Document:

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                                                               EXHIBIT NO. 10.16

                              EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is entered into as of July 1, 1999
between DIRECT ALLIANCE CORPORATION, INC. an Arizona corporation ("Company"),
and BRANSON SMITH ("Executive").

                                 R E C I T A L S

Executive is currently employed by Company in the position of President and
Chief Operating Officer. Company is the wholly owned subsidiary of Insight
Enterprises, Inc. (the "Parent"). Company has decided to offer executive an
employment agreement, the terms and provisions of which are set forth below.

NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:

1.       TERMS OF AGREEMENT

(a)      Initial Term. Executive shall be employed by Company for the duties set
         forth in Section 2 for a two-year term, commencing as of July 1, 1999
         and ending on June 30, 2001 (the "Initial Term"), unless sooner
         terminated in accordance with the provisions of this Agreement.

(b)      Renewal Term; Employment Period Defined. On each successive day after
         the commencement of the Initial Term, without further action on the
         part of Company or Executive, this Agreement shall be automatically
         renewed for a new 2-year term dated effective and beginning upon each
         such successive day (the "Renewal Term"); provided, however, that
         Company may notify Executive, or the Executive may notify the Company,
         at any time, that there shall be no renewal of this Agreement, and in
         the event of such notice, neither party shall be under any obligation
         to renew or extend this Agreement. The period of time commencing as of
         the date hereof and ending on the effective date of the termination of
         employment of Executive under this or any successor Agreement shall be
         referred to as the "Employment Period."

2.       POSITION AND DUTIES

(a)      Job Duties. Company does hereby employ, engage and hire Executive as
         President of Company, and Executive does hereby accept and agree to
         such employment, engagement, and hiring. Executive's duties and
         authority during the Employment Period shall be such executive and
         managerial duties as the Board of Directors of the Company or the Board
         of Directors of the Parent (either or both of which may be referred to
         herein as the "Board") shall reasonably provided that such duties and
         authority shall not be materially different than they are at the date
         of this Agreement; further that the authority of Executive shall not be
         diminished, and that Executive shall not be demoted. Executive will
         devote such time as the Board shall reasonably determine; provided that
         such devotion of time shall not be materially different from
         Executive's devotion of time at the date of this Agreement, reasonable
         absences because of illness, personal and family exigencies excepted.

(b)      Best Efforts. Executive agrees that at all times during the Employment
         Period he will faithfully, and to the best of his ability, experience
         and talents, perform the duties that may be required of and from him
         and fulfill his responsibilities hereunder pursuant to the express
         terms hereof. Executive's ownership of, or participation (including any
         board memberships) in, any entity (other than Company or Parent) must
         be disclosed to the Board; provided, however, that Executive need not
         disclose any equity interest held in any public company or any private
         company that is not engaged in a competing business as defined in
         Section 10 of this Agreement when such interest constitutes less than
         1% of the issued and outstanding equity of such public or private
         company.
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3.       COMPENSATION

(a)      Base Salary. Company shall pay Executive a "Base Salary" in
         consideration for Executive's services to Company at the rate of
         $200,000 per annum. The Base Salary shall be payable as nearly as
         possible in equal semi-monthly installments or in such other
         installments as are customary from time to time for Company's or
         Parent's executives. The Base Salary may be adjusted from time to time
         in accordance with the procedures established by Company or Parent for
         salary adjustments for executives, provided that the Base Salary shall
         not be reduced.

(b)      Incentive Compensation.

         (1)      Executive shall also be permitted to participate in such
                  incentive compensation plans as adopted by the Board from time
                  to time. During the Employment Period, the Executive shall be
                  entitled to an incentive bonus, calculated and payable
                  quarterly, equal to 2.0% of the Company's "net earnings",
                  provided that the Company's net earnings exceed the Minimum
                  Amount for the applicable fiscal quarter; and provided further
                  that the incentive bonus for the total of the four quarters
                  constituting the fiscal year ending December 31, 1999 shall
                  not exceed 270% of Executive's annual Base Salary for that
                  fiscal year, but such limitation shall not be applicable
                  thereafter.

         (2)      For purposes of calculating Executive's incentive bonus
                  pursuant to this subsection (b), the Company's "net earnings"
                  shall be the Company's consolidated net after tax earnings
                  prior to any incentive bonus amounts for Executive and other
                  executives of Company. All allocations of overhead expense
                  from Parent to determine Company's "net earnings" shall be on
                  a basis consistent with the allocation methods applied for
                  prior accounting periods of Parent and Company, provided,
                  however, that changes thereto required by U.S. Generally
                  Accepted Accounting Principles shall be deemed acceptable. The
                  amounts payable pursuant to this subparagraph (b) shall be
                  paid on or before thirty (30) days after the public financial
                  reporting by Parent at the end of the applicable fiscal
                  quarter. For purposes of this subparagraph (b) the term
                  "Minimum Amount" means an amount equal to eighty percent (80%)
                  of the average of the Company's net earnings for the
                  immediately preceding four fiscal quarters ended prior to the
                  applicable fiscal quarter.

