Document:

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                                                                   EXHIBIT 10.04

                              SNOWBALL.COM, INC.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

                         As Adopted February 22, 2000

     1.   Establishment of Plan.  Snowball.com, Inc. (the "Company") proposes to
grant options for purchase of the Company's  Common Stock to eligible employees
of the Company and its Participating Subsidiaries (as hereinafter defined)
pursuant to this Employee Stock Purchase Plan (this "Plan").  For purposes of
this Plan, "Parent Corporation" and "Subsidiary" shall have the same meanings as
"parent corporation" and "subsidiary corporation" in Sections 424(e) and 424(f),
respectively, of the Internal Revenue Code of 1986, as amended (the "Code").
"Participating Subsidiaries" are Parent Corporations or Subsidiaries that the
Board of Directors of the Company (the "Board") designates from time to time as
corporations that shall participate in this Plan.  The Company intends this Plan
to qualify as an "employee stock purchase plan" under Section 423 of the Code
(including any amendments to or replacements of such Section), and this Plan
shall be so construed.  Any term not expressly defined in this Plan but defined
for purposes of Section 423 of the Code shall have the same definition herein.
A total of 500,000 shares of the Company's  Common Stock is reserved for
issuance under this Plan.  In addition, on each January 1, the aggregate number
of shares of the Company's Common Stock reserved for issuance under the Plan
shall be increased automatically by a number of shares equal to 1% of the total
number of outstanding shares of the Company Common Stock on the immediately
preceding December 31; provided, that the Board or the Committee may in its sole
                       ---------
discretion reduce the amount of the increase in any particular year; and,
provided further, that the aggregate number of shares issued over the term of
----------------
this Plan shall not exceed 5,000,000 shares.  Such number shall be subject to
adjustments effected in accordance with Section 14 of this Plan.

     2.   Purpose.  The purpose of this Plan is to provide eligible employees of
the Company and Participating Subsidiaries with a convenient means of acquiring
an equity interest in the Company through payroll deductions, to enhance such
employees' sense of participation in the affairs of the Company and
Participating Subsidiaries, and to provide an incentive for continued
employment.

     3.   Administration.  This Plan shall be administered by the Compensation
Committee of the Board (the "Committee").  Subject to the provisions of this
Plan and the limitations of Section 423 of the Code or any successor provision
in the Code, all questions of interpretation or application of this Plan shall
be determined by the Committee and its decisions shall be final and binding upon
all participants.  Members of the Committee shall receive no compensation for
their services in connection with the administration of this Plan, other than
standard fees as established from time to time by the Board for services
rendered by Board members serving on Board committees.  All expenses incurred in
connection with the administration of this Plan shall be paid by the Company.

     4.   Eligibility.  Any employee of the Company or the Participating
Subsidiaries is eligible to participate in an Offering Period (as hereinafter
defined) under this Plan except the following:

          (a) employees who are not employed by the Company or a Participating
Subsidiary prior to the beginning of such Offering Period or prior to such other
time period as specified by the Committee, except that employees who are
employed on the Effective Date of the Registration Statement filed by the
Company with the Securities and Exchange Commission ("SEC") under the Securities
Act of 1933, as amended (the "Securities Act") registering the initial public
offering of the Company's Common Stock shall be eligible to participate in the
first Offering Period under the Plan;

          (b) employees who are customarily employed for twenty (20) hours or
less per week;

          (c) employees who are customarily employed for five (5) months or
less in a calendar year;

          (d) employees who, together with any other person whose stock would
be attributed to such employee pursuant to Section 424(d) of the Code, own stock
or hold options to purchase stock possessing five
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                                                              Snowball.com, Inc.
                                               2000 Employee Stock Purchase Plan

percent (5%) or more of the total combined voting power or value of all classes
of stock of the Company or any of its Participating Subsidiaries or who, as a
result of being granted an option under this Plan with respect to such Offering
Period, would own stock or hold options to purchase stock possessing five
percent (5%) or more of the total combined voting power or value of all classes
of stock of the Company or any of its Participating Subsidiaries; and

          (e)  individuals who provide services to the Company or any of its
Participating Subsidiaries as independent contractors who are reclassified as
common law employees for any reason except for federal income and employment tax
                                    ------ ---
purposes.

     5.   Offering Dates.  The offering periods of this Plan (each, an "Offering
Period") shall be of twenty-four (24) months duration commencing on May 1
and November 1 of each year and ending on April 30 and October 31 of each year;
provided, however, that notwithstanding the foregoing, the first such Offering
-----------------
Period shall commence on the first business day on which price quotations for
the Company's Common Stock are available on the Nasdaq National Market (the
"First Offering Date") and shall end on April 30, 2002.  Except for the first
Offering Period, each Offering Period shall consist of four (4) six month
purchase periods (individually, a "Purchase Period") during which payroll
deductions of the participants are accumulated under this Plan.  The first
Offering Period shall consist of no more than five and no fewer than three
Purchase Periods, any of which may be greater or less than six months as
determined by the Committee.  The first business day of each Offering Period is
referred to as the "Offering Date".  The last business day of each Purchase
Period is referred to as the "Purchase Date".  The Committee shall have the
power to change the Offering Dates, the Purchase Dates and the duration of
Offering Periods or Purchase Periods without stockholder approval if such change
is announced prior to the relevant Offering Period, or prior to such other time
period as specified by the Committee.

     6.   Participation in this Plan.  Eligible employees may become
participants in an Offering Period under this Plan on the first Offering Date
after satisfying the eligibility requirements by delivering a subscription
agreement to the Company prior to such Offering Date, or such other time period
as specified by the Committee.  Notwithstanding the foregoing, the Committee may
set a later time for filing the subscription agreement authorizing payroll
deductions for all eligible employees with respect to a given Offering Period.
An eligible employee who does not deliver a subscription agreement to the
Company by such date after becoming eligible to participate in such Offering
Period shall not participate in that Offering Period or any subsequent Offering
Period unless such employee enrolls in this Plan by filing a subscription
agreement with the Company prior to such Offering Date, or such other time
period as specified by the Committee.  Once an employee becomes a participant in
an Offering Period, such employee will automatically participate in the Offering
Period commencing immediately following the last day of the prior Offering
Period unless the employee withdraws or is deemed to withdraw from this Plan or
terminates further participation in the Offering Period as set forth in Section
11 below.  Such participant is not required to file any additional subscription
agreement in order to continue participation in this Plan.

     7.   Grant of Option on Enrollment.  Enrollment by an eligible employee in
this Plan with respect to an Offering Period will constitute the grant (as of
the Offering Date) by the Company to such employee of an option to purchase on
the Purchase Date up to that number of shares of Common Stock of the Company
determined by dividing (a) the amount accumulated in such employee's payroll
deduction account during such Purchase Period by (b) the lower of (i) eighty-
five percent (85%) of the fair market value of a share of the Company's Common
Stock on the Offering Date (but in no event less than the par value of a share
of the Company's  Common Stock), or (ii) eighty-five percent (85%) of the fair
market value of a share of the Company's  Common Stock on the Purchase Date (but
in no event less than the par value of a share of the Company's  Common Stock),
provided, however, that the number of shares of the Company's  Common Stock
-----------------
subject to any option granted pursuant to this Plan shall not exceed the lesser
of (x) the maximum number of shares set by the Committee pursuant to Section
10(c) below with respect to the applicable Purchase Date, or (y) the maximum
number of shares which may be purchased pursuant to Section 10(b) below with
respect to the applicable Purchase Date.  The fair market value of a share of
the Company's  Common Stock shall be determined as provided in Section 8 below.

     8.   Purchase Price.  The purchase price per share at which a share of
Common Stock will be sold in any Offering Period shall be eighty-five percent
(85%) of the lesser of:

                                       2
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                                                              Snowball.com, Inc.
                                               2000 Employee Stock Purchase Plan

          (a)  The fair market value on the Offering Date; or

          (b)  The fair market value on the Purchase Date.

          For purposes of this Plan, the term "Fair Market Value" means, as of
any date, the value of a share of the Company's Common Stock determined as
follows:

          (a)  if such Common Stock is then quoted on the Nasdaq National
Market, its closing price on the Nasdaq National Market on the date of
determination as reported in The Wall Street Journal;
                             -----------------------

          (b)  if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of determination on
the principal national securities exchange on which the  Common Stock is listed
or admitted to trading as reported in The Wall Street Journal;
                                      -----------------------

          (c)  if such Common Stock is publicly traded but is not quoted on the
Nasdaq National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on the date
of determination as reported in The Wall Street Journal; or
                                -----------------------

          (d)  if none of the foregoing is applicable, by the Board in good
faith, which in the case of the First Offering Date will be the price per share
at which shares of the Company's  Common Stock are initially offered for sale to
the public by the Company's underwriters in the initial public offering of the
Company's  Common Stock pursuant to a registration statement filed with the SEC
under the Securities Act.

     9.   Payment Of Purchase Price; Changes In Payroll Deductions; Issuance Of
Shares.

          (a)  The purchase price of the shares is accumulated by regular
payroll deductions made during each Offering Period.  The deductions are made as
a percentage of the participant's compensation in one percent (1%) increments
not less than one percent (1%), nor greater than ten percent (10%) or such lower
limit set by the Committee.  Compensation shall mean all W-2 cash compensation,
including, but not limited to, base salary, wages, commissions, overtime, shift
premiums and bonuses, plus draws against commissions, provided, however, that
                                                      --------  -------
for purposes of determining a participant's compensation, any election by such
participant to reduce his or her regular cash remuneration under Sections 125 or
401(k) of the Code shall be treated as if the participant did not make such
election.  Payroll deductions shall commence on the first payday of the Offering
Period and shall continue to the end of the Offering Period unless sooner
altered or terminated as provided in this Plan.

