10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended: June 30, 2002

OR

    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from __________ to __________

Commission File Number: 0-25092

INSIGHT ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 86-0766246
(I.R.S. Employer Identification Number)

1305 West Auto Drive, Tempe, Arizona 85284
(Address of principal executive offices) (Zip Code)

(480) 902-1001
(Registrant’s telephone number, including area code)

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

Yes       No      

         The number of shares outstanding of the issuer’s common stock as of August 6, 2002 was 46,064,661.

TABLE OF CONTENTS

PART I – Financial Information
	Item 1. Financial Statements
		CONDENSED CONSOLIDATED BALANCE SHEETS
		CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures about Market Risk
Part II — Other Information
	Item 1. Legal Proceedings
	Item 2. Recent Sales of Unregistered Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
Index to Exhibits
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
Exhibit 10.7
Exhibit 10.8
Exhibit 10.9
Exhibit 10.10
EX-99.1
EX-99.2

INSIGHT ENTERPRISES, INC.
FORM 10-Q QUARTERLY REPORT
Three Months Ended June 30, 2002

TABLE OF CONTENTS

		Page
PART I — Financial Information
Item 1 - Financial Statements:
	Condensed Consolidated Balance Sheets - June 30, 2002 and December 31, 2001		3
	Condensed Consolidated Statements of Earnings - Three Months and Six Months Ended June 30, 2002 and 2001		4
	Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2002 and 2001		5
	Notes to Condensed Consolidated Financial Statements		6
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations			11
Item 3 - Quantitative and Qualitative Disclosures about Market Risk			25
PART II — Other Information			25
Item 1 – Legal Proceedings			25
Item 2 – Recent Sales of Unregistered Securities			25
Item 4 – Submission of Matters to a Vote of Security Holders			26
Item 6 - Exhibits and Reports on Form 8-K			27
Signatures			28

2

PART I – Financial Information
Item 1. Financial Statements

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

					June 30,			December 31,
					2002			2001
					(unaudited)
ASSETS
Current assets:
	Cash and cash equivalents				$	—		$	31,868
	Accounts receivable, net					470,289			296,749
	Inventories, net					80,028			33,754
	Deferred income taxes and other current assets					13,481			13,046
			Total current assets			563,798			375,417
Property and equipment, net						123,198			105,663
Goodwill, net						174,855			108,731
Other assets						333			670
					$	862,184		$	590,481
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
		Current portion of long-term debt and capital leases			$	3,197		$	3,009
		Lines of credit				83,553			—
		Accounts payable				282,764			172,872
		Accrued expenses and other current liabilities				39,641			39,794
				Total current liabilities		409,155			375,417
Long-term debt and capital leases, less current portion						14,756			16,228
Lines of credit						—			38,524
Deferred income taxes						1,209			—
Stockholders’ equity:
		Preferred stock, $.01 par value, 3,000 shares authorized; no shares issued				—			—
		Common stock, $.01 par value, 100,000 shares authorized; 46,865 shares at June 30, 2002 and 42,735 shares at December 31, 2001 issued and outstanding				469			427
		Additional paid-in capital				255,973			170,982
		Retained earnings				199,496			174,288
		Accumulated other comprehensive income — foreign currency translation adjustment				4,435			(2,334	)
		Treasury stock, 812 shares at cost				(23,309	)		(23,309	)
				Total stockholders’ equity		437,064			320,054
					$	862,184		$	590,481

See accompanying notes to condensed consolidated financial statements.

3

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share data)
(unaudited)

			Three Months Ended					Six Months Ended
			June 30,					June 30,
			2002		2001			2002		2001
Net sales			$	737,065	$	504,826		$	1,265,028	$	1,062,329
Costs of goods sold				650,181		446,487			1,112,574		939,712
	Gross profit			86,884		58,339			152,454		122,617
Operating expenses:
Selling and administrative expenses				63,950		38,515			109,682		78,549
Aborted IPO costs				—		1,354			—		1,354
Amortization				311		481			311		973
		Earnings from operations		22,623		17,989			42,461		41,741
Non-operating expense (income), net				1,218		(60	)		2,015		(18	)
		Earnings before income taxes		21,405		18,049			40,446		41,759
Income tax expense				8,262		6,981			15,238		16,405
		Net earnings	$	13,143	$	11,068		$	25,208	$	25,354
Earnings per share:
		Basic	$	0.29	$	0.27		$	0.58	$	0.61
		Diluted	$	0.28	$	0.26		$	0.56	$	0.60
Shares used in per share calculation:
		Basic		44,924		41,462			43,549		41,255
		Diluted		46,363		42,577			44,991		42,414

See accompanying notes to condensed consolidated financial statements.

4

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

					Six Months Ended
					June 30,
					2002			2001
Cash flows from operating activities:
	Net earnings				$	25,208		$	25,354
	Adjustments to reconcile net earnings to net cash provided by operating activities:
		Depreciation and amortization				8,451			8,069
		Tax benefit from stock options exercised				5,189			3,389
		Provision for losses on accounts receivable				4,974			5,032
		Provision for obsolete, slow moving and non-salable inventories				4,277			6,006
		Deferred income taxes				(153	)		(222	)
	Change in assets and liabilities, net of acquisitions:
			(Increase) decrease in accounts receivable			(27,436	)		35,135
			(Increase) decrease in inventories			(1,436	)		4,381
			Decrease (increase) in other current assets			4,383			(2,776	)
			Decrease in other assets			312			595
			Increase (decrease) in accounts payable			34,414			(30,587	)
			Decrease in accrued expenses and other current liabilities			(13,654	)		(4,280	)
				Net cash provided by operating activities		44,529			50,096
Cash flows from investing activities, net of acquisitions:
	Purchases of property and equipment					(9,653	)		(13,665	)
	Purchase of Comark, Inc. and Comark Investments, Inc. (collectively, “Comark”)					(102,392	)		—
				Net cash used in investing activities		(112,045	)		(13,665	)
Cash flows from financing activities, net of acquisitions:
	Net borrowings (repayment) on lines of credit					9,302			(19,000	)
	Net repayment of long-term debt and capital leases					(1,569	)		(1,259	)
	Proceeds from sales of common stock through employee stock plans					27,844			10,413
				Net cash provided by (used in) financing activities		35,577			(9,846	)
Foreign currency impact on cash flow						71			(108	)
(Decrease) increase in cash and cash equivalents						(31,868	)		26,477
Cash and cash equivalents at beginning of period						31,868			24,917
Cash and cash equivalents at end of period					$	—		$	51,394
Supplemental disclosure of non-cash investing activity:
	Common stock issued in connection with acquisition of Comark				$	50,000		$	—
	Common stock issued to settle deferred compensation liability assumed in connection with the acquisition of Comark				$	2,000		$	—

See accompanying notes to condensed consolidated financial statements.

5

INSIGHT ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1.      Description of Business

         Insight Enterprises, Inc. (the “Company”) is a holding company with the following operating segments: the direct marketing segment (referred to as “Insight”) and the business process outsourcing segment (referred to as “Direct Alliance”).

         Insight is a direct marketer of computers, hardware and software with locations in the United States, Canada and the United Kingdom. Insight sells its products and services via a staff of customer-dedicated account executives utilizing proactive outbound telephone-based sales, a customer-focused “face-to-face” sales force, electronic commerce and marketing, and via the Internet.

         Direct Alliance is a business process outsourcing organization providing marketplace solutions in the areas of direct marketing, direct sales, finance and logistics using proprietary technology, infrastructure and processes.

2.      Basis of Presentation

         The accompanying unaudited condensed consolidated financial statements and notes have been prepared in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by generally accepted accounting principles. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of June 30, 2002, the results of operations for the three and six months ended June 30, 2002 and 2001, and the cash flows for the six months ended June 30, 2002 and 2001. The condensed consolidated balance sheet as of December 31, 2001 was derived from the audited consolidated financial statements at such date. Certain amounts in the condensed consolidated financial statements have been reclassified to conform to the current presentation. The results of operations for such interim periods are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements, including the related notes thereto, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.

         The condensed consolidated financial statements include the accounts of Insight Enterprises, Inc. and its subsidiaries, which are primarily wholly-owned. Intercompany accounts and transactions have been eliminated in consolidation.

3.      Lines of Credit

         The Company amended its $100,000,000 credit facility with a finance company on April 25, 2002. The amended agreement provides for cash advances outstanding at any one time up to a maximum of $100,000,000 on the line of credit, subject to limitations based upon the Company’s eligible accounts receivable and inventories. Cash advances bear interest at London Interbank Offered Rate for the United States dollar (“US LIBOR”) plus 1.50% (3.34% at June 30, 2002) if the average monthly outstanding balance is less than $35,000,000, US LIBOR plus 2.00% (3.84% at June 30, 2002) if the average monthly outstanding balance is equal to or greater than $35,000,000 but less than $50,000,000 or US LIBOR plus 2.75% (4.59% at June 30, 2002) if the average monthly outstanding balance is equal to or greater than $50,000,000. Interest is payable monthly. The credit facility, up to a maximum outstanding balance of $40,000,000, can be used to facilitate the purchases of inventories from certain suppliers, and that portion is classified on the balance sheet as accounts payable. The credit facility expires February 2003 and is secured by substantially all the assets of the Company, except the assets of Comark. The credit facility contains various covenants including the requirement that the Company maintain a specified amount of tangible net worth as well as restrictions on transferring inventory and accounts receivable to Comark and restrictions on the payment of cash dividends. The Company was in compliance with all such covenants at June 30, 2002. As of June 30, 2002, $33,247,000 was outstanding under the credit facility of which $17,979,000

6

INSIGHT ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

was used to facilitate the purchase of inventories and included in accounts payable. $66,753,000 was available under the credit facility at June 30, 2002.

         Comark, our recently acquired subsidiary, also has a credit facility with a bank. The credit facility provides for cash advances outstanding at any one time up to a maximum of $100,000,000, subject to limitations based upon Comark’s eligible accounts receivable. Cash advances bear interest, at Comark’s option, at the bank’s corporate base rate (3.63% at June 30, 2002), the swing-line rate (2.94% at June 30, 2002) or the bank’s US LIBOR-based rate (3.09% at June 30, 2002), payable quarterly. The credit facility expires April 2003 and is secured by substantially all of the assets of Comark. The credit facility contains various covenants, including the requirement that Comark maintain a specific dollar amount of tangible net worth and certain leverage and interest coverage ratios. Comark was in compliance with all such covenants at June 30, 2002. As part of the credit agreement, $50,000,000 was immediately borrowed against the facility and loaned to the Company as an additional source of funds for the acquisition of Comark. As of June 30, 2002, the outstanding balance was $67,200,000, and $32,800,000 was available under the line of credit.

         Action Limited (“Action”), a subsidiary of the Company in the United Kingdom, has an overdraft facility of $2,287,000 with a bank. The facility expires March 2003 and bears interest at London Interbank Offered Rate for the Great Britain pound plus 1.75% (5.75% at June 30, 2002). As of June 30, 2002, there was an outstanding balance of $1,085,000 and $1,202,000 was available under the overdraft facility. The facility is secured by substantially all of the assets of Action. The prior credit facility in the United Kingdom was terminated in April 2002 in connection with the integration of Action into Insight’s existing United Kingdom operations.

4.      Income Taxes

         Income tax expense as provided for the three and six months ended June 30, 2002 and 2001 is based upon the estimated annual income tax rate of the Company.

5.      Goodwill and Other Intangible Assets

Goodwill

         The Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets” on January 1, 2002. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually. SFAS No. 142 also requires that intangible assets with definite useful lives be amortized over the respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144.

         The Company’s goodwill balance of $108.7 million as of December 31, 2001 is in the direct marketing segment. Goodwill was tested for impairment as of January 1, 2002 and will be tested for impairment annually in the fourth quarter. As of January 1, 2002, there was no impairment of goodwill. The fair value of the direct marketing segment was estimated using a valuation based on a market approach, which takes into consideration market values of comparable publicly traded companies.

         Application of the provisions of SFAS No. 142 has affected the comparability of current period results of operations with prior periods because the goodwill in the direct marketing segment is no longer being amortized over a twenty-year period. Thus, the following transitional disclosures present net earnings and earnings per share, adjusted as shown below (in thousands, except per share amounts):

7

INSIGHT ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

	Three Months Ended		Six Months Ended
	June 30, 2001		June 30, 2001
Net earnings	$	11,068	$	25,354
Add back: amortization of goodwill, net of taxes *		481		973
Adjusted net earnings	$	11,549	$	26,327
Basic earnings per share	$	0.27	$	0.61
Add back: amortization of goodwill, net of taxes *		0.01		0.02
Adjusted basic earnings per share	$	0.28	$	0.63
Diluted earnings per share	$	0.26	$	0.60
Add back: amortization of goodwill, net of taxes *		0.01		0.02
Adjusted diluted earnings per share	$	0.27	$	0.62

•     Amortization of goodwill was non-deductible for tax purposes; therefore, the tax component of the adjustment for amortization of goodwill is $0.

The changes in the carrying amount of goodwill for the six months ended June 30, 2002 are as follows (in thousands):

Balance as of December 31, 2001	$	108,731
Goodwill acquired during the year		66,287
Goodwill adjustments related primarily to lease termination settlements		(5,026	)
Foreign currency impact on goodwill		4,863
Balance as of June 30, 2002	$	174,855

Other Intangible Assets

         Based on preliminary estimates for fair value of intangible assets obtained in connection with the acquisition of Comark, the Comark trade name has been assigned a value of $1,400,000, which represents its gross carrying amount at June 30, 2002. Amortization expense, for the three and six months ended June 30, 2002, and accumulated amortization at June 30, 2002 were $311,000. Given an estimated useful life of 9 months, we expect amortization expense for the years ended December 31, 2002 and 2003 to total $1,244,000 and $156,000, respectively.

6.      Acquisition

         On April 25, 2002, the Company acquired all of the outstanding stock of Comark pursuant to a Stock Purchase Agreement. Under the Agreement, the base purchase price was $150,000,000, subject to adjustments for: 1) an $85,500,000 minimum net book value requirement for Comark as of April 25, 2002; and 2) certain contingent payments pursuant to which the previous owners of Comark could be paid up to an additional $3,600,000 based on the post-closing performance of Comark during the period from April 25, 2002 to December 31, 2003. The purchase price was paid by delivery of $100,000,000 in cash and 2,306,964 shares of the Company’s common stock valued at $50,000,000. The original purchase price of $150,000,000 has subsequently been reduced by $780,388 due to Comark not meeting the minimum net book value requirement of $85,500,000 on the date of acquisition. The reduction in the purchase price will be refunded in cash.

8

INSIGHT ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

         Founded in 1977 and headquartered in Bloomingdale, Illinois, Comark is a reseller of brand name computers, peripherals, networking products, storage products, software and accessories. Comark also provides services such as asset management, configuration and integration, network design and consulting, installations, moves, adds and changes, network monitoring, system integration, enterprise consulting, hardware maintenance and voice/video/data integration. Comark markets to medium-to-large enterprises, educational customers, federal, state and local government agencies, small businesses and certain corporate resellers. Its principal customers are medium-to-large enterprises. As a result of the acquisition, the Company has expanded its customer base in the United States and expects to reduce costs through economies of scale. The Company has recorded total goodwill of $66,287,000 for this acquisition, which is expected to be deductible for tax purposes.

         The following table summarizes the purchase price and the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The Company is in the process of obtaining valuations of certain intangible assets; therefore, the allocation of the purchase price is subject to refinement.

Purchase price paid as:						(in 000's)
		Borrowings on lines of credit				$	99,220
		Common stock					23
		Additional paid-in capital					49,977
		Acquisition costs					3,172
	Total purchase price						152,392
Fair value of net assets acquired:
		Current assets	$	197,435
		Intangible assets – trade name		1,400
		Property and equipment		14,443
		Other assets		264
		Current liabilities		(127,437	)
	Total fair value of net assets acquired						86,105
Excess purchase price over fair value of net assets acquired (“goodwill”)						$	66,287

         Based on preliminary estimates for fair value of intangible assets, the Comark trade name has been assigned a value of $1,400,000 and a useful life of nine months. This value and useful life may be adjusted once the final valuations are completed.

         The Company has consolidated the results of operations for Comark since its acquisition on April 25, 2002. The following table reports pro forma information as if the acquisition of Comark had been completed at the beginning of the stated period.

9

INSIGHT ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

		Three				Six
		Months Ended June 30,				Months Ended June 30,
		2002		2001		2002		2001
		(in thousands, except per share data)
Net sales	As reported	$	737,065	$	504,826	$	1,265,028	$	1,062,329
	Pro forma	$	838,047	$	871,979	$	1,700,303	$	1,796,597
Net earnings	As  reported	$	13,143	$	11,068	$	25,208	$	25,354
	Pro  forma	$	14,690	$	14,673	$	30,479	$	30,456
Diluted earnings per share	As  reported	$	0.28	$	0.26	$	0.56	$	0.60
	Pro  forma	$	0.30	$	0.33	$	0.64	$	0.68

         Pro forma adjustments have been made to a) eliminate historical sales and cost of sales between the Company and Comark; b) reflect amortization of identifiable intangible assets; c) reflect increased interest expense associated with the cash paid for the acquisition; d) reflect addition shares of common stock issued as part of the purchase price; and e) to reflect income taxes on the net earnings of Comark, which previously was a Subchapter S Corporation.

7.      Subsequent Event

         The Company has been named in a lawsuit filed in the United States District Court, District of Arizona, by a stockholder alleging violations of Section 10(b) of the Securities Exchange Act of 1934, and SEC Rule 10b-5 promulgated thereunder. Plaintiff in this action alleges the Company and certain of its officers made false and misleading statements pertaining to its business, operations and management in an effort to inflate the price of its common stock. The lawsuit also names Eric J. Crown, the Company’s Chairman of the Board of Directors; Timothy A. Crown, the Company’s Chief Executive Officer and a director; and Stanley Laybourne, the Company’s Chief Financial Officer, Secretary, Treasurer and a director; as co-defendants. In the complaint, which was served on the Company August 5, 2002, the plaintiff seeks class action status to represent all buyers of the Company’s common stock from April 26, 2002 to July 17, 2002. The Company is preparing its response to the allegations as set forth in the lawsuit and intends to defend the lawsuit vigorously. In addition, the Company has been informed that a second complaint has been filed against it with respect to these matters and related matters. The Company has not yet been served with the complaint, and has not yet had sufficient time to review the complaint. The costs associated with defending the allegations in these lawsuits and the potential outcome cannot be determined at this time and, accordingly, no estimate for such costs have been included in these financial statements.

8.      Recently Issued Accounting Pronouncements

         In June 2002, the FASB issued Statement of Financial Accounting Standard No. 146, Accounting for Exit or Disposal Activities (“SFAS No. 146”), which addresses the recognition, measurement and reporting of costs associated with exit and disposal activities, including restructuring activities. SFAS No. 146 also addresses recognition of certain costs related to terminating a contract that is not a capital lease, costs to consolidate facilities or relocate employees and termination of benefits provided to employees that are voluntarily terminated under the terms of one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred compensation contract. SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002. The Company is in the process of evaluating the adoption of SFAS No. 146 and its impact on the financial position or results of operations of the Company.

10

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Certain statements contained in the Management’s Discussion and Analysis of Financial Condition and Results of Operations may be “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These forward-looking statements may include projections of matters that affect net sales, gross profit, operating expenses or net earnings; projections of capital expenditures; projections of growth; hiring plans; plans for future operations; financing needs or plans; plans relating to our products; and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking information. Some of the important factors that could cause our actual results to differ materially from those projected in forward-looking statements made by us include, but are not limited to, the following: risks associated with past and future acquisitions, management of growth, current economic conditions affecting our industry, reliance on information and telephone systems, reliance on suppliers, changes in supplier reimbursement programs, competition, short-term credit facilities, reliance on outsourcing clients, changing methods of distribution, dependence on key personnel, international operations, rapid change in product standards, inventory obsolescence, sales or use tax collection and litigation. These factors are discussed in greater detail below under “Factors That May Affect Future Results And Financial Condition”. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

         Insight Enterprises, Inc. is a holding company with the following operating segments: the direct marketing segment (referred to as “Insight”) and the business process outsourcing segment (referred to as “Direct Alliance”).

         Insight is a direct marketer of computers, hardware and software with operations in the United States, Canada and the United Kingdom. Insight sells its products and services via a staff of customer-dedicated account executives utilizing proactive outbound telephone-based sales, a customer-focused “face-to-face” sales force, electronic commerce and marketing and via the Internet. We expanded our direct marketing segment in October 2001 when we acquired Action plc (“Action”), a United Kingdom-based direct marketer of computers and computer related products and Kortex Computer Centre ltd. (“Kortex”), a Canada-based direct marketer of computers and computer related products. Additionally, in April 2002, we acquired Comark, Inc. and Comark Investments, Inc. (collectively, “Comark”), a direct marketer of computers and computer related products in the United States to further expand our direct marketing segment. The results of operations of Action, Kortex and Comark have been included in the results of operations since their respective dates of acquisition. Accordingly, the results of operations for Action and Kortex are reflected in the three and six months ended June 30, 2002 but not the three and six months ended June 30, 2001. The results of operations for Comark are reflected since April 25, 2002 in the three and six months ended June 30, 2002 but are not reflected in the three and six months ended June 30, 2001.

         Direct Alliance is a business process outsourcing organization providing marketplace solutions in the areas of direct marketing, direct sales, finance and logistics using proprietary technology, infrastructure and processes.

Critical Accounting Policies

         Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These

11

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the periods presented. The significant accounting policies which we believe are the most critical to fully understand and evaluate our reported financial results include the following:

         Sales Recognition

         We adhere to guidelines and principles of sales recognition described in Staff Accounting Bulletin No. 101 “Revenue Recognition in Financial Statements” (“SAB 101”) issued by the staff of the Securities and Exchange Commission (the “SEC”) in December 1999 and adopted by us effective January 1, 2000. The majority of Insight’s sales are product sales recognized upon shipment and corresponding passing of title to the customer. We make provisions for estimated product returns that we expect to occur under our return policy, based upon historical return rates. Should customers return a different amount of product than originally estimated, our future net sales are adjusted to reflect historical return rates. Insight sells certain third-party service contracts and software assurance or subscription products. These sales do not meet the criteria for gross sales recognition as defined in SAB 101 and thus are recorded on a net basis. As we enter into contracts with third-party service providers or vendors, we must evaluate whether the subsequent sales of such services should be recorded as gross sales or net sales in accordance with the sales recognition criteria outlined in SAB 101. Under gross sales recognition, the entire selling price is recorded in sales and our cost to the third-party service provider or vendor is recorded in costs of goods sold. Under net sales recognition, the cost to the third-party service provider or vendor is recorded as a reduction to sales resulting in net sales equal to the gross profit on the transaction and there is no costs of goods sold. Direct Alliance’s outsourcing arrangements are service fee based whereby we derive net sales based primarily upon a cost plus arrangement and a percentage of the sales price from products sold. Also, as an accommodation to select clients, Direct Alliance purchases product from suppliers and immediately resells the product to clients for ultimate resale to the client’s customer. These product sales (referred to as “pass-through product sales”) to our clients are transacted at little or no gross margin and the selling price to our client is recorded in net sales with the cost payable to the supplier recorded in cost of goods sold.

         Goodwill and Other Intangible Assets

         Goodwill represents the excess of purchase price over the fair value of the net assets acquired. Certain estimates and judgments are necessary to determine the fair market value of assets and liabilities acquired. Until December 31, 2001, goodwill arising from acquisitions completed prior to July 1, 2001 was amortized on a straight-line basis over the expected periods to be benefited, generally twenty years. Goodwill was reviewed for impairment whenever facts or circumstances indicated that the carrying amounts may not be recoverable, based on an evaluation of the estimated future undiscounted cash flows associated with the underlying business operation compared to the carrying amount of the goodwill to determine if a write-down is required. If such an assessment indicated that the undiscounted future cash flows would not be recovered, the carrying amount was reduced to the estimated fair value. On January 1, 2002, we adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets”. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually. SFAS No. 142 also requires that intangible assets with definite useful lives be amortized over the respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144.

         Our goodwill is in the direct marketing segment. Goodwill was tested for impairment as of January 1, 2002 and will be tested for impairment annually in the fourth quarter. As of January 1, 2002, there was no impairment of goodwill. The fair value of the direct marketing segment was estimated using a valuation based on a market approach, which takes into consideration market values of comparable publicly traded companies.

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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

         Allowances for Doubtful Accounts

         We maintain allowances for doubtful accounts for estimated losses on customer and vendor receivables based on historical write-offs, evaluation of the aging of the receivables and the current economic environment. Should actual collections of customer and vendor receivables differ from our estimates, adjustments to the allowances for doubtful accounts would be necessary.

         Inventories Provisions

         We make provisions on an ongoing basis for obsolete, slow moving and non-salable inventories based on the difference between the carrying amount of the inventories and market value based on estimated future demand and market conditions. If actual future demand or market conditions are less favorable than those projected by us, additional write-downs of inventories would be required.

Results of Operations

The following table sets forth for the periods indicated certain financial data of Insight Enterprises, Inc. as a percentage of net sales:

		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2002			2001			2002			2001
Net sales			100.0	%		100.0	%		100.0	%		100.0	%
Costs of goods sold			88.2			88.4			87.9			88.5
	Gross profit		11.8			11.6			12.1			11.5
Operating expenses:
Selling and administrative expenses			8.7			7.6			8.7			7.4
Aborted IPO costs			—			0.3			—			0.1
Amortization of goodwill			—			0.1			—			0.1
	Earnings from operations		3.1			3.6			3.4			3.9
Non-operating expense (income), net			0.2			—			0.2			—
	Earnings before income taxes		2.9			3.6			3.2			3.9
Income tax expense			1.1			1.4			1.2			1.5
	Net earnings		1.8	%		2.2	%		2.0	%		2.4	%

Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001

         Net Sales. Net sales increased $232.2 million, or 46%, to $737.0 million for the three months ended June 30, 2002 from $504.8 million for the three months ended June 30, 2001. Insight represented 97% and 95% of total net sales for the three months ended June 30, 2002 and 2001, respectively. Direct Alliance represented the remaining 3% and 5% of total net sales for the three months ended June 30, 2002 and 2001, respectively.

         Insight’s net sales increased $231.6 million, or 48%, to $713.2 million for the three months ended June 30, 2002 from $481.6 million for the three months ended June 30, 2001. The increase was due to the net sales from Action and Kortex, which were acquired in the fourth quarter of 2001 and the net sales from Comark, which was acquired on April 25, 2002. This increase was partially offset by a decrease in net sales in our base North American operations due to a decline in overall information technology spending, an increase in the proportion of certain software products and third-party services that are recorded as net sales (as described under Critical

13

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Accounting Policies – Sales Recognition) and an increased focus on maximizing gross margin by minimizing the volume of unprofitable sales. Insight’s average order size increased slightly to $1,263 for the three months ended June 30, 2002 from $1,256 for the three months ended June 30, 2001 primarily resulting from an increase in larger enterprise customers with the acquisition of Comark and an increase in computers, notebooks and servers as a percentage of our total product mix from 30% for the three months ended June 30, 2001 to 31% for the three months ended June 30, 2002. This increase was partially offset by decreases in average selling prices. North American sales represented 88% and 93% of Insight’s net sales for the three months ended June 30, 2002 and 2001, respectively, with the remaining sales generated in Europe. The increase in the percentage of net sales generated in Europe was due to the net sales of Action which was acquired in the fourth quarter of 2001.

         Sales to businesses, including government and education, were 99% of Insight’s net sales in the three months ended June 30, 2002 and 98% of Insight’s net sales for the three months ended June 30, 2001. Insight had 2,241 account executives at June 30, 2002, with 1,971 in North America and 270 in Europe, increases from 1,823, 1,621 and 202, respectively, at June 30, 2001. Insight reduced its number of account executives in the United States during the last half of 2001 in response to slowing sales growth rates. These decreases were offset by the addition of account executives added in connection with acquired entities.

         Net sales derived from Direct Alliance, our outsourcing business, increased $662,000, or 3%, to $23.8 million for the three months ended June 30, 2002 from $23.2 million for the three months ended June 30, 2001. Service fees increased 4.9% to $21.3 million for the three months ended June 30, 2002 from $20.3 million for the three months ended June 30, 2001. Pass-through product sales decreased 11.9% from $2.8 million to $2.5 million for the three months ended June 30, 2001 and 2002, respectively. For the three months ended June 30, 2002, one outsourcing client accounted for approximately 57% of Direct Alliance’s net sales. For the three months ended June 30, 2002, the three largest outsourcing clients accounted for approximately 96% of Direct Alliance’s net sales.

         Gross Profit. Gross profit increased $28.6 million, or 49%, to $86.9 million for the three months ended June 30, 2002 from $58.3 million for the three months ended June 30, 2001. As a percentage of net sales, gross profit increased from 11.6% for the three months ended June 30, 2001 to 11.8% for the three months ended June 30, 2002. Insight’s gross profit, as a percentage of net sales, increased from 11.0% for the three months ended June 30, 2001 to 11.5% for the three months ended June 30, 2002. Direct Alliance’s gross profit, as a percentage of net sales, decreased from 24.0% for the three months ended June 30, 2001 to 21.0% for the three months ended June 30, 2002. The majority of the overall increase in gross profit as a percentage of net sales is due to enhanced product margins and an increase in sales of certain software assurance products and third party services with net sales recognition. The net reporting of these products and services resulted in an increase of gross profit as a percentage of sales of 0.45%. These increases were offset slightly by lower gross margins in sales to large enterprise customers contributed by the acquisition of Comark and a reduction in supplier reimbursement funds recorded as an offset to cost of goods sold. Other components of costs of goods sold remained relatively constant as a percentage of net sales. We expect our future gross profit percentage to fluctuate depending on factors such as industry-wide pricing pressures, supplier reimbursement programs, pricing/selling strategies and customer, product and services mix.

         Operating Expenses.

         Selling and Administrative Expenses. Selling and administrative expenses increased $25.5 million, or 66.0%, to $64.0 million for the three months ended June 30, 2002 from $38.5 million for the three months ended June 30, 2001, and increased as a percentage of net sales to 8.7% for the three months ended June 30, 2002 from 7.6% for the three months ended June 30, 2001. Selling and administrative expenses as a percentage of net sales for Insight were 8.8% for the three months ended June 30, 2002 and 7.7% for the three months ended June 30, 2001. The increase in selling and administrative expenses at Insight was due primarily to selling and

14

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

administrative expenses attributable to acquired entities and higher than usual selling and administrative expenses in the United Kingdom as a percentage of net sales. This increase was offset by a reduction in selling and administrative expenses due to cost savings initiatives, including a reduction in staff at Insight’s North American operations during the last half of 2001. Selling and administrative expenses as a percentage of net sales for Direct Alliance were 3.8% for the three months ended June 30, 2002 and 6.5% for the three months ended June 30, 2001. The decrease in selling and administrative expenses at Direct Alliance is due to cost savings initiatives, including some reductions in staff, and an increase in the amount of expenses directly attributable to specific projects, which are included in costs of goods sold rather than selling and administrative expenses.