         (3)      If upon final presentation of consolidated financial
                  statements to Parent by the Parent's outside Certified Public
                  Accountants, the "net earnings" of Company requires
                  adjustment, then, within thirty (30) days after such
                  presentation, Company or Executive, as the case may be, shall
                  pay to the other the amount necessary to cause the net amount
                  of incentive bonus paid to be the proper amount after
                  adjustment; provided that if Executive shall pay Company
                  pursuant to the provisions of this clause (3), then the amount
                  the Executive shall pay will be reduced by the taxes withheld
                  by Company attributable to such amount ("Withheld Portion"),
                  and the Withheld Portion shall be offset against the next
                  subsequent payments of Base Salary and incentive compensation
                  made pursuant to Sections 3(a) and (b).

(c)      Incentive and Benefit Plans. Executive will be entitled to participate
         in those incentive compensation and benefit plans reserved for the
         Company's or Parent's executives, including any stock option plan
         maintained by Parent, in accordance with the terms of such compensation
         and benefit plans. Additionally, the Executive shall be entitled to
         participate in any other benefit plans sponsored by Company or Parent,
         including but not limited to, any savings plan, life insurance plan and
         health insurance plan available generally to employees of Company or
         Parent from time to time, subject to any restrictions specified in, or
         amendments made to, such plans.

(d)      Vacation. The Executive shall be entitled to four (4) weeks vacation
         during the calendar year, and such
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         additional vacation time as the Board shall approve, with such vacation
         to be scheduled and taken in accordance with the Company's or Parent's
         standard vacation policies, but this provision is not intended to
         interfere with or limit Executive's discretion to determine the
         appropriate time to be devoted to his duties hereunder.

4.       BUSINESS EXPENSES

The Company will reimburse Executive for any and all necessary, customary and
usual expenses which are incurred by Executive on behalf of Company, provided
Executive provides Company with receipts to substantiate the business expense in
accordance with Company's policies or otherwise reasonably justifies the expense
to the Company.

5.       DEATH OR DISABILITY

(a)      Death. This Agreement shall terminate upon Executive's death.
         Executive's estate shall be entitled to receive the Base Salary due
         through the date of his death and any incentive compensation payable
         for quarters ended prior to Executive's death, but no Base Salary or
         other payment or benefit will be payable after death except as
         expressly provided elsewhere in this Agreement. The determination of
         any bonuses or incentive compensation to be payable for quarters ending
         following Executive's death will be made in accordance with the
         provisions of any incentive compensation program, practice, or policy
         in which Executive participates at the time of Executive's death. If
         there is no written incentive compensation program, policy, or practice
         in effect at the time of Executive's death, Company, in the exercise of
         its discretion, may elect to pay to Executive's estate a portion of the
         incentive compensation to which Executive would have been entitled (had
         Executive not died) for the year in which this Agreement terminated due
         to Executive's death.

(b)      Disability. This Agreement shall also terminate in the event of
         Executive's "Disability". For purposes of this Agreement, "Disability"
         means the total and complete inability of Executive for a minimum
         period of six (6) months to perform the essential duties associated
         with his normal position with Company (after any accommodations
         required by the Americans with Disabilities Act or applicable state
         law) due to a physical or mental injury or illness that occurs while
         Executive is actively employed by Company. If this Agreement is
         terminated due to Executive's Disability, Executive shall receive the
         severance compensation called for by Section 6(c).

6.       TERMINATION BY COMPANY

(a)      Termination for Cause. Company may terminate this Agreement at any time
         during the Initial Term or any Renewal Terms for "Cause" upon written
         notice to Executive. If Company terminates this Agreement for "Cause",
         Executive's Base Salary shall immediately cease, and Executive shall
         not be entitled to severance payments, incentive compensation payments
         or any other payments or benefits pursuant to this Agreement, except
         for any vested rights pursuant to any benefit plans in which Executive
         participates and any accrued compensation, vacation pay and similar
         items. For purposes of this Agreement, the term "Cause" shall mean the
         termination of Executive's employment by Company for one or more of the
         following reasons:

         (1)      The criminal conviction for any felony involving theft or
                  embezzlement from Company or any affiliate;

         (2)      The criminal conviction for any felony involving moral
                  turpitude that reflects adversely upon the standing of Company
                  in the community;

         (3)      The criminal conviction for any felony involving fraud
                  committed against Company, any affiliate
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                  or any individual or entity that provides goods or services
                  to, receives goods or services from or otherwise deals with
                  Company or any affiliate;

         (4)      Acts by Executive that constitute repeated and material
                  violations of this Agreement, any written employment policies
                  of Company or Parent, or any written directives of Company or
                  Parent. A violation will not be considered to be "repeated"
                  unless such violation has occurred more than once and after
                  receipt of written notice from Company of such violation; or

         (5)      Failure to fully cooperate in any investigation by the Company
                  or Parent.

         Any termination of Executive when there is not Cause is "without
         Cause." If Company terminates Executive for Cause, and it is later
         determined that Cause did not exist, Company will pay Executive the
         amount he would have received under this Agreement if his employment
         had been terminated by Company without Cause, plus interest at the
         Prime Rate published by the Wall Street Journal on the date of
         termination. Such payments and interest shall be calculated as of the
         effective date of the initial termination. Payment shall be made within
         fifteen (15) days after such later determination is made.