          (b)  A participant may increase or decrease the rate of payroll
deductions during an Offering Period by filing with the Company a new
authorization for payroll deductions, in which case the new rate shall become
effective for the next payroll period commencing after the Company's receipt of
the authorization and shall continue for the remainder of the Offering Period
unless changed as described below.  Such change in the rate of payroll
deductions may be made at any time during an Offering Period, but not more than
one (1) change may be made effective during any Purchase Period.  A participant
may increase or decrease the rate of payroll deductions for any subsequent
Offering Period by filing with the Company a new authorization for payroll
deductions prior to the beginning of such Offering Period, or prior to such
other time period as specified by the Committee.

          (c)  A participant may reduce his or her payroll deduction percentage
to zero during an Offering Period by filing with the Company a request for
cessation of payroll deductions.  Such reduction shall be effective beginning
with the next payroll period after the Company's receipt of the request and no
further payroll deductions will be made for the duration of the Offering Period.
Payroll deductions credited to the participant's account prior to the effective
date of the request shall be used to purchase shares of Common Stock of the
Company in accordance with Section (e) below.  A participant may not resume
making payroll deductions during the Offering Period in which he or she reduced
his or her payroll deductions to zero.

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                                                              Snowball.com, Inc.
                                               2000 Employee Stock Purchase Plan

          (d)  All payroll deductions made for a participant are credited to his
or her account under this Plan and are deposited with the general funds of the
Company.  No interest accrues on the payroll deductions.  All payroll deductions
received or held by the Company may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such payroll
deductions.

          (e)  On each Purchase Date, so long as this Plan remains in effect and
provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies the Company that the participant
wishes to withdraw from that Offering Period under this Plan and have all
payroll deductions accumulated in the account maintained on behalf of the
participant as of that date returned to the participant, the Company shall apply
the funds then in the participant's account to the purchase of whole shares of
Common Stock reserved under the option granted to such participant with respect
to the Offering Period to the extent that such option is exercisable on the
Purchase Date.  The purchase price per share shall be as specified in Section 8
of this Plan.  Any cash remaining in a participant's account after such purchase
of shares shall be refunded to such participant in cash, without interest;
provided, however that any amount remaining in such participant's account on a
Purchase Date which is less than the amount necessary to purchase a full share
of Common Stock of the Company shall be carried forward, without interest, into
the next Purchase Period or Offering Period, as the case may be.  In the event
that this Plan has been oversubscribed, all funds not used to purchase shares on
the Purchase Date shall be returned to the participant, without interest.  No
Common Stock shall be purchased on a Purchase Date on behalf of any employee
whose participation in this Plan has terminated prior to such Purchase Date.

          (f)  As promptly as practicable after the Purchase Date, the Company
shall issue shares for the participant's benefit representing the shares
purchased upon exercise of his or her option.

          (g)  During a participant's lifetime, his or her option to purchase
shares hereunder is exercisable only by him or her.  The participant will have
no interest or voting right in shares covered by his or her option until such
option has been exercised.

     10.  Limitations on Shares to be Purchased.

          (a)  No participant shall be entitled to purchase stock under this
Plan at a rate which, when aggregated with his or her rights to purchase stock
under all other employee stock purchase plans of the Company or any Subsidiary,
exceeds $25,000 in fair market value, determined as of the Offering Date (or
such other limit as may be imposed by the Code) for each calendar year in which
the employee participates in this Plan.  The Company shall automatically suspend
the payroll deductions of any participant as necessary to enforce such limit
provided that when the Company automatically resumes such payroll deductions,
the Company must apply the rate in effect immediately prior to such suspension.

          (b)  No more than two hundred percent (200%) of the number of shares
determined by using eighty-five percent (85%) of the fair market value of a
share of the Company's  Common Stock on the Offering Date as the denominator may
be purchased by a participant on any single Purchase Date.

          (c)  No participant shall be entitled to purchase more than the
Maximum Share Amount (as defined below) on any single Purchase Date.  Prior to
the commencement of any Offering Period or prior to such time period as
specified by the Committee, the Committee may, in its sole discretion, set a
maximum number of shares which may be purchased by any employee at any single
Purchase Date (hereinafter the "Maximum Share Amount").  Until otherwise
determined by the Committee, there shall be no Maximum Share Amount.  In no
event shall the Maximum Share Amount exceed the amounts permitted under Section
10(b) above.  If a new Maximum Share Amount is set, then all participants must
be notified of such Maximum Share Amount prior to the commencement of the next
Offering Period.  The Maximum Share Amount shall continue to apply with respect
to all succeeding Purchase Dates and Offering Periods unless revised by the
Committee as set forth above.

          (d)  If the number of shares to be purchased on a Purchase Date by all
employees participating in this Plan exceeds the number of shares then available
for issuance under this Plan, then the Company will make a pro rata allocation
of the remaining shares in as uniform a manner as shall be reasonably
practicable and as the

                                       4
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                                                              Snowball.com, Inc.
                                               2000 Employee Stock Purchase Plan

Committee shall determine to be equitable. In such event, the Company shall give
written notice of such reduction of the number of shares to be purchased under a
participant's option to each participant affected.

          (e)  Any payroll deductions accumulated in a participant's account
which are not used to purchase stock due to the limitations in this Section 10
shall be returned to the participant as soon as practicable after the end of the
applicable Purchase Period, without interest.

     11.  Withdrawal.

          (a)  Each participant may withdraw from an Offering Period under this
Plan by signing and delivering to the Company a written notice to that effect on
a form provided for such purpose.  Such withdrawal may be elected at any time
prior to the end of an Offering Period, or such other time period as specified
by the Committee.

          (b)  Upon withdrawal from this Plan, the accumulated payroll
deductions shall be returned to the withdrawn participant, without interest, and
his or her interest in this Plan shall terminate.  In the event a participant
voluntarily elects to withdraw from this Plan, he or she may not resume his or
her participation in this Plan during the same Offering Period, but he or she
may participate in any Offering Period under this Plan which commences on a date
subsequent to such withdrawal by filing a new authorization for payroll
deductions in the same manner as set forth in Section 6 above for initial
participation in this Plan.

          (c)  If the Fair Market Value on the first day of the current Offering
Period in which a participant is enrolled is higher than the Fair Market Value
on the first day of any subsequent Offering Period, the Company will
automatically enroll such participant in the subsequent Offering Period.  Any
funds accumulated in a participant's account prior to the first day of such
subsequent Offering Period will be applied to the purchase of shares on the
Purchase Date immediately prior to the first day of such subsequent Offering
Period, if any.

     12.  Termination of Employment.  Termination of a participant's
employment for any reason, including retirement, death or the failure of a
participant to remain an eligible employee of the Company or of a Participating
Subsidiary, immediately terminates his or her participation in this Plan.  In
such event, the payroll deductions credited to the participant's account will be
returned to him or her or, in the case of his or her death, to his or her legal
representative, without interest.  For purposes of this Section 12, an employee
will not be deemed to have terminated employment or failed to remain in the
continuous employ of the Company or of a Participating Subsidiary in the case of
sick leave, military leave, or any other leave of absence approved by the Board;
provided that such leave is for a period of not more than ninety (90) days or
--------
reemployment upon the expiration of such leave is guaranteed by contract or
statute.

     13.  Return of Payroll Deductions.  In the event a participant's interest
in this Plan is terminated by withdrawal, termination of employment or
otherwise, or in the event this Plan is terminated by the Board, the Company
shall deliver to the participant all payroll deductions credited to such
participant's account.  No interest shall accrue on the payroll deductions of a
participant in this Plan.

     14.  Capital Changes.  Subject to any required action by the stockholders
of the Company, the number of shares of Common Stock covered by each option
under this Plan which has not yet been exercised and the number of shares of
Common Stock which have been authorized for issuance under this Plan but have
not yet been placed under option (collectively, the "Reserves"), as well as the
price per share of Common Stock covered by each option under this Plan which has
not yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued and outstanding shares of Common Stock of the
Company resulting from a stock split or the payment of a stock dividend (but
only on the Common Stock) or any other increase or decrease in the number of
issued and outstanding shares of Common Stock effected without receipt of any
consideration by the Company; provided, however, that conversion of any
                              -----------------
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration".  Such adjustment shall be made by the
Committee, whose determination shall be final, binding and conclusive.  Except
as expressly provided herein, no issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no

                                       5
<PAGE>

adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.

          In the event of the proposed dissolution or liquidation of the
Company, the Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee.  The Committee may, in the exercise of its sole discretion in such
instances, declare that this Plan shall terminate as of a date fixed by the
Committee and give each participant the right to purchase shares under this Plan
prior to such termination.  In the event of (i) a merger or consolidation in
which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the options under this Plan are assumed, converted or replaced by
the successor corporation, which assumption will be binding on all
participants), (ii) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (iii) the sale of all or
substantially all of the assets of the Company or (iv) the acquisition, sale, or
transfer of more than 50% of the outstanding shares of the Company by tender
offer or similar transaction, the Plan will continue with regard to Offering
Periods that commenced prior to the closing of the proposed transaction and
shares will be purchased based on the Fair Market Value of the surviving
corporation's stock on each Purchase Date, unless otherwise provided by the
Committee consistent with pooling of interests accounting treatment.

