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.
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"(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
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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
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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
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EXECUTIVE: BRANSON SMITH
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