         Overall unassisted web sales at Insight decreased to 9.5% of net sales for the three months ended June 30, 2002 from 11.3% for the three months ended June 30, 2001 due to the acquisition of Comark, which transacts virtually no unassisted web sales. Excluding the acquisition of Comark, unassisted web sales increased as a percentage of sales over the same period in the prior year. An increase in the percentage of unassisted web sales reduce selling and administrative expenses as these sales are transacted without the assistance of an account executive. The percentage of shipments made using electronic “direct ship” programs with our suppliers decreased to 61% for the three months ended June 30, 2002 from 72% for the three months ended June 30, 2001 due to the acquired entities, which process fewer direct shipments. Direct shipments from suppliers to our customers reduce selling and administrative expenses but increase costs of goods sold due to increased prices charged by suppliers for this service.

         Aborted IPO Costs. We withdrew our planned initial public offering and spin-off of Direct Alliance on June 6, 2001. We recorded a pre-tax charge of $1.4 million in operating expenses during the three months ended June 30, 2001 related to the costs of the aborted IPO.

         Amortization. In accordance with SFAS No.142, the amortization of goodwill was discontinued as of January 1, 2002 and therefore there was no goodwill amortization expense recorded for the three months ended June 30, 2002. Goodwill amortization expense was $481,000 for the three months ended June 30, 2001. The decrease in goodwill amortization was offset partially by $311,000 of amortization of intangible assets obtained in connection with the acquisition of Comark.

         Non-Operating Expense (Income), Net. Non-operating expense (income), net, which consists primarily of interest expense and interest income, increased to $1.2 million of expense for the three months ended June 30, 2002 from $60,000 of income for the three months ended June 30, 2001. Interest expense of $883,000 and $446,000 for the three months ended June 30, 2002 and 2001, respectively, primarily relates to borrowings associated with our credit facilities which are used to finance acquisitions, working capital and capital expenditures. Interest expense has increased due to the financing of acquisitions and the assumption of interest-bearing debt in connection with acquisitions, offset partially by a decline in interest rates. Interest income of $31,000 and $666,000 for the three months ended June 30, 2002 and 2001, respectively, was generated through short-term investments, some of which are investment grade tax-advantaged bonds. The decrease in interest income is due to the decrease in average short-term investments and the decrease in interest rates earned on short-term investments.

         Income Tax Expense. The Company’s effective tax rate was 38.6% for the three months ended June 30, 2002 and 38.7% for the three months ended June 30, 2001. The effective tax rate was reduced by the elimination of losses in our German operation (due to its closure during the fourth quarter of 2001), the elimination of goodwill amortization and a reduction in Canadian tax rates. The reduction in the effective tax rate was offset by the recognition of tax benefits on foreign operating losses at a lower effective tax rate than that of the United States as well as a higher state income tax rate for the acquired Comark operations.

         Net Earnings. Net earnings increased $1.2 million, or 10%, to $13.1 million for the three months ended June 30, 2002 from $11.9 million, excluding the effect of an $830,000, net of tax, aborted IPO charge for the three months ended June 30, 2001. Diluted earnings per share were $0.28 for the three months ended June 30,

15

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

2002 and June 30, 2001, excluding the one-time charge for aborted IPO costs in the three months ended June 30, 2001. Net earnings for Insight increased 13% to $10.6 million for the three months ended June 30, 2002 from $9.4 million for the three months ended June 30, 2001. Net earnings for Direct Alliance increased 3% to $2.52 million for the three months ended June 30, 2002 from $2.45, million, excluding the one-time charge for aborted IPO costs in the three months ended June 30, 2001.

Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

         Net Sales. Net sales increased $202.7 million, or 19%, to $1,265.0 million for the six months ended June 30, 2002 from $1,062.3 million for the six months ended June 30, 2001. Insight represented 96% and 95% of the total net sales for the six months ended June 30, 2002 and 2001, respectively. Direct Alliance represented the remaining 4% and 5% of total net sales for the six months ended June 30, 2002 and 2001, respectively.

         Insight’s net sales increased $202.5 million, or 20%, to $1,215.5 million for the six months ended June 30, 2002 from $1,013.0 million for the six months ended June 30, 2001. The increase was due to the net sales from Action and Kortex, which were acquired in the fourth quarter of 2001 and net sales from Comark, which was acquired on April 25, 2002. This increase was partially offset by a decrease in net sales in our base North American operations due to a decline in overall information technology spending, an increase in the proportion of certain software products and third-party services that are recorded as net sales (as described under Critical Accounting Policies – Sales Recognition) and an increased focus on maximizing gross margin by minimizing the volume of unprofitable sales. North American sales represented 83% and 93% of Insight’s net sales for the six months ended June 30, 2002 and 2001, with the remaining net sales generated in Europe. The increase in the percentage of net sales in Europe was due to net sales from Action, which was acquired in the fourth quarter of 2001.

         Net sales derived from Direct Alliance, our outsourcing business, increased $239,000, to $49.5 million for the six months ended June 30, 2001 from $49.3 million for the six months ended June 30, 2001. Service fees increased 3.1% to $43.4 million for the six months ended June 30, 2002 from $42.1 million for the six months ended June 30, 2001. Pass-through product sales decreased 15.1% from $7.2 million to $6.1 million for the six months ended June 30, 2001 and 2002, respectively. For the six months ended June 30, 2002, one outsourcing client accounted for approximately 55% of Direct Alliance’s net sales. For the six months ended June 30, 2002, the three largest outsourcing clients accounted for approximately 93% of Direct Alliance’s net sales.

         Gross Profit. Gross profit increased $29.9 million, or 24%, to $152.5 million for the six months ended June 30, 2002 from $122.6 million for the six months ended June 30, 2001. As a percentage of net sales, gross profit increased from 11.5% for the six months ended June 30, 2001 to 12.1% for the six months ended June 30, 2002. Insight’s gross profit, as a percentage of net sales, increased from 11.0% for the six months ended June 30, 2001 to 11.7% for the six months ended June 30, 2002. Direct Alliance’s gross profit, as a percentage of net sales, decreased from 22.3% for the six months ended June 30, 2001 to 21.0% for the six months ended June 30, 2002. The majority of the increase in gross profit as a percentage of net sales at Insight is due to enhanced product margins and an increase in sales of certain software assurance products and third party services with net sales recognition. The net reporting of these products and services resulted in an increase of gross profit as a percentage of sales of 0.36%. These increases were offset slightly by lower gross margins in the sales to large enterprise customers contributed by the acquisition of Comark and a reduction in supplier reimbursement funds recorded as an offset to cost of goods sold. Other components of costs of goods sold remained relatively constant as a percentage of net sales. We expect our future gross profit percentage to fluctuate depending on factors such as industry-wide pricing pressures, supplier reimbursement programs, pricing/selling strategies and customer, product and services mix.

16

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

         Operating Expenses.

         Selling and Administrative Expenses. Selling and administrative expenses increased $31.2 million, or 38%, to $109.7 million for the six months ended June 30, 2002 from $78.5 million for the six months ended June 30, 2001. Selling and administrative expenses as a percentage of net sales were 8.7% for the six months ended June 30, 2002, an increase from 7.4% for the six months ended June 30, 2001. Selling and administrative expenses as a percentage of net sales for Insight were 8.8% for the six months ended June 30, 2002 and 7.5% for the six months ended June 30, 2001. The increase in the selling and administrative expenses at Insight was due to selling and administrative expenses attributable to acquired entities and higher than usual selling and administrative expenses in the United Kingdom as a percentage of net sales during the second quarter of 2002. This increase was offset by a reduction in selling and administrative expenses due to cost savings initiatives, including a reduction in staff at Insight’s North American operations during the last half of 2001. Selling and administrative expenses as a percentage of net sales for Direct Alliance were 4.4% for the six months ended June 30, 2002 and 6.4% for the six months ended June 30, 2001. The decrease in selling and administrative expenses at Direct Alliance is due to cost savings initiatives, including some reductions in staff, and an increase in the amount of expenses directly attributable to specific projects, which are included in costs of goods sold rather than selling and administrative expenses.

         Aborted IPO Costs. We withdrew our planned initial public offering and spin-off of Direct Alliance Corporation on June 6, 2001. We recorded a pre-tax charge of $1.4 million in operating expenses during the six months ended June 30, 2001 related to the costs of the aborted IPO.

         Amortization. In accordance with SFAS No.142, the amortization of goodwill was discontinued as of January 1, 2002 and therefore there was no goodwill amortization expense recorded for the six months ended June 30, 2002. Goodwill amortization expense was $973,000 for the six months ended June 30, 2001. The decrease in goodwill amortization was offset partially by $311,000 of amortization of intangible assets obtained in connection with the acquisition of Comark.

         Non-Operating Expense (Income), Net. Non-operating expense (income), net, which consists primarily of interest income and interest expense, increased to $2.0 million of expense for the six months ended June 30, 2002 from $18,000 of income for the six months ended June 30, 2001. Interest expense of $1.7 million and $845,000 for the six months ended June 30, 2002 and 2001, respectively, primarily relates to borrowings associated with our credit facilities which are used to finance working capital, acquisitions and capital expenditures. Interest expense has increased due to the financing of acquisitions and the assumption of interest-bearing debt in connection with acquisitions, offset partially by a decline in interest rates. Interest income of $190,000 and $1.1 million for the six months ended June 30, 2002 and 2001, respectively, was generated by the Company through short-term investments, some of which are investment grade tax-advantaged bonds. The decrease in interest income is due to the decrease in average short-term investments and the decrease in interest rates earned on short-term investments.

         Income Tax Expense. The Company’s effective tax rate was 37.7% and 39.3% for the six months ended June 30, 2002 and 2001, respectively. The effective tax rate was reduced by the elimination of losses in our German operation (due to its closure during the fourth quarter of 2001), the elimination of goodwill amortization, and a reduction in Canadian tax rates. The reduction in the effective tax rate was offset partially by the recognition of tax benefits on foreign operating losses at a lower effective tax rate than that of the United States as well as a higher state income tax rate for the acquired Comark operations.

         Net Earnings. Net earnings decreased $1.0 million, or 4%, to $25.2 million, for the six months ended June 30, 2002 from $26.2 million, excluding the effect of an $830,000, net of tax, aborted IPO charge, for the six months ended June 30, 2001. Diluted earnings per share decreased 10% to $0.56 for the six months ended June 30, 2002 from $0.62, excluding the one-time charge for aborted IPO costs, for the six months ended June 30, 2001. Net earnings for Insight decreased 6% to $20.2 million for the six months ended June 30, 2002 from $21.5

17

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

million for the six months ended June 30, 2001. Net earnings for Direct Alliance increased 6% to $5.02 million for the six months ended June 30, 2002 from $4.74 million, excluding the one-time charge for aborted IPO costs, for the six months ended June 30, 2001.

Seasonality

         Although we historically have experienced variability in the rates of sales growth, we have not experienced material seasonality in our overall business during the past several years due to the large percentage of our sales to businesses customers. As we increase sales to government organizations and educational institutions, we may experience additional seasonality in our overall business, as these customers tend to increase purchases during the third quarter of the calendar year.

Liquidity and Capital Resources

         Our primary capital needs have been to fund the working capital requirements and capital expenditures necessitated by our sales growth and to provide capital for potential acquisitions. Capital expenditures for the six months ended June 30, 2002 and 2001 were $9.7 million and $13.7 million, respectively. Capital expenditures for the six months ended June 30, 2002 primarily relate to capitalized costs of computer software developed for internal use, purchases of computer equipment and capital improvements to our facility in the United Kingdom, which we purchased in 2001. Capital expenditures for the six months ended June 30, 2001 primarily relate to purchases of office furniture and equipment and capitalized costs of computer software developed for internal use.

         Our net cash provided by operating activities was $44.5 million for the six months ended June 30, 2002 compared to $50.1 million for the six months ended June 30, 2001. The positive cash flow in the current period was primarily due to $25.2 million in net earnings, $34.4 million increase in accounts payable, $9.2 million in provisions for inventories and accounts receivable, $8.5 million in depreciation and amortization and $5.2 million in tax benefit from stock options that were exercised. These funds were used to fund a $27.4 million increase in accounts receivables and a $13.7 million decrease in accrued expenses and other current liabilities.

         We amended our $100,000,000 credit facility with a finance company on April 25, 2002. The amended agreement provides for cash advances outstanding at any one time up to a maximum of $100,000,000 on the line of credit, subject to limitations based upon our eligible accounts receivable and inventories. Cash advances bear interest at London Interbank Offered Rate for the United States dollar (“US LIBOR”) plus 1.50% (3.34% at June 30, 2002) if the average monthly outstanding balance is less than $35,000,000, US LIBOR plus 2.00% (3.84% at June 30, 2002) if the average monthly outstanding balance is equal to or greater than $35,000,000 but less than $50,000,000 or US LIBOR plus 2.75% (4.59% at June 30, 2002) if the average monthly outstanding balance is equal to or greater than $50,000,000. Interest is payable monthly. The credit facility, up to a maximum outstanding balance of $40,000,000, can be used to facilitate the purchases of inventories from certain suppliers, and that portion is classified on the balance sheet as accounts payable. The credit facility expires February 2003 and is secured by substantially all of our assets, except the assets of Comark. The credit facility contains various covenants including the requirement that we maintain a specified amount of tangible net worth as well as restrictions on transferring inventory and accounts receivable to Comark and restrictions on the payment of cash dividends. We were in compliance with all such covenants at June 30, 2002. As of June 30, 2002, $33,247,000 was outstanding under the credit facility of which $17,979,000 was used to facilitate the purchase of inventories and included in accounts payable. $66,753,000 was available under the credit facility at June 30, 2002.

Comark, our recently acquired subsidiary, also has a credit facility with a bank. The credit facility provides for cash advances outstanding at any one time up to a maximum of $100,000,000, subject to limitations based upon Comark’s eligible accounts receivable. Cash advances bear interest, at Comark’s option, at the bank’s corporate base rate (3.63% at June 30, 2002), the swing-line rate (2.94% at June 30, 2002) or the bank’s US LIBOR-based rate (3.09% at June 30, 2002), payable quarterly. The credit facility expires April 23, 2003 and is secured by substantially all of the assets of Comark. The credit facility contains various covenants, including the requirement

18

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

that Comark maintain a specific dollar amount of tangible net worth and certain leverage and interest coverage ratios. Comark was in compliance with all such covenants at June 30, 2002. As part of the credit agreement, $50,000,000 was immediately borrowed against the facility and loaned to us as an additional source of funds for the acquisition of Comark. As of June 30, 2002, the outstanding balance was $67,200,000, and $32,800,000 was available under the line of credit.

         Action Limited (“Action”), a subsidiary in the United Kingdom, has an overdraft facility of $2,287,000 with a bank. The facility expires March 2003 and bears interest at London Interbank Offered Rate for the Great Britain pound plus 1.75% (5.75% at June 30, 2002). As of June 30, 2002, there was an outstanding balance of $1,085,000 and $1,202,000 was available under the overdraft facility. The facility is secured by substantially all of the assets of Action. The prior credit facility in the United Kingdom was terminated in April 2002 in connection with the integration of Action into Insight’s existing United Kingdom operations.

         Our future capital requirements include financing the following: the growth of working capital items such as accounts receivable and inventories; improvements, equipment, furniture and fixtures for the United Kingdom facility purchased in 2001; the purchase and internal development of software enhancements; equipment, furniture and fixtures to support future growth; and capital needs for potential acquisitions and integration of recent acquisitions. We anticipate that cash flow from operations together with the funds available under our credit facilities will be adequate to support our presently anticipated cash and working capital requirements for operations in 2002. We may need additional debt or equity financing to continue funding our internal growth beyond 2002. In addition, as part of our growth strategy, we intend to consider appropriate acquisition opportunities from time to time, which may require additional debt or equity financing. All of our credit facilities expire in 2003. We do not have any commitments for additional financing and we cannot assure you that we will be able to obtain such financing on terms acceptable to us or at all to fund internal growth or acquisitions. Our ability to obtain financing in the future depends to a large degree on our ability to maintain sufficient cash flows.

Factors That May Affect Future Results and Financial Condition

         Risks associated with past and future acquisitions. We recently completed the acquisitions of Comark, Inc. and Comark Investments, Inc. (collectively, “Comark”), in the United States, Action, plc (“Action”) in the United Kingdom and Kortex Computer Centre Ltd. in Canada. Acquisitions involve numerous risks, including difficulties in the assimilation of operations of the acquired company, the diversion of management’s attention from other business concerns, risks of entering markets in which we have had no or only limited direct experience, assumption of unknown liabilities and the potential loss of key employees and/or customers of the acquired company, all of which in turn could have a material adverse effect on our business, results of operations and financial condition. In addition, our strategy includes the possible acquisition of other businesses to expand or complement our operations. The magnitude, timing and nature of any future acquisitions will depend on a number of factors, including the availability of suitable acquisition candidates, the negotiation of acceptable terms, our financial capabilities and general economic and business conditions. There is no assurance that we will identify acquisition candidates that would result in successful combinations or that any such acquisitions will be consummated on acceptable terms. Any future acquisitions may result in potentially dilutive issuance of equity securities, the incurrence of additional debt and amortization of expenses related to identifiable intangible assets, all of which could affect our profitability adversely.

         Management of growth. Since our inception, we have experienced substantial changes in and expansion of our business and operations through both acquisitions such as Comark and Action, which collectively are now a material portion of our business, and internal growth. The Comark and Action acquisitions have placed, and any future acquisitions may place, significant demands on our operational, financial, administrative and other resources. For example, we will need to integrate our information systems with those of Comark in order to realize the efficiencies we expected when we acquired Comark. Additionally, we are currently working on a cost reduction program in the United Kingdom due to recent operating losses experienced in our United Kingdom operations. These operating losses resulted in the resignations, at our request, of both the President and Chief

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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Operating Officer of our United Kingdom operations. Our operating expenses and staffing levels have increased and are expected to increase in the future as our business grows. In particular, we have retained a significant percentage of the Comark employees and there can be no assurance that such persons will perform to our expectations. There can also be no assurance that we will be able to successfully replace the executives in the United Kingdom. Competition for highly qualified personnel is intense, and there can be no assurance that we will be able to continue to attract, assimilate and retain qualified persons in the future. In addition, we expect that any future expansion will continue to challenge our ability to hire, train, motivate and manage our employees. We also expect over time to expend considerable resources to expand/convert our information system and to implement a variety of new systems and procedures. System conversion decisions may result in write-downs of existing systems that will not be used after the integration or conversion. If our sales do not increase in proportion to our operating expenses, our information systems do not expand to meet increasing demands, or we fail to attract, assimilate and retain qualified personnel or otherwise fail to manage our expansion effectively, there would be a material adverse effect on our business, results of operations and financial condition. There can be no assurance that we will achieve our growth strategy.

         Current economic conditions affecting our industry. Our results of operations are influenced by a variety of factors, including general economic conditions, the condition of the computer and related products industry, shifts in demand for or availability of computer and related products and industry introductions of new products, upgrades or methods of distribution. The computer industry in general has felt the effects of the slowdown in the United States economy and we specifically have seen a decrease in demand for the products we sell. Sales can be dependent on specific product categories, and any change in demand for or supply of such products could have a material adverse effect on our sales if we fail to react in a timely manner to such changes. Our operating results are also highly dependent upon our level of gross profit as a percentage of net sales which fluctuates due to numerous factors, including changes in prices from suppliers, reductions in the amount of supplier reimbursements that are made available, changes in customer mix, the relative mix of products sold during the period, general competitive conditions, the availability of opportunistic purchases and opportunities to increase market share. In addition, our expense levels, including the costs and salaries incurred in connection with the hiring of account executives, are based, in part, on anticipated sales. Therefore, we may not be able to reduce spending in a timely manner to compensate for any unexpected sales shortfall. As a result, comparisons of our quarterly financial results should not be relied upon as an indication of future performance.

         Reliance on information and telephone systems. We believe that our success to date has been, and future results of operations will be, dependent in large part upon our ability to provide prompt and efficient service to customers. In addition, our success is largely dependent on the accuracy, quality and utilization of the information generated by our information systems, which affect our ability to manage our sales, distribution, inventory and accounting systems. Additionally, our success is dependent on our ability to successfully integrate our information system with those of acquired entities. In 1998 we began a major information system upgrade to replace our core business function software applications in order to accommodate our expanding business needs, which will continue in 2002 and beyond. Although we have redundant systems with full data backup, we do not have a formal disaster recovery plan; therefore, a substantial interruption in our information systems or in our telephone communication systems would have a material adverse effect on our business, results of operations and financial condition.

         Reliance on suppliers; Changes in supplier reimbursement programs. We acquire products for resale both directly from manufacturers and indirectly through distributors. Purchases from Tech Data Corporation and Ingram Micro, Inc., both distributors of computers and related products, accounted for approximately 32% and 27%, respectively, of aggregate purchases in 2001. No other supplier accounted for more than 10% of purchases in 2001. However, the top five suppliers as a group (Tech Data Corporation (a distributor); Ingram Micro, Inc. (a distributor); Hewlett-Packard Company (a manufacturer); Synnex Information Technologies, Inc. (a distributor) and Compaq Computer Corporation (a manufacturer)) accounted for approximately 71% of our total product purchases during 2001. The loss of Tech Data Corporation, Ingram Micro, Inc. or any other supplier could cause a short-term disruption in the availability of products. The reduction in the amount of credit granted to us by our

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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

suppliers could have a material adverse effect on our business, results of operations and financial condition. Additionally, there is no assurance that as manufacturers continue to sell directly to end users, they will not limit or curtail the availability of their product to companies such as Insight. Certain of the products offered from time to time by us are subject to manufacturer allocation, which limits the number of units of such products available to resellers like us. Our inability to obtain a sufficient quantity of product or an allocation of products from a manufacturer in a way that favors one of our competitors relative to us could cause us to be unable to fill customers’ orders in a timely manner, or at all, which could have a material adverse effect on our business, results of operations and financial condition. Certain suppliers provide us with substantial incentives in the form of payment discounts, supplier reimbursements, price protections and rebates. Supplier funds are used to offset, among other things, cost of goods sold, marketing costs and other operating expenses. No assurance can be given that we will continue to receive such incentives or that we will be able to collect outstanding amounts relating to these incentives in a timely manner, or at all. A reduction in, the discontinuance of, a significant delay in receiving or the inability to collect such incentives could have a material adverse effect on our business, results of operations and financial condition. Additionally, Compaq Computer Corporation and Hewlett-Packard Company merged on May 3, 2002. Although we do not know specifically how this merger will affect our relationships with these companies, we cannot assure you that any changes resulting from this merger will not have a material adverse effect on our business, results of operations and financial condition.

         We are subject to substantial competition. The computer and related products industry is highly competitive. Competition is based primarily on price, product availability, speed of delivery, credit availability, ability to tailor specific solutions to customer needs and quality and breadth of product lines. We compete with a large number and wide variety of marketers and resellers of computers and related products, including national direct marketers (including value-added resellers and specialty retailers, aggregators, distributors, franchisers, manufacturers and national computer retailers, some of which have commenced their own direct marketing operations), traditional computer and related products retailers, computer superstores, Internet-only computer providers, consumer electronics and office supply superstores and mass merchandisers. Certain of our competitors have longer operating histories and greater financial, technical, marketing and other resources than we do. In addition, many of these competitors offer a wider range of products and services than we do and may be able to respond more quickly to new or changing opportunities, technologies and customer requirements. Many current and potential competitors also have greater name recognition, engage in more extensive promotional activities and adopt more aggressive pricing policies than we do. Additionally, several of our competitors have lower operating costs structures, allowing them to profitably employ more aggressive pricing strategies. There can be no assurance that we will be able to compete effectively with current or future competitors or that the competitive pressures we face will not have a material adverse effect on our business, results of operations and financial condition.

         The computer and related products industry is undergoing significant change. We believe that consumers have become more accepting of large-volume, cost-effective channels of distribution, such as national direct marketers, computer superstores, Internet-only computer providers, consumer electronic and office supply superstores, and mass merchandisers. Major computer original equipment manufacturers, such as Hewlett-Packard Company and IBM, have begun to sell their products directly to end-users. Additionally, product resellers and direct marketers are combining operations or acquiring or merging with other resellers and direct marketers to increase efficiency. Moreover, current and potential competitors have established or may establish cooperative relationships among themselves or with third parties to enhance their products and services. Accordingly, it is possible that new competitors or alliances among competitors may emerge and acquire significant market share. Generally, pricing is very aggressive in the industry and we expect pricing pressures to continue. There can be no assurance that we will be able to offset the effects of price reductions with an increase in the number of customers, higher sales, cost reductions or otherwise. Pricing pressures and resulting price reductions could result in an erosion of our market share, reduced sales and reduced operating margins, any of which could have a material adverse effect on our business, results of operations and financial condition.

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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

         Our existing credit facilities expire in 2003 and if we are unable to replace these facilities on acceptable terms we may incur higher interest expenses or your equity interest may be diluted. We currently utilize two short-term lines of credit for our working capital and other needs. We may borrow up to a maximum of $100 million under each of the lines, which expire in February and April 2003. The availability under each of these lines is subject to formulas based on our eligible accounts receivable and inventories. As of June 30, 2002, our current aggregate availability under these lines is $99,553,000 and $100,447,000 in aggregate is outstanding. We intend to seek long-term financing to replace these short-term facilities prior to their expiration or, in the alternative, refinance the existing facilities. However, we may be unable to secure long-term financing or refinance our existing facilities or, if we are able to secure long-term financing or refinance our existing facilities, it may be on less favorable terms such as higher interest rates. If we were unable to secure acceptable long-term financing or refinance the current facilities, we may be required to seek other financing alternatives such as selling additional equity securities or convertible debt securities that would dilute the equity interests of current shareholders. We cannot assure you that we will be able to obtain such financing on terms favorable to us or at all.

         We rely on outsourcing clients. Through our operating segment, Direct Alliance Corporation, we perform business process outsourcing services for a small number of manufacturers in the computer industry pursuant to various arrangements. For the year ended December 31, 2001 and the six months ended June 30, 2002, one outsourcing client accounted for approximately 52% and 55%, respectively, of Direct Alliance’s net sales. The three largest clients accounted for approximately 92% and 93% of Direct Alliance’s net sales for the year ended December 31, 2001 and the six months ended June 30, 2002, respectively. These clients may cancel such arrangements on relatively short notice or fail to renew them upon expiration. There is no assurance that we will be able to replace any manufacturers that terminate or fail to renew their relationships with us. Additionally, we seek to expand our offerings outside of the computer industry. The failure to maintain current arrangements or the inability to enter into new ones within or outside the computer industry could have a material adverse effect on our business, results of operations and financial condition. All of our current outsourcing clients are manufacturers in the computer industry, and, therefore, are subject to the same risks as we are with respect to the general economy. These risks may negatively impact the amount of business our clients outsource to us.

         Changing methods of distribution. The manner in which computers and related products are distributed and sold is changing, and new methods of distribution and sale, such as on-line shopping services via the Internet, have emerged. Hardware and software manufacturers have sold, and have publicly stated their intent to intensify their efforts to sell, their products directly to end-users. From time to time, certain manufacturers have instituted programs for the direct sales of large order quantities of hardware and software to certain major corporate accounts. These types of programs may continue to be developed and used by various manufacturers. In addition, manufacturers may attempt to increase the volume of software products distributed electronically to end-users. An increase in the volume of products sold through any of these competitive programs or distributed electronically to end-users could have a material adverse effect on our business, results of operations and financial condition.

         Dependence on key personnel. Our future success will be largely dependent on the efforts of key management personnel. The loss of one or more of these key employees could have a material adverse effect on our business, results of operations and financial condition. We also believe that our future success will be largely dependent on our continued ability to attract and retain highly qualified management, sales and technical personnel. We cannot assure you that we will be able to attract and retain such personnel. Volatility or lack of positive performance in our stock price may also adversely affect our ability to retain key employees, all of whom have been granted stock options, or attract additional highly qualified personnel. Further, we make a significant investment in the training of our sales account executives. Our inability to retain such personnel or to train them rapidly enough to meet our expanding needs could cause a decrease in the overall quality and efficiency of our sales staff, which could have a material adverse effect on our business, results of operations and financial condition.

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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

         Risks associated with international operations. We initiated an operation in Canada in 1997 and completed acquisitions in Europe in 1998 as part of our effort to penetrate international markets. In the fourth quarter of 2001, we completed additional acquisitions in Canada and the United Kingdom. Also in the fourth quarter of 2001, we closed down our German operation, which was acquired in 1998, in order to focus resources exclusively on the United Kingdom. In implementing our international strategy, we face barriers to entry and the risk of competition from local and other companies that already have established global businesses, as well as, the risks generally associated with conducting business internationally, including local labor conditions and regulations, exposure to currency fluctuations, limitations on foreign investment and the additional expense and risks inherent in operating in geographically and culturally diverse locations. While we believe we will effectively integrate these recent acquisitions with our own operations, we may be unable to integrate smoothly the acquired companies’ sales, administration, distribution and information systems, resulting in our inability to realize anticipated cost savings and/or sales growth. Because we may continue to develop our international business through acquisitions, we may also be subject to risks associated with such acquisitions, including those relating to the marriage of different corporate cultures and shared decision-making. There can be no assurance that we will succeed in increasing our international business, if at all, in a profitable manner.

         Rapid changes in product standards may result in substantial inventory obsolescence. The computer and related products industry is characterized by rapid technological change and the frequent introduction of new products and product enhancements, which can decrease demand for current products or render them obsolete. In addition, in order to satisfy customer demand, protect ourselves against product shortages and obtain greater purchasing discounts, we may carry relatively high inventory levels of certain products that may have limited or no return privileges. There can be no assurance that we will be able to avoid losses related to inventory obsolescence on these products.

         Changes in state sales or use tax collection procedures may increase our administrative burden and our prices to customers. We presently collect sales tax from our customers in states in which we, via one of our subsidiaries, have a physical presence. For our subsidiaries selling to small- and medium-sized customers (< 1000 computers), these states are Arizona, Indiana and Tennessee. Although not required, we also collect state and use tax in California as an accommodation to these customers. For our subsidiaries selling to large corporate customers (> 1000 computers), we currently collect sales tax in virtually every state. Various states have sought to impose on direct marketers the burden of collecting state sales or use taxes on the sales of products shipped to that state’s residents. The United States Supreme Court has affirmed its position that, under the Commerce Clause of the United States Constitution, a state cannot constitutionally impose sales or use tax collection obligations on an out-of-state mail order company whose only contacts with the state are the solicitation of sales via the telephone or Internet or the distribution of catalogs and other advertising materials through the mail and the subsequent delivery of purchased goods by United States mail or by interstate common carrier from a point outside of the state. If the Supreme Court changes its position or if legislation is passed to overturn the Supreme Court’s decision, the imposition of a sales or use tax collection obligation on us in states to which we ship products, and do not already collect sales or use tax, would result in additional administrative expenses and could result in price increases to the customer or could otherwise have a material adverse effect on our business. From time to time, legislation to overturn this decision of the Supreme Court has been introduced, although to date no such legislation has been passed. Additionally, there is the possibility of a tax being imposed on sales transacted via the Internet, although none has been imposed to date. We also collect a goods and services tax in Canada, and a value-added tax in the United Kingdom.

