYMENT. The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, shares of Stock, or other property
(including broker-assisted "cashless exercise" arrangements), and the methods by
which shares of Stock shall be delivered or deemed to be delivered to
Participants.

                  (d) EVIDENCE OF GRANT. All Options shall be evidenced by a
written Award Agreement between the Company and the Participant. The Award
Agreement shall include such provisions as may be specified by the Committee.

         7.2 INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be granted
only to employees of the Company or any Parent or Subsidiary and the terms of
any Incentive Stock Options granted under the Plan must comply with the
following additional rules:

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                  (a) EXERCISE PRICE. The exercise price per share of Stock
shall be set by the Committee, provided that the exercise price for any
Incentive Stock Option may not be less than the Fair Market Value as of the date
of the grant.

                  (b) EXERCISE. In no event, may any Incentive Stock Option be
exercisable for more than ten years from the date of its grant.

                  (c) LAPSE OF OPTION. An Incentive Stock Option shall lapse
under the following circumstances:

                           (1) The Incentive Stock Option shall lapse ten years
from the date it is granted, unless an earlier time is set in the Award
Agreement.

                           (2) The Incentive Stock Option shall lapse three
months after the Participant's termination of employment, if the termination of
employment was attributable to (i) Disability, (ii) Retirement, or (iii) for any
other reason, provided that the Committee has approved, in writing, the
continuation of any Incentive Stock Option outstanding on the date of the
Participant's termination of employment.

                           (3) If the Participant separates from employment
other than as provided in paragraph (2), the Incentive Stock Option shall lapse
seven (7) days following the Participant's termination of employment.

                           (4) If the Participant dies before the Option lapses
pursuant to paragraph (1), (2) or (3), above, the Incentive Stock Option shall
lapse, unless it is previously exercised, on the earlier of (i) the date on
which the Option would have lapsed had the Participant lived and had his
employment status (i.e., whether the Participant was employed by the Company on
the date of his death or had previously terminated employment) remained
unchanged; or (ii) 12 months after the date of the Participant's death. Upon the
Participant's death, any Incentive Stock Options exercisable at the
Participant's death may be exercised by the Participant's legal representative
or representatives, by the person or persons entitled to do so under the
Participant's last will and testament, or, if the Participant shall fail to make
testamentary disposition of such Incentive Stock Option or shall die intestate,
by the person or persons entitled to receive said Incentive Stock Option under
the applicable laws of descent and distribution.

                  (d) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market
Value (determined as of the time an Award is made) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a Participant
in any calendar year may not exceed $100,000.00 or such other limitation as
imposed by Section 422(d) of the Code, or any successor provision. Such
$100,000.00 annual limitation applies to the total of (i) all shares of Stock
with respect to which Incentive Stock Options are first exercisable under this
Plan and (ii) all shares of Stock in all Parent companies and in all
subsidiaries thereof with respect to which Incentive Stock Options are first
exercisable under such companies' various stock benefit plan(s). To the extent
that Incentive Stock Options are first exercisable by a Participant in excess of
such limitation, the excess shall be considered Non-Qualified Stock Options.

                  (e) TEN PERCENT OWNERS. An Incentive Stock Option shall be
granted to any individual who, at the date of grant, owns stock possessing more
than ten percent of the total combined voting power of all classes of Stock of
the Company only if such Option is granted at a price that is not less than 110%
of Fair Market Value on the date of grant and the Option is exercisable for no
more than five years from the date of grant.

                                  Page 6 of 12
<PAGE>   7

                  (f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an
Incentive Stock Option may be made pursuant to this Plan after the tenth
anniversary of the Effective Date.

                  (g) RIGHT TO EXERCISE. During a Participant's lifetime, an
Incentive Stock Option may be exercised only by the Participant.

ARTICLE 8  STOCK APPRECIATION RIGHTS

         8.1 GRANT OF SARs. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:

                  (a) RIGHT TO PAYMENT. Upon the exercise of a Stock
Appreciation Right, the Participant to whom it is granted has the right to
receive the excess, if any, of:

                           (1) The Fair Market Value of a share of Stock on the
date of exercise; over

                           (2) The grant price of the Stock Appreciation Right
as determined by the Committee, which shall not be less than the Fair Market
Value of a share of Stock on the date of grant in the case of any SAR related to
any Incentive Stock Option.

                  (b) OTHER TERMS. All awards of Stock Appreciation Rights shall
be evidenced by an Award Agreement. The terms, methods of exercise, methods of
settlement, form of consideration payable in settlement, and any other terms and
conditions of any Stock Appreciation Right shall be determined by the Committee
at the time of the grant of the Award and shall be reflected in the Award
Agreement.

ARTICLE 9  PERFORMANCE SHARES

         9.1 GRANT OF PERFORMANCE SHARES. The Committee is authorized to grant
Performance Shares to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete discretion to
determine the number of Performance Shares granted to each Participant. All
Awards of Performance Shares shall be evidenced by an Award Agreement.