          The Committee may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, or in the event of the Company being consolidated with or merged into any
other corporation.

     15.  Nonassignability.  Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under this Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 22 below) by the participant.  Any such
attempt at assignment, transfer, pledge or other disposition shall be void and
without effect.

     16.  Reports. Individual accounts will be maintained for each participant
in this Plan. Each participant shall receive promptly after the end of each
Purchase Period a report of his or her account setting forth the total payroll
deductions accumulated, the number of shares purchased, the per share price
thereof and the remaining cash balance, if any, carried forward to the next
Purchase Period or Offering Period, as the case may be.

     17.  Notice of Disposition.  Each participant shall notify the Company in
writing if the participant disposes of any of the shares purchased in any
Offering Period pursuant to this Plan if such disposition occurs within two (2)
years from the Offering Date or within one (1) year from the Purchase Date on
which such shares were purchased (the "Notice Period").  The Company may, at any
time during the Notice Period, place a legend or legends on any certificate
representing shares acquired pursuant to this Plan requesting the Company's
transfer agent to notify the Company of any transfer of the shares.  The
obligation of the participant to provide such notice shall continue
notwithstanding the placement of any such legend on the certificates.

     18.  No Rights to Continued Employment.  Neither this Plan nor the grant
of any option hereunder shall confer any right on any employee to remain in the
employ of the Company or any Participating Subsidiary, or restrict the right of
the Company or any Participating Subsidiary to terminate such employee's
employment.

     19.  Equal Rights And Privileges.  All eligible employees shall have
equal rights and privileges with respect to this Plan so that this Plan
qualifies as an "employee stock purchase plan" within the meaning of Section 423
or any successor provision of the Code and the related regulations.  Any
provision of this Plan which is inconsistent with Section 423 or any successor
provision of the Code shall, without further act or amendment by the

                                       6
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                                                              Snowball.com, Inc.
                                               2000 Employee Stock Purchase Plan

Company, the Committee or the Board, be reformed to comply with the requirements
of Section 423. This Section 19 shall take precedence over all other provisions
in this Plan.

     20.  Notices.  All notices or other communications by a participant to
the Company under or in connection with this Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

     21.  Term; Stockholder Approval.  After this Plan is adopted by the
Board, this Plan will become effective on the First Offering Date (as defined
above).  This Plan shall be approved by the stockholders of the Company, in any
manner permitted by applicable corporate law, within twelve (12) months before
or after the date this Plan is adopted by the Board.  No purchase of shares
pursuant to this Plan shall occur prior to such stockholder approval.  This Plan
shall continue until the earlier to occur of (a) termination of this Plan by the
Board (which termination may be effected by the Board at any time), (b) issuance
of all of the shares of Common Stock reserved for issuance under this Plan, or
(c) ten (10) years from the adoption of this Plan by the Board.

     22.  Designation of Beneficiary.

          (a)  A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
this Plan in the event of such participant's death subsequent to the end of an
Purchase Period but prior to delivery to him of such shares and cash.  In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under this Plan in the event
of such participant's death prior to a Purchase Date.

          (b)  Such designation of beneficiary may be changed by the participant
at any time by written notice.  In the event of the death of a participant and
in the absence of a beneficiary validly designated under this Plan who is living
at the time of such participant's death, the Company shall deliver such shares
or cash to the executor or administrator of the estate of the participant, or if
no such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such shares or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

     23.  Conditions Upon Issuance of Shares; Limitation on Sale of Shares.
Shares shall not be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange or automated quotation system upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

     24.  Applicable Law.  The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of California.

     25.  Amendment or Termination of this Plan.  The Board may at any time
amend, terminate or extend the term of this Plan, except that any such
termination cannot affect options previously granted under this Plan, nor may
any amendment make any change in an option previously granted which would
adversely affect the right of any participant, nor may any amendment be made
without approval of the stockholders of the Company obtained in accordance with
Section 21 above within twelve (12) months of the adoption of such amendment (or
earlier if required by Section 21) if such amendment would:

          (a)  increase the number of shares that may be issued under this Plan;
or

          (b)  change the designation of the employees (or class of employees)
eligible for participation in this Plan.

                                       7
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                                                              Snowball.com, Inc.
                                               2000 Employee Stock Purchase Plan

          Notwithstanding the foregoing, the Board may make such amendments to
the Plan as the Board determines to be advisable, if the continuation of the
Plan or any Offering Period would result in financial accounting treatment for
the Plan that is different from the financial accounting treatment in effect on
the date this Plan is adopted by the Board.

                                       8
<PAGE>

             SNOWBALL.COM, INC. 2000 EMPLOYEE STOCK PURCHASE PLAN
                                ENROLLMENT FORM

<TABLE>
     <S>                                          <C>
     Check One:                                   Complete:

          [ ]  New Enrollment or Re-enrollment    Social Security No._________________________________________________

          [ ]  Change                             Employee No.________________________________________________________
               [ ]  Change in How Shares Are to Be Held in Account
               [ ]  Increase in Payroll Deduction Level [ ] this Purchase Period [ ] next Offering Period
               [ ]  Decrease in Payroll Deduction Level [ ] this Purchase Period [ ] next Offering Period
               [ ]  Suspension of Payroll Deductions for Open Offering Period (Attach Completed Suspension Form)
               [ ]  Withdrawal (Attach Completed Withdrawal Form)
               [ ]  Beneficiary Change
</TABLE>

1.   Name of Participant________________________________________________________

2.   Shares purchased under the Plan should be held in account with the Plan
     Broker in my name or in my name together with the name(s) indicated below:

     Name__________________________    Social Security No.______________________
     Name__________________________    Social Security No.______________________

     There may be tax consequences for naming individuals other than your spouse
     on the account in which Shares purchased under the Plan are held. If spouse
     (circle one): Joint Tenants/Community Property.

     Please notify the Plan Broker directly to transfer or sell your stock.

3.   Payroll Deduction Level (from 1% to 10% in whole percentages):____________
     (the percentage deduction will be made from your W-2 compensation including
     base salary, commissions, overtime, shift premiums, bonuses and draws
     against commissions)

4.   I confirm my spouse's interest (if married) in the community property
     herein, and I hereby designate the following person(s) as my
     beneficiary(ies) to receive all payments and/or stock attributable to my
     interest under the Plan:

<TABLE>
               NAME                                    *To be divided              ADDRESS
                                                        as follows:
     <S>                                               <C>                 <C>
     __________________________________________        ______________      _______________________________________
     Last             First        M.I.                                    Number         Street

     __________________________________________                            _______________________________________
     Social Security No.      Relationship                                 City           State          Zip

     __________________________________________        ______________      _______________________________________
     Last             First        M.I.                                    Number         Street

     __________________________________________                            _______________________________________
     Social Security No.      Relationship                                 City           State          Zip
</TABLE>

     * If more than one beneficiary: (1) insert "in equal shares", or (2) insert
     percentage to be paid to each beneficiary.

5.   The information provided on this Enrollment Form will remain in effect
     unless and until I complete and submit to Silicon Image, Inc. a new
     enrollment form.

                                   SNOWBALL.COM, INC. OFFICE USE:

     Signature:_________________   Date received by the__________________:______

     Name:______________________   Date entered into system:____________________

     Date:______________________   Please return this completed form to
                                   Snowball.com, Inc.
<PAGE>

                              SNOWBALL.COM, INC.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

                            SUBSCRIPTION AGREEMENT

1.   I elect to participate in the Snowball.com, Inc. (the "Company") 2000
     Employee Stock Purchase Plan (the "Plan") and to subscribe to purchase
     shares of the Company's Common Stock (the "Shares") in accordance with this
     Subscription Agreement and the Plan.

2.   I authorize payroll deductions from each of my paychecks in that percentage
     of my base salary, commissions, overtime, shift premiums, bonuses and draws
     against commissions as shown on my Enrollment Form, in accordance with the
     Plan.

3.   I understand that such payroll deductions shall be accumulated for the
     purchase of Shares under the Plan at the applicable purchase price
     determined in accordance with the Plan. I further understand that except as
     otherwise set forth in the Plan, Shares will be purchased for me
     automatically at the end of each Purchase Period unless I withdraw from the
     Plan or otherwise become ineligible to participate in the Plan.

4.   I understand that this Subscription Agreement will automatically re-enroll
     me in all subsequent Offering Periods unless I withdraw from the Plan or I
     become ineligible to participate in the Plan.

5.   I acknowledge that I have a copy of and am familiar with the Company's most
     recent Prospectus which describes the Plan. A copy of the complete Plan and
     the Prospectus is on file with the Company. (In the case of the initial
     Plan Purchase Period, the Prospectus will be on file on the first day of
     the Offering Period.)

6.   I understand that Shares purchased for me under the Plan will be held in a
     personal account with the Plan Broker unless I request otherwise.

7.   I hereby agree to be bound by the terms of the Plan. The effectiveness of
     this Subscription Agreement is dependent upon my eligibility to participate
     in the Plan.