         The results of litigation may affect our operating results. From time to time we will be made defendants to lawsuits both in the ordinary course of business and as a result of other circumstances. Depending on the claims made and the nature of the relief sought, any such lawsuit, if decided against us, could adversely impact our results of operations. The Company has been named in a lawsuit filed in the United States District Court, District of Arizona, by a stockholder alleging violations of Section 10(b) of the Securities Exchange Act of 1934, and SEC Rule 10b-5 promulgated thereunder. Plaintiff in this action alleges the Company and certain of its officers made false and misleading statements pertaining to its business, operations and management in an effort

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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

to inflate the price of its common stock. The lawsuit also names Eric J. Crown, the Company’s Chairman of the Board of Directors; Timothy A. Crown, the Company’s Chief Executive Officer and a director; and Stanley Laybourne, the Company’s Chief Financial Officer, Secretary, Treasurer and a director; as co-defendants. In the complaint, which was served on the Company August 5, 2002, the plaintiff seeks class action status to represent all buyers of the Company’s common stock from April 26, 2002 to July 17, 2002. The Company is preparing its response to the allegations as set forth in the lawsuit and intends to defend the lawsuit vigorously. In addition, the Company has been informed that a second complaint has been filed against it with respect to these matters and related matters. The Company has not yet been served with the complaint, and has not yet had sufficient time to review the complaint. Therefore, we cannot assure you that these, or any piece of litigation that we are currently party to or that may be filed against us in the future, will not have an adverse affect on our results of operations.

         We may issue options under our stock option plans and sell shares under our employee stock purchase plan, which may dilute the interest of shareholders. We have reserved shares of our common stock for issuance under our Employee Stock Purchase Plan, our 1998 Long Term Incentive Plan (the “1998 LTIP”) and pursuant our 1999 Broad –Based Incentive Plan. As approved by our stockholders, our 1998 LTIP provides that additional shares will be made available for issuance based on a preset formula contained in that plan. The preset formula states that the total number of shares of Common Stock remaining for grant under the 1998 LTIP and any of the Company’s other option plans, plus the number of shares of Common Stock granted but not yet exercised under the 1998 LTIP and the Company’s other option plans, shall not exceed 20% of the outstanding shares of Common Stock of the Company at the time of calculation of the additional shares. Therefore, we will reserve additional shares on an ongoing basis for issuance under this plan. At June 30, 2002, we had 7,789,907 of stock options outstanding with a weighted average exercise price of $18.82. Based on the preset formula, we had 1,331,109 stock options available for grant at June 30, 2002.

         If stock options with an exercise price lower than the current market price are exercised, our stockholders will experience dilution in the price of their shares and they may experience a dilution of earnings per share due to the increased number of shares outstanding. Also, the terms upon which we will be able to obtain equity capital may be affected, because the holders of outstanding options can be expected to exercise them at a time when we would, in all likelihood, be able to obtain needed capital on terms more favorable to us than those provided in outstanding options.

         Potential sales of additional common stock and securities convertible into our common stock may dilute the voting power of current holders. We may issue equity securities in the future whose terms and rights are superior to those of our common stock. Our Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock. These are “blank check” preferred shares, meaning our board of directors is authorized to designate and issue the shares from time to time without shareholder consent. No preferred shares are currently outstanding. Any shares of preferred stock that may be issued in the future could be given voting and conversion rights that could dilute the voting power and equity of existing holders of shares of common stock, and have preferences over shares of common stock with respect to dividends and liquidation rights.

         We have never paid dividends on our common stock and do not plan to do so in the future. Our equity securities are entitled to receive any dividends that may be declared by our board of directors. We have not paid any cash dividends on our common stock and we do not expect to pay cash dividends in the future. We intend to retain any future earnings to provide funds for operations of our business. Investors who anticipate the need for dividends from investments should not purchase our common stock.

Recently Issued Accounting Pronouncements

         In June 2002, the FASB issued Statement of Financial Accounting Standard No. 146, Accounting for Exit or Disposal Activities (“SFAS No.146”), which addresses the recognition, measurement and reporting of costs associated with exit and disposal activities, including restructuring activities. SFAS No. 146 also addresses recognition of certain costs related to terminating a contract that is not a capital lease, costs to consolidate facilities or relocate employees and termination of benefits provided to employees that are voluntarily terminated under the terms of one-time benefit arrangement that is not an ongoing benefit arrangement or an individual

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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

deferred compensation contract. SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002. The Company is in the process of evaluating the adoption of SFAS No. 146 and its impact on the financial position or results of operations of the Company.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

         We have interest rate exposure arising from our lines of credit, which have a variable interest rates. These variable interest rates are impacted by changes in short-term interest rates. We manage interest rate exposure through our conservative debt ratio target and our mix of fixed and variable rate debt. At June 30, 2002, the fair value of our long-term debt approximated its carrying value.

         We also have foreign currency translation exposure arising from the purchase and operation of foreign entities. We monitor our foreign currency exposure and may from time to time enter into hedging transactions to manage this exposure. There were no significant hedging transactions during the six months ended June 30, 2002 or hedging instruments outstanding at June 30, 2002.

Part II — Other Information

Item 1. Legal Proceedings

         The Company has been named in a lawsuit filed in the United States District Court, District of Arizona, by a stockholder alleging violations of Section 10(b) of the Securities Exchange Act of 1934, and SEC Rule 10b-5 promulgated thereunder. Plaintiff in this action alleges the Company and certain of its officers made false and misleading statements pertaining to its business, operations and management in an effort to inflate the price of its common stock. The lawsuit also names Eric J. Crown, the Company’s Chairman of the Board of Directors; Timothy A. Crown, the Company’s Chief Executive Officer and a director; and Stanley Laybourne, the Company’s Chief Financial Officer, Secretary, Treasurer and a director; as co-defendants. In the complaint, which was served on the Company August 5, 2002, the plaintiff seeks class action status to represent all buyers of the Company’s common stock from April 26, 2002 to July 17, 2002. The Company is preparing its response to the allegations as set forth in the lawsuit and intends to defend the lawsuit vigorously. In addition, the Company has been informed that a second complaint has been filed against it with respect to these matters and related matters. The Company has not yet been served with the complaint, and has not yet had sufficient time to review the complaint.

Item 2. Recent Sales of Unregistered Securities

         On April 25, 2002, we issued 2,306,964 shares of our common stock as part of the consideration for the acquisition of all of the outstanding stock of Comark, Inc. and Comark Investments, Inc., from Philip E. Corcoran and Charles S. Wolande pursuant to a Stock Purchase Agreement dated as of April 25, 2002 (the “Agreement”). Under the Agreement, the base purchase price was $150 million, subject to certain adjustments. The purchase price was paid by delivery of $100 million in cash and the aforementioned shares of our common stock. Such shares were issued pursuant to Section 4(2) of the Securities Act of 1933. We also issued 46,140 shares of our common stock to each of Timothy J. McGrath and Michael V. Wise, for an aggregate of 92,280 shares, in payment of certain liabilities we assumed as part of the Comark acquisition. Such shares were issued pursuant to Section 4(2) of the Securities Act of 1933.

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INSIGHT ENTERPRISES, INC.

Item 4. Submission of Matters to a Vote of Security Holders

(a)	The Company’s Annual Shareholders’ Meeting was held on May 29, 2002.
(c)	At the Annual Shareholders’ Meeting, a proposal was considered for the election of Larry A. Gunning and Robertson C. Jones as Class II directors to serve until the annual meeting of shareholders in 2005. The proposal was approved with the following voting results:

Proposal	Voted For		Voted Against	Abstained		Broker Non-Votes
Election of Larry A. Gunning as Class II Director		40,040,820	—		1,738,216	—
Election of Robertson C. Jones as Class II Director		40,041,125	—		1,737,911	—

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INSIGHT ENTERPRISES, INC.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits. (unless otherwise noted, exhibits are filed herewith)

Exhibit No.		Description
2.1 (3)	—	Stock Purchase Agreement dated as of April 25, 2002 by and among Insight Enterprises, Comark, Inc, Comark Investments, Inc., Philip E. Corcoran and Charles S. Wolande
3.1 (2)	—	Composite Certificate of Incorporation of Registrant
3.2 (1)	—	Bylaws of the Registrant
10.1 (4)	—	Summary description of amendment to Employment Agreement between Insight Enterprises, Inc. and Eric J. Crown effective April 1, 2002
10.2 (4)	—	Amendment to Employment Agreement between Insight Enterprises, Inc. and Stanley Laybourne dated as of August 13, 2002
10.3 (4)	—	Amendment to Employment Agreement among Insight Enterprises, Inc., Direct Alliance Corporation and Branson M. Smith dated as of July 1, 2001
10.4 (4)	—	Employment Agreement between Insight Direct Worldwide, Inc. and Dino Farfante dated as of November 17, 2000
10.5 (4)	—	Amendment to Employment Agreement between Insight Direct Worldwide, Inc. and Dino Farfante dated as of June 1, 2001
10.6 (4)	—	Employment Agreement between Insight Direct Worldwide, Inc. and Joel Borovay dated as of November 17, 2000
10.7 (4)	—	Amendment to Employment Agreement among Insight Services Corporation, Insight Direct Worldwide, Inc. and Joel Borovay dated as of April 25, 2002
10.8 (4)	—	Employment Agreement between Comark, Inc. and Michael V. Wise dated as of April 25, 2002
10.9 (4)	—	Employment Agreement between Comark, Inc. and Timothy J. McGrath dated as of April 25, 2002
10.10 (4)	—	Compromise Agreement between Insight Enterprise, Inc. and David Palk dated as of July 17, 2002
99.1	—	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002
99.2	—	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002

(1)	Incorporated by reference to our Annual Report on Form 10-K for the year ended December 31, 1999.
(2)	Incorporated by reference to our Annual Report on Form 10-K for the year ended December 31, 2001.
(3)	Incorporated by reference to our current report on Form 8-K filed on May 10, 2002.
(4)	Management contract or compensatory plan or arrangement.

(b)	Reports on Form 8-K
	A Form 8-K was filed on May 10, 2002, under Item 2, disclosing the acquisition of Comark, Inc and Comark Investments, Inc. on April 25, 2002.
	A Form 8-K was filed on June 20, 2002, under Item 5, incorporating by reference Insight Enterprises, Inc.’s June 19, 2002 press release providing an update on the integration of Comark, Inc.

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SIGNATURES

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

Date: August 14, 2002	INSIGHT ENTERPRISES, INC.
	By:	/s/ Timothy A. Crown
		Timothy A. Crown Chief Executive Officer
	By:	/s/ Stanley Laybourne
		Stanley Laybourne Chief Financial Officer, Secretary and Treasurer (principal financial officer)

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Index to Exhibits

Exhibit No.		Description
2.1 (3)	—	Stock Purchase Agreement dated as of April 25, 2002 by and among Insight Enterprises, Comark, Inc, Comark Investments, Inc., Philip E. Corcoran and Charles S. Wolande
3.1 (2)	—	Composite Certificate of Incorporation of Registrant
3.2 (1)	—	Bylaws of the Registrant
10.1 (4)	—	Summary description of amendment to Employment Agreement between Insight Enterprises, Inc. and Eric J. Crown effective April 1, 2002
10.2 (4)	—	Amendment to Employment Agreement between Insight Enterprises, Inc. and Stanley Laybourne dated as of August 13, 2002
10.3 (4)	—	Amendment to Employment Agreement among Insight Enterprises, Inc., Direct Alliance Corporation and Branson M. Smith dated as of July 1, 2001
10.4 (4)	—	Employment Agreement between Insight Direct Worldwide, Inc. and Dino Farfante dated as of November 17, 2000
10.5 (4)	—	Amendment to Employment Agreement between Insight Direct Worldwide, Inc. and Dino Farfante dated as of June 1, 2001
10.6 (4)	—	Employment Agreement between Insight Direct Worldwide, Inc. and Joel Borovay dated as of November 17, 2000
10.7 (4)	—	Amendment to Employment Agreement among Insight Services Corporation, Insight Direct Worldwide, Inc. and Joel Borovay dated as of April 25, 2002
10.8 (4)	—	Employment Agreement between Comark, Inc. and Michael V. Wise dated as of April 25, 2002
10.9 (4)	—	Employment Agreement between Comark, Inc. and Timothy J. McGrath dated as of April 25, 2002
10.10 (4)	—	Compromise Agreement between Insight Enterprise, Inc. and David Palk dated as of July 17, 2002
99.1	—	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002
99.2	—	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002

(1)	Incorporated by reference to our Annual Report on Form 10-K for the year ended December 31, 1999.
(2)	Incorporated by reference to our Annual Report on Form 10-K for the year ended December 31, 2001.
(3)	Incorporated by reference to our current report on Form 8-K filed on May 10, 2002.
(4)	Management contract or compensatory plan or arrangement.