(b)      Termination Without Cause. Company also may terminate this Agreement at
         any time during the Initial Term or Renewal Terms without Cause. If
         Company terminates this Agreement pursuant to this paragraph, Company
         shall provide Executive with ninety (90) days advance written notice.
         This Agreement shall continue during such notice period. The
         termination of this Agreement shall be effective on the ninetieth
         (90th) day (the "Date") following the day on which the notice is given.
         Company may, at its discretion, place Executive on a paid
         administrative leave during all or any part of said notice period.
         During the administrative leave, Company may bar Executive's access to
         Company's offices or facilities if reasonably necessary to the smooth
         operation of Company, or may provide Executive with access subject to
         such reasonable terms and conditions as Company chooses to impose.

(c)      Severance Compensation. Should Executive's employment by Company be
         terminated without Cause, Executive shall receive as a lump sum
         immediately upon such termination the total amount of his Base Salary
         for the remainder of the Initial Term or current Renewal Term, as
         applicable, determined as if the employment of the Executive had not
         been terminated prior to the end of such term and as if the Executive
         had continued to perform all of his obligations under this Agreement
         and as an employee and officer, director of the Company. Executive
         shall have no duty to mitigate damages in order to receive the
         Compensation described by this Subsection, and the Compensation shall
         not be reduced or offset by other income, payments or profits received
         by Executive from any source.

(d)      Incentive Compensation. Executive shall not be entitled to receive any
         incentive compensation payments for the fiscal quarter in which his
         employment is terminated for Cause or any later quarters. If Executive
         is terminated without Cause, Executive shall receive as a lump sum
         immediately upon such termination the total amount of incentive
         compensation payments determined in accordance with the provisions of
         any incentive compensation program, practice, or policy in which
         Executive participates on the effective date of the termination,
         determined as if the employment of the Executive had not been
         terminated prior to the end of the Initial Term or latest Renewal Term,
         if later, and as if the financial performance of Company upon which the
         programs, practice, or policy is determined continues as it had been
         for the immediately preceding last four (4) fiscal quarters ended prior
         to either (i) the date of notice of termination or (ii) the date of
         termination, as Executive shall elect after receiving the report of
         such performance for the applicable fiscal quarters, and as if the
         Executive had continued to perform all of his obligations under this
         Agreement and as an employee of the Company. Executive shall have no
         duty to mitigate damages in order to receive the Compensation described
         by this Subsection and the Compensation shall not be reduced or offset
         by other income, payments or profits received by Executive from any
         source. If there is no binding incentive compensation program, policy,
         or practice in effect on the effective date of the termination,
         Company, in the exercise of its discretion, may elect to pay
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         Executive a portion of the incentive compensation to which he would
         have been entitled (had his employment not terminated) for the quarter
         in which his employment is terminated without Cause.

(e)      Other Plans. Except to the extent specified in this Section 6 and as
         provided in this Subsection (e), termination of this Agreement shall
         not affect Executive's participation in, distributions from, and vested
         rights under any employee benefit plan of Company, which will be
         governed by the terms of those respective plans, in the event of
         Executive's termination of employment. If Executive is terminated
         without Cause, then Executive shall become fully vested under any and
         all stock bonus and stock option plans and agreements in which
         Executive had an interest, vested or contingent. If applicable law or
         the terms of such plan(s) prohibit such vesting, then Company shall pay
         Executive an amount equal to the value of the benefits and rights that
         would have, but for such prohibition, been vested. Executive shall have
         no duty to mitigate damages in order to receive the Compensation
         described by this Subsection and the Compensation shall not be reduced
         or offset by other income, payments or profits received by Executive
         from any source.

(f)      Example. For example, if Company provides notice to Executive of
         Termination without Cause on January 1, 2000, then the Employment
         Period ends ninety days thereafter, on April 1, 2000, and Company will
         pay to Executive in a lump sum payment immediately thereafter the sum
         of an amount equal to (i) Executive's Base Salary for the next two
         (assuming the contract started Jan 1, 2000) (2) years totaling $430,000
         (assuming the Base Salary was at that time $215,000) plus (ii) the
         incentive compensation for eight fiscal quarters computed as stated
         above, and Executive shall become fully vested in all stock bonus and
         stock option plans and agreements in which Executive had an interest.

7.       TERMINATION BY EXECUTIVE

(a)      General. Executive may terminate this Agreement at any time, with or
         without "Good Reason." If Executive terminates this Agreement without
         Good Reason, Executive shall provide Company with ninety (90) days
         advance written notice. If Executive terminates this Agreement with
         Good Reason, Executive shall provide Company with thirty (30) days
         advance written notice.

(b)      Good Reason Defined. For purposes of this Agreement, "Good Reason"
         shall mean and include each of the following (unless Executive has
         expressly agreed to such event in a signed writing):

         (1)      The demotion of Executive by Company, such as (i) assignment
                  to Executive of any duties that materially are inconsistent
                  with or inferior to his positions, duties, responsibilities,
                  and status with Company as in effect on the date of execution
                  of this Agreement (the "Relevant Date"); or (ii) a materially
                  adverse change in his titles, offices, or authority as in
                  effect on the Relevant Date; except in connection with the
                  termination of this Agreement for Cause, Executive's death or
                  Disability, termination by Executive other than for Good
                  Reason, or the expiration of the Agreement without renewal;

         (2)      The recommended travel of Executive by the Board in
                  furtherance of Company business which is materially more
                  extensive than Executive's travel or contemplated travel at
                  the Relevant Date;