8.   I have read and understood this Subscription Agreement.

                                             Signature:_________________________

                                             Name:______________________________

                                             Date:______________________________

Please return this completed form to the Company.
<PAGE>

                              SNOWBALL.COM, INC.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

                             NOTICE OF WITHDRAWAL

     I, _________________________, the undersigned participant in the Offering
Period of the Snowball.com, Inc. 2000 Employee Stock Purchase Plan (the "Plan")
which began on _______________, hereby notify Snowball.com, Inc. (the "Company")
that I wish to withdraw from the Offering Period.  I direct the Company to pay
to me as promptly as practicable all payroll deductions credited to my account
with respect to such Offering Period.  I understand and agree that my
participation in the Plan will terminate and no shares will be purchased for me
at the end of the Purchase Period so long as I submit this Notice of Withdrawal
to the Company prior to the end of the Purchase Period, or such other time
period as specified by the Company.  I understand and agree that if I submit
this Notice of Withdrawal to the Company prior to the end of the Purchase
Period, shares will be purchased for me at the end of the Purchase Period, and
my participation in the Plan will end at the beginning of the next Purchase
Period or Offering Period, as the case may be.  I further understand that no
additional payroll deductions will be made for the purchase of shares in the
current Offering Period, and I shall be eligible to participate in succeeding
Offering Periods only by timely delivering to the Company a new Subscription
Agreement and Enrollment Form.

Name and address of Participant (please print):

Name:______________________________________________________________________

Street Address or P.O. Box:________________________________________________

City, State ZIP:___________________________________________________________

__________________________________     __________________________________
Signature                              Date

Please return this form to the Company.
<PAGE>

                               SNOWBALL.COM, INC.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF SUSPENSION

     I, _________________________, the undersigned participant in the Offering
Period of the Snowball.com, Inc. 2000 Employee Stock Purchase Plan (the "Plan")
which began on _______________, hereby notify Snowball.com, Inc. (the "Company")
that I wish to suspend my payroll deductions to the Plan for the remainder of
the Offering Period.  I understand and agree that my request will be effective
beginning with the next payroll period after the Company receives this Notice of
Suspension.  I understand and agree that payroll deductions credited to my
account prior to the date this Notice of Suspension is effective will be used to
purchase shares on the next Purchase Date.  I further understand that no
additional payroll deductions will be made for the purchase of shares in the
current Offering Period, and I will be eligible to participate in succeeding
Offering Periods only by timely delivering to the Company a new Subscription
Agreement and Enrollment Form.

Name and address of Participant (please print):

Name:______________________________________________________________________

Street Address or P.O. Box:________________________________________________

City, State ZIP:___________________________________________________________

_____________________________________      ______________________________
Signature                                  Date

Please return this form to the Company.<PAGE>

                                                                    EXHIBIT 10.3

                             EMPLOYMENT AGREEMENT
                             --------------------

     This EMPLOYMENT AGREEMENT (this "Agreement"), effective as of the 12th day
of November, 1999 (the "Effective Date"), by and between CellStar Ltd. (the
"Employer"), CellStar Corporation, a Delaware corporation and parent company of
Employer ("Parent"), and Dale H. Allardyce (the "Employee").

                                R E C I T A L S
                                ---------------

     WHEREAS, Employer desires to obtain the benefit of the services of Employee
as an employee of Employer for the period of time provided in this Agreement;
and

     WHEREAS, Employee desires to render services for Employer on the terms and
conditions hereinafter provided; and

     WHEREAS, Employer desires that Employee be able to participate in Parent's
stock option and incentive compensation plans; and

     WHEREAS, the Compensation Committee of the Board of Directors of Parent
deems it advisable and in the best interests of Parent and Employer to enter
into this Employment Agreement with Employee;

                               A G R E E M E N T
                               -----------------

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:

                                   ARTICLE I

                                  Employment

     1.1  Employment.  Effective on the Effective Date the Employer shall employ
          ----------
the Employee and the Employee shall accept employment by the Employer for the
period and upon the terms and conditions contained in this Agreement.

     1.2  Term.  The term of this Agreement shall commence on the Effective Date
          ----
and shall end on the four (4) year anniversary of the Effective Date (the
"Original Term"), unless earlier terminated as provided herein (the period from
the Effective Date to the four (4) year anniversary of the Effective Date, or to
the date of such earlier termination, as applicable, is hereinafter referred to
as the "Term").  At the expiration of the Original Term, this Agreement shall
automatically be renewed on a year to year basis unless notice of any decision
not to renew this Agreement is given by the Employer or the Employee at least
365 days prior to the expiration of the Original Term or any such one year term
or unless earlier terminated as provided herein.
<PAGE>

     1.3  Position and Duties.
          -------------------

          (a) Position.  During the Term, the Employee shall serve as President
              --------
     and Chief Operating Officer of Employer, with authority, duties and
     responsibilities consistent with such position, and shall perform such
     other services for Employer, Parent and their affiliated entities
     consistent with such position as may be reasonably assigned to him from
     time to time by senior management and/or the boards of directors of
     Employer and/or Parent.  During the Term, Employee shall, if so elected or
     appointed, also accept election or appointment, and serve, as an officer
     and/or director of Employer or any of its affiliated entities and perform
     the duties appropriate thereto, without additional compensation other than
     as set forth herein. Employee's actions hereunder shall at all times be
     subject to the direction of the senior management and the boards of
     directors of Employer and Parent.

          (b) Commitment.  During the Term, the Employee shall devote
              ----------
     substantially all of his business time, energy, skill and best efforts to
     the performance of his duties hereunder in a manner that will faithfully
     and diligently further the business and interests of Employer, Parent and
     their affiliated entities.  Subject to the foregoing, the Employee may
     serve in any capacity with any civic, educational or charitable
     organization; provided that such activities and services do not interfere
     or conflict with the performance of his duties hereunder.  Further subject
     to the foregoing, the Employee may serve as a director of other
     corporations;  provided, however, that such service or position is approved
                    --------  -------
     in advance by the Board of Directors of Parent and further that such
     service or position does not at any time during the Term interfere or
     conflict with the performance of his duties hereunder.  Employee shall
     comply with policies, standards and regulations established from time to
     time by senior management and/or the boards of directors of Employer and
     Parent.

     1.4  Compensation.
          ------------

          (a) Base Salary.  Subject to Section 1.4(c) below, beginning on the
              -----------
     Effective Date, Employer shall pay the Employee as compensation an
     aggregate salary ("Base Salary") of $400,000 per year during the Term, or
     such greater amount as shall be approved in accordance with the policies of
     Employer and/or Parent, as applicable.  The Base Salary for each year shall
     be paid by Employer in accordance with the regular payroll practices of
     Employer.

          (b) Annual Incentive Payment.  Each year during the Term, the Employee
              ------------------------
     shall be eligible to participate in an annual incentive plan approved by
     the Compensation Committee of Parent's Board of Directors.  Subject to any
     required approvals of the Compensation Committee of the Board of Directors
     of Parent and subject to achievement of specified goals (the "Goals"), for
     the fiscal year ending in November 1999, Employee will be eligible to earn
     a pro rated annual incentive payment at the 50% target level (i.e., 50% of
     his base salary earned during such fiscal year), which incentive payment
     may be less than such target level or up to two times such target level.

                                       2
<PAGE>

          (c) Withholding.  With respect to any compensation received by
              -----------
     Employee with respect to Employee's services for Employer or any of its
     affiliates, Employer will deduct such withholding and other payroll taxes
     as are required to be withheld by Employer under applicable law.

          (d) Stock Options.  Parent will recommend to the Compensation
              -------------
     Committee of the Board of Directors of Parent that Employee be granted a
     stock option  (the "Option") entitling him to purchase 200,000 shares of
     Parent's common stock at the reported market closing sales price thereof on
     the date of grant.  The Option shall become exercisable by the Employee at
     the rate of 25% of the shares covered thereby per year, beginning on the
     first anniversary of the Effective Date in accordance with the terms of the
     Parent's 1993 Amended and Restated Long Term Incentive Plan; provided,
                                                                  --------
     however, that any unvested portion of the Option shall immediately vest if
     -------
     the Employee's employment is terminated Without Cause (defined below) or
     for Company Breach (defined below) or as a result of a Change in Control
     (defined below).  The Option shall contain such additional terms as are set
     forth in Parent's 1993 Amended and Restated Long Term Incentive Plan and as
     are established by the Compensation Committee of the Board of Directors of
     Parent.  Employee shall be entitled to annual consideration for future
     grants in amounts (if any) and on terms and conditions to be determined by
     the Compensation Committee of the Board of Directors.

          (e) Payment and Reimbursement of Expenses.  During the Term, Employer
              -------------------------------------
     shall pay or reimburse the Employee for all reasonable travel and other
     expenses incurred by the Employee in performing his obligations under this
     Agreement in accordance with the policies and procedures of Employer or
     Parent, provided that the Employee properly accounts therefor in accordance
     with the regular policies of Employer or Parent, as applicable.

          (f) Fringe Benefits and Perquisites.  During the Term, the Employee
              -------------------------------
     shall be entitled to participate in or receive benefits under any stock
     purchase, profit-sharing, pension, retirement, paid time off, life,
     medical, dental, disability or other plan or arrangement made generally
     available by Employer or Parent to employees, subject to and on a basis
     consistent with the terms, conditions and overall administration of such
     plans and arrangements.  Employee shall be credited with 10 years of
     service with the Employer as of the Effective Date for purposes of
     determining eligibility and vesting for paid time off and short-term
     disability benefits.