29 EX-10.1 3 p66875exv10w1.txt EXHIBIT 10.1 EXHIBIT 10.1 Eric J. Crown. Effective April 1, 2002, Mr. Crown ceased being Vice President and has entered into a revised two-year employment agreement, which is effective April 1, 2002 and expires on April 1, 2004. Under his new employment agreement, Mr. Crown will be devoting time to acquisitions, strategic planning and other key initiatives, as requested by the Chief Executive Officer or the Board of Directors, on an as-needed basis. Mr. Crown's base annual salary is currently set at $250,000 and he is entitled to receive an incentive bonus, payable quarterly, equal to 0.75% of our net earnings (before deducting the incentive bonuses of executive officers) provided that our net earnings exceed stated minimum amounts. The incentive bonus is paid in the form of either cash or restricted stock at the election of Mr. Crown. The restricted stock vests quarterly over three years, subject to acceleration in certain circumstances. Our net earnings did not exceed the minimum amounts for the quarter ended June 30, 2002, and therefore no bonus was paid to Mr. Crown for this quarterly period. The employment agreement also contains change of control (as defined in the agreements) and non-compete provisions that, upon a change of control, would result in payments to Mr. Crown equal to three times his base salary and an incentive bonus for the preceding four quarters (all payments are to be grossed-up for the individuals' taxes) and would accelerate the vesting of all unvested stock options and restricted stock. The employment agreement provides that the Mr. Crown will receive certain benefits if his employment is terminated without cause. In the event Mr. Crown's employment agreement is terminated without cause, Mr. Crown will receive a lump sum distribution consisting of (i) the total amount of his base annual salary for the remainder of the agreement term, and (ii) the total amount of incentive compensation payments, calculated based on a defined formula, as if Mr. Crown had not been terminated. Additionally, all unvested stock options and restricted stock shares will become fully vested. EX-10.2 4 p66875exv10w2.txt EXHIBIT 10.2 EXHIBIT 10.2 AMENDMENT TO EMPLOYMENT AGREEMENT THIS AMENDMENT to the March 31, 1998 Employment Agreement effective July 1, 1997 (the "Employment Agreement") between INSIGHT ENTERPRISES, INC. ("Company") and STANLEY LAYBOURNE ("Executive") is entered into as of August 13, 2002. R E C I T A L S A. Executive is currently employed by Company. The terms and conditions of such employment are set forth in the Employment Agreement. B. The Compensation Committee of the Board of Directors of the Company approved certain changes to Executive's salary and bonus arrangements to be effective as of January 1, 2002 at a meeting on February 8, 2002, and this Amendment memorializes those changes. Therefore, effective as of January 1, 2002, the parties wish to amend the Employment Agreement as provided in this Amendment. IN CONSIDERATION of the premises and the respective covenants and agreements of Company and Executive contained in this Amendment, the sufficiency of which is hereby acknowledged, Company and Executive agree as follows: 1. Amendment and Effect. Except to the extent the Employment Agreement is modified by this Amendment, it shall remain in full force and effect. Any terms beginning with an initial capital letter used in this Amendment and not otherwise defined herein shall have the meanings given them in the Employment Agreement. 2. Effective as of January 1, 2002, in Section 3(a) of the Employment Agreement the "Base Salary" amount shall be amended to $200,000 per annum from $190,000 per annum. 3. Effective as of January 1, 2002, in Section 3(b) of the Employment Agreement the percentage rate for the "Incentive Bonus" shall be amended to one percent (1.0%) of the Company's "net earnings" (as defined therein) from 0.5% of the Company's "net earnings." THIS AMENDMENT AGREED TO AND ACCEPTED BY: COMPANY: INSIGHT ENTERPRISES, INC. a Delaware corporation /s/ Timothy A. Crown -------------------------------- By: TIMOTHY A. CROWN, CHIEF EXECUTIVE OFFICER /s/ Stanley Laybourne ------------------------------------- EXECUTIVE: STANLEY LAYBOURNE 1 EX-10.3 5 p66875exv10w3.txt EXHIBIT 10.3 EXHIBIT 10.3 AMENDMENT TO EMPLOYMENT AGREEMENT THIS AMENDMENT to the Employment Agreement effective July 1, 1999 between DIRECT ALLIANCE CORPORATION and BRANSON SMITH (the "Employment Agreement") is entered into as of July 1, 2001 by and among INSIGHT ENTERPRISES, INC. (the "Company"), DIRECT ALLIANCE CORPORATION ("DAC") and BRANSON SMITH ("Executive"). R E C I T A L S A. Executive is currently employed by DAC, a wholly owned subsidiary of the Company. The terms and conditions of such employment are set forth in the Employment Agreement. B. Effective as of July 1, 2001, the parties wish to amend the Employment Agreement as provided in this Amendment. IN CONSIDERATION of the premises and the respective covenants and agreements of DAC, the Company and Executive contained in this Amendment, the sufficiency of which is hereby acknowledged, DAC, the Company and Executive agree as follows: 1. Amendment and Effect. Except to the extent the Employment Agreement is modified by this Amendment, it shall remain in full force and effect. Any terms beginning with an initial capital letter used in this Amendment and not otherwise defined herein shall have the meanings given them in the Employment Agreement. 2. As of the effective date of this Amendment, all references to "Company" in the Employment Agreement shall be deemed to refer to Insight Enterprises, Inc. rather than to Direct Alliance Corporation. 3. Delete Section 2 ("POSITION AND DUTIES") of the Employment Agreement in its entirety and replace with the following: "2. POSITION AND DUTIES "(a) Job Duties. Company does hereby employ, engage and hire Executive to serve in an executive capacity, 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 duties as the Company's Board of Directors (the "Board") or Chief Executive Officer (the "CEO") shall reasonably determine from time to time. Executive's initial title shall be President of Company, and his initial duties shall include responsibility for the day-to-day operations of Company's two operating subsidiaries, Insight Direct Worldwide, Inc. and Direct Alliance Corporation, and for certain other of Company's subsidiaries as directed by the Board or the CEO. Such title and duties may be changed from time to time by the Board or the CEO, provided that such duties and authority shall not be materially different than the date of this agreement; further that the authority of the Executive shall not be diminished and that the Executive shall not be demoted to any position other than President of Direct Alliance Corporation. Executive will report to the CEO. Executive will devote substantially all of his working time and effort to his duties on behalf of Company, reasonable absences because of illness, vacation, and personal and family exigencies excepted. 1 "(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 ) 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 one percent (1.0%) of the issued and outstanding equity of such public or private company." 4. Delete Section 3 ("COMPENSATION") of the Employment Agreement in its entirety and replace with the following: "3. COMPENSATION "(a) Base Salary. Company shall pay Executive a "Base Salary" in consideration for Executive's services to Company at the rate of $250,000 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 executives. The Base Salary may be adjusted from time to time in accordance with the procedures established by Company 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 are adopted by the Board from time to time. Beginning on July 1, 2001 and continuing through the Employment Period, Executive shall be entitled to an incentive bonus, calculated and payable quarterly, equal to two percent (2.0%) of Company's "net earnings", provided that Company's net earnings exceed the Minimum Amount for the applicable fiscal quarter. "(2) For purposes of calculating Executive's incentive bonus pursuant to this Subsection (b), Company's "net earnings" shall be Company's consolidated net after tax earnings, calculated in accordance with accounting principles generally accepted in the United States (US GAAP) and applicable Securities and Exchange Commission regulations, prior to any incentive bonus amounts for Executive and other executives of Company. The amounts payable pursuant to this Subsection 3(b) shall be paid on or before thirty (30) days after the public financial reporting by Company at the end of the applicable fiscal quarter. For purposes of this Subsection 3(b), the term "Minimum Amount" means an amount equal to eighty percent (80%) of the average of 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 2 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 Company shall apply the Withheld Portion toward Company's withholding obligations with regard to any subsequent payments of Base Salary and incentive compensation made pursuant to Sections 3(a) and 3(b). "(c) Incentive Compensation Guarantee. For each fiscal quarter from July 1, 2001 through December 31, 2002 during or prior to which quarter this Agreement has not been terminated by Company for Cause or by Executive without Good Reason, Company guarantees that the incentive compensation to be paid to Executive pursuant to Section 3(b) will total at least $187,500.00 for each such quarter. "(d) Incentive and Benefit Plans. Executive will be entitled to participate in those incentive compensation and benefit plans reserved for Company's executives, including any stock option plans, in accordance with the terms of such compensation and benefit plans. Additionally, Executive shall be entitled to participate in any other benefit plans sponsored by Company, including any savings plan, life insurance plan and health insurance plan available generally to employees of Company from time to time, subject to any restrictions specified in, or amendments made to, such plans. "(e) Vacation. Executive shall be entitled to four (4) weeks vacation during the calendar year, and such additional vacation time as the Board shall approve, with such vacation to be scheduled and taken in accordance with Company'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." THIS AMENDMENT AGREED TO AND ACCEPTED BY: COMPANY: INSIGHT ENTERPRISES, INC. a Delaware corporation /s/ Timothy A. Crown ----------------------- By: TIMOTHY A. CROWN, CHIEF EXECUTIVE OFFICER DAC: DIRECT ALLIANCE CORPORATION a Delaware corporation /s/ Timothy A. Crown ----------------------- By: TIMOTHY A. CROWN, CHIEF EXECUTIVE OFFICER /s/ Branson Smith -------------------------- EXECUTIVE: BRANSON SMITH 3 EX-10.4 6 p66875exv10w4.txt EXHIBIT 10.4 EXHIBIT 10.4 EMPLOYMENT AGREEMENT 11/17/00 This Employment Agreement (the "Agreement") in entered into as of November 17, 2000 Between INSIGHT DIRECT WORLDWIDE, INC. ("Company"), and Dino Farfante ("Executive"). RECITALS Executive is currently employed by Company in the position of Executive Vice President. 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 1/01/01 and ending on 12/31/02 (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 Executive Vice 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 President and Chief Operating Officer ("President") shall reasonably provide; 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 President 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 emergencies excepted. Executive shall be required to work and travel in various countries in Europe throughout the term of this agreement. 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 President; 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. 3) COMPENSATION a) Base Salary. Company shall pay Executive a "Base Salary" in consideration for Executive's services to Company at the rate of $270,000 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 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 benefits plans. Executive shall also be permitted to participate in such incentive compensation plans as adopted by the President from time to time. Additionally, the Executive shall be entitled to participate in any other benefit plans sponsored by Company or Parent that employees are eligible for, 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. c) Vacation. The Executive shall be entitled to four (4) weeks vacation during the calendar year, and such additional vacation time as the President 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. 4) 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). 5) 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 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 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 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, 2002, then the Employment Period ends ninety days thereafter, on April 1, 2002, 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, 2002) (2) years 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. 6) 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 President in furtherance of Company business which is materially more extensive than Executive's travel or contemplated travel at the Relevant Date; (3) 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 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); (4) 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; (5) 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; (6) 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 (7) 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. 7) 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 President has 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. 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 President believes 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 President 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 President might determine to be appropriate. The President also wishes 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, within thirty (30) days after the first anniversary of 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 sixty days (60) 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 (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 that were granted prior to the change in control 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 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 of 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. 8) 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 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. 9) 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 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." 10) 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. 11) 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 Worldwide, Inc. c/o Michael Gumbert, President, COO 6820 South Harl Avenue Tempe, Arizona 85283 If to Executive, to: Dino Farfante 904 W. Windsong Drive Phoenix, Arizona 85045 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. 12) 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. 13) GOVERNING LAW This Agreement shall be governed by and interpreted in accordance with the laws of the State of Arizona. 14) CAPTIONS The captions included herein are for convenience and shall not constitute a part of this Agreement. 15) 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. 16) 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. 17) 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. 18) 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. 19) 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 /s/ Michael Gumbert ------------------------------- Michael Gumbert, President, COO EXECUTIVE: Dino Farfante, COO and Executive Vice President, Sales and Marketing /s/ Dino Farfante ------------------------------- Dino Farfante EX-10.5 7 p66875exv10w5.txt EXHIBIT 10.5 EXHIBIT 10.5 AMENDMENT TO EMPLOYMENT AGREEMENT 11/17/00 THIS AMENDMENT to the "Employment Agreement 11/17/00" effective January 1, 2001 (the "Employment Agreement") between INSIGHT DIRECT WORLDWIDE, INC. ("Company") and DINO FARFANTE ("Executive") is entered into as of October 9, 2001. R E C I T A L S A. Executive is currently employed by Company, a wholly owned subsidiary of Insight Enterprises, Inc. ("Parent"). The terms and conditions of such employment are set forth in the Employment Agreement. B. Effective as of October 9, 2001, the parties wish to amend the Employment Agreement as provided in this Amendment. IN CONSIDERATION of the premises and the respective covenants and agreements of Company and Executive contained in this Amendment, the sufficiency of which is hereby acknowledged, Company and Executive agree as follows: 1. Amendment and Effect. Except to the extent the Employment Agreement is modified by this Amendment, it shall remain in full force and effect. Without limiting the foregoing, this Amendment shall replace and nullify any and all previous arrangements regarding Executive's bonus or "Incentive Compensation." Any terms beginning with an initial capital letter used in this Amendment and not otherwise defined herein shall have the meanings given them in the Employment Agreement. 2. Delete Section 2 ("POSITION AND DUTIES") of the Employment Agreement in its entirety and replace with the following: "2. POSITION AND DUTIES "(a) Job Duties. Company does hereby employ, engage and hire Executive to serve in an executive capacity, 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 duties as the Company's or Parent's Board of Directors (the "Board") or the Parent's President shall reasonably determine from time to time. Executive's title as of October 9, 2001 shall be President of the Company, and his duties as of that date shall include responsibility for the day-to-day operations of the Company. Such title and duties may be changed from time to time by the Board or the Parent's President, provided that such duties and authority shall not be materially different than the date of this agreement; further that the authority of the Executive shall not be diminished and that the Executive shall not be demoted. Executive will devote substantially all of his working time and effort to his duties on behalf of the Company, 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, vacation, and 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 1 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 ) 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 9 of this Agreement when such interest constitutes less than one percent (1.0%) of the issued and outstanding equity of such public or private company." 3. In Section 3(a) ("Base Salary") of the Employment Agreement, change the amount of Executive's Base Salary from $270,000 per annum to $300,000 per annum, which change is to be effective as of April 15, 2002. 4. Add the following Section 3(d) to the Employment Agreement: "(d) Incentive Compensation. "(1) During the Employment Period, the Executive shall be entitled to an incentive bonus, calculated and payable quarterly, equal to one percent (1.0%) of Parent's "net earnings," provided that Parent's net earnings exceed the Minimum Amount for the applicable fiscal quarter. This bonus can be paid either in cash or restricted stock at the Company's sole discretion. At no time will the vesting schedule of the restricted stock be greater than three years. If there is a Change in Control of the Company, the incentive bonus will be paid only in cash from that quarter forward. Additionally, in a Change in Control of the Company, all restricted stock previously issued will be immediately converted to cash by the Company. If the Company terminates Executive's employment without Cause, then all restricted stock vests immediately. If Executive terminates his employment with Good Reason, then all restricted stock vests immediately. "(2) For purposes of calculating Executive's incentive bonus pursuant to this subsection 3(d), Parent's "net earnings" shall be Parent's consolidated net after tax earnings prior to any incentive bonus amounts for Executive and other executives of Parent. All calculations to determine Company's "net earnings" shall be on a basis consistent with financial accounting and reporting 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 subsection 3(d) 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 subsection 3(d), the term "Minimum Amount" means an amount equal to eighty percent (80%) of the average of Parent'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 Parent's outside Certified Public Accountants the "net earnings" of Parent 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 subsection 3(d)(3), then the amount the Executive shall pay will be reduced by the taxes withheld by the Company attributable to such 2 amount (the "Withheld Portion"), and the Company shall apply the Withheld Portion toward Company's withholding obligations with regard to any subsequent payments of Base Salary and incentive compensation made pursuant to this Section 3." 5. Executive hereby acknowledges receipt on October 9, 2001 of a stock option grant for 75,000 shares of the Company's stock, 25,000 shares of which constitute consideration paid to Executive in exchange for his agreement to this Amendment, which stock option grant (a) shall be subject to the terms of the Company's stock option plan and the grant documents, (b) carries an exercise price of $14.11 per share and (c) vests ratably on an annual schedule over two (2) years from the date of grant. THIS AMENDMENT AGREED TO AND ACCEPTED BY: COMPANY: INSIGHT DIRECT WORLDWIDE, INC., an Arizona corporation /s/ Timothy A. Crown -------------------------- By: TIMOTHY A. CROWN, CHIEF EXECUTIVE OFFICER /s/ Dino Farfante ------------------------------- EXECUTIVE: DINO FARFANTE 3 EX-10.6 8 p66875exv10w6.txt EXHIBIT 10.6 Exhibit 10.6 EMPLOYMENT AGREEMENT 11/17/00 This Employment Agreement (the "Agreement") in entered into as of November 17, 2000 Between INSIGHT DIRECT WORLDWIDE, INC. ("Company"), and Joel H. Borovay ("Executive"). RECITALS Executive is currently employed by Company in the position of Executive Vice President. 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 1/01/01 and ending on 12/31/02 (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 Executive Vice 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 President and Chief Operating Officer ("President") shall reasonably provide; 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 President 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 emergencies excepted. Executive shall be required to work and travel in various countries in Europe throughout the term of this agreement. 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 President; 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. 3) COMPENSATION a) Base Salary. Company shall pay Executive a "Base Salary" in consideration for Executive's services to Company at the rate of $215,000 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 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 benefits plans. Executive shall also be permitted to participate in such incentive compensation plans as adopted by the President from time to time. Additionally, the Executive shall be entitled to participate in any other benefit plans sponsored by Company or Parent that employees are eligible for, 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. c) Vacation. The Executive shall be entitled to four (4) weeks vacation during the calendar year, and such additional vacation time as the President 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. 4) 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). 5) 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 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 the 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 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 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, 2002, then the Employment Period ends ninety days thereafter, on April 1, 2002, 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, 2002)(2) years 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. 6) 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 President in furtherance of Company business which is materially more extensive than Executive's travel or contemplated travel at the Relevant Date; (3) 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 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 considered to be "Good Reason" for purposes of this clause (5); (4) 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; (5) 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; (6) 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 (7) 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. 7) 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 President has 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. 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 President believes 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 President 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 President might determine to be appropriate. The President also wishes 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, within thirty (30) days after the first anniversary of 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 sixty days (60) 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 that were granted prior to the change in control 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 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. 8) 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 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. 9) 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 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." 10) 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. 11) 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 Worldwide, Inc. c/o Michael Gumbert, President, COO 6820 South Harl Avenue Tempe, Arizona 85283 If to Executive, to: Joel H. Borovay 5064 E. Yucca Street Scottsdale, Arizona 85254 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. Notice 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. 12) 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. 13) GOVERNING LAW This Agreement shall be governed by and interpreted in accordance with the laws of the State of Arizona. 14) CAPTIONS The captions included herein are for convenience and shall not constitute a part of this Agreement. 15) 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. 16) 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. 17) 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. 18) 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. 19) 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 /s/ Michael Gumbert ----------------------------------------- Michael Gumbert, President, COO EXECUTIVE: Joel H. Borovay, Executive Vice President /s/ Joel H. Borovay ----------------------------------------- Joel H. Borovay, Executive Vice President EX-10.7 9 p66875exv10w7.txt EXHIBIT 10.7 EXHIBIT 10.7 AMENDMENT TO EMPLOYMENT AGREEMENT 11/17/00 THIS AMENDMENT to the "Employment Agreement 11/17/00" effective January 1, 2001 between INSIGHT DIRECT WORLDWIDE, INC. and JOEL BOROVAY (the "Employment Agreement") is entered into as of April 25, 2002 by and among INSIGHT SERVICES CORPORATION ("ISC"), INSIGHT DIRECT WORLDWIDE, INC. ("IDW") and JOEL BOROVAY ("Executive"). R E C I T A L S A. Executive is currently employed by IDW, a wholly owned subsidiary of Insight Enterprises, Inc. ("Parent"). (ISC is also a wholly owned subsidiary of Parent.) The terms and conditions of such employment are set forth in the Employment Agreement. B. Effective as of April 25, 2002, the parties wish to amend the Employment Agreement as provided in this Amendment. IN CONSIDERATION of the premises and the respective covenants and agreements of IDW, ISC and Executive contained in this Amendment, the sufficiency of which is hereby acknowledged, IDW, ISC and Executive agree as follows: 1. Amendment and Effect. Except to the extent the Employment Agreement is modified by this Amendment, it shall remain in full force and effect. Any terms beginning with an initial capital letter used in this Amendment and not otherwise defined herein shall have the meanings given them in the Employment Agreement. 2. As of the effective date of this Amendment, all references to "Company" in the Employment Agreement shall be deemed to refer to Insight Services Corporation rather than to Insight Direct Worldwide, Inc. 3. Delete Section 2 ("POSITION AND DUTIES") of the Employment Agreement in its entirety and replace with the following: "2. POSITION AND DUTIES "(a) Job Duties. Company does hereby employ, engage and hire Executive to serve in an executive capacity, 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 duties as the Company's or Parent's Board of Directors (the "Board") or President (the "President") shall reasonably determine from time to time. Executive's title as of April 25, 2002 shall be Co-President of the Company, and his duties as of that date shall include responsibility for the day-to-day operations of the Company. Such title and duties may be changed from time to time by the Board or the President, provided that such duties and authority shall not be materially different than the date of this agreement; further that the authority of the Executive shall not be diminished and that the Executive shall not be demoted. Executive will report to the President. Executive will devote substantially all of his working time and effort to his duties on behalf of the Company, provided that such devotion of time shall not be materially different from Executive's devotion of time at the date of this Agreement, 1 reasonable absences because of illness, vacation, and 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 ) 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 9 of this Agreement when such interest constitutes less than one percent (1.0%) of the issued and outstanding equity of such public or private company." 4. Add the following new Section 3(d) to the Agreement: "(d) Incentive Compensation. "(1) Executive may be eligible for a quarterly bonus of up to $12,500 per quarter, which bonus may be granted in whole or in part. Payment of such bonus shall be determined at the sole discretion of the President of the Company. "(2) Executive shall also be permitted to participate in such incentive compensation plans as are adopted by the Board from time to time. Beginning on the date hereof and continuing through the Employment Period, Executive shall be entitled to an incentive bonus, calculated and payable quarterly, equal to two percent (2.00%) of the Net Earnings (as defined below) of the Company. "(3) For purposes of calculating Executive's incentive bonus pursuant to this Subsection (b), "Net Earnings" shall mean the net earnings of the Company calculated in accordance with accounting principles generally accepted in the United States (US GAAP). For the avoidance of doubt, Net Earnings shall be calculated after deducting (i) the "holding company allocation", (ii) interest, (iii) taxes and (iv) any incentive bonus amounts for Executive and other executives of the Company. The "holding company allocation" shall mean the quarterly allocation of Parent's and affiliate companies' expenses allocated to the Company by Parent and such affiliate companies in a manner consistent with Parent's customary practices. The amounts payable pursuant to this Subsection 3(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. "(4) If upon final presentation of consolidated financial statements to Parent by Parent's outside Certified Public Accountants, the combined "net earnings" of the Company requires adjustment for any period for which the Executive received an incentive bonus hereunder, 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 Company shall apply the Withheld Portion toward Company's withholding obligations with regard to any subsequent 2 payments of Base Salary and incentive compensation made pursuant to Sections 3(a) and 3(b) or, at Company's option, Executive shall repay to Company any remaining amount due within seven business days of Company's written request therefor. Notwithstanding the foregoing, if the presentation of consolidated financial statements referenced above occurs more than five (5) years after the last day of the period to which the original incentive bonus at issue applied, no adjustments may be made pursuant to this subsection." THIS AMENDMENT AGREED TO AND ACCEPTED BY: ISC: INSIGHT SERVICES CORPORATION, an Arizona corporation /s/ Timothy A. Crown -------------------------------- By: TIMOTHY A. CROWN, CHIEF EXECUTIVE OFFICER IDW: INSIGHT DIRECT WORLDWIDE, INC., an Arizona corporation /s/ Timothy A. Crown -------------------------------- By: TIMOTHY A. CROWN, CHIEF EXECUTIVE OFFICER /s/ Joel Borovay ------------------------------------ EXECUTIVE: JOEL BOROVAY 3 EX-10.8 10 p66875exv10w8.txt EXHIBIT 10.8 CONFIDENTIAL EXHIBIT 10.8 EMPLOYMENT AGREEMENT This Employment Agreement (the "Agreement") is entered into and effective as of April 25, 2002 between Comark, Inc., an Illinois corporation ("Company"), and Michael V. Wise ("Executive"). R E C I T A L S Company is a wholly owned subsidiary of Insight Enterprises, Inc. ("Parent"). Executive is currently employed by Company in the position of Senior Vice-President and Chief Operating Officer. 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) Replacement of Previous Agreements. When this Agreement becomes effective on April 25, 2002, it will replace all previous employment agreements between Executive and Company and/or its affiliates for all purposes. The consideration for this Agreement and the termination of such previous agreements is solely as stated in this Agreement and neither party shall have any further rights or duties under such previous agreements. The foregoing shall not diminish Executive's right, title and interest, pursuant to the terms of the Comark, Inc. Equity Incentive/Employment Agreement between Executive and Company dated October 13, 1999 (the "Equity Agreement"), to payment of his "Account" (as that term is defined in the Equity Agreement) as vested on April 25, 2002. (b) Initial Term. Executive shall be employed by Company for the duties set forth in Section 2 for a one-year term, commencing as of April 25, 2002 and ending on April 25, 2003 (the "Initial Term"), unless sooner terminated in accordance with the provisions of this Agreement. (c) 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 one-year term dated effective and beginning upon each such successive day (the "Renewal Term"); provided, however, that Company may notify Executive, or Executive may notify 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 to serve in an executive capacity, 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 duties as Parent's President (the "President") shall reasonably determine from time to time. Executive's initial title shall be Chief Operating Officer of Company and Co-President of Insight Services Corporation ("ISC"), and his initial duties shall include responsibility for the day-to-day 1 CONFIDENTIAL operations of Company and of ISC and their operating subsidiaries, and for certain other of Parent's subsidiaries as directed by the President. Such title and duties may be changed from time to time by the President. In the absence of the President, Parent's Chief Executive Officer (the "CEO") may assume the President's role under this Agreement, and in the absence of the CEO the Parent's Board of Directors (the "Board") may assume such role. Executive will devote substantially all of his working time and effort to his duties on behalf of Company, reasonable absences because of illness, vacation, and 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 ) 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 one percent (1.0%) of the issued and outstanding equity of such public or private company. 3. COMPENSATION (a) Base Salary. Company shall pay Executive a "Base Salary" in consideration for Executive's services to Company at the rate of $300,000 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 executives. The Base Salary may be adjusted from time to time in accordance with the procedures established by Company 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 are adopted by the Board or Company from time to time. Beginning on the date hereof and continuing through the Employment Period, Executive shall be entitled to an incentive bonus, calculated and payable quarterly, equal to one and 65/100ths percent (1.65%) of the combined Net Earnings (as defined below) of Company and ISC (collectively, the "Business"), provided that the Net Earnings exceed the Minimum Amount (as defined below) for the applicable fiscal quarter. Company and Executive understand and agree that Company's business shall include all corporate sales divisions of Company and Insight Direct USA, Inc. ("Insight"), and that ISC's business shall include all services sales divisions of Company and Insight. Furthermore, Company and Executive understand and agree that the Business will not include any small- to medium-sized business (SMB) sales divisions or public sector sales divisions of either Company or Insight, which sales divisions will be moved into other subsidiaries of Parent. (2) For purposes of calculating Executive's incentive bonus pursuant to this Subsection (b), "Net Earnings" shall mean the net earnings of the Business calculated in accordance with accounting principles generally accepted in the United States (US GAAP). For the avoidance of doubt, Net Earnings shall be calculated after deducting (i) the "holding company allocation", (ii) Interest (as defined below), (iii) taxes and (iv) any incentive bonus amounts for Executive and other executives of the Business. The "holding company allocation" shall mean the monthly allocation of Parent's and affiliate companies' expenses allocated to the Business by Parent and its affiliate companies in a 2 CONFIDENTIAL manner consistent with Parent's customary practices, excluding any allocation of interest income associated with the Purchase Debt (as defined below). "Interest" shall mean interest charged on external and intercompany debt, excluding interest charged on debt (including both external and intercompany) totaling approximately $150 million ("Purchase Debt") created in conjunction with the acquisition of Comark, Inc. by Insight Enterprises, Inc. The amounts payable pursuant to this Subsection 3(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 Subsection 3(b), the term "Minimum Amount" means an amount equal to eighty percent (80%) of the average of the Net Earnings for the immediately preceding four fiscal quarters ended prior to the applicable fiscal quarter. Notwithstanding the foregoing, the Net Earnings during the second calendar quarter of 2001 shall be deemed to be $4,591,000, during the third calendar quarter of 2001 shall be $7,641,000, during the fourth calendar quarter of 2001 shall be $10,655,000, during the first calendar quarter of 2002 shall be $4,741,000, and during the second calendar quarter of 2002 shall be the Net Earnings for May and June 2002 only (i.e., excluding April 2002) multiplied by a factor of 3/2. Notwithstanding any provision in this Subsection 3(b) to the contrary, Executive's incentive bonus for the second calendar quarter of 2002 shall be calculated pursuant to the foregoing provisions and then multiplied by a factor of 2/3, due to the fact that the term of this Agreement excludes most of April 2002. (3) If upon final presentation of consolidated financial statements to Parent by Parent's outside Certified Public Accountants, the combined "net earnings" of the Business requires adjustment for any period for which the Executive received an incentive bonus hereunder, 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 Company shall apply the Withheld Portion toward Company's withholding obligations with regard to any subsequent payments of Base Salary and incentive compensation made pursuant to Sections 3(a) and 3(b) or, at Company's option, Executive shall repay to Company any remaining amount due within seven business days of Company's written request therefor. Notwithstanding the foregoing, if the presentation of consolidated financial statements referenced above occurs more than five (5) years after the last day of the period to which the original incentive bonus at issue applied, no adjustments may be made pursuant to this subsection. (c) Incentive and Benefit Plans. Executive will be entitled to participate in those incentive compensation and benefit plans reserved for Company's executives, including any such plans offered by Parent to employees of its subsidiaries, including any stock option plans, in accordance with the terms of such compensation and benefit plans. Additionally, Executive shall be entitled to participate in any other benefit plans sponsored by Company or offered by Parent to employees of its subsidiaries, including any savings plan, life insurance plan and health insurance plan available generally to employees of Company from time to time, subject to any restrictions specified in, or amendments made to, such plans. (d) Vacation. Executive shall be entitled to four (4) weeks vacation during the calendar year, and such additional vacation time as the Board shall approve, with such vacation to be scheduled and taken in accordance with Company's standard vacation policies, but this provision is not intended 3 CONFIDENTIAL to interfere with or limit Executive's discretion to determine the appropriate time to be devoted to his duties hereunder. (e) Stock Options. Concurrently herewith, Executive is being granted 100,000 stock options under Parent's 1998 Long-Term Incentive Plan, at a strike price to equal the closing share price of Parent's stock on the date of grant and vesting at 50,000 shares on April 25, 2003 and 50,000 shares on April 25, 2004, such options to be evidenced by and subject to the provisions in the award agreements being delivered concurrently. 4. BUSINESS EXPENSES 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 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. The Company may terminate this Agreement upon written notice to Executive in the event of Executive's "Disability". For purposes of this Agreement, Executive shall be deemed to have a "Disability" if, for a minimum continuous period of six (6) months, Executive meets the definition of "Disability" used to determine Executive's right to benefits pursuant to the long-term disability insurance policy in place for Company's exempt employees at the end of such six-month period and such disability occurs due to a physical or mental injury or illness that occurs while Executive is actively employed by Company. Notwithstanding the foregoing, Executive shall be deemed to have a "Disability" if the sole factor preventing Executive from otherwise meeting the definition of "Disability" set forth above is Executive's employment and/or receipt of compensation pursuant to this Agreement. If this Agreement is terminated due to Executive's Disability, Executive shall receive the severance compensation called for by Section 6B(b). Company may not terminate this Agreement for Cause (see Section 6A) due solely to Executive's breach of Section 2 if such breach is the result of Executive's Disability. 6A. TERMINATION BY COMPANY FOR CAUSE (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 4 CONFIDENTIAL other payments or benefits pursuant to this Agreement, except for any vested rights pursuant to any benefit plans in which Executive participates including Executive's stock options in Parent, any accrued compensation, any accrued 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 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 any written directives of Company. 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 Company or Parent. (b) Determination of No Cause. If Company terminates Executive for Cause, and it is later determined at the conclusion of the Dispute Resolution process provided in Section 11 of this Agreement 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. (c) Termination by Executive without Good Reason. If Executive terminates his employment without Good Reason as that term is defined in Subsection 7(b), the consequences under this Agreement shall be identical to those of a termination for Cause. (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. (e) Other Plans. Except to the extent specified in this Section 6A including this Subsection (e), termination of Executive's employment under 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. 6B. TERMINATION BY COMPANY WITHOUT CAUSE (a) 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 Subsection, Company shall provide Executive with ninety (90) days advance written 5 CONFIDENTIAL notice. This Agreement shall continue during such notice period. The termination of this Agreement shall be effective on the ninetieth (90th) day 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. (b) 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 Executive had not been terminated prior to the end of such term and as if Executive had continued to perform all of his obligations under this Agreement and as an employee, officer and/or director of Company. Except as otherwise provided herein, Executive shall have no duty to mitigate damages in order to receive the severance compensation described by this Subsection, and the severance compensation shall not be reduced or offset by other income, payments or profits received by Executive from any source. (c) Incentive Compensation. If Executive is terminated without Cause, Executive shall receive as a lump sum immediately upon such termination incentive compensation for the number of quarters remaining in the Initial Term or latest Renewal Term, with the amount per quarter equal to the average bonus paid during the four quarters immediately preceding the date of notice of termination as if Executive had continued to perform all of his obligations under this Agreement and as an employee of Company. Except as otherwise provided herein, Executive shall have no duty to mitigate damages in order to receive the incentive compensation described by this Subsection and the incentive compensation shall not be reduced or offset by other income, payments or profits received by Executive from any source. (d) Other Plans. Except to the extent specified in this Section 6B including this Subsection (d), 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. Except as otherwise provided herein, 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. (e) Example. For example, if Company were to provide notice to Executive of Termination without Cause on January 1, 2003, then the Employment Period would end ninety days thereafter, on April 1, 2003, and Company would 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 one (1) year totaling $300,000 (assuming the Base Salary was at that time $300,000) plus (ii) the incentive compensation for four fiscal quarters computed as stated above. Additionally, on April 1, 2003 Executive would become fully vested in all Company stock bonus and stock option plans and agreements in which Executive had an interest. 6 CONFIDENTIAL 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 assignment to Executive of duties which are not executive in nature, 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 as of the effective date of this Agreement, taking into consideration the additional duties that will be assumed by Executive as of such date; (3) The assignment of Executive by Company to a location more than 50 miles from the present executive offices of 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 is participating on the effective date of this Agreement (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 effective date of this Agreement 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 as provided in Section 6A(b) 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 7 CONFIDENTIAL (9) Any action taken by Company over the specific, contemporaneous, written objection of 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 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 Subsection 7(b), Executive shall be entitled to receive all of the payments and benefits provided by Section 6B and otherwise in this Agreement to the same extent as if this Agreement had been terminated by Company without Cause. 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 Executive with a continuation of benefits in the event Executive's employment with Company terminates under certain limited circumstances. 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 Subsection 8(c) 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 Subsection 8(b) hereof, Company will provide Executive with the following benefits: 8 CONFIDENTIAL (1) A lump sum severance payment within ten (10) days following Executive's last day of work equal to the sum of (i) 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) the amount of all incentive compensation paid or accrued to Executive for Company's most recent four fiscal quarters then ended. (2) Executive shall become fully vested in any and all stock bonus and stock option plans and agreements of Company and Parent 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 benefits and rights that would have, but for such prohibition, have been vested in Executive. Nothing in this Section 8(c)(2) shall prevent any stock option granted to Executive by Company or Parent from vesting upon a "change of control" as defined in and pursuant to the terms of the plan pursuant to which such stock option was granted. (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 12 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 Subsection 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) Except as otherwise provided herein, Executive shall have no duty to mitigate damages in order to receive the severance compensation described by this Subsection, and the severance compensation shall not be reduced or offset by other income, payments or profits received by Executive from any source. If Executive is entitled to receive the payments called for by this Subsection 8(c), Executive's right to receive the compensation provided by Sections 6A, 6B and 7 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 Sections 13 and 14(d)(2) of the Securities Exchange 9 CONFIDENTIAL Act of 1934 ("1934 Act")), excluding affiliates of 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 Company is a member at the effective date of this Agreement. (e) Good Reason Defined. For purposes of this Section, "Good Reason" shall have the meaning assigned to it in Subsection 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 payable by 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 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. 10 CONFIDENTIAL (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 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 8(g), 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 their 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(c) 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 Subsection 8(b) of this Agreement. Nothing in this Section 8(i) shall prevent any stock option granted to Executive by Company or Parent from vesting upon a "change of control" as defined in and pursuant to the terms of the plan pursuant to which such stock option was granted. 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 and all affiliates and subsidiaries of Company's (collectively, "Company's Family") confidential data, including the existence, termination and terms of this Agreement, the terms and circumstances of the termination (by either party) of this Agreement, and information and documents concerning Company'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 11 CONFIDENTIAL the business of Company'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 and except that Executive may disclose the existence, terms and termination of this agreement to Executive's accountants, attorneys or estate planning professionals. 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 Company'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, in the event of either the termination of Executive's employment by Company with Cause or the termination of employment by Executive without Good Reason, Executive agrees that, for one year ("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 or Europe ("Area"). For purposes of this Agreement, Executive shall be deemed to be engaged in a "Competing Business" if, in any capacity, including 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 any member of Company's Family is engaged on the date of, or any business contemplated by Company'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's Family is 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's Family may be treated as activities of which one may be engaged that is competitive with Company's Family. (2) The "Time Period" used for the purposes of Section 10(a)(1) shall be shortened to six months in the event Executive's employment is terminated by Company "without Cause" or by Executive for "Good Reason." (b) Non-Solicitation. Executive recognizes that Company's Family's customers are valuable and proprietary resources of Company'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, (i) solicit business from any individual or entity located in the United States, Canada, or Europe which obtained services from Company's Family at any time during Executive's employment with Company, except to the extent that such solicitation is non-competitive with the then actual business in which any member of Company's Family is engaged on the date of, or any business contemplated by Company's business plan in effect on the date of 12 CONFIDENTIAL notice of, Executive's termination of employment, (ii) 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 Company's Family, except to the extent that such solicitation is non-competitive with the then actual business in which any member of Company's Family is engaged on the date of, or any business contemplated by Company's business plan in effect on the date of notice of, Executive's termination of employment, and (iii) he will not solicit employees of Company's Family who would have the skills and knowledge necessary to enable or assist efforts by Executive to engage in a Competing Business. This covenant shall apply in the event of any termination of this Agreement by either party. (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 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. 