         (3)      The assignment of Executive by the Company to a location more
                  than 50 miles from the present executive offices of the
                  Company;

         (4)      Reduction by Company in Executive's Base Salary as set forth
                  in this Agreement or as the same may be increased from time to
                  time;

         (5)      Failure by Company to continue in effect any incentive
                  compensation program, policy or practice, or any savings, life
                  insurance, health and accident or disability plan in which
                  Executive
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                  is participating on the Relevant Date (or plans which provide
                  Executive with substantially similar benefits) or the taking
                  of any action by Company which would adversely affect
                  Executive's participation in or materially reduce his benefit
                  under any of such plans or deprive him of any material fringe
                  benefit enjoyed by him as of the Relevant Date or any later
                  date. Amendment or modification of said plans, to the extent
                  required pursuant to applicable federal law and the procedures
                  set forth in the respective plan, or amendments of such plans
                  that apply to either all employees generally or all senior
                  executives shall not be considered to be "Good Reason" for
                  purposes of this clause (5);

         (6)      Failure of Company to obtain a specific written agreement
                  satisfactory to Executive from any successor to the business,
                  or substantially all the assets of Company, to assume this
                  Agreement or issue a substantially similar agreement;

         (7)      The termination or attempted termination of this Agreement by
                  Company purportedly for Cause if it is thereafter determined
                  that Cause did not exist under this Agreement with respect to
                  the termination;

         (8)      Breach of any material provisions of this Agreement by Company
                  which is not cured within thirty (30) days after receipt by
                  Company of written notice of such breach from Executive; or

         (9)      Any action taken by Company over the specific,
                  contemporaneous, written objection of the Executive that is
                  likely (i) to cause a material reduction in the value of this
                  Agreement to Executive or (ii) to materially impair
                  Executive's abilities to discharge his duties hereunder. This
                  provision is not intended to affect either the Company's or
                  Executive's right to terminate this Agreement as provided for
                  elsewhere herein.

(c)      Effect of Good Reason Termination. If Executive terminates this
         Agreement for Good Reason (as defined in Section 7(b)), Executive shall
         be entitled to receive all of the payments and benefits provided by
         Section 6 and otherwise in this Agreement to the same extent as if this
         Agreement had been terminated by Company without Cause.

(d)      Effect of Termination without Good Reason. If Executive terminates this
         Agreement without Good Reason, Executive shall be entitled to receive
         his Base Salary through the effective date of his termination.
         Executive's entitlement to receive any other amount shall be determined
         in accordance with the provisions of any benefit plans in which
         Executive participates on the effective date of the termination.
         Executive shall not be entitled to receive any incentive compensation
         for the quarter in which his employment is terminated by him without
         Good Reason or any later quarter.

8.       CHANGE IN CONTROL OF COMPANY

(a)      General. Company considers the maintenance of a sound and vital
         management to be essential to protecting and enhancing the best
         interests of Company, Parent and Parent's shareholders. Company and
         Parent recognize that, as is the case with many publicly held
         corporations, the continuing possibility of an unsolicited tender offer
         or other takeover bid for Parent may be unsettling to Executive and
         other senior executives of Company or Parent and may result in the
         departure or distraction of management personnel to the detriment of
         Company, Parent and Parent's shareholders. The Board and the
         Compensation Committee of the Board (the "Committee") have previously
         determined that it is in the best interests of Company, Parent and
         Parent's shareholders for Company to minimize these concerns by making
         this Change in Control provision an integral part of this Employment
         Agreement, which would provide the Executive with a continuation of
         benefits in the event the Executive's employment with Company
         terminates under certain limited circumstances.
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         This provision is offered to help assure a continuing dedication by
         Executive to his duties to Company notwithstanding the occurrence of a
         tender offer or other takeover bid. In particular, the Board and the
         Committee believe it important, should Company or Parent receive
         proposals from third parties with respect to its future, to enable
         Executive, without being influenced by the uncertainties of his own
         situation, to assess and advise the Board whether such proposals would
         be in the best interests of Company, Parent and Parent's shareholders
         and to take such other action regarding such proposals as the Board
         might determine to be appropriate. The Board and the Committee also
         wish to demonstrate to Executive that Company is concerned with his
         welfare and intends to see he is treated fairly.

(b)      Continued Eligibility to Receive Benefits. In view of the foregoing and
         in further consideration of Executive's continued employment with
         Company, if a Change in Control occurs, Executive shall be entitled to
         a lump-sum severance benefit provided in subparagraph (c) of this
         Section 8 if, prior to the expiration of twenty-four (24) months after
         the Change in Control, Executive notifies Company of his intent to
         terminate his employment with Company for Good Reason or Company
         terminates Executive's employment without Cause or if, prior to the
         expiration of one hundred twenty (120) days after the Change in
         Control, Executive terminates his employment with Company. If Executive
         triggers the application of this Section by terminating employment for
         Good Reason, he must do so within one hundred twenty (120) days
         following his receipt of notice of the occurrence of the last event
         that constitutes Good Reason. The full severance benefits provided by
         this Section shall be payable regardless of the period remaining until
         the expiration of the Agreement without renewal.