          (g) Relocation Expenses.  The Employee acknowledges and agrees that he
              -------------------
     will relocate his primary residence to the Dallas/Fort Worth area in order
     to perform his duties and responsibilities under this Agreement.  In
     connection with such relocation:

              (i)  The Employer agrees to reimburse the Employee for the
          reasonable costs of temporary corporate housing in the Dallas/Fort
          Worth area for up to 180 days from the Effective Date.

                                       3
<PAGE>

              (ii)  The Employer agrees to reimburse Employee for the cost of
          Employee's trips home to Connecticut on a bi-weekly basis for up to
          180 days from the Effective Date.  Reimbursable expenses include round
          trip coach air fare and any reasonable out-of-pocket expenses (i.e.,
          airport parking).

              (iii) The Employer shall reimburse Employee for the cost of two
          (2) house hunting trips for members of the Employee's immediate
          family. Reimbursable expenses include round trip coach air fare,
          automobile rental, reasonable costs for meals, lodging (if needed) and
          other reasonable out-of-pocket expenses.

              (iv)  The Employer shall reimburse Employee for all normal and
          customary costs associated with the sale of Employee's current
          residence, including broker's fees not to exceed 6%.

              (v)   The Employer shall reimburse Employee for all normal and
          customary costs associated with the purchase of a residence in the
          Dallas/Fort Worth area, including but not limited to survey fees, loan
          origination fees, title insurance and attorneys fees.

              (vi)  The Employer shall reimburse Employee for all normal and
          customary moving costs for household goods from Connecticut to the
          Dallas/Fort Worth area.

              (vii) The Employer shall reimburse Employee for all reasonable
          and customary out-of-pocket travel expenses incurred by Employee and
          his immediate family during the actual relocation from Connecticut to
          the Dallas/Fort Worth area.

          All amounts reimbursed pursuant to this subsection shall be grossed up
     for all applicable taxes.

     1.5  Termination.
          -----------

          (a) Disability.  Employer may terminate this Agreement for Disability.
              ----------
     "Disability" shall exist if, because of ill health or physical or mental
     disability, the Employee shall have been unable to perform his duties under
     this Agreement, with reasonable accommodation by the Employer, as
     determined in good faith by Parent's Board of Directors or a committee
     thereof, for a period of 180 consecutive days, or if, in any 12-month
     period, the Employee shall have been unable or shall have failed to perform
     his duties for a period of 270 or more business days, irrespective of
     whether or not such days are consecutive.

          (b) Cause.  Employer may terminate the Employee's employment for
              -----
     Cause. Termination for "Cause" shall mean termination because of the
     Employee's (i) the willful failure by Employee to perform his duties,
     provided that no act, or failure to act, on the Employee's part shall be
     considered "willful" unless the Board of Directors, in the

                                       4
<PAGE>

     reasonable exercise of its business judgment, determines that such act or
     failure to act was committed without good faith and without a reasonable
     belief that such act or failure to act was in the best interests of the
     Employer, Parent or their affiliated entities, (ii) misconduct that causes
     or is likely to cause material economic harm to Employer, Parent or their
     affiliated entities or that brings or is likely to bring material discredit
     to the reputation of Employer, Parent or any of their affiliated entities,
     as determined by the Board of Directors of Parent in good faith, (iii)
     failure to substantially follow directions of senior management or the
     boards of directors of Employer or Parent that are consistent with his
     duties under this Agreement, provided that no act, or failure to act, on
     the Employee's part shall be deemed to constitute Cause unless done, or
     omitted to be done, by the Employee not in good faith and without
     reasonable belief that the Employee's act, or failure to act, was in or not
     opposed to the best interest of Employer, (iv) conviction of, or entry of a
     pleading of guilty or nolo contendre to, any felony involving moral
     turpitude or entry of an order duly issued by any federal or state
     regulatory agency having jurisdiction in the matter permanently prohibiting
     Employee from participating in the conduct of the affairs of Employer,
     Parent or their affiliated entities, or (v) any other material breach of
     any provision of this Agreement. Items (i), (ii), (iii) and (v) of this
     subsection shall not constitute Cause unless Employer or Parent notified
     the Employee thereof in writing, specifying in reasonable detail the basis
     therefor and stating that it is grounds for Cause. Furthermore, if the
     Employee's actions are curable, items (i), (ii), (iii) and (v) of this
     subsection shall not constitute Cause unless the Employee fails to cure
     such matter within 30 days after such notice is sent or given under this
     Agreement. It is understood that "Cause" shall not include a failure to
     perform due to a Disability.

          (c) Without Cause.  During the Term, Employer may terminate the
              -------------
     Employee's employment Without Cause, subject to the provisions of
     subsection 1.6(c) (Termination Without Cause or for Company Breach).
                        -----------------------------------------------
     Termination "Without Cause" shall mean termination of the Employee's
     employment by Employer other than termination for Cause or for Disability.

          (d) Company Breach.  The Employee may terminate his employment
              --------------
     hereunder for Company Breach.  For purposes of this Agreement a "Company
     Breach" shall be deemed to occur in the event of a material breach of this
     Agreement by Employer or Parent; provided, however, that the Employee shall
                                      --------  -------
     not be entitled to terminate for Company Breach unless the Employee
     notifies Employer thereof in writing, specifying in reasonable detail the
     basis therefor and stating that it is grounds for Company Breach, and
     unless Employer fails to cure such Company Breach within 30 days after such
     notice is sent or given under this Agreement.  For purposes of this
     Agreement, a material breach by Employer or Parent shall include, without
     limitation, (i) the material reduction without his consent of the title,
     authority, duties or responsibilities that the Employee has on the
     Effective Date, (ii) the reduction in the Employee's annual base salary as
     in effect on the Effective Date, (iii) if the Employee's eligibility for a
     bonus in any fiscal year (provided that all performance standards
     established for him have been achieved) shall be, in terms of a percentage
     of base salary, any

                                       5
<PAGE>

     amount less than the percentage of base salary established for the Chief
     Executive Officer of Parent for such fiscal year, (iv) if the Employee's
     eligibility for bonus in any fiscal year shall be based on performance
     standards that are materially greater or different than those established
     for the Chief Executive Officer of Parent, or (v) the relocation of the
     Employer's principal office, or the Employee's own office location as
     assigned to him by Employer, to a location more than 50 miles from the
     present location of Employer's principal office.

          (e) Change in Control.  The Employee may terminate his employment
              -----------------
     hereunder within 12 months of a Change in Control (defined below):

               (i)  "Change in Control" shall mean any of the following:

                    (1) any consolidation or merger of Parent in which Parent is
               not the continuing or surviving corporation or pursuant to which
               shares of Parent's common stock would be converted into cash,
               securities or other property, other than a merger of Parent in
               which the holders of Parent common stock immediately prior to the
               merger have the same proportionate ownership of common stock of
               the surviving corporation immediately after the merger;

                    (2) any sale, lease, exchange or other transfer (in one
               transaction or a series of related transactions) of all or
               substantially all of the assets of Parent;

                    (3) any approval by the stockholders of Parent of any plan
               or proposal for the liquidation or dissolution of Parent;

                    (4) the cessation of control (by virtue of their not
               constituting a majority of directors) of Parent's Board of
               Directors by the individuals (the "Continuing Directors") who (x)
               at the date of this Agreement were directors or (y) become
               directors after the date of this Agreement and whose election or
               nomination for election by Parent's stockholders, was approved by
               a vote of at least two-thirds of the directors then in office who
               were directors at the date of this Agreement or whose election or
               nomination for election was previously so approved); or

                    (5) (A) the acquisition of beneficial ownership ("Beneficial
               Ownership"), within the meaning of Rule 13d-3 under the
               Securities Exchange Act of 1934, as amended (the "Exchange Act"),
               of an aggregate of 15% or more of the voting power of Parent's
               outstanding voting securities by any person or group (as such
               term is used in Rule 13d-5 under the Exchange Act) who
               Beneficially Owned less than 10% of the voting power of Parent's
               outstanding voting securities on the Effective Date of this
               Agreement, (B) the

                                       6
<PAGE>

               acquisition of Beneficial Ownership of an additional 5% of the
               voting power of Parent's outstanding voting securities by any
               person or group who Beneficially Owned at least 10% of the voting
               power of Parent's outstanding voting securities on the Effective
               Date of this agreement, or (C) the execution by Parent and a
               stockholder of a contract that by its terms grants such
               stockholder (in its, hers or his capacity as a stockholder) or
               such stockholder's Affiliate (as defined in Rule 405 promulgated
               under the Securities Act of 1933 (an "Affiliate")) including,
               without limitation, such stockholder's nominee to Parent's Board
               of Directors (in its, hers or his capacity as an Affiliate of
               such stockholder), the right to veto or block decisions or
               actions of Parent's Board of Directors; provided, however, that
                                                       --------  -------
               notwithstanding the foregoing, the events described in items (A),
               (B) or (C) above shall not constitute a Change in Control
               hereunder if the acquiror is (aa) Alan H. Goldfield or his
               Affiliates, (bb) a trustee or other fiduciary holding securities
               under an employee benefit plan of Employer, Parent or one of
               their affiliated entities and acting in such capacity, (cc) a
               corporation owned, directly or indirectly, by the stockholders of
               Parent in substantially the same proportions as their ownership
               of voting securities of Parent or (dd) a person or group meeting
               the requirements of clauses (i) and (ii) of Rule 13d-1(b)(1)
               under the Exchange Act or (ee) in the case of an acquisition
               described in items (A) or (B) above (but not in the case of an
               acquisition described in item (C) above), any other person whose
               acquisition of shares of voting securities is approved in advance
               by a majority of the Continuing Directors;  provided further,
                                                           -------- -------
               however that none of the following shall constitute a Change in
               -------
               Control: (aa) the right of the holders of any voting securities
               of Parent to vote as a class on any matter or (bb) any vote
               required of disinterested or unaffiliated directors or
               stockholders including, without limitation, pursuant to Section
               144 of the Delaware General Corporation Law or Rule 16b-3
               promulgated pursuant to the Exchange Act.