11. DISPUTE RESOLUTION (a) Mediation. Any and all disputes between the parties arising during the term of this Agreement, or arising at any time related to this Agreement or the relationship of the parties arising out of this Agreement, shall, if not settled by negotiation, be subject to non-binding mediation before an independent mediator selected by the parties pursuant to Subsection 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 personally, or 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 Cook County, Illinois, within thirty (30) days of the date of selection or appointment of the mediator. Each of the parties shall bear its own costs of participation and representation with regard to any mediation, and each shall pay one-half of all charges billed by 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 Subsection 11(d). The mediator shall not serve as the arbitrator. EXCEPT AS PROVIDED IN SUBSECTION 11 (a) OR A CONFIRMATION PROCEEDING AS SET FORTH IN SUBSECTION 11(c), 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 13 CONFIDENTIAL BE NO RECOURSE TO COURT, AND ALL RIGHTS OR REQUESTS FOR A JURY TRIAL ARE EXPRESSLY WAIVED. The arbitration hearing shall occur at a time and place convenient to the parties in Cook County, Illinois, within thirty (30) days of selection or appointment of the arbitrator. If Company has adopted a lawful 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. Sections 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, damages shall be limited to contract damages. In cases of claims based on an alleged statutory violation, the remedy shall be limited to the remedies provided by 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 governed by the Federal Arbitration Act, 9 U.S.C. Sections 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 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, sent by overnight commercial carrier requiring a signature release, or sent by registered or certified mail, postage prepaid and return receipt requested: If to Company, to: Comark, Inc. c/o Insight Enterprises, Inc. ATTN: Tony Smith, President 1305 West Auto Drive Tempe, Arizona 85284 14 CONFIDENTIAL If to Executive, to: Michael V. Wise 35 Stone Springs Circle The Woodlands, Texas 77381 Either party may change the address to which its notices are to be sent 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, on date of deposit with overnight commercial carrier or on the date of deposit in the United States mail in the manner provided for giving notice by mail. 14. ENTIRE AGREEMENT Except as otherwise provided in Section 1(a), 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 Illinois. 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 express written notice from the terminating party or an express written agreement between the parties providing to the contrary. 15 CONFIDENTIAL 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. CONSTRUCTION The language in all parts of this Agreement shall in all cases be construed as a whole according to its fair meaning and not strictly for or against any party. The Section, Subsection and Subparagraph headings contained in this Agreement are for reference purposes only and will not affect the meaning or interpretation of this Agreement in any way. All terms used in one number or gender shall be construed to include any other number or gender as the context may require. 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, no provision of this Agreement or any amendments or exhibits hereto shall be construed for or against Company or Executive, regardless of which party drafted the provision at issue. Whenever the words "include," "includes," or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation. THIS EMPLOYMENT AGREEMENT AGREED TO AND ACCEPTED BY: COMPANY: COMARK, INC. a Delaware corporation By: /s/ Stanley Laybourne -------------------------------- Its: Chief Financial Officer ------------------------------- /s/ Michael V. Wise ------------------------------------ EXECUTIVE: Michael V. Wise 16 EX-10.9 11 p66875exv10w9.txt EXHIBIT 10.9 CONFIDENTIAL EXHIBIT 10.9 EMPLOYMENT AGREEMENT This Employment Agreement (the "Agreement") is entered into and effective as of April 25, 2002 between Comark, Inc., a Delaware corporation ("Company"), and Timothy J. McGrath ("Executive"). R E C I T A L S Company is a wholly owned subsidiary of Insight Enterprises, Inc. ("Parent"). Executive is currently employed by Company in the position of Executive Vice-President of Sales and Marketing. 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) Replacement of Previous Agreements. When this Agreement becomes effective on April 25, 2002, it will replace all previous employment agreements between Executive and Company and/or its affiliates for all purposes. The consideration for this Agreement and the termination of such previous agreements is solely as stated in this Agreement and neither party shall have any further rights or duties under such previous agreements. The foregoing shall not diminish Executive's right, title and interest, pursuant to the terms of the Comark, Inc. Equity Incentive/Employment Agreement between Executive and Company dated October 13, 1999 (the "Equity Agreement"), to payment of his "Account" (as that term is defined in the Equity Agreement) as vested on April 25, 2002. (b) Initial Term. Executive shall be employed by Company for the duties set forth in Section 2 for a one-year term, commencing as of April 25, 2002 and ending on April 25, 2003 (the "Initial Term"), unless sooner terminated in accordance with the provisions of this Agreement. (c) 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 one-year term dated effective and beginning upon each such successive day (the "Renewal Term"); provided, however, that Company may notify Executive, or Executive may notify 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 to serve in an executive capacity, 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 duties as Parent's President (the "President") shall reasonably determine from time to time. Executive's initial title shall be President of Company, and his initial duties shall include responsibility for the day-to-day operations of Company and its operating subsidiaries, and for 1 CONFIDENTIAL certain other of Parent's subsidiaries as directed by the President. Such title and duties may be changed from time to time by the President. In the absence of the President, Parent's Chief Executive Officer (the "CEO") may assume the President's role under this Agreement, and in the absence of the CEO the Parent's Board of Directors (the "Board") may assume such role. Executive will devote substantially all of his working time and effort to his duties on behalf of Company, reasonable absences because of illness, vacation, and 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 ) 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 one percent (1.0%) of the issued and outstanding equity of such public or private company. 3. COMPENSATION (a) Base Salary. Company shall pay Executive a "Base Salary" in consideration for Executive's services to Company at the rate of $300,000 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 executives. The Base Salary may be adjusted from time to time in accordance with the procedures established by Company 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 are adopted by the Board or Company from time to time. Beginning on the date hereof and continuing through the Employment Period, Executive shall be entitled to an incentive bonus, calculated and payable quarterly, equal to one and 65/100ths percent (1.65%) of the combined Net Earnings (as defined below) of Company and Insight Services Corporation ("ISC") (collectively, the "Business"), provided that the Net Earnings exceed the Minimum Amount (as defined below) for the applicable fiscal quarter. Company and Executive understand and agree that Company's business shall include all corporate sales divisions of Company and Insight Direct USA, Inc. ("Insight"), and that ISC's business shall include all services sales divisions of Company and Insight. Furthermore, Company and Executive understand and agree that the Business will not include any small- to medium-sized business (SMB) sales divisions or public sector sales divisions of either Company or Insight, which sales divisions will be moved into other subsidiaries of Parent. (2) For purposes of calculating Executive's incentive bonus pursuant to this Subsection (b), "Net Earnings" shall mean the net earnings of the Business calculated in accordance with accounting principles generally accepted in the United States (US GAAP). For the avoidance of doubt, Net Earnings shall be calculated after deducting (i) the "holding company allocation", (ii) Interest (as defined below), (iii) taxes and (iv) any incentive bonus amounts for Executive and other executives of the Business. The "holding company allocation" shall mean the monthly allocation of Parent's and affiliate 2 CONFIDENTIAL companies' expenses allocated to the Business by Parent and its affiliate companies in a manner consistent with Parent's customary practices, excluding any allocation of interest income associated with the Purchase Debt (as defined below). "Interest" shall mean interest charged on external and intercompany debt, excluding interest charged on debt (including both external and intercompany) totaling approximately $150 million ("Purchase Debt") created in conjunction with the acquisition of Comark, Inc. by Insight Enterprises, Inc. The amounts payable pursuant to this Subsection 3(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 Subsection 3(b), the term "Minimum Amount" means an amount equal to eighty percent (80%) of the average of the Net Earnings for the immediately preceding four fiscal quarters ended prior to the applicable fiscal quarter. Notwithstanding the foregoing, the Net Earnings during the second calendar quarter of 2001 shall be deemed to be $4,591,000, during the third calendar quarter of 2001 shall be $7,641,000, during the fourth calendar quarter of 2001 shall be $10,655,000, during the first calendar quarter of 2002 shall be $4,741,000, and during the second calendar quarter of 2002 shall be the Net Earnings for May and June 2002 only (i.e., excluding April 2002) multiplied by a factor of 3/2. Notwithstanding any provision in this Subsection 3(b) to the contrary, Executive's incentive bonus for the second calendar quarter of 2002 shall be calculated pursuant to the foregoing provisions and then multiplied by a factor of 2/3, due to the fact that the term of this Agreement excludes most of April 2002. (3) If upon final presentation of consolidated financial statements to Parent by Parent's outside Certified Public Accountants, the combined "net earnings" of the Business requires adjustment for any period for which the Executive received an incentive bonus hereunder, 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 Company shall apply the Withheld Portion toward Company's withholding obligations with regard to any subsequent payments of Base Salary and incentive compensation made pursuant to Sections 3(a) and 3(b) or, at Company's option, Executive shall repay to Company any remaining amount due within seven business days of Company's written request therefor. Notwithstanding the foregoing, if the presentation of consolidated financial statements referenced above occurs more than five (5) years after the last day of the period to which the original incentive bonus at issue applied, no adjustments may be made pursuant to this subsection. (c) Incentive and Benefit Plans. Executive will be entitled to participate in those incentive compensation and benefit plans reserved for Company's executives, including any such plans offered by Parent to employees of its subsidiaries, including any stock option plans, in accordance with the terms of such compensation and benefit plans. Additionally, Executive shall be entitled to participate in any other benefit plans sponsored by Company or offered by Parent to employees of its subsidiaries, including any savings plan, life insurance plan and health insurance plan available generally to employees of Company from time to time, subject to any restrictions specified in, or amendments made to, such plans. (d) Vacation. Executive shall be entitled to four (4) weeks vacation during the calendar year, and such additional vacation time as the Board shall approve, with such vacation to be scheduled and taken in accordance with Company's standard vacation policies, but this provision is not intended 3 CONFIDENTIAL to interfere with or limit Executive's discretion to determine the appropriate time to be devoted to his duties hereunder. (e) Stock Options. Concurrently herewith, Executive is being granted 100,000 stock options under Parent's 1998 Long-Term Incentive Plan, at a strike price to equal the closing share price of Parent's stock on the date of grant and vesting at 50,000 shares on April 25, 2003 and 50,000 shares on April 25, 2004, such options to be evidenced by and subject to the provisions in the award agreements being delivered concurrently. 4. BUSINESS EXPENSES 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 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. The Company may terminate this Agreement upon written notice to Executive in the event of Executive's "Disability". For purposes of this Agreement, Executive shall be deemed to have a "Disability" if, for a minimum continuous period of six (6) months, Executive meets the definition of "Disability" used to determine Executive's right to benefits pursuant to the long-term disability insurance policy in place for Company's exempt employees at the end of such six-month period and such disability occurs due to a physical or mental injury or illness that occurs while Executive is actively employed by Company. Notwithstanding the foregoing, Executive shall be deemed to have a "Disability" if the sole factor preventing Executive from otherwise meeting the definition of "Disability" set forth above is Executive's employment and/or receipt of compensation pursuant to this Agreement. If this Agreement is terminated due to Executive's Disability, Executive shall receive the severance compensation called for by Section 6B(b). Company may not terminate this Agreement for Cause (see Section 6A) due solely to Executive's breach of Section 2 if such breach is the result of Executive's Disability. 6A. TERMINATION BY COMPANY FOR CAUSE (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 4 CONFIDENTIAL other payments or benefits pursuant to this Agreement, except for any vested rights pursuant to any benefit plans in which Executive participates including Executive's stock options in Parent, any accrued compensation, any accrued 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 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 any written directives of Company. 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 Company or Parent. (b) Determination of No Cause. If Company terminates Executive for Cause, and it is later determined at the conclusion of the Dispute Resolution process provided in Section 11 of this Agreement 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. (c) Termination by Executive without Good Reason. If Executive terminates his employment without Good Reason as that term is defined in Subsection 7(b), the consequences under this Agreement shall be identical to those of a termination for Cause. (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. (e) Other Plans. Except to the extent specified in this Section 6A including this Subsection (e), termination of Executive's employment under 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. 6B. TERMINATION BY COMPANY WITHOUT CAUSE (a) 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 Subsection, Company shall provide Executive with ninety (90) days advance written 5 CONFIDENTIAL notice. This Agreement shall continue during such notice period. The termination of this Agreement shall be effective on the ninetieth (90th) day 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. (b) 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 Executive had not been terminated prior to the end of such term and as if Executive had continued to perform all of his obligations under this Agreement and as an employee, officer and/or director of Company. Except as otherwise provided herein, Executive shall have no duty to mitigate damages in order to receive the severance compensation described by this Subsection, and the severance compensation shall not be reduced or offset by other income, payments or profits received by Executive from any source. (c) Incentive Compensation. If Executive is terminated without Cause, Executive shall receive as a lump sum immediately upon such termination incentive compensation for the number of quarters remaining in the Initial Term or latest Renewal Term, with the amount per quarter equal to the average bonus paid during the four quarters immediately preceding the date of notice of termination as if Executive had continued to perform all of his obligations under this Agreement and as an employee of Company. Except as otherwise provided herein, Executive shall have no duty to mitigate damages in order to receive the incentive compensation described by this Subsection and the incentive compensation shall not be reduced or offset by other income, payments or profits received by Executive from any source. (d) Other Plans. Except to the extent specified in this Section 6B including this Subsection (d), 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. Except as otherwise provided herein, 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. (e) Example. For example, if Company were to provide notice to Executive of Termination without Cause on January 1, 2003, then the Employment Period would end ninety days thereafter, on April 1, 2003, and Company would 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 one (1) year totaling $300,000 (assuming the Base Salary was at that time $300,000) plus (ii) the incentive compensation for four fiscal quarters computed as stated above. Additionally, on April 1, 2003 Executive would become fully vested in all Company stock bonus and stock option plans and agreements in which Executive had an interest. 6 CONFIDENTIAL 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 assignment to Executive of duties which are not executive in nature, 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 as of the effective date of this Agreement, taking into consideration the additional duties that will be assumed by Executive as of such date; (3) The assignment of Executive by Company to a location more than 50 miles from the present executive offices of 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 is participating on the effective date of this Agreement (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 effective date of this Agreement 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 as provided in Section 6A(b) 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 7 CONFIDENTIAL (9) Any action taken by Company over the specific, contemporaneous, written objection of 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 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 Subsection 7(b), Executive shall be entitled to receive all of the payments and benefits provided by Section 6B and otherwise in this Agreement to the same extent as if this Agreement had been terminated by Company without Cause. 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 Executive with a continuation of benefits in the event Executive's employment with Company terminates under certain limited circumstances. 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 Subsection 8(c) 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 Subsection 8(b) hereof, Company will provide Executive with the following benefits: 8 CONFIDENTIAL (1) A lump sum severance payment within ten (10) days following Executive's last day of work equal to the sum of (i) 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) the amount of all incentive compensation paid or accrued to Executive for Company's most recent four fiscal quarters then ended. (2) Executive shall become fully vested in any and all stock bonus and stock option plans and agreements of Company and Parent 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 benefits and rights that would have, but for such prohibition, have been vested in Executive. Nothing in this Section 8(c)(2) shall prevent any stock option granted to Executive by Company or Parent from vesting upon a "change of control" as defined in and pursuant to the terms of the plan pursuant to which such stock option was granted. (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 12 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 Subsection 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) Except as otherwise provided herein, Executive shall have no duty to mitigate damages in order to receive the severance compensation described by this Subsection, and the severance compensation shall not be reduced or offset by other income, payments or profits received by Executive from any source. If Executive is entitled to receive the payments called for by this Subsection 8(c), Executive's right to receive the compensation provided by Sections 6A, 6B and 7 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 Sections 13 and 14(d)(2) of the Securities Exchange 9 CONFIDENTIAL Act of 1934 ("1934 Act")), excluding affiliates of 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 Company is a member at the effective date of this Agreement. (e) Good Reason Defined. For purposes of this Section, "Good Reason" shall have the meaning assigned to it in Subsection 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 payable by 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 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. 10 CONFIDENTIAL (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 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 8(g), 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 their 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(c) 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 Subsection 8(b) of this Agreement. Nothing in this Section 8(i) shall prevent any stock option granted to Executive by Company or Parent from vesting upon a "change of control" as defined in and pursuant to the terms of the plan pursuant to which such stock option was granted. 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 and all affiliates and subsidiaries of Company's (collectively, "Company's Family") confidential data, including the existence, termination and terms of this Agreement, the terms and circumstances of the termination (by either party) of this Agreement, and information and documents concerning Company'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 11 CONFIDENTIAL the business of Company'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 and except that Executive may disclose the existence, terms and termination of this agreement to Executive's accountants, attorneys or estate planning professionals. 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 Company'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, in the event of either the termination of Executive's employment by Company with Cause or the termination of employment by Executive without Good Reason, Executive agrees that, for one year ("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 or Europe ("Area"). For purposes of this Agreement, Executive shall be deemed to be engaged in a "Competing Business" if, in any capacity, including 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 any member of Company's Family is engaged on the date of, or any business contemplated by Company'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's Family is 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's Family may be treated as activities of which one may be engaged that is competitive with Company's Family. (2) The "Time Period" used for the purposes of Section 10(a)(1) shall be shortened to six months in the event Executive's employment is terminated by Company "without Cause" or by Executive for "Good Reason." (b) Non-Solicitation. Executive recognizes that Company's Family's customers are valuable and proprietary resources of Company'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, (i) solicit business from any individual or entity located in the United States, Canada, or Europe which obtained services from Company's Family at any time during Executive's employment with Company, except to the extent that such solicitation is non-competitive with the then actual business in which any member of Company's Family is engaged on the date of, or any business contemplated by Company's business plan in effect on the date of 12 CONFIDENTIAL notice of, Executive's termination of employment, (ii) 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 Company's Family, except to the extent that such solicitation is non-competitive with the then actual business in which any member of Company's Family is engaged on the date of, or any business contemplated by Company's business plan in effect on the date of notice of, Executive's termination of employment, and (iii) he will not solicit employees of Company's Family who would have the skills and knowledge necessary to enable or assist efforts by Executive to engage in a Competing Business. This covenant shall apply in the event of any termination of this Agreement by either party. (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 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. 11. DISPUTE RESOLUTION (a) Mediation. Any and all disputes between the parties arising during the term of this Agreement, or arising at any time related to this Agreement or the relationship of the parties arising out of this Agreement, shall, if not settled by negotiation, be subject to non-binding mediation before an independent mediator selected by the parties pursuant to Subsection 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 personally, or 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 Cook County, Illinois, within thirty (30) days of the date of selection or appointment of the mediator. Each of the parties shall bear its own costs of participation and representation with regard to any mediation, and each shall pay one-half of all charges billed by 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 Subsection 11(d). The mediator shall not serve as the arbitrator. EXCEPT AS PROVIDED IN SUBSECTION 11 (a) OR A CONFIRMATION PROCEEDING AS SET FORTH IN SUBSECTION 11(c), 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 13 CONFIDENTIAL BE NO RECOURSE TO COURT, AND ALL RIGHTS OR REQUESTS FOR A JURY TRIAL ARE EXPRESSLY WAIVED. The arbitration hearing shall occur at a time and place convenient to the parties in Cook County, Illinois, within thirty (30) days of selection or appointment of the arbitrator. If Company has adopted a lawful 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. Sections 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, damages shall be limited to contract damages. In cases of claims based on an alleged statutory violation, the remedy shall be limited to the remedies provided by 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 governed by the Federal Arbitration Act, 9 U.S.C. Sections 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 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, sent by overnight commercial carrier requiring a signature release, or sent by registered or certified mail, postage prepaid and return receipt requested: If to Company, to: Comark, Inc. c/o Insight Enterprises, Inc. ATTN: Tony Smith, President 1305 West Auto Drive Tempe, Arizona 85284 14 CONFIDENTIAL If to Executive, to: Timothy J. McGrath 4111 Royal Troon Court St. Charles, Illinois 60174 Either party may change the address to which its notices are to be sent 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, on date of deposit with overnight commercial carrier or on the date of deposit in the United States mail in the manner provided for giving notice by mail. 14. ENTIRE AGREEMENT Except as otherwise provided in Section 1(a), 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 Illinois. 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 express written notice from the terminating party or an express written agreement between the parties providing to the contrary. 15 CONFIDENTIAL 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. CONSTRUCTION The language in all parts of this Agreement shall in all cases be construed as a whole according to its fair meaning and not strictly for or against any party. The Section, Subsection and Subparagraph headings contained in this Agreement are for reference purposes only and will not affect the meaning or interpretation of this Agreement in any way. All terms used in one number or gender shall be construed to include any other number or gender as the context may require. 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, no provision of this Agreement or any amendments or exhibits hereto shall be construed for or against Company or Executive, regardless of which party drafted the provision at issue. Whenever the words "include," "includes," or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation. THIS EMPLOYMENT AGREEMENT AGREED TO AND ACCEPTED BY: COMPANY: COMARK, INC. a Delaware corporation By: Stanley Laybourne -------------------------------------- Its: Chief Financial Officer ------------------------------------- /s/ Timothy J. McGrath ------------------------------------------ EXECUTIVE: Timothy J. McGrath 16 EX-10.10 12 p66875exv10w10.txt EXHIBIT 10.10 EXHIBIT 10.10 DATED 17 JULY 2002 - -------------------------------------------------------------------------------- (1) INSIGHT ENTERPRISES INC - AND - (2) DAVID PALK -------------------- COMPROMISE AGREEMENT -------------------- CONTENTS 1. INTERPRETATION......................................................... 1 2. SEVERVANCE PAYMENT AND CONTINUING BENEFITS............................. 2 3. LEGAL EXPENSES......................................................... 3 4. RESIGNATION OF DIRECTORSHIP............................................ 4 5. WARRANTIES............................................................. 4 6. TAX INDEMNITY.......................................................... 4 7. CONFIDENTIALITY........................................................ 5 8. POST-TERMINATION RESTRICTIONS.......................................... 7 9. COMPANY PROPERTY....................................................... 9 10. CLAIMS AGAINST THE COMPANY............................................. 9 11. WHOLE AGREEMENT........................................................ 12 12. THIRD PARTY RIGHTS..................................................... 12 13. HEADINGS............................................................... 12 ANNEX...................................................................... 14 SCHEDULE 1................................................................. 15 Letter of Resignation.................................................. 15 Schedule 3................................................................. 16 THIS COMPROMISE AGREEMENT is made on 17 July 2002 BETWEEN (1) INSIGHT ENTERPRISES INC of 6820 South Harl Avenue, Tempe, Arizona 85283 USA ("COMPANY"); (2) DAVID PALK of Tumblehome, Mill Road, Marlow, Buckinghamshire SL7 1QB ("DIRECTOR"). BACKGROUND 1. The Director's employment with the Company terminated on the Termination Date. 2. The Company is entering into this agreement for itself and as agent for all its Associated Companies and is duly authorized in that behalf. IT IS AGREED 1. INTERPRETATION In this agreement: "ADDITIONAL TAX" means further income tax, national insurance contributions interest and/or penalties thereon arising in respect of the payments made and benefits provided under this agreement, other than the income tax deducted under clause 2 below; "APPOINTMENT" means the employment of the Director by the Company; "ASSOCIATED COMPANY" means a company un which the Company or any other holding Company or Subsidiary Company is directly or indirectly beneficially interested in 20% (twenty per cent) or more of that company's issued ordinary share capital. "Holding Company" and "Subsidiary Company" have the meanings defined by section 736 of the Company of the Companies Act 1985 (or any statutory modification or re-enactment of that Act); "BOARD OF DIRECTORS" means the board of directors of the Company from time to time; "BUSINESS means the business carried on by the Company from time to time: 1 "GROUP" means the Company and all companies which are for the time being either a Holding Company of the Company or a Subsidiary or Associated Company of either the Company or any such Holding Company; "PAYE REGULATIONS" means the Income Tax (Employment) Regulations 1993 (as amended, extended or replaced from time to time); "TERMINATION DATE" means Tuesday 16 July 2002. 2. SEVERANCE PAYMENT AND CONTINUING BENEFITS Subject to the Director's compliance with all obligations imposed by virtue of this agreement and in full and final settlement of the claims set out in clause 10.1 below, the Company shall, as compensation for loss of employment but without admission of liability: 2.1 SEVERANCE PAYMENT Pay to the Director within 14 days following the date of this agreement the sum of L400.000 ("SEVERANCE PAYMENT") 2.1.1 It is understanding of the parties to this agreement that the first L30,000 of the Severance Payment may be paid free of tax and National Insurance contributions. 2.1.2 The company shall deduct from the Severance Payment of a sum of L47,500 as accrued pension contributions relating to the period 16th July 2002-15th July 2003 and pay into the Directors Pension fund. Income tax and National Insurance contributions on the balance in excess of the initial L30,000 will account for the same to the Inland Revenue or other statutory authority as required by law. 2.1.3 The Company shall deduct from the Severance Payment basic rate income tax and National Insurance contributions on the balance in excess of L30,000 and will account for the same to the Inland Revenue or other statutory authority as required by law. 2 2.1.4 Any further liability in respect of Additional Tax on the Severance Payment and other benefits provided pursuant to this agreement shall be the Director's alone. 2.2 PRIVATE MEDICAL INSURANCE Until 15 July 2003 or until the Director takes up full time employment with another employer, whichever is the sooner, continue to provide for the benefit of the Director private medical insurance on the same terms and conditions as applied immediately prior to the Termination Date. 2.3 EXPENSES The Company shall reimburse the Director for all reasonable and authorized out of pocket expenses (including hotel and traveling expenses) wholly necessary and exclusively incurred by the Executive in the discharge of his duties subject to the production of appropriate receipts or vouchers or such other evidence as the Company may reasonably require as proof of such expenses/Company's rules and policies relating to expenses as may be in force from time to time within 30 days of the date of this agreement. 2.4 PROPERTY Reimburse to the Director L36,000 deposit paid by the Director in relation to the purchase of a property in Tapestry Canyon, Arizona conditional on and in the event that the Director having undertaken all reasonable endeavors to recover the deposit himself has failed to do so. 3. LEGAL EXPENSES The Company shall on the production of an appropriate copy VAT invoice addressed to the Director for payment by the Company, pay to the Director's relevant independent adviser as referred to in clause 10 below the Director's legal expenses relating exclusively to the negotiation and preparation of this agreement, up to a maximum of L250 including VAT. Payment will be made direct to the Director's legal advisers. 3 4. RESIGNATION OF DIRECTORSHIP 4.1 The Director shall immediately resign as a director of any Group Companies by signing the letter of resignation attached to this agreement at Schedule 1, which shall be deemed to have been delivered to the Company and the relevant Group Companies as at the date of this agreement. 4.2 The Director shall immediately do all such acts and things as the Company may require to effect the resignation from other offices with the Company or any of its Group Companies or which the Director held by reason of employment by the Company including (but without prejudice to the generality of the above) any trusteeships. 4.3 Having resigned as a director of the Company and from such other offices which the Director holds with any Group Company the Director will not represent or suggest in any way any continued authority in respect of or connection to the Company or any Group Company 5. WARRANTIES 5.1 Director warrants to the Company that as of the date of this agreement the Director has not commenced employment and has not agreed to accept nor received any offer of employment from any person firm or company, the expression "employment" for the purpose of this clause to include any contract of service, any contract for services, any partnership or agency agreement. 5.2 Director warrants to the Company that as far as the Director is aware there is not in existence at the date of this agreement any material fact concerning the business of the Company, which has not been disclosed to the Board of Directors. 6. TAX INDEMNITY The Director undertakes that if the Company or any of its Associated Companies or Group Companies is called upon to account to the Inland Revenue to pay any Additional Tax the Director will, at the written request of such company, immediately pay to such company an amount equal to the Additional Tax (on an after-tax) provided that no payment of Additional Tax will be made to the Inland Revenue without particulars of any proposed payment being given to the Director and the Director being given the opportunity at the Director's own expenses to dispute any such a payment. 4 7. CONFIDENTIALITY 7.1 The Company and Director undertakes that they will not, whether directly or indirectly, make publish or otherwise communicate any disparaging or derogatory statements, whether in writing or otherwise, concerning the other, including in the case of the Director concerning any of the Company's Associated Companies or Group Companies or any of its or their officers or Directors save and except that the Company publish a statement as it determines appropriate concerning the financial performance of the Company for the period 1 April 2002 to 31 July 2002. 7.2 The Director agrees to keep the terms on which the Director's employment is terminated strictly confidential and agrees not to disclose, communicate or otherwise make public the same to anyone (save to the Director's immediate family, professional advisers and the relevant tax authorities and otherwise as may be required to be disclosed by law). 7.3 The Director shall not at any time during the Appointment nor at any time after its termination except for a purpose of the Company or the Group directly or indirectly use or disclose trade secrets or confidential information relating to the Company or any Group company or the Company's or any group company's agents, customers, prospective customers or suppliers. 7.4 For the purpose of clause 7.3 confidential information shall include any information relating to the Business and/or the financial affairs of the Company or the Group or the company's or any Group company's agents, customers, prospective customers or suppliers and in particular shall include: 7.4.1 The business methods and information of the Company and any Group company (including price charged, discounts given to customers or obtained from suppliers, product development, marketing and advertising programmes, costings, budgets, turnover, sales targets or other financial information); 7.4.2 Lists and particulars of the Company's and Group company's suppliers and customers and the individual contacts at such suppliers and customers; 5 7.4.3 Details and terms of the Company's and any Group company's agreements 7.4.4 with suppliers and customers; 7.4.5 Secret manufacturing or production processes and know-how employed by the Company and any Group company or its/their suppliers; 7.4.6 Confidential details as to the design of the Company's and any Group company's or its and/or their suppliers' products and inventions or developments relating to future products. 7.4.7 Details or any promotions or future promotions or marketing or publicity exercises planned by the Company or any Group Company. 7.4.8 Details of any business plans of the Company or any Group company; and 7.4.9 Any information which may affect the value of the business or the shares of the Company or any Group company; Whether or not in the case of documents or other written materials they are or were marked as confidential and whether or not, in the case of other information, such information is identified or treated by the Company or any Group company as being confidential. 7.5 The Director shall not be restrained from disclosing any confidential information which: 7.5.1 he is authorized to disclose by the Board of Directors; 7.5.2 had entered the public domain unless the public domain as a result of an unauthorized disclosure by the Director or an authorized disclosure for an unauthorized purpose by the Director or anyone else employed or engaged by the Company or any Group company; 7.5.3 he required to disclose by laws; or 6 7.5.4 he is entitled to disclose under the Public Interest Disclosure Act of 1998 provided that the disclosure is made in an appropriate way to an appropriate person having regard to the provisions of that Act. 8. POST-TERMINATION RESTRICTIONS 8.1 The Director shall not without the prior written consent of the Board of Directors (such consent not to be unreasonably withheld) for a period of 12 months after the termination Date, directly or indirectly, on his own behalf, or on behalf of any person firm or company in connection with any business which is or is intended or about to be competitive with Restricted Business (as defined below) 8.1.1 solicit or canvass the custom of any Customer (as defined below); 8.1.2 solicit or canvass the custom of any Potential Customer (as defined below); 8.1.3 deal with any Customer; 8.1.4 solicit or entice away, or attempt to entice away from the Company or any Associated Company or Group Company any employee of the Company or any Associated Company or Group Company who is employed by the Company or any Associated Company or Group Company at the Termination Date provided that this restriction shall only apply to persons whom the Director has managed or with whom he has worked at any time during the 12 months immediately preceding the Termination Date and who on the Termination Date was employed by the Company or Group Company or Associated Company in the capacity of director or any technical, IT, financial, marketing, business development or any other managerial role and provided that this restriction shall not apply to nonmanagerial (clerical or administration or manual) staff; 7 8.1.5 employ, offer to employ or enter into partnership with any employee of the Company or any Group Company or Associated Company who is employed by the Company or any Group Company at the Termination Date provided that this restriction shall only apply to the persons whom the Director has managed or with whom he has worked at any time during the 12 months immediately preceding the Termination Date and who on the Termination Date was employed in the capacity of director or any technical, IT, financial, marketing, business development or any other managerial role with a view to using the knowledge or skills of such person in connection with any business or activity which is or is intended to be competitive with the Restricted Business and provided that his restriction shall not apply to nonmanagerial (clerical or administrative or manual) staff. 8.2 In clause 7.5.4 the following words and phrases shall have the following meanings: 8.2.1 "RESTRICTED BUSINESS" shall mean the Business or any part of the Business which in either case: 8.2.1.1 is carried on by the Company or any member of the Group or an Associated Company at the Termination Date; or 8.2.1.2 is to the knowledge of the Executive to be carried out by the Company or any member of the Group or an Associated Company at any time during the six months immediately following the Termination Date; and which the Director was materially concerned with or had management responsibility for (or had substantial confidential information regarding) in either case at any time during the period of 12 months immediately prior to the Termination Date; 8.2.2 "CUSTOMER" shall mean any person, firm or company who at the Termination Date or at any time during the 12 months immediately prior to such termination was a customer of the Company or any member of the Group or Associated Company and from whom the Director had obtained business on behalf of the Company or any Group Company or Associated Company or to whom the Director had provided or arranged the provision of goods or services on behalf of the Company or any Group Company or Associated Company or for whom the Director had management responsibility in any case at any time during the period of 12 months immediately prior to the Termination Date; 8 8.2.3 "POTENTIAL CUSTOMER" shall mean any person, firm or company with whom either the Director or any other employee of the Company or an Group Company or Associated Company who the Director had, at the date of the negotiations, management responsibility for carried out negotiations on behalf of the Company or any Group Company or Associated Company at any time during the six months immediately prior to the Termination Date with a view to such person, firm or company becoming a customer of the Company or any Group Company or Associated Company. 8.3 The restrictions contained in this clause are considered by the parties to be reasonable in all the circumstances. Each sub clause constitutes an entirely separate and independent restriction and the duration, extent and application of each of the restrictions are no greater than is necessary for the protection of the interests of the Company and any Group Company or Associated Company. 9. COMPANY PROPERTY The Director undertakes that all property, equipment, records, correspondence, documents, files and other information (whether originals, copies or extracts or in any electronic format) belonging to the Company or any of its Associated Companies or Group Companies (other than as specified in this agreement) has been returned and that the Director has not retain any copies. 10. CLAIMS AGAINST THE COMPANY 10.1 The Director believes that but for this agreement he could bring proceedings against the Company, its Associated Companies, Group Companies and their respective shareholders, officers or directors for the contractual an statutory claims listed below: 10.1.1 Wrongful dismissal; and 10.1.2 Breach of contract; and 10.1.3 Unlawful deduction of wages under the Employment Rights Act 1996 (as amended) ("ERA"); and 9 10.1.4 unfair dismissal under the ERA; and 10.1.5 unlawful discrimination on grounds of sex or marital status (including for the avoidance of doubt victimization) under the Sex Discrimination Act 1975 (as amended) ("SDA"); and 10.1.6 unlawful discrimination on grounds of race, colour, ethnic, or national origins, nationality (including for the avoidance of doubt victimization) under the Race Relations Act 1976 (as amended) ("RRA"); and 10.1.7 unlawful discrimination on grounds of disability (including for the avoidance of doubt victimization) under the Disability Discrimination Act 1995 (as amended) ("DDA"); and 10.1.8 under the Equal Pay Act 1970 (as amended) ("EPA"); and 10.1.9 under the Trade Union and Labour Relations (Consolidation) Act 1992 ("TULR(C)A"); and 10.1.10 under the National Minimum Wage Act 1998 ("NMWA"); and 10.1.11 under the Transfer of Undertaking (Protection of Employment) Regulations 1981 ("TUPE"); and 10.1.12 under the Working Time Regulations 1998 ("WTR"); and 10.1.13 under the Transnational Information and Consultation of Employee Regulations 1999 ("TICER"); and 10.1.14 under the Part-Time Workers (Prevention of Less Favourable Treatment Regulations 2000 ("PTWR"); and 10.1.15 under the Treaty of Amsterdam. 10.2 The terms of this agreement are reached without admission of liability and are in full and final settlement of all claims (if any) whether contractual, statutory or otherwise and whether under United Kingdom and/or European Union law (including but not limited to the Director's claims under clause 10.1 above) which the Director has or may has against the Company or any of its Associated 10 Companies or Group Companies or their respective shareholders, officers or directors arising out of or in connection with the Director's employment or directorship or their termination save for any claims for personal injury (other than any stress related personal injury claim alleged to have been incurred in connection with claque 10.1 above) 10.3 The Director represents and warrants that the claims listed a t clause 10.1 include all of the companies, claims and concerns which with the benefit of legal advice the Director believes that he has against the Company or any of its Associated Companies or Group Companies or their respective shareholders, officers or directors arising out of the Director's employment or any act or omission relating to the Director's employment or relating to, arising out of or connected to the manner of its termination. 10.4. The Director represents and warrants that: 10.4.1 the Director has received independent legal advice from a relevant independent adviser as to the terms and effect of this agreement and in particular its effect on the Director's ability to pursue statutory rights before an employment tribunal. The name of the relevant independent adviser who has so advised the Director is Karen Bulfin of Bulfin & Co of 203 Field End, East Cole, Pinner, Middlesex HA5 1QZ and the Director will procure the relevant independent adviser to complete and return to the Company the endorsement annexed to this agreement; and 10.4.2 the Director is advised by the relevant independent adviser that there is in force and was, at the time the Director received the advice referred to above a contract of insurance, or an indemnity provided for members of a profession or professional body, covering the risk of a claim by the Director in respect of loss arising in consequence of that advice; and 10.4.3 the Director has not issued proceedings before the employment tribunals, High Court or County Court in respect of any claim in connection with the Service Agreement or its termination and that all monies paid to the Director under this agreement will be repayable to the Company, as a debt and upon demand; and 11 10.4.4 as at the date of this agreement, the Director is not aware of any facts or matters which might give rise to a claim for personal injury against the Company or any of its Associated Companies or Group Companies. 10.5 The Company and the Director agree and acknowledge that the conditions regulating compromise agreements and to compromise contracts contained in the ERA, the SDA, the RRA, the DDA, the NMWA and in any other act or statutory instrument referred to in clause 10.1 above are intended to be and have been satisfied. 10.6 The Director shall indemnify the Company in full and keep the Company fully indemnified for and against all and any claims, demands, judgments, orders, liabilities, damages, expenses or costs including without limitation all reasonable legal and professional fees and disbursements together with VAT thereon incurred by the Company arising out of or in connection with any breach by the Director of the warranties in this clause 10. 11. WHOLE AGREEMENT The agreement sets out the entire agreement between the parties and supersedes all prior discussions between them or their advisors and all statements, representations, terms, and conditions, warranties, guarantees, proposals, communications, and understandings whenever given and whether orally or in writing. 12. THIRD PARTY RIGHTS Nothing in this agreement confers on any third party and benefits under the provisions of the Contracts (Rights of Third Parties) Act 1999. 13. HEADINGS The headings to clauses in this agreement are for convenience only and have no legal effect. 12 ANNEX INDEPENDENT ADVISER'S ENDORSEMENT ADDRESSED TO THE BOARD OF DIRECTORS OF THE COMPANY I, KAREN BULFIN of Bulfin & CO confirm that I have given independent legal advice to David Palk of Tumblehome, Mill Road, Marlow, Buckinghamshire, SL7 1QB as to the terms and effect of the above Agreement and in particular its effect on David Palk' ability to pursue his rights before an employment tribunal. I confirm that I am a "relevant independent adviser" (as such term is defined in section 203 of the Employment Rights Act 1996) and that there is and was at the time I gave the advice referred to above in force a contract of insurance or an indemnity provided for members of a profession or professional body, covering the risk of a claim by David Palk in respect of any loss arising in consequence of that advice. SIGNED /s/ Karen Bulfin ---------------------- BUFLIN & CO SOLICITORS 203 FIELD END ROAD EASTCOTE, PINNER MIDDLESEX, HA5 1QZ 13 SIGNED /s/ Tony Smith ------------------------------------------------------- FOR AND BEHALF OF INSIGHT ENTERPRISES INC SIGNED /s/ Mr. David Palk ------------------------------------------------------- 14 SCHEDULE Refer clause 4 LETTER OF RESIGNATION Private & Confidential The Directors Insight Enterprises Inc 6820 South Harl Avenue Tempe Arizona 85283 USA 17 July 2002 Dear Sirs Please accept this letter as formal notice of my resignation as a director of each of this Group Companies of which I am a director. My resignation is to be effective immediately. Please arrange for particulars of my resignation to be filed with the Register of Companies. Yours faithfully, /s/ Mr. David Palk 15 17 July 2002 D. Palk Esq., Tumbleholme, Mill Road, Marlow, Bucks, SL7 1QB Dear David, Settlement and Compromise Agreement dated 17th July 2002 Section 2-2 Private Medical Insurance Amendment As an amendment to section 2-2 Private Medical Insurance is to now also include life assurance cover to the value of 4 x annual salary (at date of termination) for a period of 12 months from 16th July 2002 or until suitable alternative employment is found. Yours sincerely, /s/ Tony Smith President-Insight Worldwide Accepted on behalf of David Palk 18-7-02 16 17 July 2002 Mr. D Palk Tumblehome Mill Road Marlow Buckinghamshire SL7 1QV Dear David This letter is to record out agreement to vary the terms of the compromise agreement entered into between you and the Company date [17 July 2002]. It is agreed that clause 2 will be varied as follows:- 1. There shall be a new clause 2.1.2:- "Subject to prior receipt by the Company from the Director's pension scheme administrators of satisfactory evidence of compliance with Inland Revenue Pension Rules the Company shall deduct from the Severance Payment a sum of L47,500 gross as accrued pension contributions relating to the period 16 July 2002 to 15 July 2003 and shall pay such sum into the Director's pension fund." 2. Clause 2.1.3 shall be amended to read:- "The Company shall deduct from the balance of the Severance Payment basic rate income tax and national insurance contributions and will account for the same to the Inland Revenue or other statutory authority as required by law." 3. Clause 2.1.3 shall renumbered 2.1.4. 4. Clause 4.2 shall be varied by the addition of the following words added to the end of the paragraph:- "save in respect of the Director's executive pension fund. For the avoidance of doubt there is nothing in this agreement preventing fund trustees from transferring the Director's executive pension fund to a new legal entity of their choosing." 5. Clause 2.5 shall be varied to read as follows:- 17 "Within 60 days of the signing of the Compromise Agreement reimburse to the Director L36,000 paid by the Director as a deposit in relation to the purchase of a property in Tapestry Canyon, Arizona conditional on and in the event of the Director having undertaken all reasonable endeavors to recover such deposit and failed to do so. On payment by the Company of such sum to the Director, the Director shall transfer to the Company all rights to recover such deposit to the Company and shall take such steps as are necessary without delay to ensure that such rights are transferred effectively and legally." Please sign this letter where indicated below to confirm your agreement to these variations to the compromise agreement. Yours sincerely - ------------------------------------ SIGNED: /s/ Tony Smith ---------------------------- Insight Direct DATED: 17/7/02 ---------------------------- SIGNED: /s/ David B. Palk ---------------------------- DATE: 17/7/02 ---------------------------- 18 EX-99.1 13 p66875exv99w1.htm EX-99.1