(c)      Receipt of Benefits. If Executive is entitled to receive a severance
         benefit pursuant to Section 8(b) hereof, Company will provide Executive
         with the following benefits:

         (1)      A lump sum severance payment within ten (10) days following
                  Executive's last day of work equal to the sum of (i) two times
                  the greater of Executive's annualized Base Salary in effect on
                  the date of termination of employment or Executive's highest
                  annualized Base Salary in effect on any date during the term
                  of this Agreement and (ii) two times the amount of all
                  incentive compensation paid or accrued to Executive for the
                  Company's most recent last four fiscal quarters then ended.

         (2)      Executive shall become vested in any and all stock bonus and
                  stock option plans and agreements of Company or Parent in
                  which Executive had an interest, vested or contingent. If
                  applicable law prohibits such vesting, then Company shall pay
                  Executive an amount equal to the value of benefits and rights
                  that would have, but for such prohibition, have been vested in
                  Executive.

         (3)      Executive will continue to receive life, disability, accident
                  and group health and dental insurance benefits substantially
                  similar to those which he was receiving immediately prior to
                  his termination of employment until the earlier of (i) the end
                  of the period of 24 months following his termination of
                  employment or (ii) the day on which he becomes eligible to
                  receive any substantially similar continuing health care
                  benefits under any plan or program of any other employer. The
                  benefits provided pursuant to this Section shall be provided
                  on substantially the same terms and conditions as they were
                  provided prior to the Change in Control, except that the full
                  cost of such benefits shall be paid by Company. Executive's
                  right to receive continued coverage under Company's group
                  health plans pursuant to Section 601 et seq. of the Employee
                  Retirement Income Security Act of 1974, as it may be amended
                  or replaced from time to time, shall commence following the
                  expiration of his right to receive continued benefits under
                  this Agreement. Executive's right to receive all forms of
                  benefits under this Section is reduced to the extent he is
                  eligible to receive any health care benefit from any other
                  employer without his request to pay any premium with respect
                  thereto.

         (4)      Executive shall have no duty to mitigate damages or loss in
                  order to receive the benefits provided
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                  by this Section or in this Agreement. If Executive is entitled
                  to receive the payments called for by this Section 8(c),
                  Executive's right to receive the compensation provided by
                  Section 6(c) or 7(c) shall to the extent of such payments be
                  reduced.

(d)      Change in Control Defined. For purposes of this Agreement, a "Change in
         Control" means any one or more of the following events:

         (1)      When the individuals who, at the beginning of any period of
                  two years or less, constituted the Board of Parent 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 Parent through a transaction or series
                  of transactions, such that any person (as that term is used in
                  Section 13 and 14(d)(2) of the Securities Exchange Act of 1934
                  ("1934 Act")), excluding affiliates 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 Parent representing 50% or more
                  of the combined voting power of Parent's then outstanding
                  securities;

         (3)      Any merger, consolidation or liquidation of Parent in which
                  Parent is not the continuing or surviving company or pursuant
                  to which stock would be converted into cash, securities or
                  other property, other than a merger of Parent in which the
                  holders of the shares of stock immediately before the merger
                  have the same proportionate ownership of common stock of the
                  surviving company immediately after the merger;

         (4)      The shareholders of Parent approve any plan or proposal for
                  the liquidation or dissolution of Parent; or

         (5)      Substantially all of the assets of Parent are sold or
                  otherwise transferred to parties that are not within a
                  "controlled group of corporations" (as defined in Section 1563
                  of the Internal Revenue Code of 1986, as amended (the "Code")
                  in which Parent is a member at the Relevant Date.

(e)      Good Reason Defined. For purposes of this Section, "Good Reason" shall
         have the meaning assigned to it in Section 7(b).

(f)      Notice of Termination by Executive. Any termination by Executive under
         this Section 8 shall be communicated by written notice to Company which
         shall set forth generally the facts and circumstances claimed to
         provide a basis for such termination.

(g)      Gross-Up Allowance.

         (1)      General Rules. The Code places significant tax consequences on
                  Executive and Company if the total payments made to Executive
                  due, or deemed due, to a Change in Control exceed prescribed
                  limits. For example, if Executive's "Base Period Income" (as
                  defined below) is $100,000 and Executive's "Total Payments"
                  exceed 299% of such Base Period Income (the "Cap"), Executive
                  will be subject to an excise tax under Section 4999 of the
                  Code of 20% of all amounts paid to him in excess of $100,000.
                  In other words, if Executive's Cap is $299,999, he will not be
                  subject to an excise tax if he receives exactly $299,999. If
                  Executive receives $300,000, he will be subject to an excise
                  tax of $40,000 (20% of $200,000). In the event that an excise
                  tax is imposed on Executive as a result of the application of
                  Sections 280G and 4999 of the Code, for any reason, due to
                  this Agreement or otherwise, Company shall pay to Executive a
                  "gross-up allowance" equal in amount to the sum of (i) the
                  excise tax liability of Executive on the Total
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                  Payments, and (ii) all the total excise, income, and payroll
                  tax liability of Executive on the "gross-up allowance,"
                  further increased by all additional excise, income, and
                  payroll tax liability thereon, which increase shall be part of
                  the "gross-up allowance" for purpose of computing the
                  "gross-up allowance." Company shall indemnify and hold
                  Executive harmless from such additional tax liability for the
                  income and payroll tax arising from the "gross-up allowance"
                  and all excise tax arising with respect to compensation and
                  other payments made to Executive under this Agreement and
                  excise, income, and payroll tax on the "gross-up allowance,"
                  and all penalties and interest thereon. The purpose and effect
                  of the gross-up allowance is to cause Executive to have the
                  same net compensation after income, excise, and payroll taxes
                  that Executive would have if there was no tax under Code
                  Section 4999.