                    (6) subject to applicable law, in a Chapter 11 bankruptcy
               proceeding, the appointment of a trustee or the conversion of a
               case involving Parent to a case under Chapter 7.

          (f)  Without Good Reason.  During the Term, the Employee may terminate
               -------------------
     his employment Without Good Reason upon 30 days prior written notice to
     Employer of such termination, which notice may be waived by Employer in
     Employer's discretion. Termination "Without Good Reason" shall mean
     termination of the Employee's employment by the Employee other than
     termination for Company Breach.

          (g)  Explanation of Termination of Employment. Any party terminating
               ----------------------------------------
     this Agreement shall give prompt written notice ("Notice of Termination")
     to the other party hereto advising such other party of the termination of
     this Agreement stating in reasonable

                                       7
<PAGE>

     detail the basis for such termination. The Notice of Termination shall
     indicate whether termination is being made for Cause, Without Cause or for
     Disability (if Employer has terminated the Agreement) or for Company
     Breach, upon a Change in Control or Without Good Reason (if the Employee
     has terminated the Agreement).

          (h) Date of Termination.  "Date of Termination" shall mean the last
              -------------------
     day of Employee's employment, as determined in accordance with this Section
     1.5.

     1.6  Compensation Upon Termination.
          -----------------------------

          (a) During Disability.  During any period that the Employee fails to
              -----------------
     perform his duties hereunder because of ill health or physical or mental
     disability, he shall continue to receive his full salary and benefits
     pursuant to Section 1.4 (Compensation) through the Date of Termination,
                              ------------
     after giving effect to all disability benefits received by Employee under
     the terms of any applicable disability policy.

          (b) Termination for Cause or Without Good Reason.  If Employer shall
              --------------------------------------------
     terminate the Employee's employment for Cause or if the Employee shall
     terminate his employment Without Good Reason, then Employer's obligation to
     pay salary and benefits pursuant to Section 1.4 (Compensation) shall
                                                      ------------
     terminate, except that Employer shall pay the Employee his accrued but
     unpaid salary and benefits pursuant to Section 1.4 (Compensation) through
                                                         ------------
     the Date of Termination.

          (c) Termination Without Cause or for Company Breach.   If Employer
              -----------------------------------------------
     shall terminate the Employee's employment Without Cause or if the Employee
     shall terminate his employment for Company Breach, then Employer shall pay
     to the Employee, as severance pay in a lump sum on the 15th day following
     the Date of Termination, the following amounts:

              (i)  his accrued but unpaid Base Salary through the Date of
          Termination at the rate in effect as of the Date of Termination; and

              (ii) in lieu of any further Base Salary and Annual Incentive
          Payments for periods subsequent to the Date of Termination, an amount
          equal to the product of (A) the sum of Employee's Base Salary at the
          rate in effect as of the Date of Termination plus the amount of the
          Annual Incentive Payment paid to the Employee for the preceding year
          (or an annualized equivalent of the Annual Incentive Payment paid for
          any shorter period) divided by 365 and (B) multiplied by the lesser of
          (y) 720, or (z) the number of days from the Date of Termination to the
          last day of the Original Term or the applicable renewal term, but in
          no event less than 365 days.

                                       8
<PAGE>

     In addition, the Employee will be entitled to a prorated portion of any
     annual incentive payment earned for the fiscal year in which his employment
     is terminated, if earned in accordance with the terms of its grant.

          Employee hereby acknowledges and agrees that the payments by the
     Employer under this Section 1.6(c) shall be the sole and exclusive remedy
     of the Employee for termination of Employee's employment Without Cause or
     by reason of a Company Breach, and Employee hereby waives any and all other
     remedies under law or in equity.

          If the Employee terminates his employment for Company Breach based
     upon a material reduction by Employer of the Employee's Base Salary, then
     for purposes of this subsection 1.6(c) (Termination Without Cause or for
                                             --------------------------------
     Company Breach), the Employee's Base Salary as of the Date of Termination
     --------------
     shall be deemed to be the Employee's Base Salary immediately prior to the
     reduction that the Employee claims as grounds for Company Breach.

          (d) Termination Upon a Change in Control.  If the Employee terminates
              ------------------------------------
     his employment after a Change in Control pursuant to subsection 1.5(e)
     (Change in Control), then Employer shall pay to the Employee as severance
     ------------------
     pay and as liquidated damages (because actual damages are difficult to
     ascertain), in a lump sum, in cash, within 15 days after termination, an
     amount which, when combined with all payments under Section 1.6(c), equals
     $100 less than three (3) times the Employee's "annualized includable
     compensation for the base period" (as defined in Section 280G of the
     Internal Revenue Code of 1986); provided, however, that if such lump sum
                                     --------  -------
     severance payment, either alone or together with other payments or
     benefits, either cash or non-cash, that the Employee has the right to
     receive from Employer, including, but not limited to, accelerated vesting
     or payment of any deferred compensation, options, stock appreciation rights
     or any benefits payable to the Employee under any plan for the benefit of
     employees, would constitute an "excess parachute payment" (as defined in
     Section 280G of the Internal Revenue Code of 1986), then such lump sum
     severance payment or other benefit shall be reduced to the largest amount
     that will not result in receipt by the Employee of a parachute payment.
     The determination of the amount of the payment described in this subsection
     shall be made by Parent's independent auditors.

          (e) Termination for Disability.  If Employer shall terminate the
              --------------------------
     Employee's employment for Disability, Employer's obligation to pay salary
     and benefits pursuant to Section 1.4 (Compensation) shall terminate, except
                                           ------------
     that Employer shall pay the Employee accrued but unpaid salary and benefits
     pursuant to Section 1.4 (Compensation) through the Date of Termination,
                              ------------
     after giving effect to all disability benefits received by Employee under
     the terms of any applicable disability policy.

          (f) Employee Benefits.   Employer shall maintain in full force and
              -----------------
     effect (to the extent consistent with past practice), for the continued
     benefit of Employee and, if

                                       9
<PAGE>

     applicable, his wife and children, the employee benefits set forth in
     subsections 1.4(f) (Fringe Benefits and Perquisites) through the Date of
                         -------------------------------
     Termination (subject to the provisions of Section 1.6(e)); provided that
     his continued participation or, if applicable, the participation of his
     wife and children, is possible under the general terms and conditions of
     such plans and programs. Following the Date of Termination, Employee and
     his eligible dependents shall be eligible for continued health coverage in
     accordance with the terms of applicable law.

     1.7  Death of Employee.  If Employee dies prior to the expiration of this
          -----------------
Agreement, Employee's employment and other obligations under this Agreement
shall automatically terminate and all compensation to which Employee is or would
have been entitled hereunder (including without limitation under subsections
1.4(a) (Base Salary) and 1.4(b) (Annual Incentive Payment)) shall terminate as
        -----------              ------------------------
of the end of the month in which Employee's death occurs; provided, however,
                                                          --------  -------
that (i) Employer shall pay to Employee's estate, as soon as practicable, a
prorated Annual Incentive Payment, if earned in accordance with Parent's annual
incentive plan; and (ii) for the balance of the month in which Employee's death
occurs, Employee's wife and children shall be entitled to receive their benefits
under Employer's group hospitalization, medical and dental plans (if any), to
the extent permitted under the terms of such plans, and thereafter Employee's
dependents shall have a right to continued health coverage in accordance with
the terms of applicable law.

                                   ARTICLE 2

                      Non-Competition and Confidentiality

     2.1  Training/Confidential Information.  For purposes of this Article 2
          ---------------------------------
(Non-Competition and Confidentiality), the term "the Company" shall be construed
------------------------------------
also to include Employer, Parent and any and all Affiliates of Employer and
Parent.  The Company agrees that it will provide Employee with specialized
knowledge and training regarding the business in which the Company is involved,
and will provide Employee with initial and ongoing confidential information and
trade secrets of the Company (hereinafter referred to as "Confidential
Information").  For purposes of this Agreement, Confidential Information
includes, but is not limited to:

          (a) Customer lists and prospect lists developed by the Company;

          (b) Information regarding the Company's customers which Employee
     acquired as a result of his employment with the Employer, including but not
     limited to, customer contracts, work performed for customers, customer
     contacts, customer requirements and needs, data used by the Company to
     formulate customer bids, customer financial information and other
     information regarding the customer's business;

          (c) Information regarding the Company's vendors which Employee
     acquired as a result of his employment with the Employer, including but not
     limited to, product and service information and other information regarding
     the business activities of such vendors;

                                       10
<PAGE>

          (d) Information related to the Company's business, including but not
     limited to marketing strategies and plans, sales procedures, operating
     policies and procedures, pricing and pricing strategies, business plans,
     sales, profits, and other business and financial information of the
     Company;

          (e) Training materials developed by and utilized by the Company;

          (f) Any other information which Employee acquired as a result of his
     employment with the Employer and which Employee has a reasonable basis to
     believe the Company would not want disclosed to a business competitor or to
     the general public.