Exhibit 99.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the Quarterly Report of Insight Enterprises, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy A. Crown, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

         (1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Timothy A. Crown Timothy A. Crown
Chief Executive Officer
August 14, 2002

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-99.2 14 p66875exv99w2.htm EX-99.2

Exhibit 99.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the Quarterly Report of Insight Enterprises, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stanley Laybourne, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

         (1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Stanley Laybourne Stanley Laybourne
Chief Financial Officer
August 14, 2002

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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EX-10.1

                                                                    EXHIBIT 10.1


Eric J. Crown. Effective April 1, 2002, Mr. Crown ceased being Vice President
and has entered into a revised two-year employment agreement, which is effective
April 1, 2002 and expires on April 1, 2004. Under his new employment agreement,
Mr. Crown will be devoting time to acquisitions, strategic planning and other
key initiatives, as requested by the Chief Executive Officer or the Board of
Directors, on an as-needed basis. Mr. Crown's base annual salary is currently
set at $250,000 and he is entitled to receive an incentive bonus, payable
quarterly, equal to 0.75% of our net earnings (before deducting the incentive
bonuses of executive officers) provided that our net earnings exceed stated
minimum amounts. The incentive bonus is paid in the form of either cash or
restricted stock at the election of Mr. Crown. The restricted stock vests
quarterly over three years, subject to acceleration in certain circumstances.
Our net earnings did not exceed the minimum amounts for the quarter ended June
30, 2002, and therefore no bonus was paid to Mr. Crown for this quarterly
period. The employment agreement also contains change of control (as defined in
the agreements) and non-compete provisions that, upon a change of control, would
result in payments to Mr. Crown equal to three times his base salary and an
incentive bonus for the preceding four quarters (all payments are to be
grossed-up for the individuals' taxes) and would accelerate the vesting of all
unvested stock options and restricted stock. The employment agreement provides
that the Mr. Crown will receive certain benefits if his employment is terminated
without cause. In the event Mr. Crown's employment agreement is terminated
without cause, Mr. Crown will receive a lump sum distribution consisting of (i)
the total amount of his base annual salary for the remainder of the agreement
term, and (ii) the total amount of incentive compensation payments, calculated
based on a defined formula, as if Mr. Crown had not been terminated.
Additionally, all unvested stock options and restricted stock shares will become
fully vested.

EX-10.2

                                                                    EXHIBIT 10.2

                                  AMENDMENT TO
                              EMPLOYMENT AGREEMENT


THIS AMENDMENT to the March 31, 1998 Employment Agreement effective July 1, 1997
(the "Employment Agreement") between INSIGHT ENTERPRISES, INC. ("Company") and
STANLEY LAYBOURNE ("Executive") is entered into as of August 13, 2002.

                                 R E C I T A L S

A.    Executive is currently employed by Company. The terms and conditions of
such employment are set forth in the Employment Agreement.

B.    The Compensation Committee of the Board of Directors of the Company
approved certain changes to Executive's salary and bonus arrangements to be
effective as of January 1, 2002 at a meeting on February 8, 2002, and this
Amendment memorializes those changes. Therefore, effective as of January 1,
2002, the parties wish to amend the Employment Agreement as provided in this
Amendment.

IN CONSIDERATION of the premises and the respective covenants and agreements of
Company and Executive contained in this Amendment, the sufficiency of which is
hereby acknowledged, Company and Executive agree as follows:

1.    Amendment and Effect. Except to the extent the Employment Agreement is
modified by this Amendment, it shall remain in full force and effect. Any terms
beginning with an initial capital letter used in this Amendment and not
otherwise defined herein shall have the meanings given them in the Employment
Agreement.

2.    Effective as of January 1, 2002, in Section 3(a) of the Employment
Agreement the "Base Salary" amount shall be amended to $200,000 per annum from
$190,000 per annum.

3.    Effective as of January 1, 2002, in Section 3(b) of the Employment
Agreement the percentage rate for the "Incentive Bonus" shall be amended to one
percent (1.0%) of the Company's "net earnings" (as defined therein) from 0.5% of
the Company's "net earnings."

THIS AMENDMENT AGREED TO AND ACCEPTED BY:

                                          COMPANY:
                                          INSIGHT ENTERPRISES, INC.
                                          a Delaware corporation


                                              /s/ Timothy A. Crown
                                              --------------------------------
                                          By: TIMOTHY A. CROWN,
                                              CHIEF EXECUTIVE OFFICER



                                          /s/ Stanley Laybourne
                                          -------------------------------------
                                          EXECUTIVE: STANLEY LAYBOURNE


                                        1

EX-10.3

                                                                    EXHIBIT 10.3

                                  AMENDMENT TO
                              EMPLOYMENT AGREEMENT


THIS AMENDMENT to the Employment Agreement effective July 1, 1999 between DIRECT
ALLIANCE CORPORATION and BRANSON SMITH (the "Employment Agreement") is entered
into as of July 1, 2001 by and among INSIGHT ENTERPRISES, INC. (the "Company"),
DIRECT ALLIANCE CORPORATION ("DAC") and BRANSON SMITH ("Executive").

                                 R E C I T A L S

A.    Executive is currently employed by DAC, a wholly owned subsidiary of the
Company. The terms and conditions of such employment are set forth in the
Employment Agreement.

B.    Effective as of July 1, 2001, the parties wish to amend the Employment
Agreement as provided in this Amendment.

IN CONSIDERATION of the premises and the respective covenants and agreements of
DAC, the Company and Executive contained in this Amendment, the sufficiency of
which is hereby acknowledged, DAC, the Company and Executive agree as follows:

1.    Amendment and Effect. Except to the extent the Employment Agreement is
modified by this Amendment, it shall remain in full force and effect. Any terms
beginning with an initial capital letter used in this Amendment and not
otherwise defined herein shall have the meanings given them in the Employment
Agreement.

2.    As of the effective date of this Amendment, all references to "Company" in
the Employment Agreement shall be deemed to refer to Insight Enterprises, Inc.
rather than to Direct Alliance Corporation.

3.    Delete Section 2 ("POSITION AND DUTIES") of the Employment Agreement in
its entirety and replace with the following:

      "2.   POSITION AND DUTIES

      "(a)  Job Duties. Company does hereby employ, engage and hire Executive to
            serve in an executive capacity, 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
            duties as the Company's Board of Directors (the "Board") or Chief
            Executive Officer (the "CEO") shall reasonably determine from time
            to time. Executive's initial title shall be President of Company,
            and his initial duties shall include responsibility for the
            day-to-day operations of Company's two operating subsidiaries,
            Insight Direct Worldwide, Inc. and Direct Alliance Corporation, and
            for certain other of Company's subsidiaries as directed by the Board
            or the CEO. Such title and duties may be changed from time to time
            by the Board or the CEO, provided that such duties and authority
            shall not be materially different than the date of this agreement;
            further that the authority of the Executive shall not be diminished
            and that the Executive shall not be demoted to any position other
            than President of Direct Alliance Corporation. Executive will report
            to the CEO. Executive will devote substantially all of his working
            time and effort to his duties on behalf of Company, reasonable
            absences because of illness, vacation, and personal and family
            exigencies excepted.



                                       1

      "(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 ) 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 one percent (1.0%) of the issued
            and outstanding equity of such public or private company."

4.    Delete Section 3 ("COMPENSATION") of the Employment Agreement in its
entirety and replace with the following:

      "3.   COMPENSATION

      "(a)  Base Salary. Company shall pay Executive a "Base Salary" in
            consideration for Executive's services to Company at the rate of
            $250,000 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
            executives. The Base Salary may be adjusted from time to time in
            accordance with the procedures established by Company 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 are adopted by the Board from
                  time to time. Beginning on July 1, 2001 and continuing through
                  the Employment Period, Executive shall be entitled to an
                  incentive bonus, calculated and payable quarterly, equal to
                  two percent (2.0%) of Company's "net earnings", provided that
                  Company's net earnings exceed the Minimum Amount for the
                  applicable fiscal quarter.

            "(2)  For purposes of calculating Executive's incentive bonus
                  pursuant to this Subsection (b), Company's "net earnings"
                  shall be Company's consolidated net after tax earnings,
                  calculated in accordance with accounting principles generally
                  accepted in the United States (US GAAP) and applicable
                  Securities and Exchange Commission regulations, prior to any
                  incentive bonus amounts for Executive and other executives of
                  Company. The amounts payable pursuant to this Subsection 3(b)
                  shall be paid on or before thirty (30) days after the public
                  financial reporting by Company at the end of the applicable
                  fiscal quarter. For purposes of this Subsection 3(b), the term
                  "Minimum Amount" means an amount equal to eighty percent (80%)
                  of the average of 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


                                       2

                  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 Company shall apply the Withheld Portion toward Company's
                  withholding obligations with regard to any subsequent payments
                  of Base Salary and incentive compensation made pursuant to
                  Sections 3(a) and 3(b).

      "(c)  Incentive Compensation Guarantee. For each fiscal quarter from July
            1, 2001 through December 31, 2002 during or prior to which quarter
            this Agreement has not been terminated by Company for Cause or by
            Executive without Good Reason, Company guarantees that the incentive
            compensation to be paid to Executive pursuant to Section 3(b) will
            total at least $187,500.00 for each such quarter.

      "(d)  Incentive and Benefit Plans. Executive will be entitled to
            participate in those incentive compensation and benefit plans
            reserved for Company's executives, including any stock option plans,
            in accordance with the terms of such compensation and benefit plans.
            Additionally, Executive shall be entitled to participate in any
            other benefit plans sponsored by Company, including any savings
            plan, life insurance plan and health insurance plan available
            generally to employees of Company from time to time, subject to any
            restrictions specified in, or amendments made to, such plans.

      "(e)  Vacation. Executive shall be entitled to four (4) weeks vacation
            during the calendar year, and such additional vacation time as the
            Board shall approve, with such vacation to be scheduled and taken in
            accordance with Company'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."


THIS AMENDMENT AGREED TO AND ACCEPTED BY:

                                          COMPANY:
                                          INSIGHT ENTERPRISES, INC.
                                          a Delaware corporation


                                              /s/ Timothy A. Crown
                                              -----------------------
                                          By: TIMOTHY A. CROWN,
                                              CHIEF EXECUTIVE OFFICER

                                          DAC:
                                          DIRECT ALLIANCE CORPORATION
                                          a Delaware corporation


                                              /s/ Timothy A. Crown
                                              -----------------------
                                          By: TIMOTHY A. CROWN,
                                              CHIEF EXECUTIVE OFFICER



                                          /s/ Branson Smith
                                          --------------------------
                                          EXECUTIVE: BRANSON SMITH




                                        3

EX-10.4

                                                                    EXHIBIT 10.4

                         EMPLOYMENT AGREEMENT 11/17/00

This Employment Agreement (the "Agreement") in entered into as of November 17,
2000 Between INSIGHT DIRECT WORLDWIDE, INC. ("Company"), and Dino Farfante
("Executive").

                                    RECITALS

Executive is currently employed by Company in the position of Executive Vice
President. 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 1/01/01 and
        ending on 12/31/02 (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
        Executive Vice 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 President and Chief Operating Officer
        ("President") shall reasonably provide; 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 President 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 emergencies excepted. Executive shall be
      required to work and travel in various countries in Europe throughout the
      term of this agreement.

   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 President; 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.

3) COMPENSATION

   a) Base Salary. Company shall pay Executive a "Base Salary" in consideration
      for Executive's services to Company at the rate of $270,000 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 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 benefits
      plans. Executive shall also be permitted to participate in such incentive
      compensation plans as adopted by the President from time to time.
      Additionally, the Executive shall be entitled to participate in any other
      benefit plans sponsored by Company or Parent that employees are eligible
      for, 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.

   c) Vacation. The Executive shall be entitled to four (4) weeks vacation
      during the calendar year, and such additional vacation time as the
      President 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.

4) 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).

5) 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 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 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 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, 2002, then the Employment Period ends ninety days
   thereafter, on April 1, 2002, 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, 2002) (2)
   years 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.

6) 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 President in furtherance
             of Company business which is materially more extensive than
             Executive's travel or contemplated travel at the Relevant Date;

        (3)  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 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);

        (4)  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;

        (5)  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;

               (6)  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

               (7)  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.

7)   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 President has
          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.

          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 President
          believes 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 President 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 President

     might determine to be appropriate. The President also wishes 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, within thirty (30) days after the first anniversary of
     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 sixty days (60) 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 (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 that were granted
              prior to the change in control 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 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 of 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.

8) 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 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.

9) 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 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."

10) 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.

11) 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 Worldwide, Inc.
                           c/o Michael Gumbert, President, COO
                           6820 South Harl Avenue
                           Tempe, Arizona 85283

     If to Executive, to:  Dino Farfante
                           904 W. Windsong Drive
                           Phoenix, Arizona 85045

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.

12) 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.

13) GOVERNING LAW

This Agreement shall be governed by and interpreted in accordance with the laws
of the State of Arizona.

14) CAPTIONS

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

15) 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.

16) 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.

17) 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.

18) 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.

19) 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



                                /s/ Michael Gumbert
                                -------------------------------
                                Michael Gumbert, President, COO



                                EXECUTIVE:
                                Dino Farfante, COO and Executive Vice
                                President, Sales and Marketing



                                /s/ Dino Farfante
                                -------------------------------
                                Dino Farfante

EX-10.5

                                                                    EXHIBIT 10.5


                                  AMENDMENT TO
                          EMPLOYMENT AGREEMENT 11/17/00


THIS AMENDMENT to the "Employment Agreement 11/17/00" effective January 1, 2001
(the "Employment Agreement") between INSIGHT DIRECT WORLDWIDE, INC. ("Company")
and DINO FARFANTE ("Executive") is entered into as of October 9, 2001.

                                 R E C I T A L S

A.    Executive is currently employed by Company, a wholly owned subsidiary of
Insight Enterprises, Inc. ("Parent"). The terms and conditions of such
employment are set forth in the Employment Agreement.

B.    Effective as of October 9, 2001, the parties wish to amend the Employment
Agreement as provided in this Amendment.

IN CONSIDERATION of the premises and the respective covenants and agreements of
Company and Executive contained in this Amendment, the sufficiency of which is
hereby acknowledged, Company and Executive agree as follows:

1.    Amendment and Effect. Except to the extent the Employment Agreement is
modified by this Amendment, it shall remain in full force and effect. Without
limiting the foregoing, this Amendment shall replace and nullify any and all
previous arrangements regarding Executive's bonus or "Incentive Compensation."
Any terms beginning with an initial capital letter used in this Amendment and
not otherwise defined herein shall have the meanings given them in the
Employment Agreement.

2.    Delete Section 2 ("POSITION AND DUTIES") of the Employment Agreement in
its entirety and replace with the following:

      "2.   POSITION AND DUTIES

      "(a)  Job Duties. Company does hereby employ, engage and hire Executive to
            serve in an executive capacity, 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
            duties as the Company's or Parent's Board of Directors (the "Board")
            or the Parent's President shall reasonably determine from time to
            time. Executive's title as of October 9, 2001 shall be President of
            the Company, and his duties as of that date shall include
            responsibility for the day-to-day operations of the Company. Such
            title and duties may be changed from time to time by the Board or
            the Parent's President, provided that such duties and authority
            shall not be materially different than the date of this agreement;
            further that the authority of the Executive shall not be diminished
            and that the Executive shall not be demoted. Executive will devote
            substantially all of his working time and effort to his duties on
            behalf of the Company, 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,
            vacation, and 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


                                       1

            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 ) 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 9 of this
            Agreement when such interest constitutes less than one percent
            (1.0%) of the issued and outstanding equity of such public or
            private company."

3.    In Section 3(a) ("Base Salary") of the Employment Agreement, change the
amount of Executive's Base Salary from $270,000 per annum to $300,000 per annum,
which change is to be effective as of April 15, 2002.

4.    Add the following Section 3(d) to the Employment Agreement:

      "(d)  Incentive Compensation.

            "(1)  During the Employment Period, the Executive shall be entitled
                  to an incentive bonus, calculated and payable quarterly, equal
                  to one percent (1.0%) of Parent's "net earnings," provided
                  that Parent's net earnings exceed the Minimum Amount for the
                  applicable fiscal quarter. This bonus can be paid either in
                  cash or restricted stock at the Company's sole discretion. At
                  no time will the vesting schedule of the restricted stock be
                  greater than three years. If there is a Change in Control of
                  the Company, the incentive bonus will be paid only in cash
                  from that quarter forward. Additionally, in a Change in
                  Control of the Company, all restricted stock previously issued
                  will be immediately converted to cash by the Company. If the
                  Company terminates Executive's employment without Cause, then
                  all restricted stock vests immediately. If Executive
                  terminates his employment with Good Reason, then all
                  restricted stock vests immediately.

            "(2)  For purposes of calculating Executive's incentive bonus
                  pursuant to this subsection 3(d), Parent's "net earnings"
                  shall be Parent's consolidated net after tax earnings prior to
                  any incentive bonus amounts for Executive and other executives
                  of Parent. All calculations to determine Company's "net
                  earnings" shall be on a basis consistent with financial
                  accounting and reporting 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 subsection 3(d) 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 subsection 3(d), the term "Minimum Amount"
                  means an amount equal to eighty percent (80%) of the average
                  of Parent'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 Parent's outside Certified Public
                  Accountants the "net earnings" of Parent 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 subsection 3(d)(3), then the amount the Executive shall
                  pay will be reduced by the taxes withheld by the Company
                  attributable to such


                                       2

                  amount (the "Withheld Portion"), and the Company shall apply
                  the Withheld Portion toward Company's withholding obligations
                  with regard to any subsequent payments of Base Salary and
                  incentive compensation made pursuant to this Section 3."

5.    Executive hereby acknowledges receipt on October 9, 2001 of a stock option
grant for 75,000 shares of the Company's stock, 25,000 shares of which
constitute consideration paid to Executive in exchange for his agreement to this
Amendment, which stock option grant (a) shall be subject to the terms of the
Company's stock option plan and the grant documents, (b) carries an exercise
price of $14.11 per share and (c) vests ratably on an annual schedule over two
(2) years from the date of grant.


THIS AMENDMENT AGREED TO AND ACCEPTED BY:

                                          COMPANY:
                                          INSIGHT DIRECT WORLDWIDE, INC.,
                                          an Arizona corporation


                                              /s/ Timothy A. Crown
                                              --------------------------
                                          By: TIMOTHY A. CROWN,
                                              CHIEF EXECUTIVE OFFICER




                                          /s/ Dino Farfante
                                          -------------------------------
                                          EXECUTIVE: DINO FARFANTE




                                       3

EX-10.6

                                                                    Exhibit 10.6
                         EMPLOYMENT AGREEMENT 11/17/00

This Employment Agreement (the "Agreement") in entered into as of November 17,
2000 Between INSIGHT DIRECT WORLDWIDE, INC. ("Company"), and Joel H. Borovay
("Executive").

                                    RECITALS

Executive is currently employed by Company in the position of Executive Vice
President. 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 1/01/01 and
      ending on 12/31/02 (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
      Executive Vice 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 President and Chief Operating Officer
      ("President") shall reasonably provide; 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 President 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 emergencies excepted. Executive shall be
      required to work and travel in various countries in Europe throughout the
      term of this agreement.

   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 President; 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.

3) COMPENSATION

   a) Base Salary. Company shall pay Executive a "Base Salary" in consideration
      for Executive's services to Company at the rate of $215,000 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 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 benefits
      plans. Executive shall also be permitted to participate in such incentive
      compensation plans as adopted by the President from time to time.
      Additionally, the Executive shall be entitled to participate in any other
      benefit plans sponsored by Company or Parent that employees are eligible
      for, 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.

   c) Vacation. The Executive shall be entitled to four (4) weeks vacation
      during the calendar year, and such additional vacation time as the
      President 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.

4) 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).

5) 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 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 the 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 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 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, 2002, then the Employment Period
      ends ninety days thereafter, on April 1, 2002, 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, 2002)(2) years 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.

6) 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 President in furtherance of
       Company business which is materially more extensive than Executive's
       travel or contemplated travel at the Relevant Date;

   (3) 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 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 considered to be "Good
       Reason" for purposes of this clause (5);

   (4) 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;

   (5) 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;




          (6) 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

          (7) 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.

7) 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 President has 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.

       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 President believes
       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 President 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 President

    might determine to be appropriate. The President also wishes 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, within thirty (30) days after the first anniversary of 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 sixty days (60) 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 that were granted
         prior to the change in control 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 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.

8) 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 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.

9) 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 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."

10) 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.

11) 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 Worldwide, Inc.
                              c/o Michael Gumbert, President, COO
                              6820 South Harl Avenue
                              Tempe, Arizona 85283

     If to Executive, to:     Joel H. Borovay
                              5064 E. Yucca Street
                              Scottsdale, Arizona 85254

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. Notice 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.

12) 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.

13) GOVERNING LAW

This Agreement shall be governed by and interpreted in accordance with the laws
of the State of Arizona.

14) CAPTIONS

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



15) 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.

16) 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.

17) 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.

18) 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.


19) 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

                                       /s/  Michael Gumbert
                                       -----------------------------------------
                                       Michael Gumbert, President, COO


                                       EXECUTIVE:
                                       Joel H. Borovay, Executive Vice President

                                       /s/  Joel H. Borovay
                                       -----------------------------------------
                                       Joel H. Borovay, Executive Vice President

EX-10.7

                                                                    EXHIBIT 10.7

                                  AMENDMENT TO
                          EMPLOYMENT AGREEMENT 11/17/00


THIS AMENDMENT to the "Employment Agreement 11/17/00" effective January 1, 2001
between INSIGHT DIRECT WORLDWIDE, INC. and JOEL BOROVAY (the "Employment
Agreement") is entered into as of April 25, 2002 by and among INSIGHT SERVICES
CORPORATION ("ISC"), INSIGHT DIRECT WORLDWIDE, INC. ("IDW") and JOEL BOROVAY
("Executive").

                                 R E C I T A L S

A.    Executive is currently employed by IDW, a wholly owned subsidiary of
Insight Enterprises, Inc. ("Parent"). (ISC is also a wholly owned subsidiary of
Parent.) The terms and conditions of such employment are set forth in the
Employment Agreement.

B.    Effective as of April 25, 2002, the parties wish to amend the Employment
Agreement as provided in this Amendment.

IN CONSIDERATION of the premises and the respective covenants and agreements of
IDW, ISC and Executive contained in this Amendment, the sufficiency of which is
hereby acknowledged, IDW, ISC and Executive agree as follows:

1.    Amendment and Effect. Except to the extent the Employment Agreement is
modified by this Amendment, it shall remain in full force and effect. Any terms
beginning with an initial capital letter used in this Amendment and not
otherwise defined herein shall have the meanings given them in the Employment
Agreement.

2.    As of the effective date of this Amendment, all references to "Company" in
the Employment Agreement shall be deemed to refer to Insight Services
Corporation rather than to Insight Direct Worldwide, Inc.

3.    Delete Section 2 ("POSITION AND DUTIES") of the Employment Agreement in
its entirety and replace with the following:

      "2.   POSITION AND DUTIES

      "(a)  Job Duties. Company does hereby employ, engage and hire Executive to
            serve in an executive capacity, 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
            duties as the Company's or Parent's Board of Directors (the "Board")
            or President (the "President") shall reasonably determine from time
            to time. Executive's title as of April 25, 2002 shall be
            Co-President of the Company, and his duties as of that date shall
            include responsibility for the day-to-day operations of the Company.
            Such title and duties may be changed from time to time by the Board
            or the President, provided that such duties and authority shall not
            be materially different than the date of this agreement; further
            that the authority of the Executive shall not be diminished and that
            the Executive shall not be demoted. Executive will report to the
            President. Executive will devote substantially all of his working
            time and effort to his duties on behalf of the Company, provided
            that such devotion of time shall not be materially different from
            Executive's devotion of time at the date of this Agreement,


                                       1

            reasonable absences because of illness, vacation, and 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 ) 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 9 of this Agreement when
            such interest constitutes less than one percent (1.0%) of the issued
            and outstanding equity of such public or private company."

4.    Add the following new Section 3(d) to the Agreement:

      "(d)  Incentive Compensation.

            "(1)  Executive may be eligible for a quarterly bonus of up to
                  $12,500 per quarter, which bonus may be granted in whole or in
                  part. Payment of such bonus shall be determined at the sole
                  discretion of the President of the Company.

            "(2)  Executive shall also be permitted to participate in such
                  incentive compensation plans as are adopted by the Board from
                  time to time. Beginning on the date hereof and continuing
                  through the Employment Period, Executive shall be entitled to
                  an incentive bonus, calculated and payable quarterly, equal to
                  two percent (2.00%) of the Net Earnings (as defined below) of
                  the Company.

            "(3)  For purposes of calculating Executive's incentive bonus
                  pursuant to this Subsection (b), "Net Earnings" shall mean the
                  net earnings of the Company calculated in accordance with
                  accounting principles generally accepted in the United States
                  (US GAAP). For the avoidance of doubt, Net Earnings shall be
                  calculated after deducting (i) the "holding company
                  allocation", (ii) interest, (iii) taxes and (iv) any incentive
                  bonus amounts for Executive and other executives of the
                  Company. The "holding company allocation" shall mean the
                  quarterly allocation of Parent's and affiliate companies'
                  expenses allocated to the Company by Parent and such affiliate
                  companies in a manner consistent with Parent's customary
                  practices. The amounts payable pursuant to this Subsection
                  3(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.

            "(4)  If upon final presentation of consolidated financial
                  statements to Parent by Parent's outside Certified Public
                  Accountants, the combined "net earnings" of the Company
                  requires adjustment for any period for which the Executive
                  received an incentive bonus hereunder, 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 Company shall apply the Withheld
                  Portion toward Company's withholding obligations with regard
                  to any subsequent


                                       2

                  payments of Base Salary and incentive compensation made
                  pursuant to Sections 3(a) and 3(b) or, at Company's option,
                  Executive shall repay to Company any remaining amount due
                  within seven business days of Company's written request
                  therefor. Notwithstanding the foregoing, if the presentation
                  of consolidated financial statements referenced above occurs
                  more than five (5) years after the last day of the period to
                  which the original incentive bonus at issue applied, no
                  adjustments may be made pursuant to this subsection."


THIS AMENDMENT AGREED TO AND ACCEPTED BY:

                                          ISC:
                                          INSIGHT SERVICES CORPORATION,
                                          an Arizona corporation


                                              /s/ Timothy A. Crown
                                              --------------------------------
                                          By: TIMOTHY A. CROWN,
                                              CHIEF EXECUTIVE OFFICER

                                          IDW:
                                          INSIGHT DIRECT WORLDWIDE, INC.,
                                          an Arizona corporation


                                              /s/ Timothy A. Crown
                                              --------------------------------
                                          By: TIMOTHY A. CROWN,
                                              CHIEF EXECUTIVE OFFICER





                                          /s/ Joel Borovay
                                          ------------------------------------
                                          EXECUTIVE: JOEL BOROVAY






                                       3

EX-10.8

                                                                    CONFIDENTIAL


                                                                    EXHIBIT 10.8


                              EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is entered into and effective as of
April 25, 2002 between Comark, Inc., an Illinois corporation ("Company"), and
Michael V. Wise ("Executive").

                                 R E C I T A L S

Company is a wholly owned subsidiary of Insight Enterprises, Inc. ("Parent").
Executive is currently employed by Company in the position of Senior
Vice-President and Chief Operating Officer. 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)   Replacement of Previous Agreements. When this Agreement becomes effective
      on April 25, 2002, it will replace all previous employment agreements
      between Executive and Company and/or its affiliates for all purposes. The
      consideration for this Agreement and the termination of such previous
      agreements is solely as stated in this Agreement and neither party shall
      have any further rights or duties under such previous agreements. The
      foregoing shall not diminish Executive's right, title and interest,
      pursuant to the terms of the Comark, Inc. Equity Incentive/Employment
      Agreement between Executive and Company dated October 13, 1999 (the
      "Equity Agreement"), to payment of his "Account" (as that term is defined
      in the Equity Agreement) as vested on April 25, 2002.

(b)   Initial Term. Executive shall be employed by Company for the duties set
      forth in Section 2 for a one-year term, commencing as of April 25, 2002
      and ending on April 25, 2003 (the "Initial Term"), unless sooner
      terminated in accordance with the provisions of this Agreement.