         9.2 RIGHT TO PAYMENT. A grant of Performance Shares gives the
Participant rights, valued as determined by the Committee, and payable to, or
exercisable by, the Participant to whom the Performance Shares are granted, in
whole or in part, as the Committee shall establish at grant or thereafter. The
Committee shall set performance goals and other terms or conditions to payment
of the Performance Shares in its discretion which, depending on the extent to
which they are met, will determine the number and value of Performance Shares
that will be paid to the Participant, provided that the time period during which
the performance goals must be met shall, in all cases, exceed six months.

         9.3 OTHER TERMS. Performance Shares may be payable in cash, Stock, or
other property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Agreement.

ARTICLE 10 RESTRICTED STOCK AWARDS

         10.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make
Awards of Restricted Stock to Participants in such amounts and subject to such
terms and conditions as may be

                                  Page 7 of 12
<PAGE>   8

selected by the Committee. All Awards of Restricted Stock shall be evidenced by
a Restricted Stock Award Agreement.

         10.2 ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise, as the Committee
determines at the time of the grant of the Award or thereafter.

         10.3 FORFEITURE. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of employment
during the applicable restriction period, Restricted Stock that is at that time
subject to restrictions shall be forfeited and reacquired by the Company,
provided, however, that the Committee may provide in any Award Agreement that
restrictions or forfeiture conditions relating to Restricted Stock will be
waived in whole or in part in the event of terminations resulting from specified
causes, and the Committee may in other cases waive in whole or in part
restrictions or forfeiture conditions relating to Restricted Stock.

         10.4 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted under
the Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock, and
the Company shall retain physical possession of the certificate until such time
as all applicable restrictions lapse.

ARTICLE 11 PROVISIONS APPLICABLE TO AWARDS

         11.1 STAND-ALONE, TANDEM, AND SUBSTITUTE AWARDS. Awards granted under
the Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for, any other Award granted
under the Plan. If an Award is granted in substitution for another Award, the
Committee may require the surrender of such other Award in consideration of the
grant of the new Award. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the
grant of such other Awards.

         11.2 EXCHANGE PROVISIONS. The Committee may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Stock,
or another Award (subject to Section 11.1), based on the terms and conditions
the Committee determines and communicates to the Participant at the time the
offer is made.

         11.3 TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from the date of its grant.

         11.4 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and
any applicable law or Award Agreement, payments or transfers to be made by the
Company or a Subsidiary on the grant or exercise of an Award may be made in such
forms as the Committee determines at or after the time of grant, including
without limitation, cash, Stock, other Awards, or other property, or any
combination, and may be made in a single payment or transfer, in installments,
or on a deferred basis, in each case determined in accordance with rules adopted
by, and at the discretion of, the Committee.

                                  Page 8 of 12
<PAGE>   9

         11.5 LIMITS ON TRANSFER. No right or interest of a Participant in any
Award may be pledged, encumbered, or hypothecated to or in favor of any party
other than the Company or a Subsidiary, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the
Company or a Subsidiary. Except as otherwise provided by the Committee, no Award
shall be assignable or transferable by a Participant other than by will or the
laws of descent and distribution.

         11.6 BENEFICIARIES. Notwithstanding Section 11.5, a Participant may, in
the manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If the Participant is married, a designation of a person other
than the Participant's spouse as his beneficiary with respect to more than 50
percent of the Participant's interest in the Award shall not be effective
without the written consent of the Participant's spouse. If no beneficiary has
been designated or survives the Participant, payment shall be made to the person
entitled thereto under the Participant's will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Committee.

         11.7 STOCK CERTIFICATES. All Stock certificates delivered under the
Plan are subject to any stop-transfer orders and other restrictions as the
Committee deems necessary or advisable to comply with Federal or state
securities laws, rules and regulations and the rules of any national securities
exchange or automated quotation system on with the Stock is listed, quoted, or
traded. The Committee may place legends on any Stock certificate to reference
restrictions applicable to the Stock.

         11.8 TENDER OFFERS. In the event of a public tender for all or any
portion of the Stock, or in the event that a proposal to merge, consolidate, or
otherwise combine with another company is submitted for stockholder approval,
the Committee may in its sole discretion declare previously granted Options to
be immediately exercisable. To the extent that this provision causes Incentive
Stock Options to exceed the dollar limitation set forth in Section 7.2(d), the
excess Options shall be deemed to be Non-Qualified Stock Options.

         11.9 ACCELERATION UPON A CHANGE OF CONTROL. If a Change of Control
occurs, all outstanding Options, Stock Appreciation Rights, and other Awards
shall become fully exercisable and all restrictions on outstanding Awards shall
lapse. To the extent that this provision causes Incentive Stock Options to
exceed the dollar limitation set forth in Section 7.2(d), the excess Options
shall be deemed to be Non-Qualified Stock Options. Upon, or in anticipation of,
such an event, the Committee may cause every Award outstanding hereunder to
terminate at a specific time in the future and shall give each Participant the
right to exercise Awards during a period of time as the Committee, in its sole
and absolute discretion, shall determine, except in the event that the surviving
or resulting entity agrees to assume the Awards on terms and conditions that
substantially preserve the Participant's rights and benefits of the Award then
outstanding.