          (g)  Information which:

               (i)   is proprietary to, about or created by the Company;

               (ii)  gives the Company some competitive advantage, the
          opportunity of obtaining such advantage or the disclosure of which
          could be detrimental to the interests of the Company;

               (iii) is not typically disclosed to non-employees by the
          Company, or otherwise is treated as confidential by the Company; or

               (iv)  is designated as Confidential Information by the Company or
          from all the relevant circumstances should reasonably be assumed by
          the Employee to be confidential to the Company.

Notwithstanding the foregoing, Confidential Information shall not include any
information that is or has become public knowledge, other than by acts by the
Employee or representatives of the Employee in violation of this Agreement.

     2.2  Non-Disclosure.  The Employee acknowledges, understands and agrees
          --------------
that all Confidential Information, whether developed by the Company or others or
whether developed by the Employee while carrying out the terms and provisions of
this Agreement (or previously while serving as an officer of the Company), shall
be the exclusive and confidential property of the Company and (i) shall not be
disclosed to any person (except as otherwise required by law or legal process)
other than employees of the Company and professionals engaged on behalf of the
Company, and other than disclosure in the scope of the Company's business in
accordance with the Company's policies for disclosing information, (ii) shall be
safeguarded and kept from unintentional disclosure and (iii) shall not be used
for the Employee's personal benefit.  Subject to the terms of the preceding
sentence, the Employee shall not use, copy or transfer Confidential Information
other than as is necessary in carrying out his duties under this Agreement.

                                       11
<PAGE>

     2.3  Return of Company Property and Information.  Upon termination of
          ------------------------------------------
employment, or at any earlier time as directed by Company, Employee shall
immediately deliver to Company any and all Confidential Information in
Employee's possession, any other documents or information which Employee
acquired as a result of his employment with Employer, and any copies of such
documents/information.  Employee shall not retain any originals or copies of
such documents or materials related to Company's business which Employee came
into possession of or created as a result of his employment at Company.
Employee acknowledges that such information, documents and materials are the
exclusive property of Company.  Upon termination of employment, or at any
earlier time as directed by Company, Employee shall immediately deliver to
Company any property of Company in Employee's possession.  Employee agrees that
should he fail to return any Company property, Company shall be entitled to
deduct from any sums otherwise due Employee (including, but not necessarily
limited to wages and expense reimbursements) the cost and/or value of any
property which Employee fails to return, up to the maximum amount allowed by
law.  Employee hereby authorizes Company to deduct and/or withhold any such sums
from Employee's wages and/or other sums due Employee.

     2.4  Non-Competition.
          ---------------

          (a)  Description of Proscribed Actions.  During the Term and for a
               ---------------------------------
     period of 18 months thereafter (or 12 months thereafter in the event of
     Termination Without Cause or for Company Breach), in consideration for the
     obligations of Employer and Parent hereunder, including without limitation
     their disclosure (pursuant to subsection 2.1 (Training/Confidential
                                                   ---------------------
     Information) above) of Confidential Information, the Employee shall not:
     -----------

               (i)  directly or indirectly, engage or invest in, own, manage,
          operate, control or participate in the ownership, management,
          operation or control of, be employed by, associated or in any manner
          connected with, or render services or advice to, any Competing
          Business (defined below); provided, however, that the Employee may
                                    --------  -------
          invest in the securities of any enterprise (but without otherwise
          participating in the activities of such enterprise) if (x) such
          securities are listed on any national or regional securities exchange
          or have been registered under Section 12(g) of the Exchange Act and
          (y) the Employee does not beneficially own (as defined Rule 13d-3
          promulgated under the Exchange Act) in excess of 5% of the outstanding
          capital stock of such enterprise;

               (ii) directly or indirectly, either as principal, agent,
          independent contractor, consultant, director, officer, employee,
          employer, advisor (whether paid or unpaid), stockholder, partner or in
          any other individual or representative capacity whatsoever, either for
          his own benefit or for the benefit of any other person or entity,
          solicit, divert or take away any suppliers, customers or clients of
          the Company or any of its Affiliates; or

                                       12
<PAGE>

               (iii)  directly or indirectly, either as principal, agent,
          independent contractor, consultant, director, officer, employee,
          employer, advisor (whether paid or unpaid), stockholder, partner or in
          any other individual or representative capacity whatsoever, either for
          his own benefit or for the benefit of any other person or entity,
          either (i) hire, attempt to hire, contact or solicit with respect to
          hiring, any employee of Employer or Parent or any Affiliate thereof,
          (ii) induce or otherwise counsel, advise or encourage any employee of
          Employer, Parent or any Affiliate thereof to leave the employment of
          Employer, Parent or any Affiliate thereof, or (iii) induce any
          representative or agent of Employer, Parent or any Affiliate thereof
          to terminate or modify its relationship with Employer, Parent or such
          Affiliate.

          (b)  Judicial Modification.  The Employee agrees that if a court of
               ---------------------
     competent jurisdiction determines that the length of time or any other
     restriction, or portion thereof, set forth in this Section 2.4 (Non-
                                                                     ---
     Competition) is overly restrictive and unenforceable, the court may reduce
     -----------
     or modify such restrictions to those which it deems reasonable and
     enforceable under the circumstances, and as so reduced or modified, the
     parties hereto agree that the restrictions of this Section 2.4 (Non-
                                                                     ---
     Competition) shall remain in full force and effect. The Employee further
     -----------
     agrees that if a court of competent jurisdiction determines that any
     provision of this Section 2.4 (Non-Competition) is invalid or against
                                    ---------------
     public policy, the remaining provisions of this Section 2.4 (Non-
                                                                  ---
     Competition) and the remainder of this Agreement shall not be affected
     -----------
     thereby, and shall remain in full force and effect.

          (c)  Nature of Restrictions.  The Employee acknowledges that the
               ----------------------
     business of Employer and Parent and their Affiliates is international in
     scope and that the Restrictions imposed by this Agreement are legitimate,
     reasonable and necessary to protect Employer's, Parent's and their
     Affiliates' investment in their businesses and the goodwill thereof.  The
     Employee acknowledges that the scope and duration of the restrictions
     contained herein are reasonable in light of the time that the Employee has
     been or will be engaged in the business of Employer, Parent and/or their
     Affiliates, and the Employee's relationship with the suppliers, customers
     and clients of Employer, Parent and their Affiliates.  The Employee further
     acknowledges that the restrictions contained herein are not burdensome to
     the Employee in light of the consideration paid therefor and the other
     opportunities that remain open to the Employee.  Moreover, the Employee
     acknowledges that he has other means available to him for the pursuit of
     his livelihood.

          (d)  Competing Business.  "Competing Business" shall mean any
               ------------------
     individual, business, firm, company, partnership, joint venture,
     organization, or other entity engaged in the wholesale distribution or
     retail sales of wireless communication equipment in any domestic or
     international market area in which Employer, Parent or any of their
     Affiliates does business at any time during the Employee's employment with
     Employer or any of its Affiliates.

                                       13
<PAGE>

     2.5  Injunctive Relief.  Because of the Employee's experience and
          -----------------
reputation in the industries in which Employer, Parent and their Affiliates
operate, and because of the unique nature of the Confidential Information, the
Employee acknowledges, understands and agrees that Employer and Parent will
suffer immediate and irreparable harm if the Employee fails to comply with any
of his obligations under Article 2 (Non-Competition and Confidentiality) of this
                                    -----------------------------------
Agreement, and that monetary damages will be inadequate to compensate Employer
and Parent for such breach.  Accordingly, the Employee agrees that Employer and
Parent shall, in addition to any other remedies available to them at law or in
equity, be entitled to injunctive relief to enforce the terms of Article 2 (Non-
                                                                            ---
Competition and Confidentiality), without the necessity of proving inadequacy of
-------------------------------
legal remedies or irreparable harm.

                                   ARTICLE 3

                  Representations and Warranties by Employee

     Employee hereby represents and warrants, the same being part of the essence
of this Agreement, that, as of the Effective Date, he is not a party to any
agreement, contract or understanding, and that no facts or circumstances exist,
that would in any way restrict or prohibit him from undertaking or performing
any of his obligations under this Agreement.  The foregoing representation and
warranty shall remain in effect throughout the Term.

                                   ARTICLE 4

                                Indemnification

     Parent agrees to indemnify, and advance expenses to, the Employee to the
extent provided in the Certificate of Incorporation and Bylaws of Parent as of
the date of this Agreement.  To the extent that a change in the Delaware General
Corporation Law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under Parent's
Certificate of Incorporation and Bylaws and this Agreement, it is the intent of
the parties hereto that the Employee shall enjoy by this Agreement the greater
benefits so afforded by such change.