(c)   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 one-year term dated effective and beginning upon each such successive
      day (the "Renewal Term"); provided, however, that Company may notify
      Executive, or Executive may notify 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 to serve
      in an executive capacity, 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 duties as Parent's
      President (the "President") shall reasonably determine from time to time.
      Executive's initial title shall be Chief Operating Officer of Company and
      Co-President of Insight Services Corporation ("ISC"), and his initial
      duties shall include responsibility for the day-to-day


                                       1

                                                                    CONFIDENTIAL



      operations of Company and of ISC and their operating subsidiaries, and for
      certain other of Parent's subsidiaries as directed by the President. Such
      title and duties may be changed from time to time by the President. In the
      absence of the President, Parent's Chief Executive Officer (the "CEO") may
      assume the President's role under this Agreement, and in the absence of
      the CEO the Parent's Board of Directors (the "Board") may assume such
      role. Executive will devote substantially all of his working time and
      effort to his duties on behalf of Company, reasonable absences because of
      illness, vacation, and 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 ) 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 one percent (1.0%) of the issued
      and outstanding equity of such public or private company.

3.    COMPENSATION

(a)   Base Salary. Company shall pay Executive a "Base Salary" in consideration
      for Executive's services to Company at the rate of $300,000 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 executives. The Base Salary may be adjusted from time
      to time in accordance with the procedures established by Company 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 are adopted by the Board or Company from time
            to time. Beginning on the date hereof and continuing through the
            Employment Period, Executive shall be entitled to an incentive
            bonus, calculated and payable quarterly, equal to one and 65/100ths
            percent (1.65%) of the combined Net Earnings (as defined below) of
            Company and ISC (collectively, the "Business"), provided that the
            Net Earnings exceed the Minimum Amount (as defined below) for the
            applicable fiscal quarter. Company and Executive understand and
            agree that Company's business shall include all corporate sales
            divisions of Company and Insight Direct USA, Inc. ("Insight"), and
            that ISC's business shall include all services sales divisions of
            Company and Insight. Furthermore, Company and Executive understand
            and agree that the Business will not include any small- to
            medium-sized business (SMB) sales divisions or public sector sales
            divisions of either Company or Insight, which sales divisions will
            be moved into other subsidiaries of Parent.

      (2)   For purposes of calculating Executive's incentive bonus pursuant to
            this Subsection (b), "Net Earnings" shall mean the net earnings of
            the Business calculated in accordance with accounting principles
            generally accepted in the United States (US GAAP). For the avoidance
            of doubt, Net Earnings shall be calculated after deducting (i) the
            "holding company allocation", (ii) Interest (as defined below),
            (iii) taxes and (iv) any incentive bonus amounts for Executive and
            other executives of the Business. The "holding company allocation"
            shall mean the monthly allocation of Parent's and affiliate
            companies' expenses allocated to the Business by Parent and its
            affiliate companies in a


                                       2

                                                                    CONFIDENTIAL



            manner consistent with Parent's customary practices, excluding any
            allocation of interest income associated with the Purchase Debt (as
            defined below). "Interest" shall mean interest charged on external
            and intercompany debt, excluding interest charged on debt (including
            both external and intercompany) totaling approximately $150 million
            ("Purchase Debt") created in conjunction with the acquisition of
            Comark, Inc. by Insight Enterprises, Inc. The amounts payable
            pursuant to this Subsection 3(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 Subsection
            3(b), the term "Minimum Amount" means an amount equal to eighty
            percent (80%) of the average of the Net Earnings for the immediately
            preceding four fiscal quarters ended prior to the applicable fiscal
            quarter. Notwithstanding the foregoing, the Net Earnings during the
            second calendar quarter of 2001 shall be deemed to be $4,591,000,
            during the third calendar quarter of 2001 shall be $7,641,000,
            during the fourth calendar quarter of 2001 shall be $10,655,000,
            during the first calendar quarter of 2002 shall be $4,741,000, and
            during the second calendar quarter of 2002 shall be the Net Earnings
            for May and June 2002 only (i.e., excluding April 2002) multiplied
            by a factor of 3/2. Notwithstanding any provision in this Subsection
            3(b) to the contrary, Executive's incentive bonus for the second
            calendar quarter of 2002 shall be calculated pursuant to the
            foregoing provisions and then multiplied by a factor of 2/3, due to
            the fact that the term of this Agreement excludes most of April
            2002.

      (3)   If upon final presentation of consolidated financial statements to
            Parent by Parent's outside Certified Public Accountants, the
            combined "net earnings" of the Business requires adjustment for any
            period for which the Executive received an incentive bonus
            hereunder, 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 Company shall apply the Withheld Portion toward
            Company's withholding obligations with regard to any subsequent
            payments of Base Salary and incentive compensation made pursuant to
            Sections 3(a) and 3(b) or, at Company's option, Executive shall
            repay to Company any remaining amount due within seven business days
            of Company's written request therefor. Notwithstanding the
            foregoing, if the presentation of consolidated financial statements
            referenced above occurs more than five (5) years after the last day
            of the period to which the original incentive bonus at issue
            applied, no adjustments may be made pursuant to this subsection.

(c)   Incentive and Benefit Plans. Executive will be entitled to participate in
      those incentive compensation and benefit plans reserved for Company's
      executives, including any such plans offered by Parent to employees of its
      subsidiaries, including any stock option plans, in accordance with the
      terms of such compensation and benefit plans. Additionally, Executive
      shall be entitled to participate in any other benefit plans sponsored by
      Company or offered by Parent to employees of its subsidiaries, including
      any savings plan, life insurance plan and health insurance plan available
      generally to employees of Company from time to time, subject to any
      restrictions specified in, or amendments made to, such plans.

(d)   Vacation. Executive shall be entitled to four (4) weeks vacation during
      the calendar year, and such additional vacation time as the Board shall
      approve, with such vacation to be scheduled and taken in accordance with
      Company's standard vacation policies, but this provision is not intended


                                       3

                                                                    CONFIDENTIAL



      to interfere with or limit Executive's discretion to determine the
      appropriate time to be devoted to his duties hereunder.

(e)   Stock Options. Concurrently herewith, Executive is being granted 100,000
      stock options under Parent's 1998 Long-Term Incentive Plan, at a strike
      price to equal the closing share price of Parent's stock on the date of
      grant and vesting at 50,000 shares on April 25, 2003 and 50,000 shares on
      April 25, 2004, such options to be evidenced by and subject to the
      provisions in the award agreements being delivered concurrently.

4.    BUSINESS EXPENSES

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 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. The Company may terminate this Agreement upon written notice
      to Executive in the event of Executive's "Disability". For purposes of
      this Agreement, Executive shall be deemed to have a "Disability" if, for a
      minimum continuous period of six (6) months, Executive meets the
      definition of "Disability" used to determine Executive's right to benefits
      pursuant to the long-term disability insurance policy in place for
      Company's exempt employees at the end of such six-month period and such
      disability occurs due to a physical or mental injury or illness that
      occurs while Executive is actively employed by Company. Notwithstanding
      the foregoing, Executive shall be deemed to have a "Disability" if the
      sole factor preventing Executive from otherwise meeting the definition of
      "Disability" set forth above is Executive's employment and/or receipt of
      compensation pursuant to this Agreement. If this Agreement is terminated
      due to Executive's Disability, Executive shall receive the severance
      compensation called for by Section 6B(b). Company may not terminate this
      Agreement for Cause (see Section 6A) due solely to Executive's breach of
      Section 2 if such breach is the result of Executive's Disability.

6A.   TERMINATION BY COMPANY FOR CAUSE

(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


                                       4

                                                                    CONFIDENTIAL



      other payments or benefits pursuant to this Agreement, except for any
      vested rights pursuant to any benefit plans in which Executive
      participates including Executive's stock options in Parent, any accrued
      compensation, any accrued 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 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
            any written directives of Company. 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 Company or
            Parent.

(b)   Determination of No Cause. If Company terminates Executive for Cause, and
      it is later determined at the conclusion of the Dispute Resolution process
      provided in Section 11 of this Agreement 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.

(c)   Termination by Executive without Good Reason. If Executive terminates his
      employment without Good Reason as that term is defined in Subsection 7(b),
      the consequences under this Agreement shall be identical to those of a
      termination for Cause.

(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.

(e)   Other Plans. Except to the extent specified in this Section 6A including
      this Subsection (e), termination of Executive's employment under 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.

6B.   TERMINATION BY COMPANY WITHOUT CAUSE

(a)   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 Subsection, Company
      shall provide Executive with ninety (90) days advance written


                                       5

                                                                    CONFIDENTIAL



      notice. This Agreement shall continue during such notice period. The
      termination of this Agreement shall be effective on the ninetieth (90th)
      day 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.

(b)   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 Executive had not been terminated prior
      to the end of such term and as if Executive had continued to perform all
      of his obligations under this Agreement and as an employee, officer and/or
      director of Company. Except as otherwise provided herein, Executive shall
      have no duty to mitigate damages in order to receive the severance
      compensation described by this Subsection, and the severance compensation
      shall not be reduced or offset by other income, payments or profits
      received by Executive from any source.

(c)   Incentive Compensation. If Executive is terminated without Cause,
      Executive shall receive as a lump sum immediately upon such termination
      incentive compensation for the number of quarters remaining in the Initial
      Term or latest Renewal Term, with the amount per quarter equal to the
      average bonus paid during the four quarters immediately preceding the date
      of notice of termination as if Executive had continued to perform all of
      his obligations under this Agreement and as an employee of Company. Except
      as otherwise provided herein, Executive shall have no duty to mitigate
      damages in order to receive the incentive compensation described by this
      Subsection and the incentive compensation shall not be reduced or offset
      by other income, payments or profits received by Executive from any
      source.

(d)   Other Plans. Except to the extent specified in this Section 6B including
      this Subsection (d), 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. Except
      as otherwise provided herein, 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.

(e)   Example. For example, if Company were to provide notice to Executive of
      Termination without Cause on January 1, 2003, then the Employment Period
      would end ninety days thereafter, on April 1, 2003, and Company would 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 one (1) year
      totaling $300,000 (assuming the Base Salary was at that time $300,000)
      plus (ii) the incentive compensation for four fiscal quarters computed as
      stated above. Additionally, on April 1, 2003 Executive would become fully
      vested in all Company stock bonus and stock option plans and agreements in
      which Executive had an interest.



                                       6

                                                                    CONFIDENTIAL



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 assignment to Executive of duties which are not executive in
            nature, 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 as of the effective date of this
            Agreement, taking into consideration the additional duties that will
            be assumed by Executive as of such date;

      (3)   The assignment of Executive by Company to a location more than 50
            miles from the present executive offices of 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 is participating
            on the effective date of this Agreement (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 effective date of this Agreement 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 as
            provided in Section 6A(b) 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



                                       7

                                                                    CONFIDENTIAL



      (9)   Any action taken by Company over the specific, contemporaneous,
            written objection of 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
            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 Subsection 7(b), Executive shall be
      entitled to receive all of the payments and benefits provided by Section
      6B and otherwise in this Agreement to the same extent as if this Agreement
      had been terminated by Company without Cause.

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 Executive with a continuation of benefits
      in the event Executive's employment with Company terminates under certain
      limited circumstances.

      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 Subsection 8(c) 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 Subsection 8(b) hereof, Company will provide Executive
      with the following benefits:



                                       8

                                                                    CONFIDENTIAL



      (1)   A lump sum severance payment within ten (10) days following
            Executive's last day of work equal to the sum of (i) 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) the amount of all incentive compensation paid or accrued to
            Executive for Company's most recent four fiscal quarters then ended.

      (2)   Executive shall become fully vested in any and all stock bonus and
            stock option plans and agreements of Company and Parent 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 benefits and
            rights that would have, but for such prohibition, have been vested
            in Executive. Nothing in this Section 8(c)(2) shall prevent any
            stock option granted to Executive by Company or Parent from vesting
            upon a "change of control" as defined in and pursuant to the terms
            of the plan pursuant to which such stock option was granted.

      (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 12
            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 Subsection
            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)   Except as otherwise provided herein, Executive shall have no duty to
            mitigate damages in order to receive the severance compensation
            described by this Subsection, and the severance compensation shall
            not be reduced or offset by other income, payments or profits
            received by Executive from any source. If Executive is entitled to
            receive the payments called for by this Subsection 8(c), Executive's
            right to receive the compensation provided by Sections 6A, 6B and 7
            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 Sections
            13 and 14(d)(2) of the Securities Exchange


                                       9

                                                                    CONFIDENTIAL



            Act of 1934 ("1934 Act")), excluding affiliates of 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 Company is a member
            at the effective date of this Agreement.

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



                                       10

                                                                    CONFIDENTIAL



      (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 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
            8(g), 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 their 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(c) 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 Subsection 8(b) of
      this Agreement. Nothing in this Section 8(i) shall prevent any stock
      option granted to Executive by Company or Parent from vesting upon a
      "change of control" as defined in and pursuant to the terms of the plan
      pursuant to which such stock option was granted.

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 and all affiliates and subsidiaries of Company's
(collectively, "Company's Family") confidential data, including the existence,
termination and terms of this Agreement, the terms and circumstances of the
termination (by either party) of this Agreement, and information and documents
concerning Company'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


                                       11

                                                                    CONFIDENTIAL



the business of Company'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 and except that Executive may disclose the existence, terms and
termination of this agreement to Executive's accountants, attorneys or estate
planning professionals. 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 Company'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, in the event
            of either the termination of Executive's employment by Company with
            Cause or the termination of employment by Executive without Good
            Reason, Executive agrees that, for one year ("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 or
            Europe ("Area"). For purposes of this Agreement, Executive shall be
            deemed to be engaged in a "Competing Business" if, in any capacity,
            including 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 any member of
            Company's Family is engaged on the date of, or any business
            contemplated by Company'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's Family is 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's Family may be treated as activities of which one may be
            engaged that is competitive with Company's Family.

      (2)   The "Time Period" used for the purposes of Section 10(a)(1) shall be
            shortened to six months in the event Executive's employment is
            terminated by Company "without Cause" or by Executive for "Good
            Reason."

(b)   Non-Solicitation. Executive recognizes that Company's Family's customers
      are valuable and proprietary resources of Company'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, (i)
      solicit business from any individual or entity located in the United
      States, Canada, or Europe which obtained services from Company's Family at
      any time during Executive's employment with Company, except to the extent
      that such solicitation is non-competitive with the then actual business in
      which any member of Company's Family is engaged on the date of, or any
      business contemplated by Company's business plan in effect on the date of


                                       12

                                                                    CONFIDENTIAL



      notice of, Executive's termination of employment, (ii) 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 Company's
      Family, except to the extent that such solicitation is non-competitive
      with the then actual business in which any member of Company's Family is
      engaged on the date of, or any business contemplated by Company's business
      plan in effect on the date of notice of, Executive's termination of
      employment, and (iii) he will not solicit employees of Company's Family
      who would have the skills and knowledge necessary to enable or assist
      efforts by Executive to engage in a Competing Business. This covenant
      shall apply in the event of any termination of this Agreement by either
      party.

(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 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.

11.   DISPUTE RESOLUTION

(a)   Mediation. Any and all disputes between the parties arising during the
      term of this Agreement, or arising at any time related to this Agreement
      or the relationship of the parties arising out of this Agreement, shall,
      if not settled by negotiation, be subject to non-binding mediation before
      an independent mediator selected by the parties pursuant to Subsection
      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
      personally, or 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 Cook
      County, Illinois, within thirty (30) days of the date of selection or
      appointment of the mediator. Each of the parties shall bear its own costs
      of participation and representation with regard to any mediation, and each
      shall pay one-half of all charges billed by 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 Subsection 11(d). The mediator
      shall not serve as the arbitrator. EXCEPT AS PROVIDED IN SUBSECTION 11 (a)
      OR A CONFIRMATION PROCEEDING AS SET FORTH IN SUBSECTION 11(c), 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


                                       13

                                                                    CONFIDENTIAL



      BE NO RECOURSE TO COURT, AND ALL RIGHTS OR REQUESTS FOR A JURY TRIAL ARE
      EXPRESSLY WAIVED.

      The arbitration hearing shall occur at a time and place convenient to the
      parties in Cook County, Illinois, within thirty (30) days of selection or
      appointment of the arbitrator. If Company has adopted a lawful 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.
      Sections 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, damages shall be limited to
      contract damages. In cases of claims based on an alleged statutory
      violation, the remedy shall be limited to the remedies provided by 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 governed by
      the Federal Arbitration Act, 9 U.S.C. Sections 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 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, sent by
overnight commercial carrier requiring a signature release, or sent by
registered or certified mail, postage prepaid and return receipt requested:

      If to Company, to:      Comark, Inc.
                              c/o Insight Enterprises, Inc.
                              ATTN: Tony Smith, President
                              1305 West Auto Drive
                              Tempe, Arizona 85284


                                       14

                                                                    CONFIDENTIAL



      If to Executive, to:    Michael V. Wise
                              35 Stone Springs Circle
                              The Woodlands, Texas  77381

Either party may change the address to which its notices are to be sent 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, on date of deposit with overnight commercial
carrier or on the date of deposit in the United States mail in the manner
provided for giving notice by mail.

14.   ENTIRE AGREEMENT

Except as otherwise provided in Section 1(a), 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 Illinois.

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 express written notice from the terminating party or an express written
agreement between the parties providing to the contrary.



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                                                                    CONFIDENTIAL



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.   CONSTRUCTION

The language in all parts of this Agreement shall in all cases be construed as a
whole according to its fair meaning and not strictly for or against any party.
The Section, Subsection and Subparagraph headings contained in this Agreement
are for reference purposes only and will not affect the meaning or
interpretation of this Agreement in any way. All terms used in one number or
gender shall be construed to include any other number or gender as the context
may require. 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, no provision of this
Agreement or any amendments or exhibits hereto shall be construed for or against
Company or Executive, regardless of which party drafted the provision at issue.
Whenever the words "include," "includes," or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without limitation.



THIS EMPLOYMENT AGREEMENT AGREED TO AND ACCEPTED BY:

                                          COMPANY:
                                          COMARK, INC.
                                          a Delaware corporation


                                          By: /s/ Stanley Laybourne
                                              --------------------------------
                                          Its: Chief Financial Officer
                                               -------------------------------




                                          /s/ Michael V. Wise
                                          ------------------------------------
                                          EXECUTIVE: Michael V. Wise




                                       16

EX-10.9

                                                                    CONFIDENTIAL


                                                                    EXHIBIT 10.9


                              EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is entered into and effective as of
April 25, 2002 between Comark, Inc., a Delaware corporation ("Company"), and
Timothy J. McGrath ("Executive").

                                 R E C I T A L S

Company is a wholly owned subsidiary of Insight Enterprises, Inc. ("Parent").
Executive is currently employed by Company in the position of Executive
Vice-President of Sales and Marketing. 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)   Replacement of Previous Agreements. When this Agreement becomes effective
      on April 25, 2002, it will replace all previous employment agreements
      between Executive and Company and/or its affiliates for all purposes. The
      consideration for this Agreement and the termination of such previous
      agreements is solely as stated in this Agreement and neither party shall
      have any further rights or duties under such previous agreements. The
      foregoing shall not diminish Executive's right, title and interest,
      pursuant to the terms of the Comark, Inc. Equity Incentive/Employment
      Agreement between Executive and Company dated October 13, 1999 (the
      "Equity Agreement"), to payment of his "Account" (as that term is defined
      in the Equity Agreement) as vested on April 25, 2002.

(b)   Initial Term. Executive shall be employed by Company for the duties set
      forth in Section 2 for a one-year term, commencing as of April 25, 2002
      and ending on April 25, 2003 (the "Initial Term"), unless sooner
      terminated in accordance with the provisions of this Agreement.

(c)   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 one-year term dated effective and beginning upon each such successive
      day (the "Renewal Term"); provided, however, that Company may notify
      Executive, or Executive may notify 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 to serve
      in an executive capacity, 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 duties as Parent's
      President (the "President") shall reasonably determine from time to time.
      Executive's initial title shall be President of Company, and his initial
      duties shall include responsibility for the day-to-day operations of
      Company and its operating subsidiaries, and for


                                        1

                                                                    CONFIDENTIAL



      certain other of Parent's subsidiaries as directed by the President. Such
      title and duties may be changed from time to time by the President. In the
      absence of the President, Parent's Chief Executive Officer (the "CEO") may
      assume the President's role under this Agreement, and in the absence of
      the CEO the Parent's Board of Directors (the "Board") may assume such
      role. Executive will devote substantially all of his working time and
      effort to his duties on behalf of Company, reasonable absences because of
      illness, vacation, and 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 ) 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 one percent (1.0%) of the issued
      and outstanding equity of such public or private company.

3.    COMPENSATION

(a)   Base Salary. Company shall pay Executive a "Base Salary" in consideration
      for Executive's services to Company at the rate of $300,000 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 executives. The Base Salary may be adjusted from time
      to time in accordance with the procedures established by Company 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 are adopted by the Board or Company from time
            to time. Beginning on the date hereof and continuing through the
            Employment Period, Executive shall be entitled to an incentive
            bonus, calculated and payable quarterly, equal to one and 65/100ths
            percent (1.65%) of the combined Net Earnings (as defined below) of
            Company and Insight Services Corporation ("ISC") (collectively, the
            "Business"), provided that the Net Earnings exceed the Minimum
            Amount (as defined below) for the applicable fiscal quarter. Company
            and Executive understand and agree that Company's business shall
            include all corporate sales divisions of Company and Insight Direct
            USA, Inc. ("Insight"), and that ISC's business shall include all
            services sales divisions of Company and Insight. Furthermore,
            Company and Executive understand and agree that the Business will
            not include any small- to medium-sized business (SMB) sales
            divisions or public sector sales divisions of either Company or
            Insight, which sales divisions will be moved into other subsidiaries
            of Parent.

      (2)   For purposes of calculating Executive's incentive bonus pursuant to
            this Subsection (b), "Net Earnings" shall mean the net earnings of
            the Business calculated in accordance with accounting principles
            generally accepted in the United States (US GAAP). For the avoidance
            of doubt, Net Earnings shall be calculated after deducting (i) the
            "holding company allocation", (ii) Interest (as defined below),
            (iii) taxes and (iv) any incentive bonus amounts for Executive and
            other executives of the Business. The "holding company allocation"
            shall mean the monthly allocation of Parent's and affiliate


                                       2

                                                                    CONFIDENTIAL



            companies' expenses allocated to the Business by Parent and its
            affiliate companies in a manner consistent with Parent's customary
            practices, excluding any allocation of interest income associated
            with the Purchase Debt (as defined below). "Interest" shall mean
            interest charged on external and intercompany debt, excluding
            interest charged on debt (including both external and intercompany)
            totaling approximately $150 million ("Purchase Debt") created in
            conjunction with the acquisition of Comark, Inc. by Insight
            Enterprises, Inc. The amounts payable pursuant to this Subsection
            3(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 Subsection 3(b), the term "Minimum
            Amount" means an amount equal to eighty percent (80%) of the average
            of the Net Earnings for the immediately preceding four fiscal
            quarters ended prior to the applicable fiscal quarter.
            Notwithstanding the foregoing, the Net Earnings during the second
            calendar quarter of 2001 shall be deemed to be $4,591,000, during
            the third calendar quarter of 2001 shall be $7,641,000, during the
            fourth calendar quarter of 2001 shall be $10,655,000, during the
            first calendar quarter of 2002 shall be $4,741,000, and during the
            second calendar quarter of 2002 shall be the Net Earnings for May
            and June 2002 only (i.e., excluding April 2002) multiplied by a
            factor of 3/2. Notwithstanding any provision in this Subsection 3(b)
            to the contrary, Executive's incentive bonus for the second calendar
            quarter of 2002 shall be calculated pursuant to the foregoing
            provisions and then multiplied by a factor of 2/3, due to the fact
            that the term of this Agreement excludes most of April 2002.

      (3)   If upon final presentation of consolidated financial statements to
            Parent by Parent's outside Certified Public Accountants, the
            combined "net earnings" of the Business requires adjustment for any
            period for which the Executive received an incentive bonus
            hereunder, 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 Company shall apply the Withheld Portion toward
            Company's withholding obligations with regard to any subsequent
            payments of Base Salary and incentive compensation made pursuant to
            Sections 3(a) and 3(b) or, at Company's option, Executive shall
            repay to Company any remaining amount due within seven business days
            of Company's written request therefor. Notwithstanding the
            foregoing, if the presentation of consolidated financial statements
            referenced above occurs more than five (5) years after the last day
            of the period to which the original incentive bonus at issue
            applied, no adjustments may be made pursuant to this subsection.

(c)   Incentive and Benefit Plans. Executive will be entitled to participate in
      those incentive compensation and benefit plans reserved for Company's
      executives, including any such plans offered by Parent to employees of its
      subsidiaries, including any stock option plans, in accordance with the
      terms of such compensation and benefit plans. Additionally, Executive
      shall be entitled to participate in any other benefit plans sponsored by
      Company or offered by Parent to employees of its subsidiaries, including
      any savings plan, life insurance plan and health insurance plan available
      generally to employees of Company from time to time, subject to any
      restrictions specified in, or amendments made to, such plans.

(d)   Vacation. Executive shall be entitled to four (4) weeks vacation during
      the calendar year, and such additional vacation time as the Board shall
      approve, with such vacation to be scheduled and taken in accordance with
      Company's standard vacation policies, but this provision is not intended


                                       3

                                                                    CONFIDENTIAL



      to interfere with or limit Executive's discretion to determine the
      appropriate time to be devoted to his duties hereunder.

(e)   Stock Options. Concurrently herewith, Executive is being granted 100,000
      stock options under Parent's 1998 Long-Term Incentive Plan, at a strike
      price to equal the closing share price of Parent's stock on the date of
      grant and vesting at 50,000 shares on April 25, 2003 and 50,000 shares on
      April 25, 2004, such options to be evidenced by and subject to the
      provisions in the award agreements being delivered concurrently.

4.    BUSINESS EXPENSES

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 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. The Company may terminate this Agreement upon written notice
      to Executive in the event of Executive's "Disability". For purposes of
      this Agreement, Executive shall be deemed to have a "Disability" if, for a
      minimum continuous period of six (6) months, Executive meets the
      definition of "Disability" used to determine Executive's right to benefits
      pursuant to the long-term disability insurance policy in place for
      Company's exempt employees at the end of such six-month period and such
      disability occurs due to a physical or mental injury or illness that
      occurs while Executive is actively employed by Company. Notwithstanding
      the foregoing, Executive shall be deemed to have a "Disability" if the
      sole factor preventing Executive from otherwise meeting the definition of
      "Disability" set forth above is Executive's employment and/or receipt of
      compensation pursuant to this Agreement. If this Agreement is terminated
      due to Executive's Disability, Executive shall receive the severance
      compensation called for by Section 6B(b). Company may not terminate this
      Agreement for Cause (see Section 6A) due solely to Executive's breach of
      Section 2 if such breach is the result of Executive's Disability.

6A.   TERMINATION BY COMPANY FOR CAUSE

(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


                                       4

                                                                    CONFIDENTIAL



      other payments or benefits pursuant to this Agreement, except for any
      vested rights pursuant to any benefit plans in which Executive
      participates including Executive's stock options in Parent, any accrued
      compensation, any accrued 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 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
            any written directives of Company. 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 Company or
            Parent.

(b)   Determination of No Cause. If Company terminates Executive for Cause, and
      it is later determined at the conclusion of the Dispute Resolution process
      provided in Section 11 of this Agreement 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.

(c)   Termination by Executive without Good Reason. If Executive terminates his
      employment without Good Reason as that term is defined in Subsection 7(b),
      the consequences under this Agreement shall be identical to those of a
      termination for Cause.

(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.

(e)   Other Plans. Except to the extent specified in this Section 6A including
      this Subsection (e), termination of Executive's employment under 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.

6B.   TERMINATION BY COMPANY WITHOUT CAUSE

(a)   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 Subsection, Company
      shall provide Executive with ninety (90) days advance written


                                       5

                                                                    CONFIDENTIAL



      notice. This Agreement shall continue during such notice period. The
      termination of this Agreement shall be effective on the ninetieth (90th)
      day 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.

(b)   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 Executive had not been terminated prior
      to the end of such term and as if Executive had continued to perform all
      of his obligations under this Agreement and as an employee, officer and/or
      director of Company. Except as otherwise provided herein, Executive shall
      have no duty to mitigate damages in order to receive the severance
      compensation described by this Subsection, and the severance compensation
      shall not be reduced or offset by other income, payments or profits
      received by Executive from any source.

(c)   Incentive Compensation. If Executive is terminated without Cause,
      Executive shall receive as a lump sum immediately upon such termination
      incentive compensation for the number of quarters remaining in the Initial
      Term or latest Renewal Term, with the amount per quarter equal to the
      average bonus paid during the four quarters immediately preceding the date
      of notice of termination as if Executive had continued to perform all of
      his obligations under this Agreement and as an employee of Company. Except
      as otherwise provided herein, Executive shall have no duty to mitigate
      damages in order to receive the incentive compensation described by this
      Subsection and the incentive compensation shall not be reduced or offset
      by other income, payments or profits received by Executive from any
      source.

(d)   Other Plans. Except to the extent specified in this Section 6B including
      this Subsection (d), 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. Except
      as otherwise provided herein, 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.

(e)   Example. For example, if Company were to provide notice to Executive of
      Termination without Cause on January 1, 2003, then the Employment Period
      would end ninety days thereafter, on April 1, 2003, and Company would 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 one (1) year
      totaling $300,000 (assuming the Base Salary was at that time $300,000)
      plus (ii) the incentive compensation for four fiscal quarters computed as
      stated above. Additionally, on April 1, 2003 Executive would become fully
      vested in all Company stock bonus and stock option plans and agreements in
      which Executive had an interest.



                                       6

                                                                    CONFIDENTIAL



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 assignment to Executive of duties which are not executive in
            nature, 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 as of the effective date of this
            Agreement, taking into consideration the additional duties that will
            be assumed by Executive as of such date;

      (3)   The assignment of Executive by Company to a location more than 50
            miles from the present executive offices of 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 is participating
            on the effective date of this Agreement (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 effective date of this Agreement 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 as
            provided in Section 6A(b) 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



                                       7

                                                                    CONFIDENTIAL



      (9)   Any action taken by Company over the specific, contemporaneous,
            written objection of 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
            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 Subsection 7(b), Executive shall be
      entitled to receive all of the payments and benefits provided by Section
      6B and otherwise in this Agreement to the same extent as if this Agreement
      had been terminated by Company without Cause.

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 Executive with a continuation of benefits
      in the event Executive's employment with Company terminates under certain
      limited circumstances.

      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 Subsection 8(c) 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 Subsection 8(b) hereof, Company will provide Executive
      with the following benefits:



                                       8

                                                                    CONFIDENTIAL



      (1)   A lump sum severance payment within ten (10) days following
            Executive's last day of work equal to the sum of (i) 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) the amount of all incentive compensation paid or accrued to
            Executive for Company's most recent four fiscal quarters then ended.

      (2)   Executive shall become fully vested in any and all stock bonus and
            stock option plans and agreements of Company and Parent 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 benefits and
            rights that would have, but for such prohibition, have been vested
            in Executive. Nothing in this Section 8(c)(2) shall prevent any
            stock option granted to Executive by Company or Parent from vesting
            upon a "change of control" as defined in and pursuant to the terms
            of the plan pursuant to which such stock option was granted.