         (2)      Special Definitions. For purposes of this Section, the
                  following specialized terms will have the following meanings:

                  (A)      "Base Period Income". "Base Period Income" is an
                           amount equal to Executive's "annualized includable
                           compensation" for the "base period" as defined in
                           Sections 280G(d)(1) and (2) of the Internal Revenue
                           Code of 1986, as amended (the "Code") and the
                           regulations adopted thereunder. Generally,
                           Executive's "annualized includable compensation" is
                           the average of his annual taxable income from the
                           Company for the "base period," which is the five
                           calendar years prior to the year in which the Change
                           of Control occurs.

                  (B)      "Cap" or "280G Cap". "Cap" or "280G Cap" shall mean
                           an amount equal to 2.99 times Executive's "Base
                           Period Income." This is the maximum amount which he
                           may receive without becoming subject to the excise
                           tax imposed by Section 4999 of the Code or which
                           Company may pay without loss of deduction under
                           Section 280G of the Code.

                  (C)      "Total Payments". The "Total Payments" include any
                           "payments in the nature of compensation" (as defined
                           in Section 280G of the Code and the regulations
                           adopted thereunder), made pursuant to this Agreement
                           or otherwise, to or for Executive's benefit, the
                           receipt of which is contingent or deemed contingent
                           on a Change of Control and to which Section 280G of
                           the Code applies.

         (3)      Inclusion of Successor Sections. For purposes of this
                  subsection (g) of this Section 8, any reference to any Section
                  of the Code also shall be deemed a reference to any Code
                  Section resulting from the modification, amendment,
                  renumbering or replacement of such Code Section.

(h)      Effect of Repeal. In the event that the provisions of Sections 280G and
         4999 of the Code are repealed without succession, Subsection 8(g) shall
         be of no further force or effect.

(i)      Employment by Successor. For purposes of this Agreement, employment by
         a successor of Company or Parent, or affiliate thereof, that has
         assumed this Agreement, shall be considered to be employment by Company
         or Parent or one of its affiliates. As a result, if Executive is
         employed by such a successor following a Change in Control, he will not
         be entitled to receive the benefits provided by Section 8 unless his
         employment with the successor is subsequently terminated without Cause,
         he terminates his employment for Good Reason, or he terminates his
         employment within 120 days after the Change in Control in accordance
         with subparagraph (b) of Section 8 of this Agreement.

9.       CONFIDENTIALITY

Executive covenants and agrees to hold in strictest confidence, and not disclose
to any person, firm or company, without the express written consent of Company,
any and all of Company's, Parent's and all other subsidiaries of
<PAGE>   10
Parent's (collectively, "Parent's Family") confidential data, including but not
limited to information and documents concerning Parent's Family's business,
customers, and suppliers, market methods, files, trade secrets, or other
"know-how" or techniques or information not of a published nature or generally
known (for the duration they are not published or generally known) which shall
come into his possession, knowledge, or custody concerning the business of
Parent's Family, except as such disclosure may be required by law or in
connection with Executive's employment hereunder or except as such matters may
have been known to Executive at the time of his employment by Company. This
covenant and agreement of Executive shall survive this Agreement and continue to
be binding upon Executive after the expiration or termination of this Agreement,
whether by passage of time or otherwise so long as such information and data
shall be treated as confidential by Parent's Family.

10.      RESTRICTIVE COVENANTS

(a)      Covenant-not-to-Compete.

         (1)      In consideration of Company's agreements contained herein and
                  the payments to be made by it to Executive pursuant hereto,
                  and except for termination of Executive's employment by
                  Company without Cause, or termination of employment by
                  Executive for Good Reason, Executive agrees that, for two
                  years ("Time Period") following his termination of employment
                  and so long as Company is continuously not in default of its
                  obligations to Executive hereunder or under any other
                  agreement, covenant, or obligation, he will not, without prior
                  written consent of Company, consult with or act as an advisor
                  to another company about activity which is a "Competing
                  Business" of such company in the United States, Canada and
                  Europe ("Area"). For purposes of this Agreement, Executive
                  shall be deemed to be engaged in a "Competing Business" if, in
                  any capacity, including but not limited to proprietor,
                  partner, officer, director or employee, he engages or
                  participates, directly or indirectly, in the operation,
                  ownership or management of the activity of any proprietorship,
                  partnership, company or other business entity which activity
                  is competitive with the then actual business in which Company
                  or Parent is engaged on the date of, or any business
                  contemplated by the Company's or Parent's business plan in
                  effect on the date of notice of, Executive's termination of
                  employment. Nothing in this subparagraph is intended to limit
                  Executive's ability to own equity in a public company
                  constituting less than one percent (1%) of the outstanding
                  equity of such company, when Executive is not actively engaged
                  in the management thereof. Company shall furnish Executive
                  with a good-faith written description of the business or
                  businesses in which Company and Parent are then actively
                  engaged within 30 days after Executive's termination of
                  employment, and only those activities so timely described
                  which are in fact actively engaged by Company and Parent may
                  be treated as activities of which one may be engaged that is
                  competitive with Company and Parent.