         11.10 EFFECT OF TERMINATION OF EMPLOYMENT OR SERVICE. Notwithstanding
any other provision of this Plan, upon the termination of a Participant's
employment or service with the Company or any Parent or Subsidiary under any
circumstances, all Awards shall immediately terminate as to any Option shares
that have not previously vested as of the date of such termination.

                                  Page 9 of 12
<PAGE>   10

         11.11 LAPSE OF AWARD. Notwithstanding any other provision of this Plan,
in the event of a Participant's termination of employment or service with the
Company or any Subsidiary, Parent or other Corporate Affiliate for "Cause" (as
defined below), all outstanding Awards to that Participant shall immediately
terminate in full as of the date of such termination of employment or service.
For purposes of this Agreement, "Cause" shall mean the occurrence of any of the
following events, as determined by the Committee in its sole and absolute
discretion and which determination shall be final:

                  (a) The Participant's conviction of or guilty plea to the
commission of an act or acts constituting a felony under the laws of the United
States or any state thereof;

                  (b) Action by the Participant toward the Company or any Parent
or Subsidiary involving personal dishonesty, theft or fraud in connection with
the Participant's duties as an employee of or consultant to the Company or any
Parent or Subsidiary;

                  (c) The Participant's willful failure to abide by or follow
lawful directions of the Company or any Parent or Subsidiary; or

                  (d) Other material breach by the Participant of any employment
or consulting agreement between Participant and the Company or any Parent or
Subsidiary.

ARTICLE 12 CHANGES IN CAPITAL STRUCTURE

         12.1 GENERAL. In the event a stock dividend is declared upon the Stock,
the shares of Stock then subject to each Award shall be increased
proportionately without any change in the aggregate purchase price therefor. In
the event the Stock shall be changed into or exchanged for a different number or
class of shares of Stock or of another corporation, whether through
reorganization, recapitalization, stock split-up, combination of shares, merger
or consolidation, there shall be substituted for each such share of Stock then
subject to each Award the number and class of shares of Stock into which each
outstanding share of Stock shall be so exchanged, all without any change in the
aggregate purchase price for the shares then subject to each Award.

         12.2 OUTSTANDING AWARDS AND CHANGE IN CONTROL. In connection with any
Change in Control the Committee may provide, in its sole discretion, for the
cancellation of any outstanding Awards and payment in cash, stock or other
property therefor.

ARTICLE 13 AMENDMENT, MODIFICATION AND TERMINATION

         13.1 AMENDMENT, MODIFICATION AND TERMINATION. With the approval of the
Board, at any time and from time to time, the Committee may terminate, amend or
modify the Plan.

         13.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant.

ARTICLE 14 GENERAL PROVISIONS

         14.1 NO RIGHTS TO AWARDS. No Participant , employee, or other person
shall have any claim to be granted any Award under the Plan, and neither the
Company nor the Committee is obligated to treat Participants, employees, and
other persons uniformly.

                                 Page 10 of 12
<PAGE>   11

         14.2 NO STOCKHOLDERS RIGHTS. No Award gives the Participant any of the
rights of a stockholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Award.

         14.3 WITHHOLDING. The Company or any Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of this Plan.

         14.4 NO RIGHT TO EMPLOYMENT. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or any
Subsidiary.

         14.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an
"unfunded" plan for incentive compensation. With respect to any payments not yet
made to a Participant pursuant to an Award, nothing contained in the Plan or any
Award Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Company or any Subsidiary.

         14.6 INDEMNIFICATION. To the extent allowable under applicable law,
each member of the Committee or of the Board shall be indemnified and held
harmless by the Company from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by such member in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure
to act under the Plan and against and from any and all amounts paid by him or
her in satisfaction of judgment in such action, suit, or proceeding against him
or her provided he or she gives the Company an opportunity, at its own expense,
to handle and defend the same before he or she undertakes to handle and defend
it on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or By-Laws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.

         14.7 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary.

         14.8 EXPENSES. The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries.

         14.9 TITLES AND HEADINGS. The titles and headings of the Sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.

         14.10 FRACTIONAL SHARES. No fractional shares of stock shall be issued
and the Committee shall determine, in its discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up.

         14.11 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company
to make payment of awards in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Company shall be under no obligation to
register under the Securities Act of 1933, as amended (the "1933 Act"), any of
the

                                 Page 11 of 12
<PAGE>   12

shares of Stock paid under the Plan. If the shares paid under the Plan may in
certain circumstances be exempt from registration under the 1933 Act, the
Company may restrict the transfer of such shares in such manner as it deems
advisable to ensure the availability of any such exemption.

         14.12 GOVERNING LAW. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of Arizona.

                                 Page 12 of 12

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