      (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 12
            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 Subsection
            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)   Except as otherwise provided herein, Executive shall have no duty to
            mitigate damages in order to receive the severance compensation
            described by this Subsection, and the severance compensation shall
            not be reduced or offset by other income, payments or profits
            received by Executive from any source. If Executive is entitled to
            receive the payments called for by this Subsection 8(c), Executive's
            right to receive the compensation provided by Sections 6A, 6B and 7
            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 Sections
            13 and 14(d)(2) of the Securities Exchange


                                       9

                                                                    CONFIDENTIAL



            Act of 1934 ("1934 Act")), excluding affiliates of 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 Company is a member
            at the effective date of this Agreement.

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



                                       10

                                                                    CONFIDENTIAL



      (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 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
            8(g), 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 their 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(c) 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 Subsection 8(b) of
      this Agreement. Nothing in this Section 8(i) shall prevent any stock
      option granted to Executive by Company or Parent from vesting upon a
      "change of control" as defined in and pursuant to the terms of the plan
      pursuant to which such stock option was granted.

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 and all affiliates and subsidiaries of Company's
(collectively, "Company's Family") confidential data, including the existence,
termination and terms of this Agreement, the terms and circumstances of the
termination (by either party) of this Agreement, and information and documents
concerning Company'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


                                       11

                                                                    CONFIDENTIAL



the business of Company'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 and except that Executive may disclose the existence, terms and
termination of this agreement to Executive's accountants, attorneys or estate
planning professionals. 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 Company'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, in the event
            of either the termination of Executive's employment by Company with
            Cause or the termination of employment by Executive without Good
            Reason, Executive agrees that, for one year ("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 or
            Europe ("Area"). For purposes of this Agreement, Executive shall be
            deemed to be engaged in a "Competing Business" if, in any capacity,
            including 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 any member of
            Company's Family is engaged on the date of, or any business
            contemplated by Company'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's Family is 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's Family may be treated as activities of which one may be
            engaged that is competitive with Company's Family.

      (2)   The "Time Period" used for the purposes of Section 10(a)(1) shall be
            shortened to six months in the event Executive's employment is
            terminated by Company "without Cause" or by Executive for "Good
            Reason."

(b)   Non-Solicitation. Executive recognizes that Company's Family's customers
      are valuable and proprietary resources of Company'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, (i)
      solicit business from any individual or entity located in the United
      States, Canada, or Europe which obtained services from Company's Family at
      any time during Executive's employment with Company, except to the extent
      that such solicitation is non-competitive with the then actual business in
      which any member of Company's Family is engaged on the date of, or any
      business contemplated by Company's business plan in effect on the date of


                                       12

                                                                    CONFIDENTIAL



      notice of, Executive's termination of employment, (ii) 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 Company's
      Family, except to the extent that such solicitation is non-competitive
      with the then actual business in which any member of Company's Family is
      engaged on the date of, or any business contemplated by Company's business
      plan in effect on the date of notice of, Executive's termination of
      employment, and (iii) he will not solicit employees of Company's Family
      who would have the skills and knowledge necessary to enable or assist
      efforts by Executive to engage in a Competing Business. This covenant
      shall apply in the event of any termination of this Agreement by either
      party.

(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 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.

11.   DISPUTE RESOLUTION

(a)   Mediation. Any and all disputes between the parties arising during the
      term of this Agreement, or arising at any time related to this Agreement
      or the relationship of the parties arising out of this Agreement, shall,
      if not settled by negotiation, be subject to non-binding mediation before
      an independent mediator selected by the parties pursuant to Subsection
      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
      personally, or 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 Cook
      County, Illinois, within thirty (30) days of the date of selection or
      appointment of the mediator. Each of the parties shall bear its own costs
      of participation and representation with regard to any mediation, and each
      shall pay one-half of all charges billed by 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 Subsection 11(d). The mediator
      shall not serve as the arbitrator. EXCEPT AS PROVIDED IN SUBSECTION 11 (a)
      OR A CONFIRMATION PROCEEDING AS SET FORTH IN SUBSECTION 11(c), 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


                                       13

                                                                    CONFIDENTIAL



      BE NO RECOURSE TO COURT, AND ALL RIGHTS OR REQUESTS FOR A JURY TRIAL ARE
      EXPRESSLY WAIVED.

      The arbitration hearing shall occur at a time and place convenient to the
      parties in Cook County, Illinois, within thirty (30) days of selection or
      appointment of the arbitrator. If Company has adopted a lawful 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.
      Sections 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, damages shall be limited to
      contract damages. In cases of claims based on an alleged statutory
      violation, the remedy shall be limited to the remedies provided by 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 governed by
      the Federal Arbitration Act, 9 U.S.C. Sections 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 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, sent by
overnight commercial carrier requiring a signature release, or sent by
registered or certified mail, postage prepaid and return receipt requested:

      If to Company, to:      Comark, Inc.
                              c/o Insight Enterprises, Inc.
                              ATTN: Tony Smith, President
                              1305 West Auto Drive
                              Tempe, Arizona 85284




                                       14

                                                                    CONFIDENTIAL



      If to Executive, to:    Timothy J. McGrath
                              4111 Royal Troon Court
                              St. Charles, Illinois  60174

Either party may change the address to which its notices are to be sent 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, on date of deposit with overnight commercial
carrier or on the date of deposit in the United States mail in the manner
provided for giving notice by mail.

14.   ENTIRE AGREEMENT

Except as otherwise provided in Section 1(a), 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 Illinois.

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 express written notice from the terminating party or an express written
agreement between the parties providing to the contrary.



                                       15

                                                                    CONFIDENTIAL



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.   CONSTRUCTION

The language in all parts of this Agreement shall in all cases be construed as a
whole according to its fair meaning and not strictly for or against any party.
The Section, Subsection and Subparagraph headings contained in this Agreement
are for reference purposes only and will not affect the meaning or
interpretation of this Agreement in any way. All terms used in one number or
gender shall be construed to include any other number or gender as the context
may require. 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, no provision of this
Agreement or any amendments or exhibits hereto shall be construed for or against
Company or Executive, regardless of which party drafted the provision at issue.
Whenever the words "include," "includes," or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without limitation.



THIS EMPLOYMENT AGREEMENT AGREED TO AND ACCEPTED BY:

                                    COMPANY:
                                    COMARK, INC.
                                    a Delaware corporation


                                    By: Stanley Laybourne
                                        --------------------------------------
                                    Its: Chief Financial Officer
                                         -------------------------------------




                                    /s/ Timothy J. McGrath
                                    ------------------------------------------
                                    EXECUTIVE: Timothy J. McGrath





                                       16

EX-10.10

                                                                   EXHIBIT 10.10



DATED                                                               17 JULY 2002
- --------------------------------------------------------------------------------


                           (1) INSIGHT ENTERPRISES INC

                                     - AND -

                                 (2) DAVID PALK


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

                              COMPROMISE AGREEMENT

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

                                    CONTENTS

                                                                           
1.  INTERPRETATION.........................................................    1
2.  SEVERVANCE PAYMENT AND CONTINUING BENEFITS.............................    2
3.  LEGAL EXPENSES.........................................................    3
4.  RESIGNATION OF DIRECTORSHIP............................................    4
5.  WARRANTIES.............................................................    4
6.  TAX INDEMNITY..........................................................    4
7.  CONFIDENTIALITY........................................................    5
8.  POST-TERMINATION RESTRICTIONS..........................................    7
9.  COMPANY PROPERTY.......................................................    9
10. CLAIMS AGAINST THE COMPANY.............................................    9
11. WHOLE AGREEMENT........................................................   12
12. THIRD PARTY RIGHTS.....................................................   12
13. HEADINGS...............................................................   12
ANNEX......................................................................   14
SCHEDULE 1.................................................................   15
    Letter of Resignation..................................................   15
Schedule 3.................................................................   16



THIS COMPROMISE AGREEMENT is made on 17 July 2002

BETWEEN

(1)   INSIGHT ENTERPRISES INC of 6820 South Harl Avenue, Tempe, Arizona 85283
      USA ("COMPANY");

(2)   DAVID PALK of Tumblehome, Mill Road, Marlow, Buckinghamshire SL7 1QB
      ("DIRECTOR").

BACKGROUND

1.    The Director's employment with the Company terminated on the Termination
      Date.

2.    The Company is entering into this agreement for itself and as agent for
      all its Associated Companies and is duly authorized in that behalf.

IT IS AGREED

1.    INTERPRETATION

      In this agreement:

      "ADDITIONAL TAX" means further income tax, national insurance
      contributions interest and/or penalties thereon arising in respect of the
      payments made and benefits provided under this agreement, other than the
      income tax deducted under clause 2 below;

      "APPOINTMENT" means the employment of the Director by the Company;

      "ASSOCIATED COMPANY" means a company un which the Company or any other
      holding Company or Subsidiary Company is directly or indirectly
      beneficially interested in 20% (twenty per cent) or more of that company's
      issued ordinary share capital. "Holding Company" and "Subsidiary Company"
      have the meanings defined by section 736 of the Company of the Companies
      Act 1985 (or any statutory modification or re-enactment of that Act);

      "BOARD OF DIRECTORS" means the board of directors of the Company from time
      to time;

      "BUSINESS means the business carried on by the Company from time to time:


                                                                               1



      "GROUP" means the Company and all companies which are for the time being
      either a Holding Company of the Company or a Subsidiary or Associated
      Company of either the Company or any such Holding Company;

      "PAYE REGULATIONS" means the Income Tax (Employment) Regulations 1993 (as
      amended, extended or replaced from time to time);

      "TERMINATION DATE" means Tuesday 16 July 2002.

2.    SEVERANCE PAYMENT AND CONTINUING BENEFITS

      Subject to the Director's compliance with all obligations imposed by
      virtue of this agreement and in full and final settlement of the claims
      set out in clause 10.1 below, the Company shall, as compensation for loss
      of employment but without admission of liability:

   2.1   SEVERANCE PAYMENT

         Pay to the Director within 14 days following the date of this agreement
         the sum of L400.000 ("SEVERANCE PAYMENT")

      2.1.1 It is understanding of the parties to this agreement that the first
            L30,000 of the Severance Payment may be paid free of tax and
            National Insurance contributions.

      2.1.2 The company shall deduct from the Severance Payment of a sum of
            L47,500 as accrued pension contributions relating to the period 16th
            July 2002-15th July 2003 and pay into the Directors Pension fund.
            Income tax and National Insurance contributions on the balance in
            excess of the initial L30,000 will account for the same to the
            Inland Revenue or other statutory authority as required by law.

      2.1.3 The Company shall deduct from the Severance Payment basic rate
            income tax and National Insurance contributions on the balance in
            excess of L30,000 and will account for the same to the Inland
            Revenue or other statutory authority as required by law.


                                                                               2

      2.1.4 Any further liability in respect of Additional Tax on the Severance
            Payment and other benefits provided pursuant to this agreement shall
            be the Director's alone.

   2.2   PRIVATE MEDICAL INSURANCE

         Until 15 July 2003 or until the Director takes up full time employment
         with another employer, whichever is the sooner, continue to provide for
         the benefit of the Director private medical insurance on the same terms
         and conditions as applied immediately prior to the Termination Date.

   2.3   EXPENSES

         The Company shall reimburse the Director for all reasonable and
         authorized out of pocket expenses (including hotel and traveling
         expenses) wholly necessary and exclusively incurred by the Executive in
         the discharge of his duties subject to the production of appropriate
         receipts or vouchers or such other evidence as the Company may
         reasonably require as proof of such expenses/Company's rules and
         policies relating to expenses as may be in force from time to time
         within 30 days of the date of this agreement.

   2.4   PROPERTY

         Reimburse to the Director L36,000 deposit paid by the Director in
         relation to the purchase of a property in Tapestry Canyon, Arizona
         conditional on and in the event that the Director having undertaken all
         reasonable endeavors to recover the deposit himself has failed to do
         so.

3.    LEGAL EXPENSES

      The Company shall on the production of an appropriate copy VAT invoice
      addressed to the Director for payment by the Company, pay to the
      Director's relevant independent adviser as referred to in clause 10 below
      the Director's legal expenses relating exclusively to the negotiation and
      preparation of this agreement, up to a maximum of L250 including VAT.
      Payment will be made direct to the Director's legal advisers.




                                                                               3

4.    RESIGNATION OF DIRECTORSHIP

   4.1   The Director shall immediately resign as a director of any Group
         Companies by signing the letter of resignation attached to this
         agreement at Schedule 1, which shall be deemed to have been delivered
         to the Company and the relevant Group Companies as at the date of this
         agreement.

   4.2   The Director shall immediately do all such acts and things as the
         Company may require to effect the resignation from other offices with
         the Company or any of its Group Companies or which the Director held by
         reason of employment by the Company including (but without prejudice to
         the generality of the above) any trusteeships.

   4.3   Having resigned as a director of the Company and from such other
         offices which the Director holds with any Group Company the Director
         will not represent or suggest in any way any continued authority in
         respect of or connection to the Company or any Group Company

5.    WARRANTIES

   5.1   Director warrants to the Company that as of the date of this agreement
         the Director has not commenced employment and has not agreed to accept
         nor received any offer of employment from any person firm or company,
         the expression "employment" for the purpose of this clause to include
         any contract of service, any contract for services, any partnership or
         agency agreement.

   5.2   Director warrants to the Company that as far as the Director is aware
         there is not in existence at the date of this agreement any material
         fact concerning the business of the Company, which has not been
         disclosed to the Board of Directors.

6.    TAX INDEMNITY

      The Director undertakes that if the Company or any of its Associated
      Companies or Group Companies is called upon to account to the Inland
      Revenue to pay any Additional Tax the Director will, at the written
      request of such company, immediately pay to such company an amount equal
      to the Additional Tax (on an after-tax) provided that no payment of
      Additional Tax will be made to the Inland Revenue without particulars of
      any proposed payment being given to the Director and the Director being
      given the opportunity at the Director's own expenses to dispute any such a
      payment.

                                                                               4

7.    CONFIDENTIALITY

   7.1   The Company and Director undertakes that they will not, whether
         directly or indirectly, make publish or otherwise communicate any
         disparaging or derogatory statements, whether in writing or otherwise,
         concerning the other, including in the case of the Director concerning
         any of the Company's Associated Companies or Group Companies or any of
         its or their officers or Directors save and except that the Company
         publish a statement as it determines appropriate concerning the
         financial performance of the Company for the period 1 April 2002 to 31
         July 2002.

   7.2   The Director agrees to keep the terms on which the Director's
         employment is terminated strictly confidential and agrees not to
         disclose, communicate or otherwise make public the same to anyone (save
         to the Director's immediate family, professional advisers and the
         relevant tax authorities and otherwise as may be required to be
         disclosed by law).

   7.3   The Director shall not at any time during the Appointment nor at any
         time after its termination except for a purpose of the Company or the
         Group directly or indirectly use or disclose trade secrets or
         confidential information relating to the Company or any Group company
         or the Company's or any group company's agents, customers, prospective
         customers or suppliers.

   7.4   For the purpose of clause 7.3 confidential information shall include
         any information relating to the Business and/or the financial affairs
         of the Company or the Group or the company's or any Group company's
         agents, customers, prospective customers or suppliers and in particular
         shall include:

      7.4.1 The business methods and information of the Company and any Group
            company (including price charged, discounts given to customers or
            obtained from suppliers, product development, marketing and
            advertising programmes, costings, budgets, turnover, sales targets
            or other financial information);

      7.4.2 Lists and particulars of the Company's and Group company's suppliers
            and customers and the individual contacts at such suppliers and
            customers;


                                                                               5

      7.4.3 Details and terms of the Company's and any Group company's
            agreements

      7.4.4 with suppliers and customers;

      7.4.5 Secret manufacturing or production processes and know-how employed
            by the Company and any Group company or its/their suppliers;

      7.4.6 Confidential details as to the design of the Company's and any Group
            company's or its and/or their suppliers' products and inventions or
            developments relating to future products.

      7.4.7 Details or any promotions or future promotions or marketing or
            publicity exercises planned by the Company or any Group Company.

      7.4.8 Details of any business plans of the Company or any Group company;
            and

      7.4.9 Any information which may affect the value of the business or the
            shares of the Company or any Group company;

      Whether or not in the case of documents or other written materials they
      are or were marked as confidential and whether or not, in the case of
      other information, such information is identified or treated by the
      Company or any Group company as being confidential.

   7.5   The Director shall not be restrained from disclosing any confidential
         information which:

      7.5.1 he is authorized to disclose by the Board of Directors;

      7.5.2 had entered the public domain unless the public domain as a result
            of an unauthorized disclosure by the Director or an authorized
            disclosure for an unauthorized purpose by the Director or anyone
            else employed or engaged by the Company or any Group company;

      7.5.3 he required to disclose by laws; or

                                                                               6

      7.5.4 he is entitled to disclose under the Public Interest Disclosure Act
            of 1998 provided that the disclosure is made in an appropriate way
            to an appropriate person having regard to the provisions of that
            Act.

8.    POST-TERMINATION RESTRICTIONS

   8.1   The Director shall not without the prior written consent of the Board
         of Directors (such consent not to be unreasonably withheld) for a
         period of 12 months after the termination Date, directly or indirectly,
         on his own behalf, or on behalf of any person firm or company in
         connection with any business which is or is intended or about to be
         competitive with Restricted Business (as defined below)

      8.1.1 solicit or canvass the custom of any Customer (as defined below);

      8.1.2 solicit or canvass the custom of any Potential Customer (as defined
            below);

      8.1.3 deal with any Customer;

      8.1.4 solicit or entice away, or attempt to entice away from the Company
            or any Associated Company or Group Company any employee of the
            Company or any Associated Company or Group Company who is employed
            by the Company or any Associated Company or Group Company at the
            Termination Date provided that this restriction shall only apply to
            persons whom the Director has managed or with whom he has worked at
            any time during the 12 months immediately preceding the Termination
            Date and who on the Termination Date was employed by the Company or
            Group Company or Associated Company in the capacity of director or
            any technical, IT, financial, marketing, business development or any
            other managerial role and provided that this restriction shall not
            apply to nonmanagerial (clerical or administration or manual) staff;


                                                                               7

      8.1.5 employ, offer to employ or enter into partnership with any employee
            of the Company or any Group Company or Associated Company who is
            employed by the Company or any Group Company at the Termination Date
            provided that this restriction shall only apply to the persons whom
            the Director has managed or with whom he has worked at any time
            during the 12 months immediately preceding the Termination Date and
            who on the Termination Date was employed in the capacity of director
            or any technical, IT, financial, marketing, business development or
            any other managerial role with a view to using the knowledge or
            skills of such person in connection with any business or activity
            which is or is intended to be competitive with the Restricted
            Business and provided that his restriction shall not apply to
            nonmanagerial (clerical or administrative or manual) staff.

   8.2   In clause 7.5.4 the following words and phrases shall have the
         following meanings:

      8.2.1 "RESTRICTED BUSINESS" shall mean the Business or any part of the
            Business which in either case:

            8.2.1.1  is carried on by the Company or any member of the Group or
                     an Associated Company at the Termination Date; or

            8.2.1.2  is to the knowledge of the Executive to be carried out by
                     the Company or any member of the Group or an Associated
                     Company at any time during the six months immediately
                     following the Termination Date;

            and which the Director was materially concerned with or had
            management responsibility for (or had substantial confidential
            information regarding) in either case at any time during the period
            of 12 months immediately prior to the Termination Date;

      8.2.2 "CUSTOMER" shall mean any person, firm or company who at the
            Termination Date or at any time during the 12 months immediately
            prior to such termination was a customer of the Company or any
            member of the Group or Associated Company and from whom the Director
            had obtained business on behalf of the Company or any Group Company
            or Associated Company or to whom the Director had provided or
            arranged the provision of goods or services on behalf of the Company
            or any Group Company or Associated Company or for whom the Director
            had management responsibility in any case at any time during the
            period of 12 months immediately prior to the Termination Date;


                                                                               8

      8.2.3 "POTENTIAL CUSTOMER" shall mean any person, firm or company with
            whom either the Director or any other employee of the Company or an
            Group Company or Associated Company who the Director had, at the
            date of the negotiations, management responsibility for carried out
            negotiations on behalf of the Company or any Group Company or
            Associated Company at any time during the six months immediately
            prior to the Termination Date with a view to such person, firm or
            company becoming a customer of the Company or any Group Company or
            Associated Company.

   8.3   The restrictions contained in this clause are considered by the parties
         to be reasonable in all the circumstances. Each sub clause constitutes
         an entirely separate and independent restriction and the duration,
         extent and application of each of the restrictions are no greater than
         is necessary for the protection of the interests of the Company and any
         Group Company or Associated Company.

9.    COMPANY PROPERTY

      The Director undertakes that all property, equipment, records,
      correspondence, documents, files and other information (whether originals,
      copies or extracts or in any electronic format) belonging to the Company
      or any of its Associated Companies or Group Companies (other than as
      specified in this agreement) has been returned and that the Director has
      not retain any copies.

10.   CLAIMS AGAINST THE COMPANY

   10.1  The Director believes that but for this agreement he could bring
         proceedings against the Company, its Associated Companies, Group
         Companies and their respective shareholders, officers or directors for
         the contractual an statutory claims listed below:

      10.1.1 Wrongful dismissal; and

      10.1.2 Breach of contract; and

      10.1.3 Unlawful deduction of wages under the Employment Rights Act 1996
            (as amended) ("ERA"); and


                                                                               9

      10.1.4 unfair dismissal under the ERA; and

      10.1.5 unlawful discrimination on grounds of sex or marital status
             (including for the avoidance of doubt victimization) under the Sex
             Discrimination Act 1975 (as amended) ("SDA"); and

      10.1.6 unlawful discrimination on grounds of race, colour, ethnic, or
             national origins, nationality (including for the avoidance of doubt
             victimization) under the Race Relations Act 1976 (as amended)
             ("RRA"); and

      10.1.7 unlawful discrimination on grounds of disability (including for the
             avoidance of doubt victimization) under the Disability
             Discrimination Act 1995 (as amended) ("DDA"); and

      10.1.8 under the Equal Pay Act 1970 (as amended) ("EPA"); and

      10.1.9 under the Trade Union and Labour Relations (Consolidation) Act 1992
             ("TULR(C)A"); and

      10.1.10 under the National Minimum Wage Act 1998 ("NMWA"); and

      10.1.11 under the Transfer of Undertaking (Protection of Employment)
             Regulations 1981 ("TUPE"); and

      10.1.12 under the Working Time Regulations 1998 ("WTR"); and

      10.1.13 under the Transnational Information and Consultation of Employee
             Regulations 1999 ("TICER"); and

      10.1.14 under the Part-Time Workers (Prevention of Less Favourable
             Treatment Regulations 2000 ("PTWR"); and

      10.1.15 under the Treaty of Amsterdam.

   10.2  The terms of this agreement are reached without admission of liability
         and are in full and final settlement of all claims (if any) whether
         contractual, statutory or otherwise and whether under United Kingdom
         and/or European Union law (including but not limited to the Director's
         claims under clause 10.1 above) which the Director has or may has
         against the Company or any of its Associated


                                                                              10

         Companies or Group Companies or their respective shareholders, officers
         or directors arising out of or in connection with the Director's
         employment or directorship or their termination save for any claims for
         personal injury (other than any stress related personal injury claim
         alleged to have been incurred in connection with claque 10.1 above)

   10.3  The Director represents and warrants that the claims listed a t clause
         10.1 include all of the companies, claims and concerns which with the
         benefit of legal advice the Director believes that he has against the
         Company or any of its Associated Companies or Group Companies or their
         respective shareholders, officers or directors arising out of the
         Director's employment or any act or omission relating to the Director's
         employment or relating to, arising out of or connected to the manner of
         its termination.

   10.4. The Director represents and warrants that:

      10.4.1 the Director has received independent legal advice from a relevant
             independent adviser as to the terms and effect of this agreement
             and in particular its effect on the Director's ability to pursue
             statutory rights before an employment tribunal. The name of the
             relevant independent adviser who has so advised the Director is
             Karen Bulfin of Bulfin & Co of 203 Field End, East Cole, Pinner,
             Middlesex HA5 1QZ and the Director will procure the relevant
             independent adviser to complete and return to the Company the
             endorsement annexed to this agreement; and

      10.4.2 the Director is advised by the relevant independent adviser that
             there is in force and was, at the time the Director received the
             advice referred to above a contract of insurance, or an indemnity
             provided for members of a profession or professional body, covering
             the risk of a claim by the Director in respect of loss arising in
             consequence of that advice; and

      10.4.3 the Director has not issued proceedings before the employment
             tribunals, High Court or County Court in respect of any claim in
             connection with the Service Agreement or its termination and that
             all monies paid to the Director under this agreement will be
             repayable to the Company, as a debt and upon demand; and


                                                                              11

      10.4.4 as at the date of this agreement, the Director is not aware of any
             facts or matters which might give rise to a claim for personal
             injury against the Company or any of its Associated Companies or
             Group Companies.

   10.5  The Company and the Director agree and acknowledge that the conditions
         regulating compromise agreements and to compromise contracts contained
         in the ERA, the SDA, the RRA, the DDA, the NMWA and in any other act or
         statutory instrument referred to in clause 10.1 above are intended to
         be and have been satisfied.

   10.6  The Director shall indemnify the Company in full and keep the Company
         fully indemnified for and against all and any claims, demands,
         judgments, orders, liabilities, damages, expenses or costs including
         without limitation all reasonable legal and professional fees and
         disbursements together with VAT thereon incurred by the Company arising
         out of or in connection with any breach by the Director of the
         warranties in this clause 10.

11.   WHOLE AGREEMENT

      The agreement sets out the entire agreement between the parties and
      supersedes all prior discussions between them or their advisors and all
      statements, representations, terms, and conditions, warranties,
      guarantees, proposals, communications, and understandings whenever given
      and whether orally or in writing.

12.   THIRD PARTY RIGHTS

      Nothing in this agreement confers on any third party and benefits under
      the provisions of the Contracts (Rights of Third Parties) Act 1999.

13.   HEADINGS

      The headings to clauses in this agreement are for convenience only and
      have no legal effect.



                                                                              12

                                      ANNEX

      INDEPENDENT ADVISER'S ENDORSEMENT ADDRESSED TO THE BOARD OF DIRECTORS OF
      THE COMPANY

      I, KAREN BULFIN of Bulfin & CO confirm that I have given independent legal
      advice to David Palk of Tumblehome, Mill Road, Marlow, Buckinghamshire,
      SL7 1QB as to the terms and effect of the above Agreement and in
      particular its effect on David Palk' ability to pursue his rights before
      an employment tribunal.

      I confirm that I am a "relevant independent adviser" (as such term is
      defined in section 203 of the Employment Rights Act 1996) and that there
      is and was at the time I gave the advice referred to above in force a
      contract of insurance or an indemnity provided for members of a profession
      or professional body, covering the risk of a claim by David Palk in
      respect of any loss arising in consequence of that advice.


      SIGNED  /s/ Karen Bulfin
            ----------------------

                                                      BUFLIN & CO
                                                      SOLICITORS
                                                      203 FIELD END ROAD
                                                      EASTCOTE, PINNER
                                                      MIDDLESEX, HA5 1QZ


                                                                              13

      SIGNED  /s/ Tony Smith
            -------------------------------------------------------
             FOR AND BEHALF OF INSIGHT ENTERPRISES INC

      SIGNED /s/ Mr. David Palk
            -------------------------------------------------------






                                                                              14

                                    SCHEDULE

                                 Refer clause 4
                              LETTER OF RESIGNATION

Private & Confidential

The Directors
Insight Enterprises Inc
6820 South Harl Avenue
Tempe
Arizona
85283
USA

17 July 2002


Dear Sirs

Please accept this letter as formal notice of my resignation as a director of
each of this Group Companies of which I am a director. My resignation is to be
effective immediately.


Please arrange for particulars of my resignation to be filed with the Register
of Companies.

Yours faithfully,


/s/ Mr. David Palk


                                                                              15

17 July 2002

D. Palk Esq.,
Tumbleholme,
Mill Road,
Marlow,
Bucks,
SL7 1QB

Dear David,

Settlement and Compromise Agreement dated 17th July 2002
Section 2-2 Private Medical Insurance Amendment

As an amendment to section 2-2 Private Medical Insurance is to now also include
life assurance cover to the value of 4 x annual salary (at date of termination)
for a period of 12 months from 16th July 2002 or until suitable alternative
employment is found. Yours sincerely,

/s/  Tony Smith
President-Insight Worldwide

Accepted on behalf of David Palk

18-7-02


                                                                              16

17 July 2002
Mr. D Palk
Tumblehome
Mill Road
Marlow
Buckinghamshire
SL7 1QV

Dear David

This letter is to record out agreement to vary the terms of the compromise
agreement entered into between you and the Company date [17 July 2002]. It is
agreed that clause 2 will be varied as follows:-

   1.    There shall be a new clause 2.1.2:-

         "Subject to prior receipt by the Company from the Director's pension
         scheme administrators of satisfactory evidence of compliance with
         Inland Revenue Pension Rules the Company shall deduct from the
         Severance Payment a sum of L47,500 gross as accrued pension
         contributions relating to the period 16 July 2002 to 15 July 2003 and
         shall pay such sum into the Director's pension fund."

   2.    Clause 2.1.3 shall be amended to read:-

         "The Company shall deduct from the balance of the Severance Payment
         basic rate income tax and national insurance contributions and will
         account for the same to the Inland Revenue or other statutory authority
         as required by law."

   3.    Clause 2.1.3 shall renumbered 2.1.4.

   4.    Clause 4.2 shall be varied by the addition of the following words added
         to the end of the paragraph:-

         "save in respect of the Director's executive pension fund. For the
         avoidance of doubt there is nothing in this agreement preventing fund
         trustees from transferring the Director's executive pension fund to a
         new legal entity of their choosing."

   5.    Clause 2.5 shall be varied to read as follows:-


                                                                              17

         "Within 60 days of the signing of the Compromise Agreement reimburse to
         the Director L36,000 paid by the Director as a deposit in relation to
         the purchase of a property in Tapestry Canyon, Arizona conditional on
         and in the event of the Director having undertaken all reasonable
         endeavors to recover such deposit and failed to do so. On payment by
         the Company of such sum to the Director, the Director shall transfer to
         the Company all rights to recover such deposit to the Company and shall
         take such steps as are necessary without delay to ensure that such
         rights are transferred effectively and legally."

Please sign this letter where indicated below to confirm your agreement to these
variations to the compromise agreement.


Yours sincerely


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

SIGNED: /s/ Tony Smith
       ----------------------------

Insight Direct

DATED:   17/7/02
       ----------------------------


SIGNED:  /s/ David B. Palk
       ----------------------------

DATE:    17/7/02
       ----------------------------



                                                                              18

EX-99.1

exv99w1

EX-99.2

exv99w2