                                   ARTICLE 5

                                 Miscellaneous

     5.1  Counterparts.   This Agreement may be executed in two or more
          ------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

     5.2  Indulgences, Etc.   Neither the failure nor any delay on the part of
          -----------------
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver

                                       14
<PAGE>

thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise of the same or of any right,
remedy, power or privilege, nor shall any waiver of any right, remedy, power, or
privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence.

     5.3  Employee's Sole Remedy.  The Employee's sole remedy shall be against
          ----------------------
Employer or Parent for any claim, liability or obligation of any nature
whatsoever arising out of or relating to this Agreement or an alleged breach of
this Agreement or for any other claim arising out of the termination of the
Employee's employment hereunder (collectively, "Employee Claims").  The Employee
shall have no claim or right of any nature whatsoever against any of Employer's
or its Affiliates' directors, former directors, officers, former officers,
employees, former employees, stockholders, former stockholders, agents, former
agents or the independent counsel in their individual capacities arising out of
or relating to any Employee Claim.  The Employee hereby releases and covenants
not to sue any person other than Employer or Parent over any Employee Claim.
The persons described in this Section 5.3 (other than Employer, Parent and the
Employee) shall be third-party beneficiaries of this Agreement for purposes of
enforcing the terms of this Section 5.3 (Employee's Sole Remedy) against the
                                        -----------------------
Employee.

     5.4  Notices.   All notices, requests, demands and other communications
          -------
required or permitted under this Agreement and the transactions contemplated
herein shall be in writing and shall be deemed to have been duly given, made and
received when sent by telecopy (with a copy sent by mail) or when personally
delivered or one business day after it is sent by overnight service, addressed
as set forth below:

          If to the Employee:

               Dale H. Allardyce
               10 Keeler's Ridge
               Wilton, Connecticut 06897

          If to Employer or Parent:

               CellStar Corporation
               1730 Briercroft Court
               Carrollton, Texas  75006
               Attn:  General Counsel

Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions of
this subsection for the giving of notice, which shall be effective only upon
receipt.

     5.5  Provisions Separable.  The provisions of this Agreement are
          --------------------
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable

                                       15
<PAGE>

by virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.

     5.6  Entire Agreement.   This Agreement contains the entire understanding
          ----------------
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as herein
contained, which shall be deemed terminated effective immediately.  The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.  This Agreement may not be
modified or amended other than by an agreement in writing.

     5.7  Headings; Index.   The headings of paragraphs herein are included
          ---------------
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.

     5.8  Governing Law.   This Agreement shall be governed by and construed in
          -------------
accordance with the laws of the State of Texas, without giving effect to
principles of conflict of laws.

     5.9  Dispute Resolution.  Subject to Employer's and Parent's right to seek
          ------------------
injunctive relief in court as provided in Section 2.5 (Injunctive Relief) of
                                                       -----------------
this Agreement, any dispute, controversy or claim arising out of or in relation
to or connection to this Agreement, including without limitation any dispute as
to the construction, validity, interpretation, enforceability or breach of this
Agreement, shall be exclusively and finally settled by arbitration, and any
party may submit such dispute, controversy or claim, including a claim for
indemnification under this Section 5.9 (Dispute Resolution), to arbitration.
                                        ------------------

          (a) Arbitrators.  The arbitration shall be heard and determined by one
              -----------
     arbitrator, who shall be impartial and who shall be selected by mutual
     agreement of the parties; provided,  however, that if the dispute involves
                               --------   -------
     more than $2,000,000, then the arbitration shall be heard and determined by
     three (3) arbitrators.  If three (3) arbitrators are necessary as provided
     above, then (i) each side shall appoint an arbitrator of its choice within
     thirty (30) days of the submission of a notice of arbitration and (ii) the
     party-appointed arbitrators shall in turn appoint a presiding arbitrator of
     the tribunal within thirty (30) days following the appointment of the last
     party-appointed arbitrator.  If (x) the parties cannot agree on the sole
     arbitrator, (y) one party refuses to appoint its party-appointed arbitrator
     within said thirty (30) day period or (z) the party-appointed arbitrators
     cannot reach agreement on a presiding arbitrator of the tribunal, then the
     appointing authority for the implementation of such procedure shall be the
     Senior United States District Judge for the Northern District of Texas, who
     shall appoint an independent arbitrator who does not have any financial
     interest in the dispute, controversy or claim.  If the Senior United States
     District Judge for the Northern District of Texas refuses or fails to act
     as the appointing authority within ninety (90) days after being requested
     to do so, then the appointing authority shall be the Chief Executive
     Officer of the American Arbitration Association, who shall appoint an
     independent arbitrator

                                       16
<PAGE>

     who does not have any financial interest in the dispute, controversy or
     claim. All decisions and awards by the arbitration tribunal shall be made
     by majority vote.

          (b)  Proceedings.  Unless otherwise expressly agreed in writing by the
               -----------
     parties to the arbitration proceedings:

               (i)    The arbitration proceedings shall be held in Dallas,
          Texas, at a site chosen by mutual agreement of the parties, or if the
          parties cannot reach agreement on a location within thirty (30) days
          of the appointment of the last arbitrator, then at a site chosen by
          the arbitrators;

               (ii)   The arbitrators shall be and remain at all times wholly
          independent and impartial;

               (iii)  The arbitration proceedings shall be conducted in
          accordance with the Commercial Arbitration Rules of the American
          Arbitration Association, as amended from time to time;

               (iv)   Any procedural issues not determined under the arbitral
          rules selected pursuant to item (iii) above shall be determined by the
          law of the place of arbitration, other than those laws which would
          refer the matter to another jurisdiction;

               (v)    The costs of the arbitration proceedings (including
          attorneys' fees and costs) shall be borne in the manner determined by
          the arbitrators;

               (vi)   The decision of the arbitrators shall be reduced to
          writing; final and binding without the right of appeal; the sole and
          exclusive remedy regarding any claims, counterclaims, issues or
          accounting presented to the arbitrators; made and promptly paid in
          United States dollars free of any deduction or offset; and any costs
          or fees incident to enforcing the award shall, to the maximum extent
          permitted by law, be charged against the party resisting such
          enforcement;

               (vii)  The award shall include interest from the date of any
          breach or violation of this Agreement, as determined by the arbitral
          award, and from the date of the award until paid in full, at 6% per
          annum; and

               (viii) Judgment upon the award may be entered in any court
          having jurisdiction over the person or the assets of the party owing
          the judgment or application may be made to such court for a judicial
          acceptance of the award and an order of enforcement, as the case may
          be.

     5.10 Survival.  The covenants and agreements of the parties set forth in
          --------
Article 2 (Non-Competition and Confidentiality), and Article 5 (Miscellaneous)
           -----------------------------------                  -------------
are of a continuing nature and

                                       17
<PAGE>

shall survive the expiration, termination or cancellation of this Agreement,
regardless of the reason therefor.

     5.11 Subrogation.  In the event of payment under this Agreement, Employer
          -----------
and Parent shall be subrogated to the extent of such payment to all of the
rights of recovery of the Employee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable Employer or Parent effectively
to bring suit to enforce such rights.

     5.12 No Duplication of Payments.  Employer and Parent shall not be liable
          --------------------------
under this Agreement to make any payment in connection with any claim made
against  the Employee to the extent the Employee has otherwise actually received
payment (under any insurance policy, Bylaw or otherwise) of the amounts
otherwise indemnifiable hereunder.

     5.13 Binding Effect, Etc.  This Agreement shall be binding upon and inure
          --------------------
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of Employer, Parent, spouses, heirs, and personal and legal
representatives.  Employer and Parent shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise) to
all, substantially all, or a substantial part, of their business or assets, by
written agreement in form and substance satisfactory to the Employee, expressly
to assume and agree to perform this Agreement in the same manner and to the same
extent that Employer or Parent would be required to perform if no such
succession had taken place.

     5.14 Contribution.  If the indemnity contained in this Agreement is
          ------------
unavailable or insufficient to hold the Employee harmless in a Claim for an
Indemnifiable Event, then separate from and in addition to the indemnity
provided elsewhere herein, Parent shall contribute to Expenses, judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
by or on behalf of the Employee in connection with such Claim in such proportion
as appropriately reflects the relative benefits received by, and fault of,
Parent on the one hand and the Employee on the other in the acts, transactions
or matters to which the Claim relates and other equitable considerations.

     5.15 Parent Guaranty.  Parent guarantees the payment and performance of all
          ---------------
obligations of Employer under this Agreement and agrees it will pay or perform
those obligations if for any reason Employer fails to do so.  This guarantee is
absolute, continuing, irrevocable and not conditional or contingent.  Any notice
given hereunder to either Employer or Parent will be deemed to be notice to
Parent for purposes of this guaranty.

                                       18
<PAGE>

     IN WITNESS WHEREOF, Employer and Parent have caused this Agreement to be
executed by their officer/general partner thereunto duly authorized, and
Employee has signed this Agreement, as of the date first set forth above.

                              CELLSTAR LTD
                              By:   National Auto Center, Inc.
                                    General Partner

                              By: /s/ Alan H. Goldfield
                                  ----------------------------------
                                  Alan H. Goldfield
                                  Chairman and CEO

                              CELLSTAR CORPORATION

                              By: /s/  Alan H. Goldfield
                                  ----------------------------------
                                  Alan H. Goldfield
                                  Chairman and CEO

                              /s/ Dale H. Allardyce
                              --------------------------------------
                              Dale H. Allardyce

                                       19

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