(b)      Non-Solicitation. Executive recognizes that Parent's Family's customers
         are valuable and proprietary resources of Parent's Family. Accordingly,
         Executive agrees that for a period of one year following his
         termination of employment, and only so long as Company is continuously
         not in default of its obligations to Executive hereunder or under any
         other agreement, covenant, or obligation, he will not directly or
         indirectly, through his own efforts or through the efforts of another
         person or entity, solicit business from any individual or entity
         located in the United States, Canada and Europe which obtained services
         from Parent's Family at any time during Executive's employment with
         Company, he will not solicit business from any individual or entity
         located in the United States, Canada, or Europe which was solicited by
         Executive on behalf of Parent's Family, and he will not solicit
         employees of Parent's Family who would have the skills and knowledge
         necessary to enable or assist efforts by Executive to engage in a
         Competing Business.

(c)      Remedies: Reasonableness. Executive acknowledges and agrees that a
         breach by Executive of the provisions of this Section 10 will
         constitute such damage as will be irreparable and the exact amount of
         which will be impossible to ascertain and, for that reason, agrees that
         Company will be entitled to an
<PAGE>   11
         injunction to be issued by any court of competent jurisdiction
         restraining and enjoining Executive from violating the provisions of
         this Section. The right to an injunction shall be in addition to and
         not in lieu of any other remedy available to Company for such breach or
         threatened breach, including the recovery of damages from Executive.

         Executive expressly acknowledges and agrees that (i) the Restrictive
         Covenants contained herein are reasonable as to time and geographical
         area and do not place any unreasonable burden upon him; (ii) the
         general public will not be harmed as a result of enforcement of these
         Restrictive Covenants; and (iii) Executive understands and hereby
         agrees to each and every term and condition of the Restrictive
         Covenants set forth in this Agreement.

(d)      Change of Control. The provisions of this Section 10 shall lapse and be
         of no further force or effect if Executive's employment is terminated
         by Company "without Cause" or by Executive for "Good Reason."

11.      DISPUTE RESOLUTION

(a)      Mediation. Any and all disputes arising under, pertaining to or
         touching upon this Agreement, or the statutory rights or obligations of
         either party hereto, shall, if not settled by negotiation, be subject
         to non-binding mediation before an independent mediator selected by the
         parties pursuant to Section 11(d). Notwithstanding the foregoing, both
         Executive and Company may seek preliminary injunctive or other judicial
         relief if such action is necessary to avoid irreparable damage during
         the pendency of the proceedings described in this Section 11. Any
         demand for mediation shall be made in writing and served upon the other
         party to the dispute, by certified mail, return receipt requested, at
         the address specified in Section 13. The demand shall set forth with
         reasonable specificity the basis of the dispute and the relief sought.
         The mediation hearing will occur at a time and place convenient to the
         parties in Maricopa County, Arizona, within thirty (30) days of the
         date of selection or appointment of the mediator.

(b)      Arbitration. In the event that the dispute is not settled through
         mediation, the parties shall then proceed to binding arbitration before
         an independent arbitrator selected pursuant to Section 11(d). The
         mediator shall not serve as the arbitrator. EXCEPT AS PROVIDED IN
         SECTION 11 (a), ALL DISPUTES INVOLVING ALLEGED UNLAWFUL EMPLOYMENT
         DISCRIMINATION, TERMINATION BY ALLEGED BREACH OF CONTRACT OR POLICY, OR
         ALLEGED EMPLOYMENT TORT COMMITTED BY COMPANY OR A REPRESENTATIVE OF
         COMPANY, INCLUDING CLAIMS OF VIOLATIONS OF FEDERAL OR STATE
         DISCRIMINATION STATUTES OR PUBLIC POLICY, SHALL BE RESOLVED PURSUANT TO
         THIS SECTION 11 AND THERE SHALL BE NO RECOURSE TO COURT, WITH OR
         WITHOUT A JURY TRIAL.

         The arbitration hearing shall occur at a time and place convenient to
         the parties in Maricopa County, Arizona, within thirty (30) days of
         selection or appointment of the arbitrator. If Company has adopted a
         policy that is applicable to arbitrations with executives, the
         arbitration shall be conducted in accordance with said policy, to the
         extent that the policy is consistent with this Agreement and the
         Federal Arbitration Act, 9 U.S.C. " 1-16. If no such policy has been
         adopted, the arbitration shall be governed by the National Rules for
         the Resolution of Employment Disputes of the American Arbitration
         Association ("AAA") in effect on the date of the first notice of demand
         for arbitration. Notwithstanding any provisions in such rules to the
         contrary, the arbitrator shall issue findings of fact and conclusions
         of law, and an award, within fifteen (15) days of the date of the
         hearing unless the parties otherwise agree.

(c)      Damages. In case of breach of contract or policy, damages shall be
         limited to contract damages. In cases of discrimination claims
         prohibited by statute, the arbitrator may direct payment consistent
         with the applicable statute. In cases of employment tort, the
         arbitrator may award punitive damages if proved by clear and convincing
         evidence. Issues of procedure, arbitrability, or confirmation of award
         shall be
<PAGE>   12
         governed by the Federal Arbitration Act, 9 U.S.C. " 1-16, except that
         court review of the arbitrator's award shall be that of an appellate
         court reviewing a decision of a trial judge sitting without a jury.

(d)      Selection of Mediator or Arbitrator. The parties shall select the
         mediator and arbitrator from a panel list made available by the AAA. If
         the parties are unable to agree to a mediator or an arbitrator within
         ten (10) days of receipt of a demand for mediation or arbitration, the
         mediator or arbitrator will be chosen by alternatively striking from a
         list of five (5) mediators or arbitrators obtained by Company from the
         AAA. Executive shall have the first strike.

(e)      Expenses. The prevailing party's costs and expenses of any arbitration
         (including reasonable attorneys' fees and costs) shall be awarded to
         such prevailing party to such arbitration as determined by the
         arbitrator.

12.      BENEFIT AND BINDING EFFECT

This Agreement shall inure to the benefit of and be binding upon Company, its
successors and assigns, including but not limited to any company, person, or
other entity which may acquire all or substantially all of the assets and
business of Company or any company with or into which Company may be
consolidated or merged, and Executive, his heirs, executors, administrators, and
legal representatives, provided that the obligations of Executive may not be
delegated.

13.      NOTICES

All notices hereunder shall be in writing and delivered personally or sent by
registered or certified mail, postage prepaid and return receipt requested:

         If to Company, to:         Insight Enterprises, Inc.
                                    c/o Eric Crown, CEO
                                    6820 South Harl Avenue
                                    Tempe, Arizona 85283

         If to Executive, to:       Branson Smith
                                    3680 S. Grey Thorne Way
                                    Chandler, Arizona  85248

Either party may change the address to which notices are to be sent to it by
giving ten (10) days written notice of such change of address to the other party
in the manner above provided for giving notice. Notices will be considered
delivered on personal delivery or on the date of deposit in the United States
mail in the manner provided for giving notice by mail.

14.      ENTIRE AGREEMENT

The entire understanding and agreement between the parties has been incorporated
into this Agreement, and this Agreement supersedes all other agreements and
understandings between Executive and Company with respect to the relationship of
Executive with Company, except with respect to other continuing or future bonus,
incentive, stock option, health, benefit and similar plans or agreements.

15.      GOVERNING LAW

This Agreement shall be governed by and interpreted in accordance with the laws
of the State of Arizona.
<PAGE>   13
16.      CAPTIONS

The captions included herein are for convenience and shall not constitute a part
of this Agreement.

17.      DEFINITIONS

Throughout this Agreement, certain defined terms will be identified by the
capitalization of the first letter of the defined word or the first letter of
each substantive word in a defined phrase. Whenever used, these terms will be
given the indicated meaning.

18.      SEVERABILITY

If any one or more of the provisions or parts of a provision contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity or unenforceability shall not affect any other
provision or part of a provision of this Agreement, but this Agreement shall be
reformed and construed as if such invalid, illegal or unenforceable provision or
part of a provision had never been contained herein and such provisions or part
thereof shall be reformed so that it would be valid, legal and enforceable to
the maximum extent permitted by law. Any such reformation shall be read as
narrowly as possible to give the maximum effect to the mutual intentions of
Executive and Company.

19.      TERMINATION OF EMPLOYMENT

The termination of this Agreement by either party also shall result in the
termination of Executive's employment relationship with Company in the absence
of an express written agreement providing to the contrary. Neither party intends
that any oral employment relationship continue after the termination of this
Agreement.

20.      TIME IS OF THE ESSENCE

Company and Executive agree that time is of the essence with respect to the
duties and performance of the covenants and promises of this Agreement.

21.      NO CONSTRUCTION AGAINST EITHER PARTY

This Agreement is the result of negotiation between Company and Executive and
both have had the opportunity to have this Agreement reviewed by their legal
counsel and other advisors. Accordingly, this Agreement shall not be construed
for or against Company or Executive, regardless of which party drafted the
provision at issue.

                                         COMPANY:
                                         INSIGHT DIRECT WORLDWIDE,INC.
                                         an Arizona corporation

                                         By /s/ Eric J. Crown
                                            --------------------------
                                         Eric Crown, CEO

                                         EXECUTIVE:

                                         By /s/ Branson M. Smith
                                            --------------------------
                                         BRANSON SMITH<PAGE>   1
                                                                   EXHIBIT 10.17

                           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) of
the Company as of the Effective Date, is or becomes the beneficial owner (as
that term is used in

                                  Page 1 of 12
<PAGE>   2
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.

                  (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.

                                  Page 2 of 12
<PAGE>   3
                  (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 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.

                                  Page 3 of 12
<PAGE>   4
         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.

         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.

                                  Page 4 of 12
<PAGE>   5
         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:

                  (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.

                                  Page 5 of 12
<PAGE>   6
                  (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.

                  (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.

                                  Page 6 of 12
<PAGE>   7
                  (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 selected by the Committee. All Awards of
Restricted Stock shall be evidenced by a Restricted Stock Award Agreement.

                                  Page 7 of 12
<PAGE>   8
         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.

         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

                                  Page 8 of 12
<PAGE>   9
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.

         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

                                  Page 9 of 12
<PAGE>   10
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.

         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.

                                 Page 10 of 12
<PAGE>   11
         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 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.

                                 Page 11 of 12
<PAGE>   12
         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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